Strategic Management is all about the strategies that a company has to carry to achieve better performance and competitive advantage. It deals with making and implementing decisions about future direction of our organization. It is a continuous process that evaluates and controls the business in which an organization is involved; it sets goals and strategies to meet all existing and potential competitors; and then reevaluates strategies on regular basis to determine how it was implemented and to improve it for further business of the organization. In short, it is the overarching methodology behind the business operations.
Strategic Management is best implemented when everyone within the business best understands the strategy.
The five stages of the process are
The purpose of Goal Setting is to clarify the vision of the business. With a defined strategy in mind, the management identifies and communicates goals and objectives.
These goals and objectives correlate to the predicted outcomes, strengths and opportunities.
These objectives include quantitative ways to measure the success or failure of the goals, along with the corresponding organization policy.
Typically this stage consists of identifying three key facets – First define both long-term and short-term objectives. Second, identify the process of how to accomplish the objectives.
Finally, customize the process for the staff by giving each person a task with which he/she can succeed.
Strategic Analysis is a time consuming process, which involves comprehensive market research both on the external markets as well as internal assessments.
This is a key stage because the information gained in this stage will shape the next two stages.
The focus of the analysis should be on understanding the needs of the business as a sustainable entity, its strategic direction and identifying initiatives to help the business grow.
Here we review the information we gleaned from completing the analysis. We determine what resources the business currently has that will help us reach the defined goals and objectives.
In this stage we also identify any areas in which the business requires external resources. We prioritize the issues by the importance of their success.
Once we prioritize, we begin the process of formulating the strategy.
A successful strategy implementation is critical to the success of every business venture. This is the “action” stage of the strategic management process.
As this stage, if the strategy does not work for the current business structure, then a new structure will be put in order at the beginning of this stage.
Everybody at the organization is given clear understanding of their roles and responsibilities, how they fit in the hierarchy and the overall goal. Also, the resources and/or funding will be secured at this juncture.
Evaluation and Control
The actions in this stage include performance measurements, consistent review of internal and external issues and making corrective action whenever necessary. The company will determine the progress by measuring the actual results versus the plan.
The parameters are set in such a way that they mirror the goals we have set in the stage one. We monitor the internal and external issues to enable us to react to any substantial change in our business environment. If the strategy is not moving the company towards its goal, we undertake corrective actions. If those actions are not successful we repeat the strategic management process.
The internal and external issues are constantly evolving; hence any data gained in this stage will be retained to help us with our future strategies.