A Business Encyclopedia

Strategic Management

Definition: The term ‘strategic management’ is used to denote a branch of management that is concerned with the development of strategic vision, setting out objectives, formulating and implementing strategies and introducing corrective measures for the deviations (if any) to reach the organization’s strategic intent. It has two-fold objectives:

  • To gain competitive advantage, with an aim of outperforming the competitors, to achieve dominance over the market.
  • To act as a guide to the organization to help in surviving the changes in the business environment.

Here, changes refer to changes in the internal environment, i.e. within the organization, introduced by the managers such as the change in business policies, procedures etc. and changes in the external environment as in changes in the government rules that can affect business, competitors move, change in customer’s tastes and preferences and so forth.

Strategic Management Process

Strategic Management Process

Strategic Management Process

  1. Defining the levels of strategic intent of the business:
    • Establishing vision
    • Designing mission
    • Setting objectives
  2. Formulation of strategy
    • Performing environmental and organizational appraisal
    • Considering strategies
    • Carrying out strategic analysis
    • Making strategies
    • Preparing strategic plan
  3. Implementation of strategy
    • Putting strategies into practice
    • Developing structures and systems
    • Managing behavioural and functional implementation
  4. Strategic Evaluation and Control
    • Performing evaluation
    • Exercising control
    • Recreating strategies

Strategic Management is all about specifying organization’s vision, mission and objectives, environment scanning, crafting strategies, evaluation and control.

Importance of Strategic Management

  • It guides the company to move in a specific direction. It defines organization’s goals and fixes realistic objectives, which are in alignment with the company’s vision.
  • It assists the firm in becoming proactive, rather than reactive, to make it analyse the actions of the competitors and take necessary steps to compete in the market, instead of becoming spectators.
  • It acts as a foundation for all key decisions of the firm.
  • It attempts to prepare the organization for future challenges and play the role of pioneer in exploring opportunities and also helps in identifying ways to reach those opportunities.
  • It ensures the long-term survival of the firm while coping with competition and surviving the dynamic environment.
  • It assists in the development of core competencies and competitive advantage, that helps in the business survival and growth.

The basic purpose of strategic management is to gain sustained-strategic competitiveness of the firm. It is possible by developing and implementing such strategies that create value for the company. It focuses on assessing the opportunities and threats, keeping in mind firm’s strengths and weaknesses and developing strategies for its survival, growth and expansion.

Leave a Reply

Your email address will not be published. Required fields are marked *


Related pages

introduction of sole proprietorshipeconomic and non economic factors influencing businesstotal utility economics definitiondefine laissez faire policydefine rowenopen market operation of rbidefinition of a sole proprietorego id superego examplesmonopolies definemaximization meaningtraining techniques in hrmcyclical unemployment refers todiversification definition marketingpayback definitionwhat does oligopolistic meanwage fund theory was propounded bywhat is the definition of neoclassicalinflation definition macroeconomicsformal and informal group definitiondefine tqmdivested meaningdefinition of fixed cost in economicsminimum amount for neft transferpromotion mix toolsdiminishing marginal utility explains whyadvantages and disadvantages of financial leveragetypes of speculatorsdefine pure monopolyrbi acronymadvantages and disadvantages of financial institutionsisoquant economicsqouta samplinginformal networks definitionalderfersmoral suasion economicswhat is expectancy theory of motivationfred fiedler contingency theory of leadershipvie theory of motivationdefine fiscal deficitequity and expectancy theoryfive porter forces analysiscash outlay definitionadvantages and disadvantages of a loanwho is joseph schumpeterabout nps schemewhat is the full form of crromo commercialvan heusen originkisan patraprinciples of management henri fayolcost push inflationsalivates definitionkisan vikas patra maturitylockbox bank accountforming storming norming performing adjourningwhat is the johari windowjudgemental sampling examplebrand equity pyramidteleology meaningaptitude test gategeneric strategy alternativesbehavioural segmentation exampledefine intrapreneursproperties cobb douglas production functionpayroll meaning in hran autocratic leadergreen shoe option exampledifference between collective bargaining and collective agreementverbal communication wikipediamanagerial grid modelhirer definitiondefine propoundeddefinition of correlationaldefine taylorismdefinition of a kioskcarrot stick approachprinciple of henri fayolwhat is laissez faire leadershipdefine piece rate