What is strategic management?

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.

What is the role of strategic management?

Strategic management is a broad term that includes innovative thinking, a strategic planning
process and operational strategizing. Strategic business management, more specifically, relies
largely on research. It is imperative that for a business strategy to be successful, customers’
opinions, employees’ contribution and the industry’s best practices are all taken into account. A
common way to encourage strategic business management, is to incorporate a lot of planning into
board meetings, have trustees with valued and varied experience, and to carefully consider the
impacts of decisions on each business function within the organisation. Annual plans for
businesses are often put together, but within the 21st century, it is important to be flexible and
adapt to changing environments and demands.

What do Strategic Managers Do?

Why is strategic management important?

The main importance of strategic 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.

LEVELS & ROADMAP

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 involves careful and systematic research, planning, and analysis. Although this
can take different forms, and varies by industry, the practice of strategic management generally follows
the same path from start to finish.

Research the business environment, including the marketplace and economic factors affecting the
organization
Understand organizational culture, including employee attitudes and behaviors, as well as organizational
structure and employee skills and competencies

Identify benchmarks, both internal and external, such as production, efficiency, and employee retention

Realign resources to meet goals, including human resources, capital, and infrastructure

Position leadership for oversight, allowing management to supervise the creation, sale, and deployment
of services or products

Assess progress towards targets by measuring and evaluating real performance against established
benchmarks

Importance of Strategic Management

Planning or designing a strategy involves a great deal of risk and resource assessment, ways to counter
the risks, and effective utilization of resources all while trying to achieve a significant purpose.

An organization is generally established with a goal in mind, and this goal defines the purpose for its
existence. All of the work carried out by the organization revolves around this particular goal, and it has
to align its internal resources and external environment in a way that the goal is achieved in rational
expected time.

Undoubtedly, since an organization is a big entity with probably a huge underlying investment,
strategizing becomes a necessary factor for successful working internally, as well as to get feasible
returns on the expended money.

Strategic Management on a corporate level normally incorporates preparation for future opportunities,
risks and market trends. This makes way for the firms to analyze, examine and execute administration in
a manner that is most likely to achieve the set aims. As such, strategizing or planning must be covered as
the deciding administration factor.

Strategic Management and the role it plays in the accomplishments of firms has been a subject of
thorough research and study for an extensive period of time now. Strategic Management in an
organization ensures that goals are set, primary issues are outlined, time and resources are pivoted,
functioning is consolidated, internal environment is set towards achieving the objectives, consequences
and results are concurred upon, and the organization remains flexible towards any external changes.

As more and more organizations have started to realize that strategic planning is the fundamental
aspect in successfully assisting them through any sudden contingencies, either internally or externally,
they have started to absorb strategy management starting from the most basic administration levels. In
actuality, strategy management is the essence of an absolute administration plan. For large
organizations, with a complex organizational structure and extreme regimentation, strategizing is
embedded at every tier.

Apart from faster and effective decision making, pursuing opportunities and directing work, strategic
management assists with cutting back costs, employee motivation and gratification, counteracting
threats or better, converting these threats into opportunities, predicting probable market trends, and
improving overall performance.

Keeping in mind the long-term benefits to organizations, strategic planning drives them to focus on the
internal environment, through encouraging and setting challenges for employees, helping them achieve
personal as well as organizational objectives. At the same time, it is also ensured that external
challenges are taken care of, adverse situations are tackled and threats are analyzed to turn them into
probable opportunities.

Continue to adjust strategy based on measured performance and employee feedback to improve real-
world outcomes over time

(A) Management and Organisation Benefits:

(i) Identification of future marketing opportunities and their exploitation;

(ii) Quantification of the effects of adverse business conditions and changes and their minimisation:

(iii) Effective allocation and utilisation of physical and financial resources to the identified opportunities;

(iv) Continuous review and analysis of plan execution and effective control of business and operational
activities;

(v) Establishment of viable objectives and relating major decisions and actions to achieve those
objectives; and

(vi) Attainment of basic functional objectives like coordination of plans and actions, identification of
priorities under constraints, combination of diverse functions into a unified effort, pursuing contingent
planning in times of need, and so on.

Strategic Management is all about specifying organization’s vision, mission and

objectives, environment scanning, crafting strategies, evaluation and control.

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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.