Chapter 1 STM SUMMARY.docx - CHAPTER 1 A Strategic...

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CHAPTER 1: A Strategic Management Model The Reality of Dynamism The 21 st century optimizes the reality of dynamism . In fact, today’s milieu is a state of fluidity. It is not static. Rather, changes and fluctuations are constantly happening in the surroundings. These actualities are characterized by the occurrence of phenomenal situations, continuous challenges, and triggering forces that provoke corresponding action. The certainty of change is universal and this forgone conclusion is largely experienced by all nations and people— whether developed or undeveloped, large or small, powerful or weak. Hypercompetition It is a fundamental feature of the new economy. As the world implies, it carries a note of overexcitement and agitation. Hypercompetition occurs when product/service, offerings and technologies are so new that standards become unstable and competitive advantage is not sustainable. In a strict sense, hypercompetition is a situation where both globalization and technology collaborate to create a heightened cut-throat situation. Strategic Management Defined Strategic Management - is a continuous process of strategy creation. It involves strategic process like strategic analysis and decision-making, strategy formulation and implementation, and strategy control with the primary objectives of achieving and maintaining better alignment of corporate policies, priorities, and success. Strategic Analysis consist of a systematic evaluation of variables currently existing in the external and internal environment. Strategic decision-making – deliberately bringing together the right resources for the right time. Strategy Formulation is designing strategies on the business and corporate levels Strategy Implementation is employing these crafted strategies to achieve organizational set goals and objectives. Strategic Control is the application of an appropriate monitoring and feedback system. Strategic Analysis Strategic Intelligence
Figure1.1 The Strategic Management Process Strategic Intelligence - is the capability of an organization to process relevant and related knowledge, abilities, foresight, and system thinking, such that it is able to assess its own strengths and vulnerabilities, the pressing challenges confronting the organization, as well as the trends and opportunities existing in the environment. Strategic Thinking- the cognitive process of completely and analytically weighing factors and arriving at critical decisions in the context of the current milieu which an organization is part. Organizational Competitiveness- pertains to the ability of any business/ company to utilize its resources optimally and sustainably for maximum performance and productivity. Comparative Advantage - the ability of an organization to produce a particular good or service at lower marginal and opportunity costs than its competitors.

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