Strategic Planning in the Small Business

Unit 1

HO 1-5 (continued)

10 Part I The Concepts
and Techniques of Strategic
Management

Figure 1-2 THE

COMPONENTS OF COMPANY

STRATEGY

Efforts to

fine-tune

the

prevailing

strategy

Moves to diversity

the company's revenue

base and enter

altogether newFrsofesvmvs

industries

Actions to deal with

company-specific

operating problems and

strategy-related

internal

issues

Actions

to

capitalize

on new opportunities

(new technologies,

product

innovation, a chance to

purchase a rival company,

new trade

agreements

that

open up foreign

markets)

Efforts to make

a quantum change

in

strategy

The pattern

of moves and

approaches that

delineates what

an organization's

strategy is

Moves to

improve

short-term

profit

performance

Actions

to respond to

changing

industry conditions

(shifting demano

patterns, new

government

regulations.

tIng

globalization

of competition,

exchange rate instability. entry

or exit

of new competitors)

to strengthen the

company

s long-term

competitive position

Defensive moves

to

counter the actions

of foreign or domestic

competitors

Moves and approaches

in functional area

activities that define

how

each function is being

managed

tion is

headed and how management

intends to achieve

the targeted results,.

Together,

they constitute

a strategic plan. In some

companies. especially

large

corporations that

are committed to reguhr

strategy reviews and

formal strategic

planning, the

strategic plan is explicit

and written (although

some parts of the plhn

may be omitted if

they are too sensitive

to reveal before they

are actually

undertaken).

In other companies,

the strategic pl..n

is not put on paper but

rather

exists in the

form of understandings

among manager, about

what is to be carried

over from the past

and what new actions

are to be taken. Organizational

objec­

tives are the part

of the strategic plan

most often put in writing

and circulated

widely among managers

and employees.

Illustration Capsule 3 presents

an outline of Sara

Lee Corporation's

mission.

objectives,

and strategies as an

example of how the three

direction-setting steps

join together.

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