Strategic Management

What is strategy?  When your friend tells you that his “strategy” in basketball is to win, he is not telling you a strategy at all.  A strategy is a plan of action designed to achieve a goal—in the case of your friend, a more appropriately defined strategy for his basketball game would be: “I am going to apply defensive pressure and force the opposing team to make mistakes with the end goal of winning the game.”  In this course, you will learn that you must first clearly define your goals before you develop strategies in order to achieve them.  You will also learn that strategy in business is similar to strategy in sports, war, or politics; the parallels are so close that early business strategists studied military strategies in depth.  The science of strategy development has developed beyond this by now, but the parallels still exist.

Strategic Management involves two processes: first, the process of identifying specific goals for a firm and designing strategies to achieve those goals, and second, the process of implementing those strategies.  It is easy to say that your goal is to increase sales by 50% in three years, but how do you go about achieving that goal?  Are you going to lower prices, acquire a competitor, move into other businesses, or something else?  Assuming you are going to lower prices, how are you going to do so and keep profits up?  These are the sorts of questions that strategists must answer.