 are the goals that the whole organisation is

trying to achieve.
 will be understood informally rather than
written down.
 As the firm grows the job of coordinating the
actions of every employee becomes harder.
 In order to be effective, corporate objectives
must be measurable.
 the goals established for the whole
organisation. Examples include long-term
growth and short-term profit maximisation
 MANAGEMENT BY OBJECTIVES“divides the
overall aim of the business into specific goals
for each level of the organization's hierarchy.
In this way the actions of all employees are
coordinated and individuals are motivated to
behave in a way which helps the firm
succeed.
 is the organisation’s plan of action which,
when implemented, will lead to the
achievement of the corporate objectives

 Strategy cannot therefore be considered

before the firm’™
s goals are clearly established
 Corporate strategy deals with the major
issues such as what industry, or industries,
the business should compete in, in order to
achieve corporate objectives
 an be shaped by identifying new
opportunities to apply the existing strengths
of the organisation.
 a plan devised in order to allow an
organisation to achieve a specific objective.
CORE CAPABILITIES the strengths of the
organisation, I.e. what it is good at doing.
 The typical and well-known strategic
planning process starts with the vision and
mission of the business. This is followed by a
detailed internal and external analysis, which
leads to a SWOT. The results from this
analysis allow developing several strategic
potions. They are evaluated and finally, one
option is chosen for implementation
 This approach assumes a fairly stable and
predictable environment,.
 Although these conditions are hardly present
today any more, the traditional strategy
process still has its merits. The process as a
whole and the accompanying models and
tools are widely known and very popular.
There is a huge body of knowledge.
Templates for almost every thinkable
situation are readily available. This gives the
process and its results a high acceptance and
credibility throughout organizations
 The traditional strategy process as described in this
article has evolved during the 20th century. Concepts
like positioning, analysis, strategic options, portfolio
management and more were developed as a response
to the increasing complexity of the growing post-war
economy. These were the years when more and more
large, multi-national, multi-product companies
evolved and finally formed global conglomerates.
Competition increased and global interdependencies
intensified. In this situation, businesses needed more
sophisticated management tools than their
predecessors, which were much smaller and more
locally oriented.
 Many business school textbooks teach you
that every strategy process should be based
on the vision and mission of the business.
From these, medium- to long-term objectives
are derived. Vision, mission, and objectives
provide the framework and context for the
strategy. Hence, the resulting strategy has to
guide the business on its way to fulfilling its
vision and mission.
 After that, a thorough analysis is conducted:
 On the internal side, strengths
and weaknesses are identified
 On the external side, opportunities
and threats are identified
 The most popular tool for summarizing
analysis results is the SWOT. In addition,
there are many other models and tools
around for internal and external strategic
analysis, e.g. PESTLE, Porters Five Forces,
value chain, or the 7-S-Model.
 After this analysis phase, the business should
have a clear idea which Strengths (that
hopefully set it apart from competitors) it can
use to exploit market Opportunities or to
respond to unfavorable Threats in its external
development. It is also aware of
its Weaknesses. These would limit the
businesses strategic options or are areas to
work on for improvement.
 in order to make a strategic choice, the options
have to be evaluated. They should be checked for
 Suitability – do they address the most relevant
external trends, opportunities and threats?
 Feasibility – is the business able to implement
this options? Does it have the necessary
capabilities and resources? How much change is
involved? Which timeframe is needed? …
 Acceptability – is the strategy acceptable for the
most influential stakeholders? Is it in sync with
the vision and mission?
 The standard process implies, that the business should
decide for one strategy and then enter implementation
phase.
Of course, it is wise to have one or two alternative
strategies just in case the external environment will
develop different than expected.

 This strategy and its implementation progress would be

reviewed on a regular basis. Many businesses follow a
strategic planning cycle with a frequency of one or more
years. As a result of this review, the strategy can be
adjusted. However, the general idea is that these are minor
adjustments. The overall strategy should remain valid at
least for a medium timeframe.

 This model assumes an understandable, fairly
stable, and predictable environment. Although
external analysis includes some thinking about
possible future developments, these are mainly
based on an extrapolation of the present
 Traditional strategy schools of thought see
strategies as a means for achieving competitive
advantages and a favorable position in the
marketplace. This takes place in a stable or
predictable environment by exploiting
competences and resources
 This basic process – with some variations –
has been taught in business schools for
decades. Hence, the process and the
accompanying models and tools are well
known and still very popular. Managers and
specialists are familiar with the steps and
terminology. It doesn’t need much prior
explanation and training to perform a SWOT
analysis for an organization or a business
unit (although even the SWOT is not
thoroughly understood by many
 Consultants, authors and strategic thinkers have
built their own approaches and products for
strategy consulting based upon this basic
process. Thus they helped to anchor these ideas
in the collective thinking of every major
organization.
 Such a process will gain credibility and
acceptance much easier than an innovative
approach for dynamic times. It also is easier to
design and implement. This is an advantage that
many executives and strategists value
 he traditional strategy process may still lead
to reasonable results in particular industries and
markets. This applies in particular to markets
that are not strongly affected by disruptive
changes. However, such a seemingly stable
situation may vanish virtually overnight.
 Finally, the analysis process and the SWOT model
still can serve as a way for compiling, analyzing
and structuring information. Businesses are
easily overwhelmed with the vast amount of data,
information, explicit and tacit knowledge when
analyzing their situation. The use of well-known
tools can help to filter and make sense of this
information overload
 Despite these benefits, the original design of this process did not
take into consideration todays dynamic and unpredictable
business environment. It wasn’t designed for these
circumstances. Hence, it won’t lead to optimal results. Problems
arise from the following issues:

 The process and the associated tools can’t keep up with the pace
of change in the business environment. They will lead to lagging
results.
 Strategists are tempted to shrink their focus, due to the
increasing uncertainty. Their focus shifts to internal analysis and
the near-term future.
 Strategies resulting from this process are always based on the
current situation and limited to thinkable futures.
 The growing number of viable future scenarios makes it a lottery
to decide for a strategy that fits one particular future.
 The strategic plans may be too inflexible for today’s pace of
change.
 Strategies are based on and limited to the pre-determined
corporate vision, mission, and objectives.
 A successful strategic planning process
will examine and make informed projections
about environmental realities to help an
organization anticipate and respond to
change by clarifying its mission and goals;
targeting spending; and reshaping its
programs, fundraising and other aspects of
operations.
 The three levels of strategy are:
 Corporate level strategy: This level answers
the foundational question of what you want
to achieve. ...
 Business unit level strategy: This level focuses
on how you're going to compete. ...
 Market level strategy: This strategy level
focuses on how you're going to grow.
 Because a strategic plan establishes a
direction for your business to take, it will help
it sharpen its focus in order to get there.
Strategic planning can therefore help your
organization develop the right goals and
targets and help everyone focus their efforts
into meeting them.
 Strategic management is the ongoing planning,
monitoring, analysis and assessment of all
necessities an organization needs to meet its goals
and objectives. Changes in business environments
will require organizations to constantly assess their
strategies for success. The strategic management
process helps organizations take stock of their
present situation, chalk out strategies, deploy them
and analyze the effectiveness of the implemented
management strategies. Strategic management
strategies consist of five basic strategies and can
differ in implementation depending on the
surrounding environment. Strategic management
applies both to on-premise and mobile platforms.
 Strategic management is generally thought to
have financial and nonfinancial benefits. A
strategic management process helps an
organization and its leadership to think about
and plan for its future existence, fulfilling a chief
responsibility of a board of directors. Strategic
management sets a direction for the organization
and its employees. Unlike once-and-done
strategic plans, effective strategic management
continuously plans, monitors and tests an
organization's activities, resulting in greater
operational efficiency, market share and
profitability.
 Strategic management is based around an organization's
clear understanding of its mission; its vision for where it
wants to be in the future; and the values that will guide its
actions. The process requires a commitment to strategic
planning, a subset of business management that involves
an organization's ability to set both short- and long-term
goals. Strategic planning also includes the planning of
strategic decisions, activities and resource
allocation needed to achieve those goals.
 Having a defined process for managing an institution's
strategies will help organizations make logical decisions
and develop new goals quickly in order to keep pace with
evolving technology, market and business conditions.
Strategic management can, thus, help an organization gain
competitive advantage, improve market share and plan for
its future.
 There are many schools of thought on how to
do strategic management, and academics and
managers have developed numerous
frameworks to guide the strategic
management process. In general, the process
typically includes five phases:
 assessing the organization's current strategic
direction;
 identifying and analyzing internal and
external strengths and weaknesses;
 formulating action plans;
 executing action plans; and
 evaluating to what degree action plans have
been successful and making changes when
desired results are not being produced.
 Effective communication, data collection and
organizational culture also play an important part
in the strategic management process --
especially at large, complex companies. Lack of
communication and a negative corporate
culture can result in a misalignment of the
organization's strategic management plan and
the activities undertaken by its various business
units and departments. (See Value of
organizational culture.) Thus, strategy
management includes analyzing cross-
functional business decisions prior to
implementing them to ensure they are aligned
with strategic plans.
 The types of strategic management strategies
have changed over time. The modern discipline
of strategic management traces its roots to the
1950s and 1960s. Prominent thinkers in the field
include the Peter Drucker, sometimes referred to
as the founding father of management studies.
Among his contributions was the seminal idea
that the purpose of a business is to create a
customer, and what the customer wants
determines what a business is. Management's
main job is marshalling the resources and
enabling employees to efficiently address
customers' evolving needs and preferences.
 In the 1980s, a Harvard Business School professor
called Theodore Levitt, developed a different strategy
with a focus on the customer. This strategy was
different from the previous emphasis on production -
- i.e., creating a product of high quality ensured
success.
 Distinctive competence, a term introduced in 1957 by
sociology and law scholar Philip Selznick, focused on
the idea of core competencies and competitive
advantage in strategic management theory. This
enabled the creation of frameworks for assessing the
strengths and weaknesses of an organization in
relation to the threats and opportunities in its
external environment. (See SWOT analysis).
 .
 Canadian management scientist Henry
Mintzberg concluded that the strategic
management process could be more dynamic
and less predictable than management
theorists had thought. In his 1987 paper,
"The Strategy Concept I: Five Ps for Strategy,"
he argued "the field of strategic management
cannot afford to rely on a single definition of
strategy." Instead, he outlined five definitions
of strategy and their interrelationships:
 Plan: Strategy as a consciously intended course of
action to deal with a situation.
 Ploy: Strategy as a maneuver to outwit a competitor,
which can also be part of a plan.
 Pattern: Strategy stemming from consistency in
behavior, whether or not intended and which can be
independent of a plan.
 Position: Strategy as a mediating force or match
between the organization and environment, which
can be compatible with any or all of the Ps.
 Perspective: Strategy as a concept or ingrained way of
perceiving the world -- e.g., aggressive pacesetter
vs. late mover -- which can be compatible with any
or all of the Ps
 A SWOT analysis is one of the types of
strategic management frameworks used by
organizations to build and test their business
strategies. A SWOT analysis identifies and
compares the strengths and weaknesses of
an organization with the
external opportunities and threats of its
environment. The SWOT analysis clarifies the
internal, external and other factors that can
have an impact on an organization's goals
and objectives.
 The SWOT process helps leaders determine
whether the organization's resources and
abilities will be effective in the competitive
environment within which it has to function
and to refine the strategies required to
remain successful in this environment.
 The balanced scorecard is a management system that
turns strategic goals into a set of performance objectives
that are measured, monitored and changed, if necessary,
to ensure the strategic goals are met.

 The balanced scorecard takes a four-pronged approach to

an organization's performance. It incorporates traditional
financial analysis, including metrics such as operating
income, sales growth and return on investment. It also
entails a customer analysis, including customer
satisfaction and retention; an internal analysis, including
how business processes are linked to strategic goals; and
a learning and growth analysis, including employee
satisfaction and retention, as well as the performance of
an organization's information services
 The system connects the dots between big
picture strategy elements such as mission (our
purpose), vision (what we aspire for), core values
(what we believe in), strategic focus areas
(themes, results and/or goals) and the more
operational elements such as objectives
(continuous improvement activities), measures
(or key performance indicators, or KPIs, which
track strategic performance), targets (our desired
level of performance), and initiatives (projects
that help you reach your targets)."
 Organizational culture can determine the success and
failure of a business and is a key component that
strategic leaders must consider in the strategic
management process. Culture is a major factor in the
way people in an organization outline objectives,
execute tasks and organize resources. A strong
organizational culture will make it easier for leaders
and managers to motivate employees to execute their
tasks in alignment with the outlined strategies. At
organizations where lower-level managers and
employees are expected to be involved in the
decision-making and strategy, the strategic
management process should enable them to do so
 It is important to create strategies that are
suitable for the organization's culture. If a
particular strategy does not match
the organization's culture, it will hinder the
ability to accomplish the strategy's intended
outcomes.