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Short Note Strategic Management

In: Business and Management

Submitted By snow0914
Words 598
Pages 3
Chapter 11
Strategic Priorities and Strategic Options

Syllabus ▪ Growth and change ▪ Centralization / decentralisation

Reference ▪ Haberberg, A. & Rieple, A., The Strategic Management of Organisations, Prentice Hall/Financial Times, 2001, pg 427-476

STRATEGIC ANALYSIS

Strategic Issues
A strategic issue is something that the organisation needs to be concerned about and therefore, needs to address. Strategic issues may be positive or negative in nature.

Strategic priorities
Priority is a measure of two things:

1. The importance of an issue to the firm’s survival or success 2. The urgency with which the issue must be addressed

Strategic options
A strategic option is a possible answer to address a strategic issue. For example, in response to the issue ‘How should a firm react to new technologies?’ the organisation may have a number of alternative options. For example:

Option 1: It can invest heavily in the new technology to become a leader in using it in developing new products.

Option 2: It can ignore the new technology because the firm believes that established technologies are cheaper or more reliable.

Option 3: It can make a small investment now in the new technology to see if it were viable for future use. If the initial investment showed the technology is going to be viable, then invest more later.

STEP 1: IDENTIFY STRATEGIC ISSUES

The steps involved in identifying strategic issues are:

1. Review the external environment

Find out how the environment is changing and their effects on the business, whether they are opportunities or threatening to the business.

2. Review the internal environment

▪ Financial performance: Look for growth or decline trends in the numbers which may tell you whether the firm is failing [in trouble] or a success....

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