An Overview of Strategic Management (SM)
SM is the management of an organisation’s resources to achieve its goals and beyond. Strategic management involves setting objectives, analysing the competitive environment, analysing the internal organisation, evaluating strategies, and ensuring that management rolls out the strategies across the organisation.
Understanding Strategic Management
Strategic management is divided into several schools of thought. A prescriptive approach to strategic management outlines how strategies should be developed, while a descriptive approach focuses on how strategies should be put into practice. These schools differ on whether strategies are developed through an analytic process, in which all threats and opportunities are accounted for, or are more like general guiding principles to be applied.
The five key phases - SM
Strategic management involves managing an organization's resources, analysing internal and external forces, and developing strategies to realise goals and objectives. There are five key phases that can help businesses execute their strategies.
- An organisation must first establish clear, realistic goals. Its goals should answer what the company wants to achieve and why. Once set, the company can then identify the objectives, or how the goals will be reached. During this phase, the company can articulate its vision and long and short-term goals.
- Organisations must then be able to examine, understand, and codify what internal and external forces affect their business and goals, as well as what it needs to remain competitive. Analytical tools, such as SWOT analysis, are helpful during this phase.
- Based on the analysis results, the company can develop its strategy, outlining how it will achieve its goals and how. In this phase, the company will identify the needed people, technology, and other resources; how these resources will be allocated to fulfill tasks, and what performance metrics are needed to measure success. It is also critical to gain buy-in from stakeholders and business leaders.
- Once the strategies are defined, it is time for execution. The strategy is taken from planning to implementation. The allocated resources are placed into action during this phase based on their roles and responsibilities.
- The final stage of SM is to evaluate the effectiveness of implemented strategies using defined metrics. The company will also visit whether ineffective strategies should be replaced with more viable ones. The company should continue to monitor the business landscape and internal operations, as well as maintain proven effective strategies.