Strategic management

Strategic Management Framework

SWOT en

File:Experience curve.gif

Experience curve

Folio Plot BCG Matrix Example

Elements of Industry Structure

Michael Porter's Three Generic Strategies

Strategic Management is the process by which organizations formulate, implement, and evaluate decisions that enable them to achieve their long-term objectives. It involves setting goals, analyzing the competitive environment, and assessing the internal organization to ensure that strategies are aligned with objectives. Strategic management is crucial for organizations seeking to maintain a competitive edge in their respective industries.

Overview

Strategic management encompasses the formulation and implementation of the major goals and initiatives taken by an organization's top management on behalf of owners. It involves the consideration of resources and an assessment of the internal and external environments in which the organization competes. The process is continuous and requires an understanding of the strategic position of the organization, strategic choices for the future, and turning strategy into action.

Process

The strategic management process can be divided into three phases: strategy formulation, strategy implementation, and strategy evaluation.

Strategy Formulation

In this phase, organizations determine the mission and objectives, and assess both the internal and external environments to formulate strategies. Tools such as SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats), PEST Analysis (Political, Economic, Social, and Technological), and Porter's Five Forces Model are commonly used to analyze the competitive landscape.

Strategy Implementation

Strategy implementation involves allocating resources, establishing control systems, and organizing processes to achieve strategic objectives. It requires effective communication, leadership, and often changes in organizational structure.

Strategy Evaluation

The final phase involves monitoring outcomes and making necessary adjustments. Key performance indicators (KPIs) and benchmarks are used to measure the effectiveness of the strategy against the set objectives.

Strategic Decision Making

Strategic decision making is a critical aspect of strategic management. It involves making choices between different strategies based on their potential to achieve organizational objectives. Decision-making processes are influenced by the values, preferences, and beliefs of the decision-makers.

Strategic Management Models

Several models exist to guide organizations in their strategic management process, including the Ansoff Matrix, which focuses on growth strategies; the BCG Matrix, which helps in portfolio management; and the VRIO Framework, which assesses the competitive potential of organizational resources.

Challenges in Strategic Management

Organizations face numerous challenges in strategic management, including rapidly changing environments, technological advancements, and global competition. Adapting to change, fostering innovation, and ensuring strategic flexibility are essential for success.

Conclusion

Strategic management is a comprehensive and ongoing process that is essential for organizations aiming to achieve and sustain competitive advantage. It requires careful planning, effective implementation, and continuous evaluation to respond to the dynamic business environment.