The concept of strategic management involves a continuous process of planning, monitoring, analyzing and assessing everything that is necessary for an organization to meet its goals and objectives. Fast-paced innovation, dynamic technologies and ever-so-challenging customer expectations have forced organizations to think and make decisions strategically to remain successful.
The concept of strategic management helps the leaders or owners of various companies to access their company’s present position, develop strategies, deploy and analyze the effectiveness of the implemented strategies.
Why Strategic Management is Essential for a Business?
Strategic management creates a necessity to commit to strategic planning that represents an organization’s ability to set their short-term and long-term goals and determines the actions that need to be taken to achieve those goals.
Now that we have understood the concept of strategic management and its importance, let’s study the important 7 stages of the strategic management process:
Stage 1: Setting the Goal
The first stage of strategic management is to set the goals your company wants to achieve. This includes both the short-term and long-term goals of the organization. Share these goals with the entire organization and explain how each goal will impact the organization’s future. This will give each team member a sense of purpose and meaning to their job.
Stage 2: Initial Assessment
The second stage involves gathering as much data and information as possible. This information will be an integral part of identifying the organization’s mission and vision.
The vision component answers the question: What does an organization want to become?
Whereas the mission component describes the company’s business and everything related to the products, customers, markets, values, employees of the organization, etc.
Stage 3: Situation Analysis
After identifying the mission and vision component of the organization, the next stage arrives where the organization has to assess its current situation in the market. This stage involves evaluating the internal and external environments of the business and analyzing its competitors.
Stage 4: Strategy Formulation
A Situation Analysis is followed by the creation of long-term goals and objectives. These long-term objectives indicate how a company can improve its competitive position in the long run. In any goal-oriented organization, strategies are chosen at 3 different levels: Business level, Corporate level, and global/international level.
Stage 5: Strategy Implementation
Even the best strategic plans will give the best results when executed in such a way that it successfully creates a competitive advantage for the company. At this stage, the managerial skills are of utmost importance rather than using analytics. Communication is essential at this stage of strategic management because new strategies must get support all over the organization for its effective implementation.
Stage 6: Strategy Monitoring
After implementing the strategy, it must be monitored constantly to make it successful. Due to the dynamic conditional, managers must do a SWOT analysis that prepares the organization for any new strengths, weaknesses, opportunities and threats that may arise.
Stage 7: SWOT Analysis
SWOT analysis is a very crucial element in strategic management which most organizations forget about. It helps the organization identify their strengths, weaknesses, opportunities and threats. Also, it helps prepare the organization for its future by detecting and analyzing the internal and external environments and other factors that may impact the business.
Plan for The Future
Planning for the future is essential for operating a successful organization. The concept of strategic management is a great first step towards your end goal. To help you achieve that goal, there are several strategic management courses that will guide you to keep a track of opportunities and any unexpected shifts in the strategy.