KEY TERMS IN STRATEGIC MANAGEMENT
A. Strategists - are individuals who are most responsible for the success or failure of an organization. Strategists hold various job titles, such as chief executive officers, president, owner, chair of the board, executive director, chancellor, dean, or entrepreneur.
B. Vision and Mission Statements
1. Vision statements answer the question: “What do we want to become?”
2. Mission statements are “enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm’s operations in product and market terms.” It addresses the basic question that faces all strategists: “What is our business?” It should include the values and priorities of an organization.
External Opportunities and Threats
1. External opportunities and external threats refer to economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization in the future.
2. Opportunities and threats are largely beyond the control of a single organization, thus the term external.
Internal Strengths and Weaknesses
1. Internal strengths and internal weaknesses are an organization’s controllable activities that are performed especially well or poorly.
2. Identifying and evaluating organizational strengths and weaknesses in the functional areas of a business is an essential strategic-management activity.
3. Strengths and weaknesses are determined relative to competitors and may be determined by both performance and elements of being.
Long-Term Objectives
1. Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission.
2. Long term means more than one year.
Strategies
1. Strategies are the means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint venture.
Annual Objectives
1. Annual objectives are short-term milestones that organizations must achieve to reach long-term objectives.
2. Like long-term objectives, annual objectives should be measurable, quantitative, challenging, realistic, consistent, and prioritized.
Policies
1. Policies are the means by which annual objectives will be achieved. Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives.
2. Policies are most often stated in terms of management, marketing, finance/accounting, production/operations, research and development, and computer information systems activities.
