chapter 1 – Introducing the concepts Strategic Management. I’m sure you’re all wondering what these words mean, and why are they important to us? Strategic decisions are common in today’s competitive environment for all types and sizes of organizations, so if you plan on getting a job after you graduate, you will be affected by strategic management in one way or another. I’m Katie Ficken, and these are my group members Ryan Lacy and Kelsey Combest, and today, we will be introducing you to Chapter 1 of our textbook. In this chapter, you will get a general idea of what strategic management is all about. Katie Ficken Ryan Lacy Kelsey Combest Taylor Stevenson STRATEGIC MANAGEMENT IN ACTION

Learning Outcomes Why strategic management is important What strategic management is Who’s involved with strategic management Three important factors impacting strategic management today Chapter 1 is divided into 4 main sections to explain Why strategic management is important, What strategic management is, Who is involved with it, and Three important factors that affect strategic management in today’s business environment.

Why Strategic Management is Important Everyone in an organization plays a role in managing strategically. Strategic management can make a difference in how well an organization performs; helps deal with continually changing situations; and helps in coordinating various divisions, functions, and work activities. It is important to understand that EVERYONE in an organization plays a role in managing strategically. The fact that you will someday be working in some organization means you’ll need to know about strategic management. Understanding how and why strategic decisions are made is important so you can do your job well and have your work valued and rewarded accordingly. An understanding of strategic management is not only important for you as an individual, but it can also have an affect on organizational performance. Studies have shown that organizations that use strategic management tend to have higher levels of performance, usually measured as the “bottom line” or profits. Additionally, organizations of all types and sizes face continually changing situations both externally and internally. Being able to manage these uncertainties and achieve high performance levels is a challenge, but the structure of strategic management can guide organizational leaders to examine the important issues and develop the most appropriate actions. And finally, strategic management is also important because it can ensure that the actions of employees from any organizational area and from any level, are coordinated and focused on achieving the organization’s overall goals.

What Strategic Management Is The Basics of Strategy and Strategic Management Strategies: an organization’s goal-directed plans and actions that align its capabilities and resources with the opportunities and threats in its environment. Strategic management: a process of analyzing the current situation, developing appropriate strategies, putting those strategies into action, and evaluating and changing those strategies as needed. Strategic management is interdisciplinary, has an external and internal focus, and involves future direction. Our textbook defines strategy as an organization’s goal-directed plan and action that match its capabilities and resources with the opportunities and threats in its environment. The chosen strategy, or strategies, should not only be formulated to encompass the organization’s goals but should also involve actions that implement the strategy to help the organization reach them. The organization’s strategies should take into account it’s key internal strengths and external opportunities and threats. Strategic management is defined as the process of analyzing the organization’s current situation, developing appropriate strategies, putting those strategies into action, and evaluating and modifying those strategies as needed. These activities become the basis for the strategic management process, discussed later. Our chosen company, Apple, Inc. is an extremely successful business that currently operates in a highly competitive and technologically driven consumer electronic and computer industry. The company’s goal is to bring the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and internet offerings. To reach this goal, Apple has created a strategy to achieve product differentiation. Apple has established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. Strategic management has four characteristics. First, it is interdisciplinary. It doesn’t focus on any one specific area within an organization – such as marketing or finance - but instead involves all the functional areas. Second, strategic management has an external focus. It involves the interactions of the organization with its external environment, including the economy, competitors, or market demographics that might impact strategic decisions and actions. Next, strategic management also has an internal focus, meaning it involves assessing the organization’s resources to see what they have or don’t have, and its capabilities, in other words, what it does or doesn’t do well. And finally, strategic management involves the future direction of the organization. Based on the information gathered through the strategic management process, decision makers will choose what future actions the business will take.

What Strategic Management Is The Strategic Management Process Situation Analysis Strategy Formulation Strategy Implementation Strategy Evaluation Now that you know that definition of strategic management, we will now focus on the process of managing strategically. In the strategic management process, the activities result in a set of strategies the organization uses in doing its business. The steps include situation analysis, strategy formulation, strategy implementation, and strategy evaluation. Although the process is described with sequential steps, it is important to point out that it is a continual cycle that may not always follow the stated order. Kelsey is now going to explain what is involved with each step of this process.

What Strategic Management Is The Strategic Management Process Situation Analysis – scanning and evaluating the current organizational context & external environment. Strategy Formulation – developing and then choosing the appropriate strategies. Functional strategies (operational strategies) Competitive strategies (business strategies) Corporate strategies

What Strategic Management Is The Strategic Management Process Strategy Implementation – putting the various strategies into action. Strategy Evaluation – evaluating both the outcomes of the strategies and how they’ve been implemented, and making modifications as needed.

Who’s Involved With Strategic Management Three main groups who play key roles in the strategic management process: The Board of Directors – an elected group that represents a company’s shareholders. Bill Campbell Steve Jobs Al Gore

Who’s Involved With Strategic Management Top Management Team – typically the chief executive officer (CEO) and other executive or senior managers such as a chief operating officer (COO), chief financial officer (CFO), chief information officer (CIO), and others. Steve Jobs, CEO Timothy Cook, COO Peter Oppenheimer, CFO Other Mangers & Organizational Employees – individuals that put the strategies into action and evaluate them.

Who’s Involved With Strategic Management Top management’s role involves strategic leadership: the ability to anticipate, envision, maintain flexibility, think strategically, and work with others in the organization to initiate change that will create a viable and valuable future for the organization. Effective Strategic Leadership Emphasizing Ethical Decisions and Practices Establishing Appropriately Balanced Controls Determining Organization’s Purpose or Vision Exploiting and Maintaining Core Competencies Developing Human Capital Creating and Sustaining Strong Organizational Culture

Important Factors Impacting Strategic Management Today The Global Economy & Globalization Corporate Governance E-business

iPhones 30% of total sales Apple, Inc. 2009 Sales iPods 19% of total sales iPhones 30% of total sales

Takeaways Why is strategic management important? It allows individuals to work more effectively and helps improve organizational performance. What is strategic management? The process of analyzing the current situation, developing appropriate strategies, putting those strategies into action, and evaluating and changing those strategies as needed. Who is involved with strategic management? Everyone!

References “Apple, Inc.” Hoover's Company Records.  1 September 2010 Hoover's Company Records, ProQuest. Web.  4 Sep. 2010 www.apple.com "A Strategic Analysis of Apple Corporation". http://www.scribd.com/doc/11983566/A- Strategic-Analysis-of-Apple-Corporation .