As the Opening Profile on FedEx illustrates, companies around the world are spending increasing amounts of money and time on global expansion in search of profitable new markets, acquisitions, and affiances - but often spending those resources on very different strategies. Experts predict that those companies with operations in major overseas markets (North America, Europe, and Asia) are far more likely to prosper in the twenty-first century than those without such operations. Because these new international opportunities are far more complex than those in domestic markets, managers must plan carefully - that is, strategically - to benefit from them.
The process by which a firm's managers evaluate the future prospects of the firm and decide on appropriate strategies to achieve long-term objectives is called strategic planning. The basic means by which the company competes - its choice of business or businesses in which to operate and the ways in which it differentiates itself from its competitors - is its strategy. Almost all successful companies engage in long-range strategic planning, and those with a global orientation position themselves to take full advantage of worldwide trends and opportunities. MNCs, in particular, report that strategic planning is essential to contend with increasing global competition and to coordinate their far-flung operations.
In reality, though, that rational strategic planning is often tempered, or changed at some point, by a more incremental, sometimes messy, process of y strategic decision making by some managers. When a new CEO is hired, for ex-sample, she will often call for a radical change in strategy. That is why new lead-
• ers are very carefully chosen, on the basis of what they are expected to do. So, while we discuss the rational strategic planning process here, because it is usually the ideal, inclusive, method of determining long-term plans, we need to rememb .er that, throughout, there are people making decisions, and their own personal judgment, experiences, and motivations, will shape the ultimate strategic direction.
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