Strategic Directions-formal and informal

Essay by AmBeddUniversity, Bachelor's July 2004

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2) Discuss the ways in which managers arrive at new strategic directions-formal and informal. Which is the best?

The first phase of a strategic formulation process is the planning phase. A statement of missions and objectives is developed which charts the direction of the company and provides the groundwork for subsequent strategic processes. The objectives of a company evolve from the stated mission. After the mission and objectives are completed, a company must develop an environmental assessment, which will entail collecting and compiling necessary geographic data as well as forecasting trends and actions by the competition. The next step involves an internal analysis, which determines the strengths and weaknesses of the firm's financial and managerial expertise compared to that of its competitors. This analysis focuses on the company's resources and operations. Next, company managers must ascertain the relative and potential competitive position of firms in that market or location. This will enable their company to identify potential problems, which need correcting or the need to eliminate consideration of other strategies.

The next major step in the strategic planning process considers the advantages and disadvantages of various strategic alternatives. The two levels are the overall approach to the global marketplace and the specific entry strategy appropriate for each country considered.

3) Explain the process of environmental assessment. What are the major international variables to consider in the scanning process? Discuss the levels of environmental monitoring that should be conducted. How well do you think managers conduct environmental assessment?

Environmental assessment is a major step in weighing international strategic options. The list of variables to consider during the environmental scanning process include the following:

a) Political instability- such matters as war, political unrest and terrorist activity could jeopardize the ownership or viability of a foreign business.

b) Currency instability- Inflation and fluctuations...