Chapter One
The Strategic Management Process

 Definition and characteristics of Strategy

1. Strategy is best defined as managementís game plan for 
Positioning the organization in its chosen market arena;
Competing successfully;
Pleasing customers;
Achieving good business performance.
2. A companyís strategy:
Signals organizational commitment to specific markets, competitive approaches, and ways of operating;
Is nearly always a blend of prior moves, approaches already in place, and new actions in the process of being mapped out and initiated.
Consists of the actions and business approaches management employs to achieve the targeted organizational performance.
3.  Strategic-making brings into play the critical managerial issue of HOW:
How to achieve the targeted strategic and financial performance;
How to grow the business;
How to please customers;
How to outcompete rivals;
How to respond to changing market conditions;
How to manage each major functional piece of the business ;
How to develop the needed competitive capacities.
 What is strategic management and why is it important?

5. The most trustworthy signs of a well-managed company are good strategy making combined with good strategy execution.

6.  The strategic management process embraces 5 basic tasks of:
Forming a strategic vision of companyís future business make-up and long-term direction;
Establishing objectives;
Formulating a strategy;
Implementing and executing the strategy;
Evaluating and reformulating the strategic plan in light of experience, changing conditions, and new priorities.
7.  Two compelling needs for company strategies:
To proactively shape how a companyís business will be conducted;
To mold the independent decisions and actions initiated by departments, managers, and employees, shareholders, and creditors.

Strategic Management Process
Developing a strategic vision and business mission:

8.  What is an orgíl mission?
Is the essence of the business;
Defines a business in term of scope and purpose;
Should be limited enough to set the parameters;
Should be broad enough to not require constant change.
9.  What does a mission statement include?
Who is the customer;
What is your product;
What market you are serving;
What are your beliefs, philosophies and values;
Self-concept: how do see yourself, and what makes you special;
Inspiring qualities;
Concern for image;
Social responsibility;
10.  The difference b/n a companyís mission and its strategic vision is that a mission concerns what business a company is presently in and what customer needs it is presently endeavoring to serve. While a strategic vision concerns the companyís future business make-up and long term direction "where we plan to go from here."

    Setting objectives:

11.  The purpose of setting objectives is to:
Help convert the mission and strategic vision into something specific to achieve and something the organizationís progress can be measured by;
Help the organization guard against complacency and low-grade improvements in performance;
Help establish a results-oriented organizational climate;
Push the organization to be more intentional and focused in its actions.
12.  The difference b/n financial performance and strategic performance is that financial objectives focuses such financial outcomes as earnings growth, ROI, MVA, dividend growth, good cash flow. Whereas strategic objectives directs efforts toward such outcomes as winning additional market share, overtaking key competitors on product quality or customer service or reputation with customers, winning a stronger foothold in international markets, exercising technological leadership, gaining a sustainable competitive advantage, and capturing attractive growth opportunities. SO for strengthening overall business position and competitive vitality.

13.  A company needs financial objectives because acceptable financial performance is critical to preserving its vitality and capacity to compete over the long-term.

14.  Strategic objectives relate to strengthening a companyís overall business and competitive position.

    Crafting a strategy:

15.  The task of crafting a strategy is principally concerned with developing actions and business approaches that commit an organization to specific products, markets, competitive approaches, and ways of operating and that are calculated to improve the organizationís performance and business position.

 16.  In trying to understand what a companyís strategy is, the various things to look for include:
What actions are being taken to respond to changing industry conditions;
Any actions to strengthen the companyís resource base and competitive capabilities;
Efforts to broaden/narrow the product line, improve product design, alter product quality, modify performance features, or improve customer services;
How the company manages R&D, manufacturing, sales and marketing finance human resources, and other key activities.
17. Crafting a strategy is mainly an exercise in creative brainstorming balanced against acceptable risk.

18.  A companyís actual strategy is partly planned and partly reactive to changing circumstances.

     Implementing strategy:
19. The strategy implementing challenge is to fit how the organization does things internally to what it will take for effective strategy execution.

20.  The job of implementing strategy involves mangers at all levels, from headquarters on down to each operating department, deciding how they will answer the question, "What is required for us to implement our part of the overall strategic plan and how can we best get it done?"

21.  The principal managerial tasks associated with implementing and executing strategy are:
Building an organization capable of carrying out the strategy successfully;
Creating a company culture and work environment that is conducive to successful strategy implementation and execution;
Exerting the internal leadership needed to drive implementation forward and to improve how the strategy is being carried out;
Tying the reward structure to the achievement of the targeted results.
 Evaluating Performance and Initiating Corrective Adjustments
22.  An organizationís strategy is usually modified as a consequence of:
Management efforts to recast its strategic vision for the organization and/or reshape the organizationís mission;
The launch of fresh offensive and defensive actions to strengthen the companyís long-term competitive position and profitability.
The emergence of new market opportunities;
Changing customer needs and expectations.
23.  The task of reviewing and revising a companyís mission, objectives, strategy and methods of strategy implementation is an ongoing exercise that calls for making changes whenever they are needed.

    Why strategy is an evolutionary process, not an event

24.  An organizationís strategy evolves over time as a consequence of :
The need to keep strategy matched to the organizationís changing situation;
Efforts to fine-tune and improve the quality of the strategy;
New managerial priorities and changing managerial judgements about what the best strategic course is;
Changing expectations about the future.
25.  A companyís strategy generally forms over a period of time in bits and pieces, as events unfold, and consists of some mix of holder approaches, freshly planned moves, and as-needed reactions to developing events.

26.  An organizationís strategy forms and emerges out of management:
Efforts to respond to changing industry conditions;
Actions to improve the organizationís financial performance;
Moves to bolster the organizationís long-term competitive position;
Efforts to capitalize on new opportunities.