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Figure 2.1: The Five Stages of Strategic Management
Craft aStrategy
to AchieveObjectives and Vision
SettingObjectives
Develop aStrategic
Vision(and
Mission)
Implementand
ExecuteStrategy
Revise as Needed
Stage1 Stage 2 Stage 3 Stage 4 Stage 5
Monitor,Evaluate,and Take
CorrectiveActions
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Stage 1: Strategic Vision
Purpose
Strategic Vision vs. Mission Statement
Importance
Communicating the Vision
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Stage 2: Setting Objectives
Purpose
Objectives vs. Goals
Strategic vs. Financial
Short-term and Long-term
Balanced Scorecard
Strategic Intent
Importance
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Stage 3: Crafting a Strategy
Purpose
What is Strategy?
5 Definitions of Strategy
Importance
What to Look for?
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Figure 1.1: Identifying a Company’s Strategy -- What to Look For
Patternof Actions
That DefineStrategy
Actions to build resources & capabilities
Actions to strengthen bargaining position
Actions to differentiateproducts
Actions to lower costs
Actions to alter geographic coverage
Actions to form strategic alliances and collaborative
partnerships
Actions and approaches used in
functional areas
Actions to pursue new opportunities or defend against threats
Actions to merge or acquire rival companies
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Corporate Strategy
Business Strategies
Functional-Area Strategies
Operating Strategies
Two-Way Influence
Two-Way Influence
Two-Way Influence
Corporate-Level Managers
Business-Level Managers
OperatingManagers
Functional Managers
Figure 2.2: A Company’s Strategy-Making Hierarchy
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Uniting the Strategy Making Effort
Corporate-LevelManagers
Business-LevelManagers
Functional Managers
Plant Managers,Lower-LevelSupervisors
CorporateLevel
Objectives
Corporate-wideStrategic
Vision
CorporateLevel
Strategy
BusinessLevel
Objectives
BusinessLevel Strategic
Vision
BusinessLevel
Strategies
FunctionalObjectives
Functional Missions
FunctionalStrategies
OperatingObjectives
OperatingMissions
OperatingStrategies
Two-Way Influence Two-Way Influence Two-Way Influence
Two-Way Influence Two-Way Influence Two-Way Influence
Two-Way Influence Two-Way Influence Two-Way Influence
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What is a Strategic Plan?
Where firm is headed -- Strategic vision and business mission
Action approaches to achieve targeted results -- A comprehensive strategy
Short and long term performance targets -- Strategic and financial objectives
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3 Tests of a Winning Strategy
Goodness of Fit TestHow well is strategy matched to a firm’s internal and external situation?
Competitive Advantage TestDoes the strategy lead to a sustainable competitive advantage?
Performance TestDoes strategy boost firm performance?
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Stage 4: Strategy Implementation
Creating FITS Internal Fits
People, competences, structure, policies/SOPs, best practices, support systems, rewards system, culture, budgets, and leadership.
ExternalIndustry and macroenvironment.
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Building aCapableOrganization
Allocating Resources
Establishing Strategy-Supportive Policies
Instituting BestPractices forContinuousImprovement
Installing SupportSystemsTying Rewards
to Achievementof Key Strategic Targets
Exercising StrategicLeadership
Shaping CorporateCulture to Fit Strategy
Strategy
Implementer’s
Action Agenda
Figure 10.1: The Eight Componentsof Strategy Execution
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Figure 2.1: The Five Stages of Strategic Management
Craft aStrategy
to AchieveObjectives and Vision
SettingObjectives
Develop aStrategic
Vision(and
Mission)
Implementand
ExecuteStrategy
Revise as Needed
Stage1 Stage 2 Stage 3 Stage 4 Stage 5
Monitor,Evaluate,and Take
CorrectiveActions
13
Other Strategy Issues
Business Model versus StrategyRole of the Board of DirectorsLinking Strategy with Ethics and
Corporate ResponsibilityWho Performs the 5 Tasks?
