strategic management - chapters 1 and 2

• The external environment has three layers; physical or natural, general or societal and industry or task
• the physical and societal environment comprise the macro environment while the industry comprise the micro environment
• The external environment analysis process consists of the following steps; environmental scanning, environmental monitoring and competitive intelligence
• strategic management is considered the capstone course of all management and business subject
• a manager performs several functions such as planning, organizing, staffing, directing and controlling with equal importance
• strategic managers spend more time and effort on planning as compared to other managerial functions
• a managerial postition can be at the top, middle or lower
• the steps in environmental monitoring steps are as follows:

  1. Identifying emerging issues
  2. Evaluating the time frame of emerging issues
  3. Deciding on the action to be taken
• collecting and analyzing secondary data

  The sources of information must be highly considered for validity and reliability.

  The data to be collected should be about or related to the following:

  1. Industry where a company belongs

  2. Product or service and its substitutes

  3. Customers, suppliers, and competitors

  4. Emerging technologies

  5. Government programs and priorities that may affect a company
• Environmental scanning involves the following steps:

  1. Setting up an environmental scanning system or program

  2. Collecting and analyzing secondary data

  3. Collecting and analyzing primary data. 4. Identifying issues that consistently surface

  5. Interpreting results and preparing a report
• An external environment analysis follows a systematic process. It involves three major processes as follows:

  1. Environmental scanning

  2. Environmental monitoring

  3. Competitive intelligence
• EVOLUTIONARY PHASES OF STRATEGIC MANAGEMENT

  Strategic management has undergone the following evolutionary phases

  1. Short-term financial planning phase

  2. Medium-term planning phase

  3. Strategic planning phase

  4. Strategic management phase
• The forerunner of strategic management is business policy. Business policy refers to the process of defining long-term goals of a company as determined by the members of the top level management.
• Strategic management is considered the capstone course of all management and business subjects
• Business policy refers to the process of defining the long-term goals of a company as determined by the members of the top-level management
• During the early phase, top-level managers require different departments and functional areas to prepare budgets and targets based on information generated within the company
• The commonly used strategic management tool when practicing environmental monitoring is trend analysis
• The societal environment of a company consists of political or legal, economic, sociocultural, and technological factors
• The primary objective of an industry environment analysis is to determine the different factors that influence competition so that a company can correctly position itself for continued growth and existence
• A well-defined organizational structure exhibits an effective flow of information, a well-defined control and monitoring system, and a clearly patterned chain of command
• Michael Fortes is a prominent figure in competitive strategy formulation
• The sociocultural segment refers to the customs, traditions, values, beliefs, and lifestyles in a society for a period of time
• The technological segment can make a product obsolete overnight and, at the same time, provide opportunities for creating new products in a short period of time
• An internal environment analysis identifies a company’s internal strategic factors, such as strengths and weaknesses, to enable it to exploit opportunities and avoid threats of the external environment
• The commonly used strategic management tool to conduct a societal environment analysis is the STEEP or PESTEL analysis
• Internal environment analysis involves gathering reliable and relevant information that serves as input in the formulation of a forecast
• Creditors refer to banks, financial institutions, and financial intermediaries engaged in lending money to a borrower, usually for a fee in the form of interest
• When the demand for a product or service starts to increase, the embryonic industry evolves to the next stage, which is the growth industry
• The last stage in the evaluation of a company's internal environment is to define its present status in terms of profitability and market share performance
• One of the best ways to assess corporate culture is to determine the present state of the individual or employee, the group or functional unit, and the entirety of a company