BUS 492 – Chapter 1
Cognitive Biases: errors in the way human decision makers process information and reach decisions
A lot of businesses fail because they don not have a strategy
Key things to strategic management
Strategic Leadership- Effectively managing a company’s strategy-making process
Strategy Formulation- Determining & selecting strategies
Strategy Implementation- Putting strategies into action to improve company’s efficiency
Company’s Business Model
A conception of how a set of strategies mesh and allow a company to gain competitive advantage and
achieve superior profitiability
Encompasses how the company will:
Define/differentiate product offerings
Create value for the customers
Aquire and keep customers
Deliver goods/services to the market
Organize activities within a company
Configure company resources
Achieve and sustain a high profitability
Grow business over time
Profitability and growth
o Success compared to competitors
o Oversee development of strategies
o Responsible for business unit that provides good/service for a oarticular market
o Supervise particular function/operation
Marketing. Accounting, HR
Strategy Making Process (good short answer question)*****
1. Select corporate mission and major corporate goals
2. Analyze external competitive environment to identify opportunities and threats
3. Analyze organizations internal environment to identify strength and weaknesses
4. Select Strategies that
a. Build on organizations strengths and correct weaknesses
i. Take advantage of external opportunities and counter external threats
b. Are consistent with organizations mission and major goals
c. Are congruent with and constitute a viable business model
5. Implement the strategies
1 | P a g e BUS 492 – Chapter 1
Mission Statement: Provides framework within which strategies are formulated
Mission: Reason for existence and what organization does
Vision: Some desired future state or objective to be achieved
Values: Key Values an organization is committed to
Major Goals: Measureable desired future state and organization attempts to realize
What is it the company does?
Who is being satisfied- What customer groups?
What is being satisfied- What customer needs?
How customer needs are being satisfied- by what skills, knowledge, or distinctive competencies?
A company’s mission is best approached from a customer-oriented business definition.
What would company like to achieve?
A good vision is meant to stretch a company by articulating an ambitious but attainable future state.
How managers and employees should conduct themselves
How they should do business
What kind of organization they need to build to help achieve company’s mission
· Set of values, norms, and standards that control
how employees work to achieve organization’s mission & goals
· Often seen as an important source of competitive advantage
In high-performance organizations, values respect the interests of key stakeholders.
Goal - precise/measurable desired future state a company attempts to realize.
Precise and measurable– provide yardstick or standard to judge performance
Address crucial issues– a limited number of key goals helps maintain focus
Challenging but realistic– provide employees with incentive for improving
Specify time period– motivates/i