strategic management is the art of formulating, implementing, and evaluating decisions with different functionalities that allow organizations to achieve their objectives. It is the process of specifying organizations’ objectives by developing policies and plans to achieve those objectives and allocating resources to implement those policies and plans.
Strategic management, therefore, combines the activities of various functional areas of an organization to achieve organizational objectives. It is the highest level of managerial activity.
Strategic management process
The five stages of the process are: setting goals or objectives, analysis, strategy formation, strategy implementation, and strategy monitoring.
The 5 stages of the strategic management process
The strategic management process is more than a set of rules to follow. It is a philosophical approach to business. Top management must think strategically first, then apply that thinking to a process. The process is best implemented when everyone in the business understands the strategy.
How to set business goals and strategies. The purpose of setting goals is to clarify the business vision. This stage consists of identifying three facets: First, define the short- and long-term objectives. Second, identify the process of how to achieve the objectives.
Finally, personalize the process according to our staff, give each member a task with which they can be successful. During this process, check that the objectives are detailed, realistic, and coincide with the values of your business vision. Typically, the final step at this stage is to make these goals and objectives known to all staff.
The analysis is a key stage because the information obtained in this stage will configure the following two stages. At this stage, collect relevant information and data to achieve your vision. The focus of strategic analysis should be to understand the business needs as a sustainable entity, with strategic and identify initiatives that will help the business to grow.
Examine any external or internal problems that may affect your goals and objectives. Be sure to identify the strengths and weaknesses of your organization, as well as the threats and opportunities that may arise along the way.
The first step in forming a strategy is to review the information obtained from the analysis. Determine what resources the business currently has that can help achieve defined goals and objectives. Identify any area from which external resources should be sought.
The problems facing the company must be prioritized for its importance to be successful. Once prioritized, begin formulating the strategy.
The successful implementation of the strategy is essential for the success of the company.
If the overall strategy does not work with the current business structure, a new structure must be installed at the beginning of this stage.
Everyone within the organization must be clear about their responsibilities and duties, and how this fit in with the overall goal. In addition, all resources or funds for the company must be guaranteed at this time. Once financing is in place and employees are ready, execute the plan.
5-Evaluation and control
Any successful evaluation of the strategy begins with the definition of the parameters to be measured. These parameters should reflect the goals established in Stage 1. Determine your progress by measuring actual results versus the plan.
Monitoring internal and external problems will also allow you to react to any substantial change in your business environment. If you determine that the strategy is not moving the company toward its goal, take corrective action. If those actions are not successful, repeat the strategic management process.
Because internal and external issues are constantly evolving, all data obtained at this stage should be kept to help with any future strategy.