Why Strategy is Important to Business
Linda Ann Gonzales
March 7, 2012
Management Policy and Strategy: MT460-03
This project is about why it is important to apply the strategic management process to business and at the same time will be discussing the importance of strategy for business. This paper will continue to explain the concept of the strategic management process, and will discuss the importance of having a future oriented plan, the organization’s vision, mission, purpose, philosophy, or goals, and the strategic process as input for future decision making. The information gathered will be provided from the ebook, Strategic Management, 12th Edition, Authors, John A. Pearce, II, Villanova University…show more content…
The internal analysis includes the company’s financial, human and physical resources. It is here where the company assesses the strengths and weaknesses of management and organizational structure (Pearce & Robinson, 2011).
The company’s external analysis includes all the forces outside the company (external environment) and consists of its competitors, stakeholders, government, ordinances, etc. The three interactive segments of the external environment are: the remote, industry, and operating environments. The strategic and choice analysis is an assessment of the company’s external environment and its profile to look for attractive opportunities, such as investments and maximizing shareholder values. This process focuses on achieving the company’s mission and making a strategic choice, and results in long-term objectives and generic and grand strategies. Long-term objectives involve profitability, return on investment, competitive position, productivity, social responsibility, human relations, etc. A company seeks long-term objectives to keep the company in dynamic productivity and greater profitability for years to come. Generic and grand strategies concentrate on low cost and differentiation competitive advantages that results in a comprehensive and general plan of actions to achieve long-term objectives. Short-term objectives are desired results for a year or less. Short-term
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