Chapter 1

The Nature of Strategic Management

Ch 1 - 1
Definition of Strategic Management

Art & science of formulating,

implementing, and evaluating,
cross-functional decisions that
enable an organization to achieve
its objectives

Ch 1 - 2
Strategy Formulation

Vision & Mission

External Opportunities & Threats

Internal Strengths & Weaknesses

Long-Term Objectives

Alternative Strategies

Strategy Selection

Ch 1 - 3
Strategy Implementation

Annual Objectives

Policies

Employee Motivation

Resource Allocation

Ch 1 - 4
Strategy Evaluation

Internal Review

External Review

Performance Metrics

Corrective Actions

Ch 1 - 5
 Comprehensive Strategic Management Model
External
Audit

Chapter 3

Long-Term Generate, Implement Implement Measure &

Vision
Objectives Evaluate, Strategies: Strategies: Evaluate
&
Select Mgmt Issues Marketing, Performance
Mission
Strategies Fin/Acct,
R&D, CIS
Chapter 2 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9

Internal
Audit

Chapter 4

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Aim of strategic management: Achieving
Sustained Competitive Advantage

1. Adapting to change in external trends,

internal capabilities and resources

2. Effectively formulating, implementing &

evaluating strategies

Ch 1 - 7
Adapting to Change – Key Strategic
Management Questions

• What kind of business should we

become?
• Are we in the right fields?
• Are there new competitors
• What strategies should we
pursue?
• How are our customers changing?

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The answers to those key questions
are usually stated in:

Vision Statement –
What do we want to become?

Mission Statement –
What is our business?

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To realize its vision & mission firms must
know:
Opportunities & Threats (External)

Analysis of Trends:
• Economic
• Social
• Cultural
• Demographic/Environmental
• Political, Legal, Governmental
• Technological
• Competitors

Ch 1 - 10
Strengths & Weaknesses (Internal)

Typically located in functional areas of the firm

• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research & Development
• Computer Information Systems

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Key Terms

Strategies

Means by which long-term objectives are

achieved

Ch 1 - 12
Benefits of Strategic
Management

Financial Benefits

• Improvement in sales
• Improvement in profitability
• Productivity improvement

Ch 1 - 13
Benefits of Strategic
Management

Non-Financial Benefits

• Improved understanding of competitors strategies

• Enhanced awareness of threats
• Reduced resistance to change
• Enhanced problem-prevention capabilities

Ch 1 - 14