Strategic Management Process
Click on each title to learn more about the Strategic Management Process.
Strategy Formulation Stage.
Develop a vision statement that addresses what the company intends to do-this is often one sentence and is considered the first step in the strategic management process.
Develop a mission statement that identifies the scope of the company’s operations-this statement addresses the values and priorities of the organization.
At this point in the process a company should perform an External Audit and an Internal Audit aimed at identifying key opportunities and threats.
Establish Long-Term Objectives that identify expected results of company strategies-generally a 2 to 5 year period.
Evaluate and Select Alternative Strategies that help move a company from its present position to a future position-these are derived from the vision, mission, objectives, external and internal audits.
Strategy Implementation Stage.
In Strategy Implementation a company should establish short-term objectives and allocate resources in order to better achieve its strategies. Strategy implementation is doing what you say you are going to in the strategy formulation stage. In implementing strategies, a company will likely experience issues in key departments like management, marketing, finance, accounting, R&D, and MIS. Leaders in these departments should anticipate issues and work to resolve them as part of the implementation process.
Strategy Evaluation Stage.
Strategy Evaluation is a critical piece in the strategic management process because it allows the company to identify problems or potential problems early. The three basic activities in strategy evaluation are: 1) examining the firm’s strategy, 2) comparing expected and actual results, and 3) taking corrective actions when needed.
Strategic management is “the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives” (David & David, 2017). Strategy formulation includes the development of a vision, a mission, identifying external opportunities and threats, determining internal strengths and weaknesses (also known as a SWOT analysis), and establishing long-term strategies and objectives. Strategy implementation requires the organization to create policies, short-term objectives, and to allocate resources so strategies can be achieved. Strategy evaluation reviews external and internal factors, measures performance, and takes corrective action. Strategy formulation can occur at the corporate, divisional, business unit, or functional level. There are financial and non-financial benefits in strategic planning. Success increasingly depends upon being competitive in the global market. Strategic planning can help achieve this imperative. In this unit, we will review the nature of good strategic management and establish a framework for more detailed study on individual strategic management components.
David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach, concepts and cases (16th ed.). Boston, MA: Pearson.
To successfully complete this learning unit, you will be expected to:
Describe the principles of strategy formulation, implementation, and evaluation.
Describe how a firm might achieve competitive advantage.
Analyze the opportunities, threats, strengths, and weaknesses of a real-life case. (see COWI attachments as the real life company for this whole Project.)
Unit 01 Study 1
Read Chapter 1, “The Nature of Strategic Management.”
Read the Hersey Company, Inc. 2015 cohesion case, found in the latter part (eBook) of Chapter 1.
Also, review the following online information:
Strategic Management Club. Review various sections and check out the free benefits.
Fortune Magazine Online. Review the Web site and prepare for this unit’s Competitive Advantage—Intel Corp and Andy Grove discussion by reading the article, “The Education of Andy Grove.”
Web search: Complete a Web search on the subject of strategic planning.
[u01s2] Unit 01 Study 2
In Unit 2, you will interview a person at the company you have selected for your project. To prepare for that interview, please determine whom you will interview and set an appointment with that person. Ideally, the person you interview will be a director, vice president, owner, or chief executive officer of the organization. Please review the project description.
[u01a1] Unit 01 Assignment 1:
Strategic Analysis Scoring Guide (see attached) .
In this assignment, you will choose the organization that you will use as the case study for your course project. Ideally, the company you choose will be a familiar one. (COWI attachments).
COWI is a multinational company that operates as a consultant in the fields of environmental science, engineering, and economics. The company was created in 1930 and currently operates in 24 countries and has accomplished more than 85,000 across 175 countries (COWI 4). The corporation offers consultancy and project planning by focusing on local knowledge and the experience that has been acquired over the years in business. The company’s workforce includes planners, biologists, engineers, geologists, surveyors, economists, anthropologists, sociologists, and architects. The composition offers the clients a variety of professionals, who guarantee quality services. Suggestively, it operates on 360° mindset strategy that ensures the specialists coordinate and cooperates across various disciplines to offer coherent solutions and meet customer satisfaction (COWI 4). David alludes that the strategic formulation of a company entails establishing the vision and mission as well as identifying the external opportunities and threats and recognizing the internal strengths and weakness (6). Subsequently, a business can strategize on its operations to create competitive advantage and sustainability. The intent of this paper is to conduct a SWOT analysis that will identify the opportunities, threats, strengths, and weaknesses of COWI.
External Opportunities and Threats
The external opportunities and threats refer to a range of factors that have the potential to significantly benefit or harm the organization as it continues with business operations. These external factors are shaped by aspects that are beyond the control of a firm (David 11). Identifying the opportunities and threats is important for COWI to see the gaps on what consumers need and what the competitors are doing to meet these demands (Reid and Sanders 32). Subsequently, the company can take the appropriate strategies to address the issues to maintain competitiveness and efficient performance in the market. According to David, the opportunities and threats of a company can be addressed by analyzing the following external factors (11):
The company has offices in 24 countries only. There is an opportunity to tap into growing economies across the world. Many countries are working to meet development goals that come with numerous projects the company can undertake. Nevertheless, the unstable economic condition of many countries might limit the interest of the company in some markets. Another threat is that some economies differ significantly and this difference means that COWI will have to compromise with some clients, while at the same time there are opportunities where the firm can maximize its profits. Another company that offers similar services at lower prices is likely to be a considerable threat in such situations.
Social, Cultural, and Natural Environment Forces
These forces have a significant impact on the organizational performance. Globalization has brought about changes in these factors that are likely to impact the COWI operations. The Human Resource Management (HRM) activities in many countries are converging to international standards, and this will make it easy for the company to maintain its culture in different environments. At the same time, the success of the company is limited by the diversity evident between different countries that make it difficult to manage labor. For instance, language barriers can make it difficult to deliver services and enhance cooperation in the workplace. Nevertheless, the increased diversity is important in facilitating company operations in regions where the company would face resistance due to the common social and cultural beliefs.
Political, Governmental, and Legal Forces
The political forces are instigated by leaders, political parties and other groups such as trade unions and civil society organization. Additionally, governments can formulate laws and regulations that have an impact on the organizational operations by affecting the supply chain and the market. Notably, every country has unique legal structures that might not be in line with international standards. Such laws often affect production processes and labor. Subsequently, political, government and legal forces can affect COWI operations in the international market due to the differences that exist between countries. For instance, it is difficult for the company to engage in countries that are experiencing political unrest or lack stable legal systems. Additionally, many countries have been compromised by terrorists. Nevertheless, there are governments across the world who are changing the regimes that used to be oppressive and limited business. As many countries seek an increase in Foreign Direct Investment (FDI), the company stands a chance to explore new markets with support of domestic governments
Technology is a dynamic sector that offers new solutions to problems faced in business and everyday life. Additionally, many organizations have the financial capacity to acquire new technology as a source of competitive advantage. In this light, if COWI technology is outdated, the company is likely to lose its competitiveness. On the same note, remaining innovative and investing in research and development offers the company an opportunity to pioneer in the development and use of new technology, gaining a competitive advantage.
The change in the target market demographics comes with potential opportunities and threats. In this light, increased household income in developing and developed countries could be an opportunity for the COWI to engage in the market. Aging populations in developing nations show that there is a need for more investment in automation technologies due to the lack of labor. Subsequently, this is an opportunity for the company to expand the engineering services. Nevertheless, if the changes in demographics are ignored, this would be a threat to the company.
Internal Strengths and Weaknesses
David alludes that internal strengths and weaknesses are the factors that the organization can control (12). They offer an opportunity for strategizing on various sectors of the company. On the same note, the companies are expected to capitalize on internal strengths, while eliminating the internal weaknesses.
Employees and Capabilities Forces
COWI works with different professionals from various parts of the world. Different professionals have facilitated the firm’s ability to implement the 360° mindset strategy. The threat of diversity crippling the company due to creative differences has appropriately been solved through the multidisciplinary approach to issues. Subsequently, this approach and the capability of the firm to provide the required technology and reach the markets will be instrumental in the success of the company.
The productivity of COWI has been attributed to the leadership that makes quality decisions (COWI 4). The diverse workforce has been instrumental in improving management in the company. The company is an industry leader due to the sustainability of its organizational structure that facilitates effective leadership and management.
COWI businesses are highly reliant on research. The company offers consulting services that require the professionals to have conducted research and made extensive advancements in various areas. In this light, the company has an accumulated experience that spans a long time. Nevertheless, there is a need for talent management to ensure that this knowledge is passed to new workers and preserved for the sustainability of the company.
Information systems play a fundamental role in creating competitive advantage. The fact that the company operates across the globe makes it imperative to have reliable systems that facilitate communication, cooperation, project management, and preservation of knowledge. The company is also involved in technology development, making it an important player in formulating technologies that can be instrumental to its performance in the industry. Although, the information systems are expensive to install and maintain, they are important in creating competitive advantage and supporting business operations in the long run.
COWI. COWI QATAR A/S: Company Profile. Doha, Qatar: COWI, 2013. Print
COWI. “The Future Of Development In Qatar.” n.d. Print
David, Fred R. Strategic Management: Concepts and Cases (Thirteenth Edition). New Jersey: Pearson Education, 2011. Print
Reid, R. Dan, and Nada R. Sanders. “Operations Management: An Integrated Approach (Fourth Edition).” 2011. Print.