BSM-Unit1

BUS 4951, Business Policy and Strategic Management 1

Course Learning Outcomes for Unit I Upon completion of this unit, students should be able to:

1. Analyze the nuances of strategic management. 1.1 Distinguish between strategic management and strategic planning. 1.2 Describe the strategic management process, including how it is used by organizations. 1.3 Identify the need for organizations to evaluate strengths, weaknesses, and adaptability. 1.4 Identify the difference between long-range planning and strategic planning.

2. Correlate the characteristics of vision and mission to business success.

2.1 Compare the concepts of mission and vision. 2.2 Explain why organizations may need to update their mission and vision statement

periodically.

Reading Assignment Chapter 1: The Nature of Strategic Management Management Studies Cases, pp. 372-381

Unit Lesson Welcome to Unit I. During our time together, we will learn about the principles of strategic management and how these principles are applied to businesses and organizations. Unit I is an overview related to the nature of strategic management. The principles of strategic management can be seen in many areas of life. Consider the following example: Can you imagine asking Congress and the president of the United States for bailout funds without having any clear vision or strategy of how you plan to pay back these borrowed funds or what your organization plans to do with these funds? Having this information is important when applying for any type of funding. A lending institution, whether it be a bank or a government institution, will require precise and specific information before considering allocating its own funds to assist another entity. The potential consequences of not having the right information could be detrimental to both the borrower and the lender. A recent example would include the housing market issue and lender practices. Some lenders was purposely not requesting specific information in an effort to increase sales of loans. Loans were being approved for individuals and corporations who did not qualify for this type of funding. Strategic management is both the art and science of formulating, implementing, and evaluating cross functional decisions that enable an organization to achieve its objectives. In simpler terms, it is a plan or roadmap that assists an organization to reach its intended goals. Strategic management also includes many planning aspects to include long-term planning. For example, if a corporation plans to someday be a nationwide leader in customizable phone cases, it must have the forethought and planning to achieve that goal. There are key sequential stages of the strategic management process. The steps include:

1. Strategy Formulation: This is where the vision and mission is developed. Also, a Strength, Weakness, Opportunities, and Threats (SWOT) analysis can be created.

2. Strategy Implementation: This is where the organization dives into its expected yearly objectives, policies, and other efforts. The textbook refers to this stage as the “actionable stage.”

UNIT I STUDY GUIDE

Overview of Strategic Management

BUS 4951, Business Policy and Strategic Management 2

UNIT x STUDY GUIDE

Title

3. Strategy Evaluation: During this stage, the previous two stages are evaluated and reassessed. If needed, the strategy will be modified or updated to remain relevant and operational.

The video below explains these concepts further. Warby Parker is a relatively new business that wanted to make a positive difference in the world and chose to do so through the sale of glasses. As you watch this video, consider how they used the strategic management process in their planning efforts: Warby Parker: New venture/entrepreneurial strategy. (2012) [Video file]. Retrieved from

http://media.pearsoncmg.com/ph/bp/bp_video_links/2013/mgmt/strat/Strat2012_Warby_Venture.html Warby Parker’s objectives were to provide consumers access to reasonably priced, high-quality glasses. They recognized the need for such a company and wanted to take it a step further by providing excellent customer service. What would you consider as Warby Parker’s strengths? You might say that their strengths are that they have found an innovative way to sell glasses—through the Internet. You might also say that they have revolutionized the way many people purchase glasses through trying on the glasses virtually and allowing customers to try out the glasses for 90 days. Some would even argue that their willingness to help those in need is a strength. For weaknesses, Warby Parker indicated that having enough inventory has been a challenge for them. They also find hiring to be a difficult operation as they want to hire individuals who can positively contribute to the business. Warby Parker is an example of a business that planned well. What do you think they need to do in order to find success in the long term? In addition to developing a strategic management plan, an organization must continuously remain agile and adaptable to change. Take, for example, the healthcare industry—have you noticed a change from a physician-centric culture to a patient-centric culture? Our modern healthcare enterprise now values the patient as the customer, thus focuses resources and efforts to directly support the patient and his or her family. This is a great example of an entire culture and organization that has adapted. An additional phrase to concentrate on is competitive advantage. This is how the organization sets themselves apart from competing entities. The advantage can be in multiple forms to include customer service, quality, product recognition, endorsements, and availability (Internet). Amazon has a distinct competitive advantage as compared to its many competitors because of its business model and ability to provide goods without the customers ever having to leave the comfort of their homes. This advantage is not permanent; other competitors will find ways to mimic or set themselves apart from Amazon, thus forcing Amazon to continuously adapt to remain relevant (David & David, 2015). The vision and mission statements are the foundation of every organization. Without these statements, the organization has no clear direction or goals. A vision statement is defined as a description of what the organization would like to become in the future. An example is if we wanted to start a personalized cell phone cover organization; what are our long-term expectations? The long-term expectations could be five years or longer depending on the organization. The mission statement identities the scope of the organization’s operations. The military also incorporates mission statements and includes the five Ws, which include who, what, when, where, and why/how the organization will accomplish their scope of work. The military uses this type of mission statement because it is clear and concise and can easily be understood by everyone in the organization. The CEO along with their leadership team should be involved in the development and updates related to the mission and vison statements.

Reference

David, F. R., & David, F. R. (2015). Strategic management concepts and cases: A competitive advantage approach [VitalSource Bookshelf version] (15th ed.). Retrieved from https://www.vitalsource.com/textbooks?term=9780133740356

BUS 4951, Business Policy and Strategic Management 3

UNIT x STUDY GUIDE

Title

Suggested Reading The below chapter presentation will provide you with additional information on this unit’s required reading: Click here to access the PowerPoint version of the Chapter 1 presentation. Click here to access the PDF version of the Chapter 1 presentation.