1. Strategic Planning
Strategic management is the new term that has emerged for the strategic planning process
Strategic Management is a process that involves managers from all parts of the organization in the formulation and implementation of strategic goals and strategies

2. Strategic Management Process
This Figure shows the six major components of the strategic management process: (1) establishment of mission, vision, and goals; (2) analysis of external opportunities and threats; (3) analysis of internal strengths and weaknesses; (4) SWOT (strengths, weaknesses, opportunities, and threats) analysis and strategy formulations; (5) strategy implementation; and (6) strategic control. Because this process is a planning and decision process, it is similar to the planning framework discussed earlier. Although organizations may use different terms or emphasize different parts of the process, the components and concepts described in this section are found either explicitly or implicitly in every organization.

3. Strategic Management: Step 1
Establishment of mission, vision, and goals
Mission is an organization’s basic purpose and scope of operations
Strategic vision is the long-term direction and strategic intent of a company
Strategic goals evolve from the mission and vision of the organization
The most effective vision statements inspire organization members. They offer a worthwhile target for the entire organization to work together to achieve. Often, these statements are not strictly financial, because financial targets alone may not motivate all organization members. The chief executive officer of the organization, with the input and approval of the board of directors, establishes the mission, vision, and major strategic goals. The concepts and information within the mission statement, vision statement, and strategic goals statement may not be identified as such, but they should be communicated to everyone who has contact with the organization.

4. Microsoft
Vision 1
Vision 2

5. Strategic Management: Step 2
Analysis of External Opportunities and Threats
Successful strategic management depends on an accurate and thorough evaluation of the environment
Begins with an examination of the industry
Managers should also examine other forces in the environment, such as macroeconomic conditions (laws, demographics, economy)and technological factors
One critical task is forecasting future trends
The mission and vision drive the second component of the strategic management process: analysis of the external environment.

6. Analysis of External Opportunities and Threats
This Table lists some of the important activities in an environmental analysis.

7. Strategic Management: Step 3
Analysis of Internal Strengths and Weaknesses
This kind of internal analysis provides strategic decision makers with an inventory of the organization’s existing functions, skills, and resources as well as its overall performance level
This step will also include looking at the firms resources and core competencies
A final area may include benchmarking with other firms
Benchmarking is the process of assessing how well one company’s basic functions and skills compare to those of some other company or set of companies. The goal of benchmarking is to thoroughly understand the “best practices” of other firms, and to undertake actions to achieve both better performance and lower costs.

8. Resources and Core Competencies
Resources are inputs to a system that can enhance performance
Tangible assets such as real estate, production facilities, raw materials and so on
Intangible assets such as company reputation, culture, technical knowledge, patents, and accumulated learning and experience
Resources can create a competitive advantage if:
They are instrumental for creating customer value
They are rare and not equally available to all competitors
They are difficult to imitate
Finally they must be well organized
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9. SWA
“They can imitate the airplanes. They can imitate the ticket counters and all the other hardware…..But they can’t duplicate the people of Southwest and their attitudes.” Kelleher

10. Core Competencies
Core competencies are the unique skills and/or knowledge an organization possesses that give it an edge over competitors.
Generally it refers to a set of skills or expertise in some activity, rather than physical or financial assets.
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11. Analysis of Strengths and Weaknesses
This table lists some of the areas managers should examine internally.

12. Strategic Management: Step 3
As shown in this figure, when resources are valuable, rare, inimitable, and organized, they can be viewed as a company’s core competencies. Simply stated, a core competence is something a company does especially well relative to its competitors.

13. Strategic Management: Step 4
SWOT Analysis and Strategy Formulation
By completing steps 2 and 3 managers will be able to analyze the companies strengths, weaknesses, opportunities and threats (SWOT)
Once the SWOT has been completed management will be able to begin to formulate a strategy
SWOT analysis helps managers summarize the relevant, important facts from their external and internal analyses. They can then identify the primary and secondary strategic issues their organization faces. The strategy managers then formulate will build on the SWOT analysis to take advantage of available opportunities by capitalizing on the organization’s strengths, neutralizing its weakness, and countering potential threats. In short, strategy formulation moves from analysis to devising a coherent course of action. The organization’s corporate, business, and functional strategies will begin to take shape.

14. Business Strategy
Business Strategy is the major actions by which a business competes in a particular industry or market (On what basis do we compete?).
Low-Cost Strategy is a strategy that an organization uses to build competitive advantage by being efficient and offering a standard, no frills product.
Differentiation Strategy is a strategy that an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions.
After the top management team and board make the corporate strategic decisions, executives must determine how they will compete in each business area.

15. Strategic Management: Step 5 Implementation
There are two major trends related to implementation
Organizations are adopting a more comprehensive view of implementation
Managers at all levels of the organization are being involved with the implementation process
Implementation generally involves four related steps
Define strategic tasks
Assess organization capabilities
Develop an implementation agenda
Create an implementation plan

16. Barriers to Implementation

17. Strategic Management: Step 6
Strategic Control
A system designed to support managers in evaluating the organization’s progress regarding its strategy and, when discrepancies exist, taking corrective action
The organization must develop performance indicators, an information system, and specific mechanisms to monitor progress
Normally includes a budget

19. Corporate Strategy
Corporate Strategy The set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities
Concentration A strategy employed for an organization that operates a single business and competes in a single industry
Concentric Diversification A strategy used to add new businesses that produce related products or are involved in related markets and activities
Vertical Integration The acquisition or development of new businesses that produce parts or components of the organization’s product

20. Summary of Corporate Strategies
This Figure shows four basic corporate strategy alternatives, ranging from very specialized to highly diverse.

21. Boston Consulting Group
One of the most popular techniques for analyzing a corporation’s strategy for managing its portfolio is the BCG matrix, developed by the Boston Consulting Group. Each business in the corporation is plotted on the matrix on the basis of the growth rate of its market and the relative strength of its competitive position in that market (market share). The business is represented by a circle whose size depends on the business’s contribution to corporate revenues. High-growth, weak-competitive-position businesses are called question marks. They require substantial investment to improve their position; otherwise, divestiture is recommended. High-growth, strong-competitive-position businesses are called stars. These businesses require heavy investment, but their strong position allows them to
generate the needed revenues. Low-growth, strong-competitive-position businesses are called cash cows. These businesses generate revenues in excess of their investment needs and therefore fund other businesses. Finally, low-growth, weak-competitive position businesses are called dogs. The remaining revenues from these businesses are
realized, and then the businesses are divested.

22. TiVo’s Analyst Ratings
Taken together, may be a question mark
RTE: Cash Cow

24. Situational Analysis
A process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration
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25. Alternative Goals and Plans
Based on the situational analysis, the planning process should generate alternative goals that may be pursued in the future and the alternative plans that may be used to achieve those goals
Goals are a target or end that management desires to reach
Plans are the actions or means managers intend to use to achieve organizational goals
When appropriate, goals also should be quantified and linked to a time frame. They should be acceptable to the managers and employees charged with achieving them, and they should be consistent both within and among work units.
There are also different kinds of plans. Some of these include the following:
Single use plans, are designed to achieve a set of goals that are not likely to be repeated in the future
Standing plans, focus on ongoing activities designed to achieve an enduring set of goals
Contingency plans might be referred to as “what if” plans. They include sets of actions to be taken when a company’s initial plans have not worked well or if events in the external environment require a sudden change.
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26. Goal and Plan Evaluation
This step is made up of two activities
Managers will evaluate the advantages, disadvantages, and potential effects of each alternative goal and plan.
They will prioritize those goals and even eliminate some of them from consideration.
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27. Goal and Plan Selection
Managers will select the goal and plan that is most appropriate and feasible once they have assessed all of the various goals and plans
Some organizations will generate planning scenarios to aid in the evaluation and selection process
Scenario – a narrative that describes a particular set of future conditions
This approach helps the firm avoid crises and allows greater flexibility and responsiveness
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28. Implementation Managers and employees must: Understand the plan
Have the resources necessary to implement the plan
Be motivated to implement the plan
The implementation phase probably will be more effective and efficient If both managers and employees have participated in the planning process
For a successful implementation it is important for these items to be present. Employees usually are better informed, more committed, and more highly motivated when a goal or plan is one that they helped develop.
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29. Monitor and Control
This step is essential in a formal planning process
Managers will need to develop control systems that measure thee plan’s performance
Managers should take corrective action when the plans implemented improperly or when the situation changes
Although it is sometimes ignored, this step in the formal planning process is essential. Without it, you would have no way of knowing whether your plan is succeeding. As we mentioned earlier, planning works in a cycle; it is an ongoing, repetitive process. Managers must continually monitor the actual performance of their work units according to the unit’s goals and plans.
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