This opening chapter sets the scene for the book. It tells you what the book is about.

It looks at some of the major principles that the book will deal with. It defines the concept of strategic management, and tells you about the strategic management approach that is used to structure the contents of the work. STRATEGIC MANAGEMENT AND STRATEGIC PLANNING This book is about strategic management and strategic planning. The establishment of strategies, the making of plans, and the implementation of those strategies and plans are key management decision-making processes in any kind of enterprise. The strategic decision-making process takes place, in some form or other, in most kinds of organization. The process may be formalized and systematic. Or it may be informal, opportunistic and ad hoc in nature. The formulation of strategies and plans is a prime responsibility of entrepreneurs in small to medium-sized businesses (or SMEs); and of leaders, chief executives, presidents, directors, and managers in private and public companies. Business planning and the formulation of strategy is also a prime responsibility of managers and administrators in such public sector and notforprofit organizations as hospitals, government agencies, police and security agencies, schools and universities, charities, and fund-raising institutions. This book, like its predecessor then entitled An Introduction to Business Strategy and published in 1999, takes a strategic management approach to the subject of strategic decision-making and business planning. The strategic management approach was first described by Kenneth Andrews (1980). This approach is practical and comprehensive. It also corresponds with the realities of life in enterprises and organizations as you may experience it. It is widely used by practitioners, managers, and academics. Kenneth Andrews Definition of Strategic Management Andrews comments that strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be and the nature of the economic and noneconomic contribution it intends to make to its shareholders, employees, customers and communities the strategic decision contributing to this pattern is one that is effective over long periods of time, affects the company in many different ways and focuses and commits a significant portion of its resources to the expected outcomes. The pattern resulting from a series of such decisions will probably define the central character and image of a company, the individuality it has for its members and various publics, and the position it will occupy in its industry and markets. It will permit the specification of particular objectives to be attained through a timed sequence of investment and implementation decisions and will govern directly the deployment or redeployment of resources to make these decisions effective. Some aspects of such a pattern of decision may be in an established corporation unchanging over long periods of time, like a commitment to quality, or high technology, or certain raw materials, or good labour relations. Other aspects of a strategy must change as or before the world changes, such as product line, manufacturing process or merchandising and styling practices. The basic determinants of company character, if purposefully institutionalized, are likely to persist through and shape the nature of substantial changes in product-market choices and allocation of resources

WHAT IS STRATEGIC MANAGEMENT? Strategic management is concerned with the character and direction of the enterprise as a whole. It is concerned with basic decisions about what the enterprise is now, and what it is to be in the future. It determines the purpose of the enterprise. It provides the framework for decisions about people, leadership, customers or clients, risk, finance, resources, products, systems, technologies, location, competition, and time. It determines what the enterprise should be capable of achieving, and what it will not choose to do. It will determine whether and how the organization will add value, and what form that added value should take. Strategic management is also concerned with management planning and decision-making for the medium to long-term future. It is concerned with the anticipation of that future, and with the establishment of a vision or view of how the enterprise should develop into the future that it must face. Missions, Objectives and Strategies The process of strategic management is used to establish missions, objectives, and strategies for the organization. Statements of mission specify what the enterprise is about, what its values are, and what its purpose is to be. The mission of the Walt Disney Company is for example to develop global entertainments that bring happiness to millions. Objectives are statements of the major goals that the organization is aiming to achieve. Objectives specify or quantify the targets towards which leadership, effort, investment, and willpower are to be directed. Objectives might for instance be specified in terms of market share, profitability, the number of new products developed, the cost of government services, or the number of patients treated. Strategies are the means or the game-plan by which enterprise mission is put into practice, and objectives achieved. For instance, a manufacturing company might wish to compete on the basis of making available very high quality and reliable products sold under a strongly promoted brand name such as Mercedes-Benz, Hewlett-Packard, Orange, or Cadbury. Others might choose to compete by making products or services available at the lowest possible price, which means that they are going to have to keep their costs down to a minimum. A hospital or healthcare system might instead be based on public funds and state provision (as in the UK), or it might be based on market competition between private healthcare companies (as in the USA). The identification of mission, objectives, and strategy depend on understanding the basic nature and purpose of the enterprise. The process of strategic management and business planning therefore requires us to understand what business we are in.