Lesson 1

STRATEGIC MANAGEMENT
Introduction

 Strategic Management involves the formulation and implementation of the major goals
and initiatives taken by an organization’s managers, based on consideration of resources
and an assessment of the internal and external environments in which the organization
operates.

 Strategic Management is the use of business resources to reach company’s goals and
objectives.

 It requires reflection on the processes and procedures within the organization as well
external factors that may have an impact on how company functions.

 The process of strategic management should guide top level actions and decisions.

 Companies of all sizes and in all industries can benefit from the practice of strategic
management.

 Strategic Management includes:

1. Setting of objectives for the company;

2. Analyzing the actions of competitors;
3. Reviewing the organizations internal structure;
4. Evaluating current strategies and confirming strategies are implemented company-
wide.

 Strategic Management is the sum of strategic planning and strategic thinking.

 Strategic Planning is the identification of achievable goals.
 Strategic thinking is the ability to identify the needs of the organization to achieve the
goals identified through strategic planning.

How does Strategic Management Work?

Strategic Management can either be prescriptive or descriptive.

 Prescriptive Management means developing strategies in advance of an

organizational issue.
 Descriptive Strategic Management means putting strategies into practice into
practice when needed
Upper Management – is responsible for implementing strategies, ideas or goals or
organizational challenges can come from any member of the company.

Strategists – there are companies who employ them. Their job is to think and plan strategically
to improve company functions.

Four (4) Steps to Strategic Management:

1. Analysis
2. Formulation
3. Execution
4. Evaluation

ANALYSIS - Before planning a new strategic process, you must evaluate the current process to
achieve your goal.

 Consider what is working and what is not;

 Gather inputs from stakeholders;
 Do the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis

FORMULATION – Once you have the information you need, its time to create an action plan for
reaching the goal.

Make sure, the steps are clear, focused and directly related to the goal.

Prepare easy to understand implementation guidelines if the process or procedure will impact
many people within the organization.

EXECUTION – Follow the steps outlined in your strategic plan.

Make sure the stakeholders are implementing the plan as designed for maximum efficiency.

EVALUATION – Evaluate the final product. Did you achieve your goal?

Was the process implemented appropriately company-wide ?

Reflect / Revise as needed

Benefits of Strategic Management:

1. Competitive Advantage
Because of the proactive nature which means your company will always be aware of the
changing market.

2. Achieving Goals
Helps keep goals achievable by using a clear and dynamic process for formulating steps
and implementation.

3. Sustainable Growth
Strategic Management has been shown to lead to more efficient organizational
performance, which leads to manageable.

4. Cohesive Organization –
Strategic Management necessitates communication and goal implementation company-
wide.

An organization that is working in unison towards a goal is more likely to achieve its
goals.

5. Increased Managerial Awareness

Strategic Management means looking toward the company’s future. If managers do this
consistently, they will be more aware of industry trends & challenges.

By implementing strategic planning and thinking, they will be better prepared to face
future challenges.

EXAMPLE:

Furniture company Wood’s Fine Furnishings is preparing to introduce a new line of

kitchen tables. They decided to implement strategic management to ensure that the product
release goes smoothly efficiently and consistently across all their retail locations.

1. Analysis:

In the past, Woods Fine Furnishings suffered from inconsistent marketing and incorrect
shipping costs with the release of new products in their multiple retail locations.

Before the release of their new table line, they have decided to run a SWOT analysis to see
how they can improve the process.
  Strengths:
Quality product
Several locations for ease of purchase
Flat shipping rate

 Weaknesses:
Poor communication between store managers and between store employees
Shipping rate applied times at some stores
Inconsistent marketing strategy

 Opportunities:
Unified Marketing
Transparent fees

 Threats:
Wood’s Fine Furnishings
Man’s competitors
Released a line of kitchen tables last quarter

2. Formation

Using the SWOT analysis, Woods Fine Furnishings creates a strategic plan for the release
of their kitchen tables.

 Includes providing consistent marketing collateral, both physical and digital to all
retail locations
 Sending representatives to each retail location to explain
 Sets up communication links to all stores.

3. Execution
 Seeing things … if the strategies used have worked
 If not, the managers/strategists should use the result of their observations to
plan for the next move

Activity for Lesson 1:

1. Come up with your own example of a SWOT Analysis. Be able to illustrate a company
situation and analyze the same by enumerating its strength, weaknesses, opportunities
and threats.