Module 3

Benefits of Strategic Management

 Introduction

 There are many benefits of strategic management and they include

identification, prioritization, and exploration of opportunities. For instance,
newer products, newer markets, and newer forays into business lines are only
possible if firms indulge in strategic planning. Next, strategic management allows
firms to take an objective view of the activities being done by it and do a cost
benefit analysis as to whether the firm is profitable.
 Just to differentiate, by this, we do not mean the financial benefits alone (which
would be discussed below) but also the assessment of profitability that has to do
with evaluating whether the business is strategically aligned to its goals and
priorities.
 The key point to be noted here is that strategic management allows a
firm to orient itself to its market and consumers and ensure that it is
actualizing the right strategy.
 Learning Objectives

 After this module the learners are expected to:

 Discuss the benefits of Strategic Management

 Articulate how to explore business opportunities thru
Strategic Management
 Identify and prioritize business opportunities thru strategic
management
 Financial Benefits
  

It has been shown in many studies that firms that engage in strategic management are
more profitable and successful than those that do not have the benefit of strategic
planning and strategic management.
When firms engage in forward looking planning and careful evaluation of their
priorities, they have control over the future, which is necessary in the fast changing
business landscape of the 21st century.
It has been estimated that more than 100,000 businesses fail in the US every year and
most of these failures are to do with a lack of strategic focus and strategic direction.
Further, high performing firms tend to make more informed decisions because they
have considered both the short term and long-term consequences and hence, have
oriented their strategies accordingly. In contrast, firms that do not engage themselves
in meaningful strategic planning are often bogged down by internal problems and lack
of focus that leads to failure.
 Nonfinancial Benefits

 The section above discussed some of the tangible benefits of strategic

management. Apart from these benefits, firms that engage in strategic
management are more aware of the external threats, an improved
understanding of competitor strengths and weaknesses and increased
employee productivity. They also have lesser resistance to change and a
clear understanding of the link between performance and rewards.
 The key aspect of strategic management is that the problem solving and
problem preventing capabilities of the firms are enhanced through
strategic management. Strategic management is essential as it helps firms
to rationalize change and actualize change and communicate the need to
change better to its employees. Finally, strategic management helps in
bringing order and discipline to the activities of the firm in its both
internal processes and external activities.
 How to identify opportunities thru
STRATEGIC MANAGEMENT?
 A good entrepreneur is always on the hunt for new
opportunities. One of the best ways to identify
opportunities within your business is to complete a 
SWOT analysis. 
1. Identify business strengths
2. Evaluate your weaknesses
3. After doing these one and two steps consider now your
opportunities
4. After knowing your opportunities determine the threats
Here are a few categories to consider when looking for business opportunities:

• Economic trends: Look at the economy in your area.

• Market trends: Your target market could be driving
new trends that could open doors for your business.
• Funding or cash flow changes: Think about that new
big fish customer, or maybe you’ve received a
business loan or some outside investment.
• Political support: Consider changes in political ties.
• Government regulations: Think of regulations that
are changing that might afford you new opportunities.
Cont..

• Changing relationships: Consider shifting

relationships with vendors, partners, or suppliers.
• Target audience shift: Your target market might
be expanding, aging, or shifting.
Questions to ask to find opportunities

 Questions that may help you brainstorm possibly opportunities.

1. Economic trends:
• Is the economy in your area looking up?
• Will the economy enable your audience to make
more purchases?
• Are economic shifts happening that impact your
target audience?
• Is the price of sourcing materials going down?
Market trends

• How is your market changing?

• What new trends could your company take
advantage of?
• What kind of timeframe surrounds these new
trends? Could it be a long-term opportunity?
Funding changes:

• Do you expect an increase in grant funding or

donations this year (if you’re a nonprofit)?
• Did you land a new contract (assured new
income)?
• Did you secure a loan or investment funding?
• How will funding changes help your business?
 c a l
li ti • Do you anticipate a shift in
P port:
o political support this year?
s u p
• What opportunities could be
created with new political
partnerships?
Government regulations

• Are any regulations shifting that could lead to a

positive change?
 • Are there positive changes
happening within any of your
n g s : outside business relationships?
g i h ip • Are vendors changing or
n
a on s
h
C lati expanding?
re • Has your partner decided to
move on, creating an
opportunity to work with
someone new?
 • How is your demographic shifting?
• What opportunities can you think of
that can move with these changing
📌 demographics?
e t if t:
a rg
T ence s h • Is your audience expanding? If so,
u di how can you capitalize on this
a
increase?
• Is there a related product or service
that you could launch that allows
you to gain a new market share?
 Tips to list your opportunities

ur
o h. Finding answers to some of
o y rc these questions might
D se a
require some digging. Don’t
re be afraid to make some
calls, set up meetings, and
do some market research to
gauge upcoming changes.
 .  
ti ve
ea
cr  To find an opportunity
Be where your competitors
cannot will take skill and
creativity. Don’t be afraid
to think outside the box
when you’re listing
possible opportunities.
 o f
i st
l
r es
u
o i ti
y  We’ll revisit all the
ep tun
Ke por .  sections of your SWOT
op ndy matrix so you can
ha develop actionable
strategies.
Output:

What opportunities did

you come up with for
your business?