Business managers need to go through a vast variety of business scenarios and problems and make decisions during good as well as bad times. Some of these decisions and business management skills can propel their business into a position of competitive advantage.
The key things a business manager does are goal setting, planning, business communication and marketing, managerial decision making, accounting and finance. The main purpose of a business is to make profits and these business management activities help in achieving this purpose.
Strategic management is the key to gaining a competitive advantage over one’s rival companies. Business managers need to have or develop strategic management skills to gain a competitive edge. This follows from the setting of mission and objectives of the company by the senior management and the alignment of other business functions and operations with these missions and objectives.
All business managers down the line must be able to align their respective function or operations with the company’s mission and objectives. However, in order to gain a competitive edge for each function separately, the business managers need to have a strategic outlook and not just merely carry out their operations.
As per a Harvard Business Review article, business managers can have a four-phase strategic planning module. The four phases are: meeting budget, predicting the future, thinking strategically and creating the future.
In the first phase, meeting the budget, the managers must have a basic financial planning module whereby, they must have an annual budget. They must have a functional focus on this stage and apply operational controls to stay in charge of the budget and not run into deficits. At this stage, the projected earnings growth rate indicates whether or not a company has a strategic approach.
In the second phase, predicting the future, a thorough environmental analysis, both, internal and external must be carried out. Through this analysis, managers can create multi-year forecasts. This will lead to effective planning for future growth and allocation of resources. Phase 2 is a critical phase as this step is laden with data and most business managers tend to not make thorough analysis and instead make only shortfall adjustments to previous year’s plans. This must be guarded against.
The third phase, strategic thinking, involves strategic plans based on the analysis done in phase 2. A key thing for managers is to have a heavy external focus in order to understand the customer and the market requirements, and strategies already being deployed by the competitors. Resource allocation must be dynamic as well as creative in this phase. Innovations and creativity must be the cornerstones of this phase.
The final phase, creating the future, is the time when the resources must be strategically allocated and synchronized to create a competitive advantage. The strategic planning framework must be decided and followed. The processes must be creative and flexible, having a growth orientation. All of this must be strengthened by a supportive value system within the company.
The above four phase business management process is taught in business management certificate courses and can lead managers to create strategic competitive advantage.