Basic Concept of Strategy Management
Strategic management is the concept of identification, implementation, and management of the strategies that managers carry out to achieve the goals and objectives of their organization. It can also be defined as a bundle of decisions that a manager has to undertake which directly contributes to the firm’s performance. The manager responsible for Strategic management must have a thorough knowledge of the internal and external organizational environment to make the right decisions.
The Basic Concept of Strategy Management Includes:
- Strategy Management – Definition
- Components of Strategy Management
- Process of Strategy Management
Let’s start with the definition of Strategy Management
1. Strategy Management – Definition
The basic concept of strategic management consists of a continuous process of planning, monitoring, analysing and assessing everything that is necessary for an organization to meet its goals and objectives. In simple words, it is a management technique used to prepare the organization for the unforeseeable future. Strategy management helps create a vision for an organization that helps to identify both predictable as well as unpredictable contingencies. It involves formulating and implementing appropriate strategies so the organization can attain sustainable competitive advantage.
2. Components of Strategy Management
- Strategic Intent
Strategic Intent of an organization clarifies the purpose of its existence and why it will continue to exist. It helps paint a picture of what an organization should immediately do to achieve the company’s vision.
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Mission component of strategy management states the role by which an organization intends to serve its stakeholders. It describes why an organization is operating that helps provide a framework within which the strategies to achieve its goals are formulated.
The visual component of strategy management helps identify where the organization intends to be in the future. It describes the stakeholder dreams and aspirations for the organization.
- Goals and Objectives
Goals help specify in particular what must be done in order to attain an organization’s mission or vision. Goals make the mission component of strategy management more prominent.
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The strategic management process includes 7 steps:
3. Process of Strategy Management
- Setting the Goal – The first and foremost stage in the process of strategic management requires the organization to set the short term and long term goals it wants to achieve.
- Initial Assesment – The second stages says to gathers as much data and information as possible to help state the mission and vision of the organization.
- Situation Analysis – It refers to the process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external environment that is influencing an organization.
- Strategy Formulation – Strategy formulation is the process of deciding the best course of action to be taken in order to achieve the goals and objectives of the organization.
- Strategy Implementation – Executing the formulated strategy in such a way that it successfully creates a competitive advantage for the company. In simple words, putting the chosen plan into action.
- Strategy Monitoring – Strategy Monitoring involves the key evaluation strategies like taking into account the internal and external factors that are the root of the present strategies and measuring the team performance.
- SWOT Analysis – It helps in determining the Strengths, Weaknesses, Opportunities and Threats (SWOT) of an organization and taking remedial/corrective courses of actions to fight these weaknesses and threats.
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Strategic management is an ongoing process and it the strategic manager should make sure that each component interacts with the other components and that this interaction often happens in synchronization to avoid chaos. Strategic management is not an easy job, to master the art of it you might need to take a Strategic management course online. These are short courses that will help you understand the basic concept of strategic management.