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Strategic management: The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company's objectives Nine critical tasks of strategic management * Formulate the company's mission * Conduct an internal analysis * Assess the external environment competitive and general contexts * Analyze the company's options by matching its resources with the external environment * Identify the most desirable options in light of the mission * Select a set of long-term objectives and grand strategies that will achieve the most desirable options * Develop annual objectives and short-term strategies that are compatible with long- term objectives and grand strategies * Implement the strategic choices * Evaluate the success of the strategic process for future decision making What is strategy? * Large-scale, future-oriented plan * Used to interact within competitive environment to achieve company goals * Provides a framework for managerial decisions * Reflects company's awareness of how, when, where it should compete, against whom it should compete and for what purpose it should compete Dimensions of Strategic Decisions * Strategic issues require top- management decisions * Strategic decisions overarch several Usually only top managers have the power to authorize necessary resource allocations * areas of a firm's operations * Usually only top management has the perspective needed to understand their broad implications * Strategic issues require large amounts of the firm's resources * They involve substantial allocations of people, physical assets, and money * Strategic decisions commit the firm to actions over an extended period * In highly competitive firms, achieving and maintaining customer satisfaction frequently involves commitment from every facet of the firm * Strategic issues often affect the firm's long-term prosperity * Strategic decisions commit the firm for a long time, typically 5 years; however the impact lasts much longer * Once a firm has committed itself to a strategy, its image and competitive advantages are usually tied to that strategy * Firms become known for what they do and where they compete. Shifting away from that can jeopardize their previous gains. Strategic issues are future-oriented * They are based on what managers forecast, rather than what they know * Emphasis is on the development of solid projections that will enable a firm to seek the most promising strategic options * A firm will succeed only if it takes a proactive (anticipatory) stance toward change * Strategic issues usually have mul tifunctional or multi-business consequences. * Strategic decisions have complex implications for most areas of the firm * Decisions about customer mix, competitive emphasis, or organizational structure involve a number of the firm's SBUs, divisions, or program units * Strategic issues require considering the firm's external environment * All businesses exist in an open system. They affect and are affected by All businesses exist in an open system.... View Full Document

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