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Figure 2.1: The Five Stages of Strategic Management
Craft a Strategy to Achieve Objectives and Vision Setting Develop a Strategic Vision (and Mission) Implement and Execute Revise as Needed Stage1 Stage 2 Stage 3 Stage 4 Stage 5 Monitor, Evaluate, and Take Corrective Actions
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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
Actions to strengthen bargaining position Actions to differentiate products Actions to build resources & capabilities Actions to lower costs Pattern of Actions That Define Strategy Actions and approaches used in functional areas Actions to alter geographic coverage Actions to pursue new opportunities or defend against threats Actions to merge or acquire rival companies Actions to form strategic alliances and collaborative partnerships
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Figure 2.2: A Company’s Strategy-Making Hierarchy
Corporate-Level Managers Corporate Strategy Two-Way Influence Business-Level Managers Business Strategies Two-Way Influence Functional Managers Functional-Area Strategies Two-Way Influence Operating Managers Operating Strategies
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Uniting the Strategy Making Effort
Corporate-wide Strategic Vision Corporate Level Objectives Corporate Level Strategy Corporate-Level Managers Business-Level Functional Plant Managers, Lower-Level Supervisors Two-Way Influence Two-Way Influence Two-Way Influence Business Level Strategic Vision Business Level Objectives Business Level Strategies Two-Way Influence Two-Way Influence Two-Way Influence Functional Missions Functional Objectives Functional Strategies Two-Way Influence Two-Way Influence Two-Way Influence Operating Missions Operating Objectives Operating Strategies
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What is a Strategic Plan?
Where firm is headed -- Strategic vision and business mission Short and long term performance targets -- Strategic and financial objectives Action approaches to achieve targeted results -- A comprehensive strategy
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3 Tests of a Winning Strategy
Goodness of Fit Test How well is strategy matched to a firm’s internal and external situation? Competitive Advantage Test Does the strategy lead to a sustainable competitive advantage? Performance Test Does 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. External Industry and macroenvironment.
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Figure 10.1: The Eight Components of Strategy Execution
Building a Capable Organization Allocating Resources Establishing Strategy- Supportive Policies Instituting Best Practices for Continuous Improvement Installing Support Systems Tying Rewards to Achievement of Key Strategic Targets Exercising Strategic Leadership Shaping Corporate Culture to Fit Strategy Strategy Implementer’s Action Agenda
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Figure 2.1: The Five Stages of Strategic Management
Craft a Strategy to Achieve Objectives and Vision Setting Develop a Strategic Vision (and Mission) Implement and Execute Revise as Needed Stage1 Stage 2 Stage 3 Stage 4 Stage 5 Monitor, Evaluate, and Take Corrective Actions
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Business Model versus Strategy Role of the Board of Directors
Other Strategy Issues Business Model versus Strategy Role of the Board of Directors Linking Strategy with Ethics and Corporate Responsibility Who Performs the 5 Tasks?
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