Ch 8-Notes.docx

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MGMT Ch 8-1 Ch. 8: Strategic Management What is Strategic Management? What managers do to develop an org’s strategies The org strategies are : o plans for how the org will do whatever it is in business to do o how the company will compete successfully o how it will attract and satisfy its customers in order to achieve its goals Business Model: How a company is going to make money—It focuses on two factors: o Whether customers will value what the company is providing o Whether the company can make any money doing that As managers thin about strategies, they need to think about the economic practicality of their company’s business model Why is Strategic Management Important? There are three reasons: o It can make a difference in how well an org performs (or that use strategic management have higher levels of performance) o Managers in organizations of all types and sizes faces continually changing situations—They cope with the uncertainty by using the strategic management process to examine relevant factors and decide what actions to take o Org are complex and diverse—each part need to work toward achieving the org’s goals; strategic management helps do this Strategic Management in Arab Organizations Formal strategic planning exists but is rather limited Lack of confidence in the impact of formal strategic planning The trend for formal strategic planning is on the rise The Strategic Management Process Step 1: Identifying the org’s current mission, goals & strategies Mission: Statement of its purpose—what the org is in business to do Identify the current goals & strategies so managers will have a basis for assessing whether they need to be changed Goals:
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MGMT Ch 8-2 o Strategic Goals: increase sales 20% o Tactical Goals: new plants in Brazil, China & Egypt o Operational Goals: Buy land for these plants Step 2: Doing an External Analysis External environment creates an important constraint on a manager’s actions Analyzing the environment is a critical Step Managers do an external analysis so they know: o What the competition is doing o What pending legislation might affect the org o What the labor supply is like in locations where it operates Managers should examine specific and general environments to see the trends & changes Then managers should pinpoint opportunities, positive trends in the external environment, that the org can exploit, and threats , negative trends, that it must counteract or buffer against.
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