What Is Strategic Decision Making? One of the essential parts of creating and running a small business is creating a mission or vision for the business and a set of goals the company aims to achieve. Strategic decision making, or strategic planning, describes the process of creating a company’s mission and objectives and deciding upon the courses of action a company should pursue to achieve those goals. 2. what is meant by stratagic intent ? To develop an effective strategy – you need to have strategic intent.
Invariably – companies look at competition traditionally – i. e. focus on existing position & resources, rather than at the resourcefulness of competition and their pace at which they are building competencies. Accessing the current tactical advantages of known competitors will not help to understand the resolution, stamina and inventiveness of potential competitors. Strategic intent envisions a desired leadership position and establishes the criterion the organization will chart its progress – it is simply something more than just unfettered ambition.
It captures the essence of winning and is stable over time. It sets a target that requires personal effort and commitment and also a bit of luck – it is not a soft target. The important question that companies ask is not “How will next year be different? ” – but they ask, “What must we do differently next year to get closer to our Strategic Intent? ” Most companies look at change and innovation in isolation – i. e. try and keep a few people isolated and let them free – but real innovation comes from everywhere – top management role is to add value.
The Essay on Company Profile of Executone Information Systems
Executone Information Systems, based in Milord, Connecticut, which designed and marketed telecommunications products for small-and medium-sized businesses, has become a major telecommunication company competing with AT&T and Northern Telecom since 1988. Because of economic recession in 1993, many companies had to change their product strategy to overcome this unbreakable situation. Not only ...
Strategic intent is clear about the ends, but flexible about the means – it leaves room for improvisation and creativity and the top management gives the direction. The difference is resource as a constraint versus resources as leverage. In both, it is implicit that there must be balance in the scope so as to reduce risk. In the first you do it through building a balanced portfolio of cash generating and cash consuming business, in the other you ensure a well balanced and sufficiently broad portfolio of advantages. Strategic intent implies a sizeable stretch for an organization.
Current capabilities and resources will not suffice. This will force inventiveness to make the most of existing resources. It will create a sense of urgency and force a competitor focus at all levels through widespread use of competitive intelligence. The companies will invest and train employees with the skills they need to work effectively. The management will keep on invoking challenges, but also not overwhelm the employees with unreasonable pressures and demands. They give the organization time to digest one challenge before launching another challenge.
There are clear milestones, which are communicated without any ambiguity and also review mechanisms to monitor the milestones 3. SWOT Analysis A SWOT analysis is a common strategic planning tool that managers can use to examine internal and external factors that may influence the ability to achieve goals. A SWOT analysis involves creating a list of a businesses strengths and weaknesses and the external threats and opportunities it faces. Identifying strengths, weaknesses, opportunities and threats can help managers create strategies to exploit strengths or minimize weaknesses to take advantage of opportunity and avoid threats. . What is meant by Organisational Appraisal? The process of observe an organizational internal environment to identify the strengths and weaknesses that may influence the organization’s ability to achieve goals. A firm can exploit its opportunities successfully, depending on its corporate strengths. It can be said that the corporate capabilities of the firm become the focal point for its performance and survival. They play a crucial role, both in identifying the strategy and its success. Corporate capabilities go beyond sales, profit and net worth.
The Business plan on Organization Alignment And Performance
Alignment of organization strategy and goals is very much necessary in ensuring individuals see how their effort and performance contribute to the attainment of an organization goals. When alignment is achieved, goals are clearly seen from the top management level downwards to all hierarchical levels. Proper alignment motivates employees as they can clearly see their effort in achievement of the ...
It is concerned with the state of mind and outlook of the firm. Corporate strategy ultimately means a matching game between environmental opportunities and organizational strengths to gain competitive advantage. Assessment of organization’s strengths and weaknesses is also known as Corporate Appraisal. The internal environment of an organization includes forces that operate inside the organization with specific implications for managing organizational performance. Internal environmental factors, unlike external environmental factors come from within.
These factors, collectively defined both trouble sports that need strengthening and the core competencies that the firm can build. An organization can better analyze how much activity might and value or contribute significantly to shape an effective strategy by systematically examining its internal environment. 7. write a descriptive note on nature and importance of strategic evaluation ? Strategy Evaluation is as significant as strategy formulation because it throws light on the efficiency and effectiveness of the comprehensive plans in achieving the desired results.
The managers can also assess the appropriateness of the current strategy in todays dynamic world with socio-economic, political and technological innovations. Strategic Evaluation is the final phase of strategic management. The significance of strategy evaluation lies in its capacity to co-ordinate the task performed by managers, groups, departments etc, through control of performance. Strategic Evaluation is significant because of various factors such as – developing inputs for new strategic planning, the urge for feedback, appraisal and reward, development of the strategic management process, judging the validity of strategic choice etc.
The process of Strategy Evaluation consists of following steps- 1. Fixing benchmark of performance – While fixing the benchmark, strategists encounter questions such as – what benchmarks to set, how to set them and how to express them. In order to determine the benchmark performance to be set, it is essential to discover the special requirements for performing the main task. The performance indicator that best identify and express the special requirements might then be determined to be used for evaluation.
The Term Paper on Judging Industry Analysis and Competitive Strategies
Judgments about what strategy to pursue should ideally be grounded in a probing assessment of a company's external environment and internal situation. Unless a company's strategy is well-matched to the full range of external and internal situational considerations, its suitability is suspect. This section examines the techniques of industry and competitive analysis, the terms used to refer to ...
The organization can use both quantitative and qualitative criteria for comprehensive assessment of performance. Quantitative criteria includes determination of net profit, ROI, earning per share, cost of production, rate of employee turnover etc. Among the Qualitative factors are subjective evaluation of factors such as – skills and competencies, risk taking potential, flexibility etc. 2. Measurement of performance – The standard performance is a bench mark with which the actual performance is to be compared.
The reporting and communication system help in measuring the performance. If appropriate means are available for measuring the performance and if the standards are set in the right manner, strategy evaluation becomes easier. But various factors such as managers contribution are difficult to measure. Similarly divisional performance is sometimes difficult to measure as compared to individual performance. Thus, variable objectives must be created against which measurement of performance can be done. The measurement must be done at right time else evaluation will not meet its purpose.
For measuring the performance, financial statements like – balance sheet, profit and loss account must be prepared on an annual basis. 3. Analyzing Variance – While measuring the actual performance and comparing it with standard performance there may be variances which must be analyzed. The strategists must mention the degree of tolerance limits between which the variance between actual and standard performance may be accepted. The positive deviation indicates a better performance but it is quite unusual exceeding the target always.
The negative deviation is an issue of concern because it indicates a shortfall in performance. Thus in this case the strategists must discover the causes of deviation and must take corrective action to overcome it. 4. Taking Corrective Action – Once the deviation in performance is identified, it is essential to plan for a corrective action. If the performance is consistently less than the desired performance, the strategists must carry a detailed analysis of the factors responsible for such performance.
The Review on Impact of Competitive Advantage on Firm Growth
Impact of Competitive Advantage on Firms Growth Abstract Purpose: The purpose of this paper is to measure the Impact of Competitive Advantage on Firms Growth and firm’s performance. Methodology: Data were collected from 2 organizations using Questionnaires. The questionnaire consists of eighteen items that includes four items for demographic, four items for measuring training, five items for ...
If the strategists discover that the organizational potential does not match with the performance requirements, then the standards must be lowered. Another rare and drastic corrective action is reformulating the strategy which requires going back to the process of strategic management, reframing of plans according to new resource allocation trend and consequent means going to the beginning point of strategic management process. 8. explain the term competitive advantage and competitive scope ? competitive advantage:
An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm’s cost structure, product offerings, distribution network and customer support. Competitive advantages give a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage.
There are two main types of competitive advantages: comparative advantage and differential advantage. Comparative advantage, or cost advantage, is a firm’s ability to produce a good or service at a lower cost than its competitors, which gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales. A differential advantage is created when a firm’s products or services differ from its competitors and are seen as better than a competitor’s products by customers. ompetitive scope: The expression Competitive Scope is a concept developed by Michael E. Porter in his bestseller Competitive Advantage, forming one of the variables of his model of characterization and evaluation of the strategy followed by the company. According to Porter, there are two basic types of competitive advantage: the leadership in cost and differentiation, which, together with the competitive scope, define the different types of possible generic strategies. Competitive scope can be narrow or wide.
The Essay on Competition to Gain Competitive Advantage among Firms
In the current world market, there are many products and services available to fulfill the needs of individual and businesses. According to Barney, Wright and Ketchen (2001), to succeed in such a competitive market, a competitive advantage is required to provide any firm with necessary tools, useful in increasing sales and market share, improving profit margins for a given period of time in a new ...
In the case of being narrow, such means that the company is concentrated in one only market segment or niche. In the case of being wide, means that the company seeks to reach a wider market composed by several market segments. Competitive scope can have a powerful effect on competitive advantage, because it shapes the configuration and economics of the value chain. There are four dimensions of scope that affect the value chain: 1. Segment Scope is the product varieties produced and buyer types served.
For example, in the personal computer industry there are two primary types of users–home and business. Home users have a lower need for performance but a much greater need for training, service and user-friendliness. If the big dog on the block serves both, you might be able to gain an advantage by focusing on a single user type. By doing so, you might be able to satisfy the needs of the target customer better than the generalist. 2. Degree of Integration is the extent to which activities are performed in-house instead of by independent firms. For example, you may deliver your roducts using your own trucks and employees, or you may use a contract carrier such as UPS. Your choice may have a great impact to the cost and quality of your product or service. A firm might use one or the other as a strategic means to differentiate itself from a competitor. 3. Geographic Scope is the range of communities, regions, or countries in which a firm competes with a coordinated strategy. Geographic interrelationships can enhance competitive advantage if sharing or coordinating value activities lowers costs or enhances differentiation.
For example, a bookstore might differentiate itself by researching and stocking foreign titles, winning sales locally as well as across a larger geographic area. 4. Industry Scope is the range of related industries in which the firm competes with a coordinated strategy. Similar in concept to geographic interrelationships, synergies can be derived from integrating value activities across industries. For example, a landscape company may operate a retail nursery and an installation company, which increases total volume and increases inventory turnover and utilization of the storage and greenhouse assets.
The Essay on Footwear Industry Analysis
When you wake up and get dressed every morning, one of the first decisions you make is what shoes you will wear that day. Depending on the weather and the level of professionalism you are perceived to demonstrate, you make your decision. The footwear industry is a large and ever changing industry that caters to the needs of everyone. Although in some parts of the world people are lucky to have one ...
Another example might be Starbucks selling coffee but also selling music CDs, or Disney extending from animated movies to theme parks and retail stores. Having a broad scope can allow a firm to exploit the benefits of performing more activities internally. It may also allow the firm to exploit interrelationships between the value chains that serve different segments, geographic areas or related industries. But sharing and integration have costs that may outweigh the benefits.
Having a narrow scope can allow the tailoring of the chain to serve a particular target segment, geographic area or industry, to achieve lower cost or to serve the target in a unique way. A narrow scope in integration may also improve the competitive advantage by enabling a firm to purchase or perform better or cheaper. It is important to note that a firm can pursue the benefits of a broader scope independently, or enter into coalitions with independent firms to achieve some or all of the same benefits. Examples of coalitions include technology licenses, supply agreements, marketing agreements and joint ventures.
