Strategic management involves top management setting long-term goals for the company and developing strategic plans to achieve these goals. It includes three key phases - formulation, implementation, and evaluation. In the formulation phase, strategies are developed by analyzing the company's strengths, weaknesses, opportunities, and threats. The implementation phase involves executing the strategies. In the evaluation phase, the strategies and plans are continuously monitored and updated based on performance and changes in the internal and external environment.

1. Strategic Management
Process
10.2

2. What is Strategic Management?
• Application of the basic planning process at the
highest levels of the company
• Top management sets goals for the
performance of the company
– Carefully formulating, implementing, and evaluating
plans and strategies

3. What is Strategic Management?
• Most important part is developing strategic
plans
– Plans must remain current as changes occur inside
and outside the company
• Involves many levels of management
– Top level formally develops basic plans
– Different departments may be asked to develop plans
for their own areas
– A solid plan guarantees that plans are coordinated
and are supported by everyone in the company

4. Strategic Management Approach
• Three phases critical to the success of the
process
– Formulation
• Developing the strategic plan
– Implementation
• Putting the formulated plan to work
– Evaluation
• Continuously evaluating and updating the strategic
plan

5. Formulating Strategy
Developing the grand- and business-level
strategies to be used by the company
• Company’s strengths/weaknesses and
threats/opportunities shape the strategies
• First step is to understand the current position of
the company
– Identify mission, identify past and present strategies,
diagnose the company’s past and present
performance, set objectives for the company’s
operation

6. Formulating Strategy
• Identify the mission statement
– Outlines why the company exists
– Describes the company’s basic products
and/or services and defines markets and
sources of revenue
– Designed to accomplish several goals and
ensures a common purpose within the
company

7. Apple’s Mission Statement
• Apple ignited the personal computer revolution
in the 1970s with the Apple II and reinvented the
personal computer in the 1980s with the
Macintosh. Today, Apple continues to lead the
industry in innovation with its award-winning
computers, OS X operating system and iLife and
professional applications. Apple is also
spearheading the digital media revolution with its
iPod portable music and video players and
iTunes online store, and has entered the mobile
phone market this year with its revolutionary
iPhone.

8. Who’s Mission Statements?
1. "To bring inspiration and innovation to every
athlete in the world."
2. "To enable people and businesses throughout
the world to realize their full potential."
3. “. . .seeks to be the world’s most customer-
centric company, where customers can find
and discover anything they may want to buy
online at a great price."

9. Identifying Past and Present
Strategies
• Companies need to understand and
appreciate their corporate history
• Strategic managers should ask
– Has past strategy been developed?
• If not, can past history of the company be analyzed
to identify the strategy that has evolved?
• If yes, has the strategy been recorded in writing?

10. Diagnosing Past and Present
Performance
• A corporate planner must decide if past
strategies worked and if strategic changes
are needed by asking:
– How is the company currently performing?
– How has it performed during the past few
years?
– Is the performance trend moving up or down?

11. Setting Goals
• Concise statements that provide direction
employees and set standards for
achieving the company’s strategic plan
• Established in many areas (see handout)
• Goals must be reevaluated as the
environment and opportunities change
• Multiple goals are used to reflect the
desired performance

12. Policies, Procedures, and Rules
• Policies are broad general guides to action
that establish boundaries within which
employees must operate
– “answering all written customer complaints in
writing within 10 days”

13. Policies, Procedures, and Rules
• Procedures are detailed series of related
steps/tasks written to implement a policy
– Define methods through which policies are achieved
– “the customer service representative must note the
complaint of Form 622 and forward the yellow copy of
the form…”
• Rules detail specific and definite corporate
actions that employees must follow
– Leave little doubt about what is to be done
– “no smoking in the conference room”

14. SWOT Analysis
• Strengths, Weaknesses, Opportunities,
Threats
• Process that allows companies to evaluate
overall health
– Internal (SW) and external (OT)
• Most important result of a SWOT analysis
is the ability to draw conclusions about the
attractiveness of the company’s situation
and the need for strategic action

15. Implementing Strategy
• Action stage of strategic management
• Managers determine and implement the
most appropriate company structure,
motivate employees, develop short-range
goals, and establish functional strategies
• Strategy must fit with current company
policies
– Or conflicting policies must be changed
• A. T. Cross Company

16. Evaluating and Controlling the
Strategic Plan
• Process of continuously monitoring the
company’s progress toward its long-range goals
and mission
• Managers should ask:
– Does the grand strategy need revising?
– Where are problems likely to occur?
• Basic strategy evaluation strategies:
– Review external and internal factors that are the
bases for current strategies
– Measure performance
– Take corrective action

17. Evaluating and Controlling the
Strategic Plan
• Emphasis is making the company’s
managers aware of the problems that are
likely to occur and of the actions to take if
they do arise
• Plan ahead and avoid disaster
• Strategic planning and evaluation should
be done on a predetermined schedule and
as frequently as necessary, determined by
internal and environmental factors