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, Strategic Management
STRATEGY AND STRATEGIC MANAGEMENT Learning Outcome 01:
Differentiate between the terms 'strategy' and
Strategy 'strategic management'
▪ All businesses have a reason/purpose for their existence
○ Purpose of a business/organisation may be articulated in the form of a vision and mission statement
▪ Vision: a statement of what the business wants to become & where it wants to be in the future
▪ Mission statement: aligns the business with its vision i.t.o its products and/services, market and
technology
▪ Strategies: the long-term direction of the business
○ The means by which businesses achieve their objectives
○ The deliberate choice of a set of activities to achieve a sustainable competitive advantage
Important considerations when formulating business strategies:
1. Strategies are relevant for:
- A business as a whole
- For the strategic business units
- The various functions that comprise the business (marketing, finance, operations and supply chain
functions)
- The individual in the business
2. Businesses succeed when their strategies are appropriate to their circumstances
○ Must be a fit between business strategies and the circumstances in their external and internal
environments
○ Must be a fit between the strategies & the strengths and weaknesses in the internal environment &
the opportunities and threats in the external environment
3. Strategies should be feasible in respect of business resources, skills and capabilities
4. Managers should ensure that business strategies are desirable to all stakeholders
○ Responsible manager considers the expectations of all stakeholders when strategies are formulated
▪ To succeed and ensure sustainability, businesses require a competitive advantage
▪ Overall goal of strategic management: the achievement of a sustained competitive advantage — a
situation where a business is able to outperform its competitors over the long term
The goal of the responsible business will be to achieve the coexistence of a sustained:
• Economic competitive advantage
• Above-average social value creation
• Above-average environmental value creation
Called 'responsible competitiveness'
A responsible strategy
A responsible strategy:
• Links the internal strengths and weaknesses of a business with opportunities and threats from its external
environment
• Builds responsible competitiveness for the business
• Continuously seeks ways to improve business performance
○ Aspects such as profits, employee wellness, ethical conduct, job creation, climate change, etc.
• Meets the expectations of external and internal stakeholders
• Aligns itself with environmental requirements in a global context (such as climate change and climate
action)
• Verbalises the aspirations of the business regarding ethical conduct
Strategic management
▪ Strategic management: the process of crafting, implementing and controlling business strategies with the
goal of achieving a sustainable competitive advantage
▪ Goal of strategic management (for the responsible business): to craft, implement and control strategies
to achieve responsible competitiveness
1. Strategic management is about the strategy itself, the establishment of a clear direction for the
business & every business unit, product, service, function, etc. in the business
○ Called the strategic analysis phase in the strategic management process
2. Strategic management entails the creation of a means of getting to the required end
○ Called strategy formulation
3. Strategic management requires excellence in the implementation of strategies to yield performance
○ Referred to as strategy implementation in the strategic
4 Phases of strategic management described are
▪ Strategic management is about strategic change; not about business as usual referred to as the traditional view of strategic
▪ Creativity and innovation are required to ensure the business is responsive to pressures for change & the management
strategies are improved and renewed
▪ Businesses need to adapt and change in a dynamic environment
4. Strategic management entails strategic control
○ Strategic control is necessary to determine the success of the business in attaining its vision, mission
and goals
▪ The results of a comparison between actual results vs. Intended/planned outcomes can lead to strategic
change
Phase 1: Strategic
analysis
Involves the
development of a Phase 3: Strategy
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