Steps in Strategic Management

The entire 7 step strategic management process follows:

Step1: Define the current Business:

Every company must choose the terrain on which it will compete in particular what products it will sell, where it will sell them, and how its products or services will differ from its competitors. Rolex and Seiko are both in the watch business, but Rolex sells a limited product line of high priced quality watches. Seiko sells a wide variety of relatively inexpensive but innovative specialty watches with features like compasses and altimeters.

Therefore, the most basic strategic decisions managers make involve deciding what business their firms should be in: For instance in terms of the products or services they’ll sell, the geographic locales in which they’ll sell them, and how they’ll distinguish their products or services from competitors’. They ask where are we now in terms of the business we’re in, and what business? do we want to be in, given our company’s opportunities and threats. And its strengths and weaknesses? Managers then choose strategies – courses of action such as buying competitors or expanding overseas to get the company from where it is today to where it wants to be tomorrow.

Vision: A general statement of its intended direction that evokes emotional feelings in organizational members.

Managers sometimes use a vision statement as a sort of shorthand to summarize how they see the business down the road. The company’s vision is a general statement of its intended direction that shows, in broad terms, what we want to become. Rupert Murdoch chairman of News Corporation (which owns, the Fox network, and many newspaper and satellite TV operations) has a vision of an integrated global satellite based news gathering entertainment, and multimedia firm. Web MD launched its business based on a vision of Web site supplying everything one might want to know about medical related issues. One eye care company says, our vision is caring for your vision statement that sums up in just a few words the manager’s image of where the business is heading.

To choose a direction, a leader must first have developed a mental image of a possible and desirable future state for the organization. This image, which we call a vision, may be as vague as a dream or as precise as a goal or mission statement. The critical point is that a vision articulates a view of a realistic, credible, attractive future for the organization, a condition that is better in some important ways than what now exists.

Mission: Spells out who the company is, what it does, and where it’s headed.

Visions are usually longer term, broader images; most managers also formulate mission statements to communicate who we are, what we do, and where we’re headed. Whereas visions usually lay out in very broad terms what the business should be, the mission lays out in broad terms what our main tasks are now. In the popular movie Chak De India, the mission of the women’s hockey team was to win the world cup hockey tournament and prove to the country, the world, and themselves that the Indian women’s team can win the world cup. Before their more downturn, Ford pursued and then strayed from a remarkably successful mission, summed up by the phrase where Quality is Job One. The mission of the California Energy Commission is to assess advocate and act through public/private partnerships to improve energy systems that promote a strong economy and a healthy environment.(The Commission’s vision, by way of comparison is for Californians to have energy choices that are affordable reliable, diverse, safe, and environmentally acceptable).