Strategic management refers to a branch of management that deals with an organization’s strategic objectives. This may include the development of the organization’s vision, outlining its operational objectives and coming up with and implementing the organization’s strategies. It may also include the formulation and application of deviation corrective measures where necessary. Strategic management process should not be confused with strategic planning process, a related but completely different branch of management. This article seeks to answer the question “what is strategic management process” Before venturing deeper, first let us define strategic management process.
The strategic management process, look at it as a philosophical approach to doing business. This is a blanket terminology that refers to a process by which managers come up with and implement an operational strategy that grants the organization a competitive advantage. The upper management of an organization must first use data analytics to think strategically, and then use the strategic management process to put the thought into action.
A few important aspects regarding vision are as follows:
- It is more of a dream than articulated idea.
- It is an aspiration of organization. Organization has to strive and exhert to achieve it.
- It is powerful motivator to action.
- Vision articulates the position of an organization which it may attain in distant future.
A mission should define the organization’s line/lines of business, identify its products and services, and specify the markets it serves at present and shortly. It should be achievable, in writing, and have a timeframe for achievement. Since a mission is a relatively permanent part of an organization’s identity, it should be broad-based but customer-focused.
The mission is not to make a profit. For, profit cannot differentiate one company from another. It is to give the organization its own special identity, business emphasis, and path for development. It must set a firm apart from other similarly situated firms.
No hard and fast rules exist for the formulation of a strategic management mission statement. An analysis of various strategic management mission statements of different business firms indicates that a mission statement needs to include some common issues, such as:
- Customer needs (i.e., what is being satisfied)
- Customer groups (i.e., being satisfied)
- Firm’s activities, technologies, and competencies (i.e., how the firm goes about creating value for customers and satisfying their needs)
Strategic management is an essential component of businesses. It refers to the formulation and implementation of the goals and initiatives involved in the strategies, laid out by the stakeholders of an organisation. In simpler words, to ensure wise decision-making processes, it is important that strategies are in place to support the business functions and operations. Strategic management therefore entails evaluating business goals, the organisation’s vision and objectives as well as the future plans. In addition, a strategic management process is employed to ensure that the business runs effectively and efficiently. Communicating this strategy internally and externally is crucial for success, in order for both staff and the organisation to understand the purpose and direction along with external parties understanding what you as an organisation stands for.
The main importance of strategic business management is to assist the business’ profit and decision making, yet its functions can also be broken down. Here are some reasons why strategic management is a crucial business practice:
Planning: This is an essential management tool for any company. The main task in the strategic planning process is predicting future trends that will help the business in building In order to make this happen, strategic planning tools need to be used instead of simple planning processes.
Forward thinking: Through a well thought out strategy, you will be able to draw up clear, long term goals. These goals are important so that you have a distinct idea of how to move forward which can prove beneficial for an organisation’s overall growth.
Resource allocation: The tough aspect of strategy management is that you are pushed to make choices under pressure, often with limited resources. Strategy management teaches you to ensure the company’s resources, in terms of products and services, are used wisely and vested in the most promising opportunities. This is why a good strategy manager will tell you that less is more, as long as it is the best.
Strengths and weaknesses: No one knows a business better than its owner, who will be able to recognise the strengths and weaknesses of their company. However, just being aware of the shortcomings and strong points of a business is not enough. Strategic planning is employed to bridge the gap between the capability void and the strength of a company.
Environmental impact: When running a business, you must know how your business impacts the environment and vice-versa. Strategy management involves being aware of the future potential shifts in the market that may affect the business and its environmental impacts.