Key Terms in Strategic Management

1. Competitive Advantage
 Anything that a firm does especially well compared to rival firms.
 Getting and keeping competitive advantage is essential for the long term success in an organization.
 A firm must strive for sustained competitive advantage.
2. Strategists
 Strategists are individuals who are most responsible for the success and failure of an organization.
 Strategists have various job titles such as CEO, President, Owner, Chair of the board, Executive Director, Chancellor, Dean, Entrepreneur.
3. Vision statement
• Answers the question “ what do we want to become”
• It is the first step in strategic Management.
• Many vision statements are single statements
“Our vision is to take care of your vision”
4. Mission Statements
Are enduring statements of purpose that distinguish one business firm from other similar firms.
A mission statement identifies the scope of a firm’s operations.
5. External Opportunities and Threats
• Are factors which could harm or benefit the organization.
• Comprise of the following:
• Economic
• Social
• Political
• Technological
• Cultural
• Demographic Environment
6. Internal Strengths and Weaknesses
• Controllable activities that are performed especially well or poorly.
• Relate to functional area
• Marketing
• Management
• Finance/Accounting
• Production/Operations
• Strengths and weaknesses are determined relative competitors.
• Relative deficiency or superiority is important information
7. Long Term Objectives
• Objectives can be defined as specific results that an organization seeks to achieve.
• Long term means more than five years.
Objectives are essential for organizational success
8. Strategies
Are the means by which long term objectives will be achieved.
Levels of Strategies
a. Corporate Strategy
b. Business Strategy
c. Functional strategy
d. Operational Strategy
9. Annual Objectives
• Annual objectives are short term milestones that organizations must achieve to reach long term objectives.
• Annual objectives should be stated in terms of management, marketing, finance/accounting, production/operations, research and development and MIS accomplishment.
10. Policies
• Policies are the means by which annual objectives will be achieved.
• Policies include guidelines, rules, and procedures established to support efforts to achieve stated goals.