What broad business are we in? What do we want to be in?

• Newspaper industry or the communications industry?
• Railway industry or the transportation industry?
• Wholesale, retail or both?
• Banking or financial services?
• Application software or the information industry?
• Financial holding company or operational management company?
• Medical accessories or the health industry?
• Educational books or the education industry?
• Tourism, or the leisure industry?
• What products or business areas ?
• Newspapers, magazines
• Beer, wine, sprits
• Insurance, assurance, re-insurance
• Hardware and software

What geography to operate in?

• 120 countries?
• EEC?
• One country?
• One town?

What are the critical success factors?

• Critical success factors (never more than eight) are those you wake up at night thinking about. They are vital to achieve your goals.

An example for a transport, warehousing, and distribution company:

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Strategic management is concerned with:

It is a top management activity, it is normally continuous, and, by its very nature, very time consuming.

It is to do with managing change. It is focused on understanding not only the current environment, but anticipating future changes in the environment. In a large organisation it is a staff activity with top management review and decision, as opposed to a line activity. The staff proposes and the line disposes.

Strategic management is concerned with identifying opportunities and risks, and devising plans to maximise the former and minimise the latter.

The normal time horizon for strategic management is five to seven years, but in certain industries it has to be longer. For example, if it takes five years to get a plant operational from the date of starting construction, and if the site selection, design, planning, approvals, give another four year minimum lead time, then strategic planning may need to be on a ten to fifteen year horizon.

Normally the strategy is developed by product or business area, by function, and by geography.

For example:

Product or business area :

• small cars
• large trucks
• government sales
• wholesale
• retail

Function :

• personnel
• manufacturing
• distribution
• information systems
• administration

Geography :

• France
• Germany
• USA
• Japan
• China

and all strategies will have as their common ground the contribution to the Business Goals for the organisation.

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3.3. Strategic Plan Check List

• Statement of the environment
• Market sizing
• Competitive outlook
• Major opportunities and risks
• Goals and objectives
• Critical success factors
• Strategies and action programs

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This is the end of Section Three: Strategic Management

Go to Section Four: Quality Management