New Case Study Essay
Business Policy and Strategy
Dr. M. Shakil Ahmad
THE NATURE OF STRATEGIC MANAGEMENT
I. WHAT IS STRATEGIC MANAGEMENT?
A. Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. 1. The term strategic management is used synonymously with strategic planning.
2. The purpose of strategic management is to exploit and create new and different opportunities for tomorrow while long-range planning tries to optimize for tomorrow the trends of today. B. Stages of Strategic Management
1. The strategic-management process consists of three stages.
a. Strategy …show more content…
C. Integrating Intuition and Analysis
The strategic-management process can be described as an objective, logical, systematic approach for making major decisions in an organization. It attempts to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty.
D. Adapting to Change
1. The strategic-management process is based on the belief that organizations should continually monitor internal and external events and trends so that timely changes can be made as needed. The rate and magnitude of changes that affect organizations are increasing dramatically.
2. The need to adapt to change leads organizations to key strategic-management questions, such as, What kind of business should be become?´ Are we in the right field?´ Should we reshape our business?´ What new competitors are entering our industry?´
II. KEY TERMS IN STRATEGIC MANAGEMENT
A. Competitive Advantage
1. Competitive advantage is defined as anything that a firm does especially well compared to rival firms.
2. Firms should seek a sustained competitive advantage by continually adapting to changes in external trends and internal capabilities and evaluating strategies that capitalize on those factors.