Firms that anticipate economic change and identify the constituents through which that change will be applied; can better adapt goals and action plans. Shareholder expectations of financial return are dictated in part by alternative investments and their associated return and risks. Interest rates, tax policies, shareholder incomes, availability of funds for margin-purchased equity investments, and expectations of future economic circumstances will shape changes in equity investor profiles and/or the financial performance expectations of the firm’s owners. Personal income, savings, employment, and price-level trends can have dramatic effects on the attractiveness of a firm’s products or services in output markets–not only final markets, but intermediate markets as well. Similarly, total sectoral outputs, movements in private-sector capital replacement and expansion, government spending, and the allocation of the consumer dollar can have dramatic impacts between and within industrial sectors. Each can be set off macroeconomic changes well outside the control of the firm, Continue reading
Strategic Management
Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually initiate by the board of directors and executed by the firm’s Chief Executive Officer (CEO) and executive team.
Strategic Control Process – Meaning and Process
Strategic Control “ It is the process by which managers monitor the ongoing activities of an organization and its members to evaluate whether activities are being performed efficiently and effectively and to take corrective action to improve performance if they are not” -Sam Walton Managers exercise strategic control when they work with the part of the organisation they have influence over to ensure that it achieves the strategic aims that have been set for it. To do this effectively, the managers need some decision making freedom: either to decide what needs to be achieved or how best to go about achieving the strategic aims. Such decision making freedom is one of the characteristics that differentiate strategic control from other forms of control exercised by managers (e.g. Operational control – the management of operational processes). Strategic controls take into account the changing assumptions that determine a strategy, continually evaluate the strategy Continue reading
International Competitive Strategies
Firms which succeed in implementing competitive strategy can gain competitive advantage: this latter improves the firm’s competitive position, creates a barrier to entry, and enables a firm to change its competitive stance in response to market changes. Two constructs appear significant at this strategic level. First, distinctive competence; this refers to activities which a firm does better than its competitors, but which require superior skills and resources. The latter are basically tangible assets such as the technology, the distribution network or superior resources; access to supply can also enhance the position. Distinctive competence can create barriers to imitation and help sustain competitive advantage; and superior skills and resources improve the firm’s position when they can lower costs (through scale economies, the learning curve or capacity utilization) or create value to customers. Organization is another element of distinctive competence: a better organizational design and appropriate structure enables a firm to adapt Continue reading
Building a Successful Corporate Culture
Building a strategy-supportive corporate culture is important to successful strategy execution because it produces a work climate and organizational esprit de corps that thrive on meeting performance targets and being part of a winning effort. An organization’s culture emerges from why and how it does things the way it does, the values and beliefs that senior managers espouse, the ethical standards expected of organization members, the tone and philosophy underlying key policies, and the traditions the organization maintains. Culture thus concerns the atmosphere and feeling a company has and the style in which it gets things done. Very often, the elements of company culture originate with a founder or other early influential leaders who articulate the values, beliefs, and principles to which the company should adhere, and that then get incorporated into company policies, a creed of values statement, strategies, and operating practices. Over time, these values and practices become Continue reading
The Role of Organizational Culture on Strategic Management
The organizational culture is the basis of the Strategic Management, Strategic management is to determine its mission, according to the external environment and internal conditions to set the strategic objectives of the enterprise, in order to ensure the correct implementation of the goals and progress plan, and rely on internal capabilities implemented this kind of planning and decision-making, constraints in the implementation process of a dynamic management process. The organizational culture is the value orientation of the enterprise for a variety of internal and external affairs and resources, enterprises in the long-term organizational values, under the guidance of shared values, guiding principles and select corporate behavior. Excellent organizational culture is an important condition for business strategy development and success. It can highlight the characteristics of enterprises, the formation of the common values of the members of the enterprise, also because of its distinctive personality, more conducive to enterprise to develop Continue reading
Strategic Pricing
Pricing is a key factor in business innovation. Strategic pricing involves aligning the pricing strategy with corporate strategy. The price must be chosen carefully after considering various scenarios and possible implications. Is the price attractive enough to capture the mass of target buyers? Can the company make the offering at the target cost and still earn a healthy profit margin? Can the company profit at a price that is affordable to the target buyers? Strategic pricing is a key component of Blue Ocean Strategy pioneered by Chan Kim and Renee Mauborgne. To have strong revenue flowing, the strategic price must be set. This procedure will ensure that consumers will want to buy and will have the compelling ability to achieve it. It is fundamental, from the start, to know the price that will bring mass of target consumers. The strategic price defined must not only attract customers but also retain Continue reading