Welcome to StrategyOutLine.com!
"If we know where we are and something about how we got there, we might see where we are trending - and if the outcomes which lie naturally in our course are unacceptable, to make timely change."
- Abraham Lincoln
Strategy is about taking managerial decisions that impact long term performance of a corporation. Strategy includes environmental scanning (both external and internal), strategy formulation (long-term planning), strategy implementation, and evaluation & control.
It is easy to manage short-term bursts of high performance, but only a few companies can sustain growth over a longer period of time. According to research done by several organizations, organizations that engage in strategic management generally out-perform those that do not. Strategic planning becomes more important as the environment becomes more complex and unstable.
Basic elements of strategic management
- Environment Scanning
- Strategy Formulation
- Strategy Implementation
- Strategy Evaluation and Control
The purpose of environmental scanning is to identify strategic factors (internal and external) that will determine the future of the corporation. Strategy formulation is the development of long-term plans for the effective management of strategic factors descrbed in environment scanning. It includes defining the corporate mission and vision, specifying objectives, developing strategies, and setting policy guidelines. Strategy implementation is a process by which formulated strategies are put into action through the development of programs, budgets, and procedures. Strategy evaluation and control is a process in which corporate activities and performance results are monitored and compared with the desired performance.
Five Elements of Good Strategy
A good strategy has five elements which provide answers to five key questions:
- Arenas: Where will we be active? - The scope of work
- Vehicles: How will we get there? – The roadmap to success
- Differentiators: How will we win in the marketplace? – The competitive advantage
- Staging: What will be our speed and sequence of moves? – The tactics of operations
- Economic logic: How will we obtain our returns? – The returns on investment