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Strategic Management Model Notes
Accounting 1 (ACC 1)
Northern Bukidnon State College
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Chapter 1: A Strategic Management Model
- The 21st century epitomizes the Reality of Dynamism
- Hypercompetition occurs when product/ service offerings and technologies are so new that standards become unstable and competitive advantage is not sustainable.
- Competitive Advantage is a firm’s resources and capabilities that enable it to overcome the competitive forces in its industry(ies)
- Operational Effectiveness is performing similar activities better than rivals.
- Strategic Management: -a continuous process of strategy creation -the science of creating, executing, and evaluating cross-functional decisions to enable an organization to achieve its goals and objectives.
The Strategic Management Process - Strategic Analysis- consists of a systematic evaluation of variables currently existing in the external and internal environments. - Strategy Formulation- designing strategies on the business and corporate levels - Strategy Implementation- employing these crafted strategies to achieve organizational set goals and objectives.
- Strategic Analysis àStrategic Intelligence
- Strategy Formulation à Organizational Competitiveness
- Strategy Implementation à Comparative Advantage
- If Strategic Analysis is accurately conducted, organizations can develop Strategic Intelligence. Like antenna, strategic intelligence is the capability of an organization to possess relevant and related knowledge, abilities, foresight, and systems thinking such that is able to assess its own strengths and vulnerabilities.
- If Strategy Formulation is uniquely designed and effectively communicated, organizations have greater possibilities of attaining Organizational Competitiveness. Organization competitiveness pertains to the ability of any business/company to utilize its resources optimally and sustainably for maximum performance and productivity.
- If Strategy Implementation is efficiently employed, organizations can achieve Comparative Advantage. Comparative advantage refers to the ability of an organization to produce a good or service at a lower marginal and opportunity costs than its competitors.
Ø Strategic Planning: continuous, repetitive, and competitive process of setting the goals and objectives that an organization aims to attain, defining the means to achieve them, and assessing the best way to realize them in the context of the prevailing environment while measuring performance through set standards, and periodically but continuously conducting reassessments.
Chapter 2: Challenges in the External Environment
Scanning the Environment - Organization Intelligence refers to the expertise, insight, and wisdom possessed by an entity. It serves as a valuable guide to its journey to becoming competitive. - Environment Scanning is the study and interpretation of the forces existing in the external and internal environments. - Strategic Information consists of the facts and data used by organizations to assist them in achieving their vision, mission, and goals. -Primary data: are gathered through personal experience, observation, and experimentation. -Secondary data: information collected from reports, internet sources, and other published materials.
Modes of Environmental Scanning 1) Undirected Viewing: The individual is exposed to information with no specific informational need in mind. The sources of information are wide-ranging and large chunks pf information are quickly dropped from the individual’s attention. Thus, the individual ends up with general information that may be helpful for him in spotting early signals of change. 2) Conditioned Viewing: The individual directs viewing of information to specified facts and data to be able to assess their general impact on the organization. It is not an active search but a mere viewing of information. 3) Informal Search: The individual actively looks for information to increase knowledge of a particular issue. It essentially involves a relatively unstructured effort where the objective is to gather information to expound on the issue, thus, determining whether a strategic move is needed by the organization. 4) Formal Search: the effort exerted by the individual is deliberate and planned. The search is both focused and structured and the research methodology is clearly enumerated and followed. The search approaches can include industry analysis, market studies, and competitor and customer analyses, among others.
The SWOT Matrix Analysis Ø Strengths: are features that organizations possess, thus, giving it significant advantage over others. Ø Weaknesses: are characteristics that place organizations at a disadvantage relative to others, and may just be limitations or vulnerabilities or organizations. Ø Opportunities: are possibilities in the external environment that organizations can exploit to their advantage. Ø Threats: are challenges in the external environment that can cause problems to organizations.
Strategic Management Model Notes
Course: Accounting 1 (ACC 1)
University: Northern Bukidnon State College
