The strategic-management process consists of three stages: strategy formulation, strategy implementation, and strategy evaluation. Strategy formulation includes developing a vision and a mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue. Strategy-formulation issues include deciding what new businesses to enter, what businesses to abandon, whether to expand operations or diversify, whether to enter international markets, whether to merge or form a joint venture, and how to avoid a hostile takeover.
Because no organization has unlimited ...
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Now, let's delve into the core concepts outlined in the provided passage about the strategic-management process. The strategic-management process is a dynamic framework designed to guide organizations in achieving their goals and maintaining a competitive edge. It consists of three key stages:
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Strategy Formulation:
- Vision and Mission: This involves crafting a clear and inspiring vision for the future and a mission that defines the organization's purpose.
- External Analysis: Identifying external opportunities and threats is crucial. This entails assessing the external environment to understand market trends, competition, and potential opportunities or threats.
- Internal Analysis: Determining internal strengths and weaknesses is essential for leveraging advantages and addressing areas that need improvement within the organization.
- Long-term Objectives: Establishing measurable, achievable, and overarching goals that guide the organization's strategic direction.
- Alternative Strategies: Generating a range of possible strategies to achieve the long-term objectives.
- Strategy Selection: Choosing specific strategies to pursue, which involves evaluating and selecting the most suitable approaches.
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Strategy Implementation:
- New Business Ventures: Deciding on entering new businesses to expand the organization's portfolio.
- Business Abandonment: Making strategic decisions on exiting or abandoning certain businesses that may no longer align with the organization's goals.
- Expansion and Diversification: Addressing whether to expand current operations or diversify into new markets or industries.
- International Market Entry: Evaluating the feasibility and risks associated with entering international markets.
- Mergers and Joint Ventures: Deciding on potential mergers or forming joint ventures to enhance capabilities and market presence.
- Avoiding Hostile Takeovers: Developing strategies to protect the organization from hostile takeovers.
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Strategy Evaluation:
- Assessing the effectiveness of implemented strategies in achieving the established objectives.
- Monitoring changes in the external environment and making adjustments as needed.
- Gathering feedback and data to measure performance against set benchmarks.
- Adapting strategies based on the evolving internal and external landscape.
Understanding and successfully navigating these stages are critical for organizations aiming to develop and execute effective strategic plans in today's competitive business environment.
