The top management team must take into account the competing desires and needs of an organization's various stakeholders, because their support is essential for successful strategy implementation. Stakeholders include not only the organization's managers and employees, but also the firm's owners (stockholders), suppliers, customers, creditors, and community members. As domestic and foreign competition intensifies, and during those periods when government's influence on business operations expands, an understanding of strategic management becomes even more essential. Employees, supervisors, and middle managers must also be familiar with strategic management. An appreciation of their organization's strategy helps them relate their work assignments more closely to the direction of the organization, thereby enhancing their job performance and opportunity for promotion, and making their organization more effective.
[...] An appreciation of their organization's strategy helps them relate their work assignments more closely to the direction of the organization, thereby enhancing their job performance and opportunity for promotion and making their organization more effective. Strategic Management I WHAT'S STRATEGIC MANAGEMENT? Definition of Strategy : Since the word “strategy” or some variation of it is used throughout the presentation, its definition should be clear. A strategy is a comprehensive plan of action that sets critical direction for an organization and guides the allocation of its resources. It is an action focus that represents a “best guess” regarding what must be done to ensure long-run prosperity for the organization or one of its subsystems. [...]
[...] Intense supervision of labor. Products designed for ease in manufacture. Low cost distribution system. Combination of the above policies directed at a particular strategic target. Tight cost control. Frequent, detailed control reports. Structured organization and responsibilities. Incentives based on meeting strict quantitative targets. Combination of the above policies directed at the regular strategic target. Organizations pursuing a differentiation strategy seek competitive through uniqueness. [...]
[...] McDonald's has followed a defender strategy in the fast food business. Strategic Management The analyzer strategy seeks to maintain stability of a core business while selectively responding to opportunities for innovation and change. Most of IBM's business units follow an analyzer strategy. They try to minimize risk and maximize the opportunity for profit. This lies between the prospector and reactor strategies-it is a “follow-the-leader-when-things-look-good” approach. Analyzers live by imitation. They copy the successful ideas of prospectors. IBM essentially follows its smaller and more innovative competitors with superior products, but only after the competitors have demonstrated that the market is there. [...]
[...] These changes in the rules of the game forced managers to develop a systematic means of analyzing the environment, assessing their organization's strengths and weaknesses, and identifying opportunities where the organization could have a competitive advantage. The value of strategic planning began to be recognized. V REASONS OF STRATEGIC MANAGEMENT Strategic management is important to organizations for several reasons. For one thing, the process helps organizations identify and develop a competitive advantage, which is a significant edge over the competition in dealing with competitive forces. For example, Disney has been able to gain a competitive advantage in the family entertainment industry by creating amusement parks, movies, and products based on the renowned Disney characters. [...]
[...] So every classification of any information, into either an opportunity or a threat, must be done accordingly to the organization's resources and means. This takes us to the third step of the strategic management process. Analyzing the organization's resources: Strengths and Weaknesses This step forces management to recognize that every organization, no matter how large and powerful, is constrained in some way by the resources and skills it has available. That's why managers need to give considerable attention to how organizational factors affect the competitive situation. [...]
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