Define, Evaluate, Analyze Strategy

Strategies Defined
 Thebroad program for defining and achieving

an organization’s objectives; the organization’s
response to its environment over time.
Strategic Management Defined
 The art and science of formulating, implementing, and evaluating cross-functional

decisions that enable an organization to achieve its objectives.
 Focuses on integrating management, marketing, finance/accounting,
production/operations, research and development, and computer information
systems to achieve organizational success.
 The purpose of strategic management is to exploit and create new and different
opportunities for tomorrow; long-term planning, in contrast tries to optimize for
tomorrow the trends of today.
Strategy As The Grand Plan
 The concept of strategy is ancient. The word comes from the Greek
strategeia- the art or science of being general. Effective Greek
generals needed to lead an army, win and hold territory, protect
cities from invasion, wipe out the enemy and so forth.
 Each kind of objective required a different deployment of resources.
Likewise, an army’s strategy could be defined as the pattern of
actual actions that it took in response to the enemy.
Planning
 The process of setting goals and choosing the means to achieve those goals.
 Without plans, managers cannot know how to organize people and resources
effectively.
 Without plans, they cannot lead with confidence or expect others to follow them.
 Without plans, managers and followers have little chance of achieving their goals,
or knowing when and where they stray from their paths.
Goals Are Important For At Least Four
Reasons
 Goals provide a sense of direction.

 Goals focus our efforts.
 Goals guide our plans and decisions.
 Goals help us evaluate our progress
The Hierarchy of Plans
Mission Statement
Strategic Plans
Operational Plans
Hierarchy Of Plans
 The mission statement is created by the founder, board of

directors, or top managers.
 Thestrategic plans are created by top and middle
managers.
 Theoperational plans are created by middle and first-line
managers
Differences Between Strategic And
Operational Plans
 Time horizons - Strategic plans tend to look ahead several years or
even decades. For operational plans, a year is often the relevant
time period.
 Scope - Strategic plans affect a wide range of organizational
activities whereas operational plans have a narrow and more limited
scope.
 Degree of detail - Often strategic goals are stated in terms that
look simplistic and generic. Operational plans, as derivatives of
strategic plans are stated in relatively finer detail.
Strategic Management Process
Goal Setting
Strategic
Planning
Strategy Formulation
Administration
Strategy
Implementation
Strategic Control
The Strategic Management Process
 Strategic management provides a disciplined way i for managers to

make sense of the environment in which the organization operates,
and then to act:
 Strategic planning - the sense-making activity. This includes both
the goal setting and the strategy formulation processes.
 Strategy implementation – actions based on that kind of planning,
including administration and strategic control stages.
Three Levels of Strategy
Multibusiness
Corporation
Strategic Strategic Strategic

Business Unit Business Unit Business Unit
Research & Production / Finance

Marketing
Development Operations
Three Levels of Strategy
 Corporate-level strategy – Formulated by top management to oversee the interests

and operations of organizations made up of more than one line of business: What
kind of businesses should the company engage in?
 Business-unit strategy – concerned with managing the interests and operations of
a particular line of business: How will the business compete within its market?
 Functional-level strategy – formulated by a specific functional area in an effort to
carry out a business unit strategy:
Hierarchy of Strategic and Operational Plans of a
Multi-Business Organization
Corporate Strategy
Business-Unit Strategies
Functional-Level Strategies
Operating Plans
ESG As Part of Corporate Strategy
 Environment
 Social
 Governance
Vision and Mission Statements
 Vision – Answers the question “ What do we want to become?” The first step in
strategic planning. Example from an eye clinic “ Our vision is to take care of
your vision” The vision of Institute of Management Accountants “ Global
leadership in education, certification, and practice of management accounting and
financial management”
 Mission statements are “enduring statements of purpose that distinguish one
business from other similar firms. Mission statements identify the scope of firms
operations in product and market terms. Address the basic question that faces all
strategists “ What is our business?”
Mission Statements
 A clear mission statement describes the values and

priorities of an organization.

Define, Evaluate, Analyze Strategy

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Strategies Defined

 Thebroad program for defining and achieving

 The art and science of formulating, implementing, and evaluating cross-functional

 Goals provide a sense of direction.

 The mission statement is created by the founder, board of

 Strategic management provides a disciplined way i for managers to

Strategic Strategic Strategic

Research & Production / Finance

 Corporate-level strategy – Formulated by top management to oversee the interests

 A clear mission statement describes the values and

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