SFA__7th_ed__chap._1_only__sept_2006

SFA__7th_ed__chap._1_only__sept_2006 - Chapter 1: Questions...

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Chapter 1: Questions That Every Strategist Must Answer Managers involved in developing or reviewing a firm's strategy can approach the task by asking a series of questions. First , what is the key problem facing the firm? Is the firm performing well or not? Is its strategy working? If nothing changes where will the firm be in 5 to 10 years? Second , what does "targeted analysis” indicate about the central issue? What is the specific cause of the problem? If we examine the problem from a variety of perspectives (e.g., economic, legal, historical, political, financial, organizational) does this give us additional insight? Third , what alternatives that might solve the central issue? What are their pros and cons? Fourth , which alternative is best and why? Fifth , how should the best alternative be implemented (e.g., at what cost, over what time period, what systems need to be changed)? Most strategic management texts start out by presenting a definition for strategy and explaining the traditional strategy model (i.e., development of mission and objectives, strategy formulation, strategy implementation). They proceed to present all the different analytical techniques that can be used to examine a particular aspect of the environment or the firm. These analytical tools are often grouped into categories dealing with the general environment (e.g., PEST model), the industry environment (e.g., Porter's extended rivalry
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model), intra-industry analysis (e.g., strategic mapping), customer/competitor analysis (e.g., game theory), industry change models (e.g., PLC, technology S-curve, etc) and internal analysis (e.g., strengths and weaknesses, core competence matrix). What is often lacking is an emphasis on "strategic or critical thinking" in the process of developing strategy. The ability to approach problems in a logical while asking the “right” questions is a skill that should stay with students long after they forget the details of specific analytical techniques have passed from memory. What are the characteristics of strategic thinking? Mostly, it's about asking the right questions. It's also about challenging the answers provided to these questions with even more questions. Everything must be questioned and examined from multiple perspectives (e.g., marketing, finance, economics, history, politics, psychology, etc). Research, homework, due diligence, or however we refer to the process of understanding the situation in-depth must be completed. Assumptions must be surfaced and their reasonableness questioned. Dissenting opinions need to be heard. A variety of sources must be used to gather information, rumors, insights, and creative ideas. The key principles are not how to perform a
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particular type of analysis but how to manage a process that recognizes that complex, ill-structured problems rarely have a single correct answer. . What's the central issue/problem?
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SFA__7th_ed__chap._1_only__sept_2006 - Chapter 1: Questions...

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