Strategic management is a type of planning process in which managers establish the organization’s general direction and objectives. Upper management must think strategically first, then apply that thought to a process. The strategic management process is best implemented when everyone within the business understands the strategy. Different stages of strategic management process are determining firm’s strategy and formulating the mission statement
1. Determining Company’s Strategic Vision
The first step in the strategic management process is the determination of the firm’s strategic vision. The strategic vision provides a view of the firm over the long term and what it should achieve in the future. In practice, an effective statement of strategic vision is short and compelling, and provides a general understanding of the organization’s aspirations while engendering passion among managers and employees.
2. Formulating the Company’s Mission Statement
Although statements of strategic intent are typically only a sentence in length, mission statements are usually much longer. A mission statement articulates the fundamental purpose of the organization and often contains several components including company philosophy, company self-concept, customers and markets, geographic focus and commitment to employees.
Once you have formulated company’s mission statement. You need to successfully implement the strategy. This is the action stage of the strategic management process. Everyone within the organization must be made clear of their responsibilities and duties, and how that fits in with the overall goal. Determining your progress by measuring the actual results versus the plan is equally important like other stages of strategic management. To determine what strategy to pursue requires an analysis of both the firm’s external environment and internal resources and capabilities. Firms must thoroughly analyze the external general environment and the industry and competitor environment because each can significantly affect the strategy a firm might develop, as well as whether the firm is likely to succeed or fail. Although the effects of the general environment are often indirect, they can be critical in formulating an effective strategy. Certainly, the forces in an industry and those associated with competitors are of particular importance in developing a company’s strategy.
The plans managers put in place may not be definitive and they are likely to change as time goes by, but plans should give them a general direction for the business that is strategically aimed at achieving certain outcomes. Any strategic targets planned by you should be adaptable and you are required to incorporate changes in order to reflect changes in the market.
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