The speed & scale of change today are creating more complex challenges in strategy management. Organizations need to unite manifold expertise to think, plan & act quicker, and also be able to regularly reinvent themselves. Empower yourself by responding as well as adapting to a disruptive world by attaining a vision on the present & appearing landscape, predicting the future of customers, businesses & industries, and notice new market and portfolio opportunities. Shape & deliver on your connected strategic agenda by defining your goal for customers as well as all key stakeholders, negotiating complex problems & choices, and balancing innovation, risk & reward.
Strategy management is the continuing planning, observing, inspecting & evaluation of all necessities an organization needs to meet its goals & objectives. Moreover, Changes in business environments will need organizations to regularly evaluate their strategies for success. Further, Strategic Management presents a wider viewpoint to the employees of an organization.
The strategy management process helps organizations review their current situation, put down strategies, deploy them as well as evaluate the effectiveness of the implemented management strategies. Strategic management is nothing but planning for both expected as well as impractical happenings. The big role of strategic management is to integrate several functional areas of the organization wholly, also to make sure these functional areas coordinate & get together well. Another importance of strategic management is to keep a consistent eye on the goals & objectives of the organization.
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Benefits of Strategic Management
- Strategic management concept is commonly thought to have financial as well as nonfinancial benefits. A strategic management process helps an organization as well as its leadership to think about & plan for its future existence, realizing the main responsibility of a board of directors.
- Strategic management provides a direction to the organization & also its employees. Unlike at one time strategic plans, effective strategic management process consistently plans, inspects & tests an organization’s activities, resulting in greater market share, operational efficiency & profitability.
Communicate and cascade the strategic vision throughout the organisation to ensure that everyone is working towards the same goals.
Keys to Successful Strategic Management
1. Evaluate your Contenders, Industry & Market Trends
The initial step is to evaluate the external forces forming your industry, understand the competitive as well as managerial landscape, and identifying market trends. How big is the industry? How fast is it growing? Who are the key contenders? What moves are they making? What are pricing trends? Think about this as an “external” assessment of complete market trends that impact your business.
2. Carry out a SWOT Analysis on Your Business
In co-existence with an external market evaluation, an internal organizational review will form the strategy & set a standard for the organization’s culture as well as capabilities. So, A SWOT analysis will evaluate the organization’s strengths, weaknesses, opportunities, and threats.
Strengths refer to financial resources, staff, customer base, sales channels, products, etc. Further, Weaknesses refer to missing sales channels, staff, market position, customer complaints, etc. Moreover, Opportunities to enter complementary markets, raise funds, form alliances, launch new products, etc. Further, Threats refers to lack of financial resources, losing key staff, etc. So, Take it as an “internal” assessment of your business. So, With this information, leaders will be able to figure out a set of offensive & defensive strategies that take advantage of opportunities & balance the risks of possible threats.
3. Specify Your Sight, Goal & Threats
Organization’s goal defines, Why do we exist? And sight defines What are we providing & where we are moving? This activity integrates & encourages the leaders & finally everyone to welcome the organization’s greater aim. Holding the external & internal evaluation, it is essential to focus on the priorities to attain that vision. So, Now, Leaders are involved in sound decision-making conversations that will shift the organization forward towards its goals. Having an objective, a skilled facilitator can be useful at this point to help bring up, clarify, test & coordinate leadership’s views.
4. Define Functional Objectives & Initiatives
With a clear set of goals & priorities, the next step is to define the specific objectives that trigger the strategic plan. This is best done at the functional level to enable alignment as well as increase ownership. So, Objectives should be SMART—Specific, Measurable, Achievable, Results-Focused & Timebound.
5. Decide Budgets, Staffing & Financial Requirements
Once all the departmental requirements have been defined & measured, now you can cluster them up into one centralized corporate plan. So, The strategic plan is operationalized by assigning sponsors, champions & resources behind the plan. Senior leaders act as the sponsors of particular initiatives, managing their budgets & staff. At this point, it may be necessary to identify & place strategic activation teams representing the several functions charged to tackle cross-functional strategic initiatives.
6. Identify & Track Success Measures Monthly and Quarterly
If you want to make sure that the plan is being executed then keep track of progress on strategic goals & objectives. The discipline to make progress & report on success measures ensures accountability & follow-through.
Strategy Management Process
In general, the strategy management process typically includes 4 phases:
1. Environmental Scanning
Environmental scanning refers to a process of collecting, inspecting & providing information for strategic purposes. It helps in analyzing the internal & external factors influencing an organization. The environment must be scanned to determine the development & prediction of factors that will affect organizational success.
The internal analysis involves employee interaction with other employees & management, and management interaction with shareholders, brand awareness, organizational structure, main staff, etc. Discussions, surveys & interviews can be used to evaluate the internal environment which helps in identifying the strengths & weaknesses of an organization. As the environment is dynamic, it becomes necessary to identify competitors’ moves & actions.
External analysis studies industry environment, national environment & wider socio-economic environment. Inspecting the industry environment needs an evaluation of the competitive structure of the organization’s industry, including the competitive position of a particular organization & its main competitors. The external analysis involves exploring, legal, social, government, technological & international factors that may influence the environment.
2. Strategy Formulation
It is the process of deciding the best course of action for achieving organizational goals & hence attaining organizational purpose. After performing environment scanning, managers make business, corporate & functional strategies. A corporate strategy describes the company’s complete corporate strategy. It defines the long-term objectives & generally affects all the business-nits under its umbrella.
Business strategy prepares at the business-unit level. This strategy highlights the building up of the company’s competitive position of products or services. The business strategy covers all the activities & tactics for competing in denial of the competitors. A functional strategy points up a particular functional area of an organization. It sets down to attain some objectives of a business unit by maximizing resource productivity.
3. Strategy Implementation
Strategy implementation refers to making the strategy work as intended or putting the organization’s chosen strategy into action. It involves designing the organization’s structure, developing a decision-making process, distributing resources & managing human resources.
The Steps in Implementing a Strategy:
- Spending of ample resources on strategy-essential activities.
- Creating strategy-encouraging policies.
- Employing best policies & programs for consistent improvement.
- Associating reward structure to fulfillment of results.
- Making use of strategic leadership
- Excellently formulated strategies will fail if they are not correctly implemented.
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4. Evaluation & Control
It is the last step of the strategy management process. The key strategy evaluation activities are assessing internal & external factors that are the root of present strategies, measuring performance & taking corrective actions. Evaluation makes sure that the organizational strategy & its execution meet the organizational goals. Strategic Evaluation is notable because of factors like – developing inputs for new strategic planning, the desire for feedback, appraisal & reward, development of the strategic management process, judging the validity of strategic choice, etc.
Monitor and evaluate key performance indicators on a regular basis to assess the success of implemented methods and make required adjustments.
Strategic management and various types of strategic management ensures that the performance target of an organization is met and continues to grow. It’s absolute goal is to assist the organization to gain a competitive edge over its competitors. Whether an organization is small, medium or large, every type of organization needs strategic management and human resource management to know their effectiveness within the industry and put up with the appropriate actions to attain their desired outcome.
Frequently Asked Questions
What is Strategy Management with example?
Strategic management is the continuing planning, observing, inspecting & evaluation of all necessities an organization needs to meet its goals & objectives. Changes in business environments will need organizations to regularly evaluate their strategies for success. Strategic Management presents a wider viewpoint to the employees of an organization.
What are the 5 stages of strategic management?
In general, the strategy management process typically includes 4 phases:
- Environmental Scanning
- Strategy Formulation
- Strategy Implementation
- Evaluation & Control
- Strategy management is critical for organisations to fulfil their goals, remain competitive, and react to changing market conditions.
- Strategic planning, implementation, and assessment are all essential components of good strategy management.
- Continuous learning, agility, and alignment at all organisational levels are critical to successful strategy management.