MEI609 Study Guide
Unit 3: Strategic Management for the Entrepreneur
3a. Apply appropriate tools for strategic management
- What tools are used to consider the external environment?
- How can a SWOT analysis be applied to determine opportunities?
- When analyzing the value chain, what should companies consider?
Strategic analysis is the process that firms use to study and understand the many different layers and aspects of the competitive environment. Environmental scanning is the systematic and intentional analysis of a firm's internal and external state. A SWOT analysis is a tool used for strategic analysis and requires the identification of strengths, weaknesses, opportunities, and threats. When an organization determines its weaknesses, it can turn these weaknesses into potential opportunities to improve. In addition, organizations that understand threats and opportunities are better able to create plans to deal with external threats and constantly improve their organization by taking advantage of opportunities.
PESTEL Analysis is an analysis of the external environment and looks at political, economic, sociocultural, technological, environmental, and legal factors. Companies also use Porter's Five Forces, VIRO, and the BCG matrix to analyze the external environment.
To consider the internal environment, companies look at the value chain which consists of support activities, like human resources, and primary activities, like marketing. When companies look at the value chain, they are able to understand the aspects that go directly into creation of their product or service, and can prioritize based on these elements.
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3b. Propose appropriate mission, values, and goals for an entrepreneurial venture
- How does a company utilize the strategy cycle?
- What elements of strategic planning occur in each aspect of the strategy cycle?
- What makes a good vision statement? Mission statement?
A strategy cycle relates to mission and values in that it is part of the strategy cycle. First, companies develop objectives, choose and create strategies, implement strategies, and measure and evaluate performance, all of which are tied to the overall vision and mission of the company. Companies can use the strategy cycle as a model to ensure they are tracking progress toward their mission and values.
The vision is a broad statement and describes why a company exists. A mission is more focused and asks how the company will accomplish its vision.
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3c. Create measurable goals and plans to implement a strategic plan
- How does the control process help to ensure goals are met?
- In what element of the POLC model is goal-setting usually done?
- How might an entrepreneur apply the POLC model to ensure goals are being met?
By applying the POLC model, which stands for planning, organizing, leading and controlling, managers can set effective goals and ensure they check in to ensure the goals are being met. There are different types of planning which include strategic, tactical, operational, and contingency planning. Each type of planning process has a different timeline. Once plans are made, the manager organizes people and resources to assist in meeting the planned goals.
An important part of planning and goal setting is to ensure control, in other words, a process is in place to ensure performance is measured, and information gained from this measurement is used to set and revise goals on an as-needed basis.
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Unit 3 Vocabulary
This vocabulary list includes terms you will need to know to successfully complete the final exam.
- environmental scanning
- mission
- PESTEL Analysis
- POLC Model
- strategic analysis
- SWOT analysis
- value chain
- vision