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Vision is the ultimate goal for the firm and the direction for its employees. It informs organization’s stakeholders about the products, customers, markets, values, concern for public image and employees of the organization (David, p.93) Components: Internal environment analysis, External environment analysis and Competitor analysis Tools used: PEST, SWOT, Core Competencies, Critical Success Factors, Unique Selling Proposition, Porter's 5 Forces, Competitor Profile Matrix, External Factor Evaluation Matrix, Internal Factor Evaluation Matrix, Benchmarking, Financial Ratios, Scenarios Forecasting, Market Segmentation, Value Chain Analysis, VRIO Framework When the company identifies its vision and mission it must assess its current situation in the market.
Usually, tactics rather than strategies are changed to meet the new conditions, unless firms are faced with such severe external changes as the 2007 credit crunch.
Measuring performance is another important activity in strategy monitoring. Managers have to compare their actual results with estimated results and see if they are successful in achieving their objectives.
It also redistributes responsibilities and powers between managers.
Managers may be moved from one functional area to another or asked to manage a new team.
Or market development strategy may require an additional division to be added to the company.
Every new strategy changes the organizational structure and requires reallocation of resources.
Business' vision answers the question: What does an organization want to become?
Without visualizing the company’s future, managers wouldn’t know where they want to go and what they have to achieve.
Components: Objectives, Business level, Corporate level and Global Strategy Selection Tools used: Scenario Planning, SPACE Matrix, Boston Consulting Group Matrix, GE-Mc Kinsey Matrix, Porter’s Generic Strategies, Bowman’s Strategy Clock, Porter’s Diamond, Game Theory, QSP Matrix.
Successful situation analysis is followed by creation of long-term objectives.