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Management Theory And Leadership Practice (MGT3304) Chapter 6 Notes

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Sandra Watson
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strategic position emerges from three sources:

Virginia Polytechnic Institute and State University

Management Theory And Leadership Practice (MGT3304)

6.1: What is Effective Strategy
Strategic Positioning and Its Principles
Strategic Positioning: Attempts to achieve sustainable competitive advantage by preserving
what is distinctive about a company. Three key principles underlie strategic positioning
1. Strategy Is the Creation of a Unique and Valuable Position
a. Strategic Position emerges from three sources
i. Few Needs, Many Customers
ii. Broad Needs, Few Customers
iii. Broad Needs, Many Customers
2. Strategy Requires Trade-Offs in Competing
a. A company has to choose not only what strategy to follow, but what strategy not
to follow
3. Strategy Involves Creating a “Fit” among Activities
a. “Fit” has to do with the ways a company’s activities interact and reinforce one
another
6.2: The Strategic-Management Process
The Five Steps of the Strategic-Management Process
Step 1: Establish the Mission, Vision, and Values Statements
Step 2: Assess the Current Reality
– Current Reality Assessment (aka Organizational Assessment): To look at where the
organization stands and see what is working and what could be different so as to
maximize efficiency and effectiveness in achieving the organization’s mission
Step 3: Formulate the Grand Strategy
– Grand Strategy: Explains how the organization’s mission is to be accomplished. Three
common grand strategies are growth, stability, and defensive.
– Strategy Formulation: The process of choosing among different strategies and altering
them to best fit the organization’s needs
Step 4: Implement the Strategy
– Strategy Implementation: Putting strategic plans into effect
Step 5: Maintain Strategic Control: The Feedback Loop
– Strategic Control: Consists of monitoring the execution of strategy and making
adjustments, if necessary
6.3: Establishing the Mission, Vision, and Values Statements
Characteristics of a Good Mission Statement
Characteristics of a Good Vision Statement
– Should be positive and inspiring
Characteristics of a God Values Statement
– Should not be hollow statements, they must be ingrained, inherent, and sacrosanct
6.4: Assessing the Current Reality
An assessment helps to create an objective view of everything the organization does: its
sources of revenue or funding, its work-flow processes, its organizational structure, client
satisfaction, employee turnover, and other matters.

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Management Theory And Leadership Practice (MGT3304) Chapter 6 Notes

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