Strategic Management: A Comprehensive Approach

Posted on Jan 14, 2025 in Business Administration and Innovation Management

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Strategy

Strategy is the direction of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.

Strategic Decisions

Characteristics: Long term, scope, advantage, business environment, capability, values, and expectations. They are complex, involve uncertainty, affect operational decisions, require an integrated approach, and involve change.

Vision, Values, and Mission

  • A vision is the desired future state of the organization.
  • Values are the fundamental beliefs upon which your business and its behavior are based.
  • A mission is a general expression of the overall purpose of the organization, which, ideally, is in line with the values and expectations of major stakeholders.

Strategic Levels

  • Corporate-level strategy is concerned with the overall scope of an organization and how value will be added to the different parts (business units) of the organization.
    • “Where do we want to be?”
    • “What do we need to get there?”
  • Business-level strategy is about how to compete successfully in particular markets.
    • “How do we get there?”
  • Operational strategies are concerned with how the component parts of an organization deliver effectively the corporate- and business-level strategies in terms of resources, processes, and people.
    • “What do we do to get there?”

Strategic Management Process

The strategic management process includes:

  1. Analysis of the external environment and the organization/strategic position.
  2. Establishment of a strategic direction and formulation of a strategy/strategic choice.
  3. Implementation of the strategy and development of a system of controls/strategy in action.

Strategic Position

The strategic position of an organization is influenced by:

  • The external environment.
  • Internal strategic capability and the expectations.
  • The influence of stakeholders.

Strategic Position Issues:

  • The environment.
  • The strategic capability of the organization – made up of resources and competences.
  • The major influences of stakeholder expectations on an organization’s purposes.
  • Cultural and historical influences.

Strategic Choices

Strategic choices include the underlying bases of strategy at both the corporate and business levels, and the directions and methods of development.

Typical Options and Methods:

  • To compete at the business level.
  • To compete at the corporate level: Diversification.
  • International strategy.
  • Choices about the methods by which they realize the strategies.

Key Issues for Strategy in Action

  • Strategy evaluation and selection.
  • Implementation.
  • Organizational structuring and processes.
  • Control.
  • Managing strategic change.

Service Products

  • Goods are tangible – things you can own.
  • Services are intangible – things done on your behalf or for your benefit. You do not own service products, but instead you have use of them.

Service Product Characteristics

  • Intangibility – perception of comfort.
  • Inseparability – time and place of the event.
  • Perishability – capacity, occupancy rate.
  • Heterogeneity – never identical.
  • Ownership – flight with an airplane.

Service Characteristics

  • High cost for the consumer.
  • Seasonality.
  • Ease of entry/exit.
  • Interdependence – hotel and transfer, flight and destination.
  • Impact on society – building beach hotels.
  • The effect of external shocks.