Strategic Management Process
The strategic management process is a systematic and structured approach used by organisations to develop and implement their business strategies. It involves a series of steps that guide the organisation in analysing its internal and external environment, formulating strategies, and implementing them effectively.
- Environmental Analysis
Before developing a business strategy, it is crucial to conduct a thorough analysis of the organisation’s internal and external environment. This helps in understanding the opportunities and threats that exist in the market, as well as the organisation’s strengths and weaknesses.
The external analysis involves studying the industry in which the organisation operates, identifying the competitors, and analysing the market trends. This helps in identifying potential opportunities and threats that the organisation may face.
The internal analysis focuses on evaluating the organisation’s resources, capabilities, and core competencies. This helps in identifying the organisation’s strengths and weaknesses, which can be leveraged or addressed in the business strategy.
- Strategy Formulation
Once the environmental analysis is complete, the next step is to formulate the business strategy. This involves identifying the organisation’s vision, mission, objectives, and overall strategy.
The vision statement defines the desired future state of the organisation, providing a clear direction for the strategy. The mission statement outlines the organisation’s purpose and the value it aims to create for its stakeholders.
Objectives are specific, measurable targets that the organisation aims to achieve within a certain timeframe. They provide a roadmap for the strategy and help in evaluating its success.
The overall strategy outlines the broad approach that the organisation will take to achieve its objectives. It defines the target market, competitive positioning, and key initiatives that will be undertaken.
- Strategy Implementation
After formulating the strategy, the next step is to implement it effectively. This involves translating the strategy into action plans, allocating resources, and managing the execution of the strategy.
Approach refers to the overall plan or framework that guides the implementation of the strategy. It includes decisions on how to allocate resources, structure the organisation, and coordinate activities.
Tactics are the specific actions and initiatives that are undertaken to achieve the objectives of the strategy. They involve making operational decisions and implementing specific programs or projects.
- Strategy Evaluation
The final step in the strategic management process is to evaluate the effectiveness of the strategy. This involves monitoring the progress, measuring performance, and making necessary adjustments.
Deliberate strategies are the planned actions that are executed as intended. They are based on careful analysis and follow a predetermined course of action.
Emergent strategies, on the other hand, are the unplanned actions that emerge in response to unforeseen circumstances or opportunities. They are often the result of learning, experimentation, and adaptation.
By continuously evaluating the strategy and making necessary adjustments, organisations can ensure that their strategies remain relevant and effective in a dynamic business environment.
In conclusion, the strategic management process is a systematic approach that organisations use to develop and implement their business strategies. It involves analysing the internal and external environment, formulating the strategy, implementing it effectively, and evaluating its effectiveness. By following this process, organisations can improve their chances of achieving their objectives and staying competitive in the market.