Scenario One

Strategic management is defined as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives. It comprises nine critical tasks:

1. Formulate the company’s mission, including broad statements about its purpose, philosophy, and goals.

2. Conduct an analysis that reflects the company’s internal conditions and capabilities.

3. Assess the company’s external environment, including both the competitive and the general contextual factors.

4. Analyze the company’s options by matching its resources with the external environment.

5. Identify the most desirable options by evaluating each option in light of the company’s mission.

6. Select a set of long-term objectives and grand strategies that will achieve the most desirable options.

7. Develop annual objectives and short-term strategies that are compatible with the selected set of long-term objectives and grand strategies.

8. Implement the strategic choices by means of budgeted resource allocations in which the matching of tasks, people, structures, technologies, and reward systems is emphasized.

9. Evaluate the success of the strategic process as an input for future decision making.

As these nine tasks indicate, strategic management involves the planning, directing, organizing, and controlling of a company’s strategy-related decisions and actions. By strategy, managers mean their large-scale, future-oriented plans for interacting with the competitive environment to achieve company objectives. A strategy is a company’s game plan. Although that plan does not precisely detail all future deployments (of people, finances, and material), it does provide a framework for managerial decisions. A strategy reflects a company’s awareness of how, when, and where it should compete; against whom it should compete; and for what purposes it should compete.