Strategic management
strategic formulation 1. mission: Is the purpose for the organizational existence. 2. objectives: Are the end results of planned activity. 3. strategy: A master plan that states how the organization will achieve its mission and objectives. 4. A policy: Is a broad guidelines for decision making that link the information of strategy with its implementation.
Types of strategies: 1. (SO) strategies: Are generated by thinking of ways in which a company uses its (S) to take advantage of (O). Rapid growth strategies: where company expanding by growth of sales, assets, projects are some combination. Penetration strategies: where company penetrates the market when a product is in demand, or the current market has not reached saturation. Note: synergy: is the concept that the business will generate more profit together than could separately.
2. (ST) strategies: Are generated by thinking of ways which a company uses its (S) to avoid threats Background integration strategies: where company try to control supplying sources by buying or owning. Forward integration strategies: where company try to control distribution outlets by buying or owning also. Horizontal integration strategies: where company try to control rival companies by buying or owning. Note: Acquisition: usually occurs between firms of different sizes. Merger: usually occurs between firms of similar sizes.
3. (WO) strategies: Are generated by thinking of ways to generate strategies that take advantages of (O) by overcoming (W). Concentrates diversification: where a firm invests in related industry. Conglomerate diversification: where a firm invests in industry unrelated to its current one. No change strategy ( is a decision to do nothing for now, a company following this strategy when it has found that the future is expected to continue as an extension of the present)– Stability strategies (is a decision to continuing its current activities without significant change in direction, they are very popular with small business)
4. (WT) strategies: Are generated by thinking of ways to generate strategies that minimize (W) and avoid (T) Withdrawals strategies: Turn around strategy: where the company excludes unnecessary and ineffective operations. Captive strategies: where the firm search for an angle or agree to be a captive company to one of its larger consumers in order to guarantee its continued existence with a large contract. Liquidation: where the firms’ products are sold out, and exit the market permanently.
Strategy implementation Is the process by which strategies and policies are put into action. (1) programs: is a statement of steps needed to achieve a single use plan. (2) Budget: is a statement of a corporations’ program in term of LE used in planning and control. (3) Procedures: are systems of sequential steps that describe in detail how a particular task or job is to be done.