August 22, 2022

The Nature of Strategic ManagementChapter Business Vision and Mission Overview: This weeks reading introduces the topic of strategic management and building business vision and miss

Week 1 – Overview & Learning Objectives

Week 1 – Overview & Learning Objectives Attached Files:

Chapter 1-The Nature of Strategic Management.pptx Chapter 1-The Nature of Strategic Management.pptx – Alternative Formats (1.02 MB)
Chapter 2-The Business Vision and Mission.pptx Chapter 2-The Business Vision and Mission.pptx – Alternative Formats (656.562 KB)

Assigned Readings: Chapter 1. The Nature of Strategic Management Chapter 2. Business Vision and Mission Overview: This week’s reading introduces the topic of strategic management and building business vision and mission. Strategic management is the art and science of creating an organization’s strategic plans long-term. There are three stages of strategy management (a) formulation, (b) implementation, and (c) evaluation. A business needs to develop a vision and mission as the focus of the overall strategy. Vision is about what we want to become, and mission is about what our business is about. Chapter 1 The Nature of Strategic Management Learning Objectives:

Describe the strategic-management process.
Discuss the three stages of strategy formulation, implementation, and evaluation activities.
Explain the need for integrating analysis and intuition in strategic management.
Define and give examples of key terms in strategic management.
Illustrate the comprehensive strategic-management model.
Describe the benefits of engaging in strategic management.
Explain why some firms do no strategic planning.
Describe the pitfalls in actually doing strategic planning.
Discuss the connection between business and military strategy.

Chapter 2 The Business Vision and Mission Learning Objectives:

Describe the nature and role of vision statements in strategic management.
Describe the nature and role of mission statements in strategic management.
Discuss the process of developing a vision and mission statement.
Discuss how clear vision and mission statements can benefit other strategic-management activities.
Describe the characteristics of a good mission statement.
Identify the components of mission statements.
Evaluate mission statements of different organizations and write effective vision and mission statements.

Discussion Forum Week 1

Discussion Forum Week 1Read The Cohesion Case ("Coca-Cola Company, 2018") at the end of Chapter 1 and then do Exercise 1A: The primary purpose of this exercise is to show students how to obtain vital information for doing case analysis or preparing a strategic plan for any publicly held firm. The secondary purpose is to familiarize you with (1) strategy terms introduced in this chapter and (2) key sources of information for doing strategic planning. Generally in a strategic-management course, teams of students prepare a strategic plan (case analysis) for some assigned company, so this exercise can assist in learning how to get started in such a project. This is a one-page, double-spaced assignment. Then go to the end of Chapter 2 and do Exercise 2A and 2B "Develop an Improved Vision and Mission Statement for the Coca-Cola Company." This is a minimum of one-page, double-spaced assignment.

Strategic Management Concepts: A Competitive Advantage Approach

Sixteenth Edition

Chapter 1

The Nature of Strategic Management

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Learning Objectives (1 of 2)

1.1 Describe the strategic-management process.

1.2 Discuss the three stages of strategy formulation, implementation, and evaluation activities.

1.3 Explain the need for integrating analysis and intuition in strategic management.

1.4 Define and give examples of key terms in strategic management.

After studying this chapter, you should be able to:

Describe the strategic-management process.

Discuss the three stages of strategy formulation, implementation, and evaluation activities.

Explain the need for integrating analysis and intuition in strategic management.

Define and give examples of key terms in strategic management.

Learning Objectives (2 of 2)

1.5 Illustrate the comprehensive strategic-management model.

1.6 Describe the benefits of engaging in strategic management.

1.7 Explain why some firms do no strategic planning.

1.8 Describe the pitfalls in actually doing strategic planning.

1.9 Discuss the connection between business and military strategy.

Illustrate the comprehensive strategic-management model.

Describe the benefits of engaging in strategic management.

Explain why some firms do no strategic planning.

Describe the pitfalls in actually doing strategic planning.

Discuss the connection between business and military strategy.

Defining Strategic Management (1 of 3)

Strategic Management

The art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives

Strategic management is defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. It focuses on integrating management, marketing, finance and accounting, production and operations, research and development (R&D), and information systems to achieve organizational success.

Defining Strategic Management (2 of 3)

Strategic management is used synonymously with the term strategic planning in this course.

Sometimes the term strategic management is used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation.

Strategic management in this text is used synonymously with the term strategic planning. Sometimes the term strategic management is used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation.

The purpose of strategic management is to exploit and create new and different opportunities for tomorrow.

Defining Strategic Management (3 of 3)

A strategic plan is a company’s game plan.

A strategic plan results from tough managerial choices among numerous good alternatives, and it signals commitment to specific markets, policies, procedures, and operations.

A strategic plan is, in essence, a company’s game plan. Just as a football team needs a good game plan to have a chance for success, a company must have a good strategic plan to compete successfully. A strategic plan results from tough managerial choices among numerous good alternatives, and it signals commitment to specific markets, policies, procedures, and operations in lieu of other, “less desirable” courses of action.

Stages of Strategic Management (1 of 4)

Strategy formulation

Strategy implementation

Strategy evaluation

The strategic-management process consists of three stages: strategy formulation, strategy implementation, and strategy evaluation.

Stages of Strategic Management (2 of 4)

Strategy Formulation

developing a vision and mission

identifying an organization’s external opportunities and threats

determining internal strengths and weaknesses

establishing long-term objectives

generating alternative strategies

choosing particular strategies to pursue

Strategy formulation includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.

Strategy-formulation decisions commit an organization to specific products, markets, resources, and technologies over an extended period of time.

Strategy Formulation Decisions

What new businesses to enter

What businesses to abandon

Whether to expand operations or diversify

Whether to enter international markets

Whether to merge or form a joint venture

How to avoid a hostile takeover

Strategy formulation involves many types of decisions including:

What new businesses to enter

What businesses to abandon

Whether to expand operations or diversify

Whether to enter international markets

Whether to merge or form a joint venture

How to avoid a hostile takeover.

Stages of Strategic Management (3 of 4)

Strategy Implementation

requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed

often called the action stage

Strategy implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed and is often called the action stage. Strategy implementation includes developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and using information systems, and linking employee compensation to organizational performance.

Stages of Strategic Management (4 of 4)

Strategy Evaluation

Determining which strategies are not working well

Three fundamental activities:

reviewing external and internal factors that are the bases for current strategies

measuring performance

taking corrective actions

Strategy evaluation is the final stage in strategic management. Managers desperately need to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information. All strategies are subject to future modification because external and internal factors constantly change.

Key Terms in Strategic Management (1 of 6)

Competitive Advantage

any activity a firm does especially well compared to activities done by rival firms, or

any resource a firm possesses that rival firms desire.

A firm must strive to achieve sustained competitive advantage

Strategic management is all about gaining and maintaining competitive advantage. This term can be defined as any activity a firm does especially well compared to activities done by rival firms, or any resource a firm possesses that rival firms desire.

A firm must strive to achieve sustained competitive advantage by (1) continually adapting to changes in external trends and events and internal capabilities, competencies, and resources; and (2) effectively formulating, implementing, and evaluating strategies that capitalize on those factors.

Key Terms in Strategic Management (2 of 6)

Strategists

Individuals most responsible for the success or failure of an organization

Help an organization gather, analyze, and organize information

Vision and Mission Statements

A vision statement answers the question “What do we want to become?”

A mission statement answers the question “What is our business?”

Strategists are the individuals most responsible for the success or failure of an organization. They have various job titles, such as chief executive officer, president, owner, chair of the board, executive director, chancellor, dean, and entrepreneur.

Many organizations today develop a vision statement that answers the question “What do we want to become?” Developing a vision statement is often considered the first step in strategic planning, preceding even development of a mission statement. Mission statements are “enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm’s operations in product and market terms.”

Key Terms in Strategic Management (3 of 6)

External Opportunities and Threats

economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization

Internal Strengths and Internal Weaknesses

an organization’s controllable activities that are performed especially well or poorly

determined relative to competitors

External opportunities and threats are largely beyond the control of a single organization—thus the word external.

Internal strengths and weaknesses are an organization’s controllable activities that are performed especially well or poorly and are determined relative to competitors.

Some Opportunities and Threats

Availability of capital can no longer be taken for granted.

Consumers expect green operations and products.

Marketing is moving rapidly to the Internet.

Commodity food prices are increasing.

An oversupply of oil is driving oil and gas prices down.

Table 1-2 in the textbook lists several categories of external opportunities and threats.

Key Terms in Strategic Management (4 of 6)

Long-Term Objectives

specific results that an organization seeks to achieve in pursuing its basic mission

long-term means more than one year

should be challenging, measurable, consistent, reasonable, and clear

Objectives are essential for organizational success because they provide direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating, and controlling activities.

Key Terms in Strategic Management (5 of 6)

Strategies

the means by which long-term objectives will be achieved

may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures

Strategies are the means by which long-term objectives will be achieved. They may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures.

Strategies are potential actions that require top-management decisions and large amounts of the firm’s resources.

Key Terms in Strategic Management (6 of 6)

Annual objectives

short-term milestones that organizations must achieve to reach long-term objectives

should be measurable, quantitative, challenging, realistic, consistent, and prioritized

should be established at the corporate, divisional, and functional levels in a large organization

Policies

the means by which annual objectives will be achieved

Annual objectives are short-term milestones that organizations must achieve to reach long-term objectives. They should be measurable, quantitative, challenging, realistic, consistent, and prioritized. They should be established at the corporate, divisional, and functional levels in a large organization. A set of annual objectives is needed for each long-term objective. These objectives are especially important in strategy implementation, whereas long-term objectives are particularly important in strategy formulation.

Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives.

The Strategic-Management Model

Where are we now?

Where do we want to go?

How are we going to get there?

There are three important questions to answer in developing a strategic plan:

Where are we now?

Where do we want to go?

How are we going to get there?

Figure 1-1 Comprehensive Strategic-Management Model

Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 3 (June 1988): 40. See also Anik Ratnaningsih, Nadjadji Anwar, Patdono Suwignjo, and Putu Artama Wiguna, “Balance Scorecard of David’s Strategic Modeling at Industrial Business for National Construction Contractor of Indonesia,” Journal of Mathematics and Technology, no. 4 (October 2010): 20.

The framework illustrated in Figure 1-1 is a widely accepted, comprehensive model of the strategic-management process. This model does not guarantee success, but it does represent a clear and practical approach for formulating, implementing, and evaluating strategies.

Relationships among major components of the strategic-management process are shown in the model, which appears in all subsequent chapters with appropriate areas shaped to show the particular focus of each chapter.

Benefits of Strategic Management

Strategic management allows an organization to be more proactive than reactive in shaping its own future;

It allows an organization to initiate and influence (rather than just respond to) activities-and thus to exert control over its own destiny.

Historically, the principal benefit of strategic management has been to help organizations formulate better strategies through the use of a more systematic, logical, and rational approach for decision making.

Figure 1-2 Benefits to a Firm That Does Strategic Planning

Figure 1-2 illustrates the intrinsic benefit of a firm engaging in strategic planning. Communication is a key to successful strategic management. Communication may be the most important word in management.

Financial Benefits

Businesses using strategic-management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities

High-performing firms tend to do systematic planning to prepare for future fluctuations in their external and internal environments

Businesses using strategic-management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities.

High-performing firms tend to do systematic planning to prepare for future fluctuations in their external and internal environments. High-performing firms seem to make more informed decisions with good anticipation of both short- and long-term consequences.

Nonfinancial Benefits

Enhanced awareness of external threats

Improved understanding of competitors’ strategies

Increased employee productivity

Reduced resistance to change

Clearer understanding of performance-reward relationships

Besides helping firms avoid financial demise, strategic management offers other tangible benefits, such as enhanced awareness of external threats, improved understanding of competitors’ strategies, increased employee productivity, reduced resistance to change, and a clearer understanding of performance–reward relationships. Strategic management enhances the problem-prevention capabilities of organizations because it promotes interaction among managers.

Why Some Firms Do No Strategic Planning (1 of 2)

No formal training in strategic management

No understanding of or appreciation for the benefits of planning

No monetary rewards for doing planning

No punishment for not planning

Too busy “firefighting” (resolving internal crises) to plan ahead

View planning as a waste of time, since no product/service is made

Ten reasons (excuses) often given for poor or no strategic planning in a firm are as follows:

1. No formal training in strategic management

2. No understanding of or appreciation for the benefits of planning

3. No monetary rewards for doing planning

4. No punishment for not planning

5. Too busy “firefighting” (resolving internal crises) to plan ahead

6. View planning as a waste of time, since no product/service is made

Why Some Firms Do No Strategic Planning (2 of 2)

Laziness; effective planning takes time and effort; time is money

Content with current success; failure to realize that success today is no guarantee for success tomorrow; even Apple Inc. is an example

Overconfident

Prior bad experience with strategic planning done sometime/somewhere

Additional reasons include:

7. Laziness; effective planning takes time and effort; time is money

8. Content with current success; failure to realize that success today is no guarantee for success tomorrow; even Apple Inc. is an example

9. Overconfident

10. Prior bad experience with strategic planning done sometime/somewhere

Pitfalls in Strategic Planning (1 of 2)

Using strategic planning to gain control over decisions and resources

Doing strategic planning only to satisfy accreditation or regulatory requirements

Too hastily moving from mission development to strategy formulation

Failing to communicate the plan to employees, who continue working in the dark

Top managers making many intuitive decisions that conflict with the formal plan

Top managers not actively supporting the strategic-planning process

Failing to use plans as a standard for measuring performance

Being aware of potential pitfalls and being prepared to address them is essential to success.

Here are some pitfalls to watch for and avoid in strategic planning:

• Using strategic planning to gain control over decisions and resources

• Doing strategic planning only to satisfy accreditation or regulatory requirements

• Too hastily moving from mission development to strategy formulation

• Failing to communicate the plan to employees, who continue working in the dark

• Top managers making many intuitive decisions that conflict with the formal plan

• Top managers not actively supporting the strategic-planning process

• Failing to use plans as a standard for measuring performance

Pitfalls in Strategic Planning (2 of 2)

Delegating planning to a “planner” rather than involving all managers

Failing to involve key employees in all phases of planning

Failing to create a collaborative climate supportive of change

Viewing planning as unnecessary or unimportant

Becoming so engrossed in current problems that insufficient or no planning is done

Being so formal in planning that flexibility and creativity are stifled

Additional pitfalls include:

• Delegating planning to a “planner” rather than involving all managers

• Failing to involve key employees in all phases of planning

• Failing to create a collaborative climate supportive of change

• Viewing planning as unnecessary or unimportant

• Becoming so engrossed in current problems that insufficient or no planning is done

• Being so formal in planning that flexibility and creativity are stifled

Figure 1-3 How to Gain and Sustain Competitive Advantage

Figure 1-3 reveals that to gain and sustain competitive advantages, a firm must create and nurture a clear vision and mission, and then systematically formulate, implement, and evaluate strategies.

Comparing Business and Military Strategy

A fundamental difference between military and business strategy is that business strategy is formulated, implemented, and evaluated with an assumption of competition, whereas military strategy is based on an assumption of conflict

Both business and military organizations must adapt to change and constantly improve to be successful

A strong military heritage underlies the study of strategic management. Terms such as objectives, mission, strengths, and weaknesses were first formulated to address problems on the battlefield. A fundamental difference between military and business strategy is that business strategy is formulated, implemented, and evaluated with an assumption of competition, whereas military strategy is based on an assumption of conflict.

Both business and military organizations must adapt to change and constantly improve to be successful.

Excerpts from Sun Tzu’s The Art of War Writings

War is a matter of vital importance to the state: a matter of life or death, the road either to survival or ruin. Hence, it is imperative that it be studied thoroughly

Know your enemy and know yourself, and in a hundred battles you will never be defeated

Skillful leaders do not let a strategy inhibit creative counter-movement

Sun Tzu’s The Art of War has been applied to many fields well outside of the military. Much of the text is about how to fight wars without actually having to do battle: It gives tips on how to outsmart one’s opponent so that physical battle is not necessary. Table 1-4 provides several excerpts.

Strategic Management Concepts: A Competitive Advantage Approach

Sixteenth Edition

Chapter 2

The Business Vision and Mission

If this PowerPoint presentation contains mathematical equations, you may need to check that your computer has the following installed:

1) MathType Plugin

2) Math Player (free versions available)

3) NVDA Reader (free versions available)

Learning Objectives (1 of 2)

2.1 Describe the nature and role of vision statements in strategic management.

2.2 Describe the nature and role of mission statements in strategic management.

2.3 Discuss the process of developing a vision and mission statement.

2.4 Discuss how clear vision and mission statements can benefit other strategic-management activities.

2.5 Describe the characteristics of a good mission statement.

2.6 Identify the components of mission statements.

After studying this chapter, you should be able to do the following:

1. Describe the nature and role of vision statements in strategic management.

2. Describe the nature and role of mission statements in strategic management.

3. Discuss the process of developing a vision and mission statement.

4. Discuss how clear vision and mission statements can benefit other strategic-management activities.

5. Describe the characteristics of a good mission statement.

6. Identify the components of mission statements.

7. Evaluate mission statements of different organizations and write effective vision and mission statements.

Learning Objectives (2 of 2)

2.7 Evaluate mission statements of different organizations and write effective vision and mission statements.

After studying this chapter, you should be able to do the following:

1. Describe the nature and role of vision statements in strategic management.

2. Describe the nature and role of mission statements in strategic management.

3. Discuss the process of developing a vision and mission statement.

4. Discuss how clear vision and mission statements can benefit other strategic-management activities.

5. Describe the characteristics of a good mission statement.

6. Identify the components of mission statements.

7. Evaluate mission statements of different organizations and write effective vision and mission statements.

Vision Statement

A vision statement should answer the basic question:

“What do we want to become?”

It is especially important for managers and executives in any organization to agree on the basic vision that the firm strives to achieve in the long term.

What Do We Want to Become?

The vision statement should be short, preferably one sentence, and as many managers as possible should have input into developing the statement.

The vision statement should reveal the type of business the firm engages.

Many organizations have both a vision and mission statement, but the vision statement should be established first and foremost.

Vision Statement Examples

General Motors’ vision is to be the world leader in transportation products and related services. (Author comment: Good statement)

PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate-environment, social, economic creating a better tomorrow than today. (Author comment: Statement is too vague; it should reveal how the firm’s food and beverage business benefits people)

Table 2-1 provides examples of vision statements with comments from the textbook author.

Mission Statement (1 of 2)

A declaration of an organization’s “reason for being.”

It answers the pivotal question “What is our business?”

It is essential for effectively establishing objectives and formulating strategies.

An enduring statement of purpose that distinguishes one organization from other similar enterprises, the mission statement is a declaration of an organization’s “reason for being.”

Mission Statement (2 of 2)

It reveals what an organization wants to be and whom it wants to serve

It is also called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, and a statement of business principles

All organizations have a reason for being, even if strategists have not consciously transformed this reason into writing.

Figure 2-1 A Comprehensive Strateg

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The Nature of Strategic ManagementChapter Business Vision and Mission Overview: This weeks reading introduces the topic of strategic management and building business vision and miss

Week 1 – Overview & Learning Objectives

Discussion Forum Week 1

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