In a business environment that keeps changing fast, companies need to use effective methods to ensure the achievement of their goals. Managers must continuously strive for better performance, giving the firm a competitive advantage in the market. Strategic management has been proved to be effective in this and helps companies of all sizes to realize their vision. It is essential for leaders at all levels to understand the concepts well and apply it in their work.
Explaining Strategic Management
Strategic management is a process by which companies continuously plan, monitor, analyze, and assess every aspect that will help in reaching their goals. It is a technique used for preparing a company for its future. This procedure includes planning for both predictable and unpredictable situations. It involves the preparation and execution of a plan to achieve a competitive advantage. The certificate program in strategic management from IIM Kozhikode can empower a person with the skills needed for performing this activity successfully.
Fundamental Elements Of Strategic Management
This is the element that deals with specifying the purpose of its formation and existence. The immediate plans to achieve its mission are also described.
A mission statement explains how the organization plans to serve its stakeholders. The purpose of its operations is also mentioned. It is within this framework that all strategies to achieve company goals are formulated.
The vision of an organization is what it wants to be in the future. It describes the stakeholders’ aspirations and dreams for their firm.
Objectives are what must be achieved in order to bring to life an establishment’s mission and vision. Setting objectives helps formulate plans to achieve the mission.
The Process Of Strategic Management
Those who have studied masters in strategic management know that this exercise includes 7 steps.
Setting Goals – In this step, companies decide on both short-term and long-term goals they must achieve to attain their vision.
Initial Assessment – As much information as possible is collected about the market and industry to help the company state its mission and vision with maximum clarity.
Situation Analysis – Details of an existing condition of external and internal aspects affecting an organization are collected and analyzed.
Strategy Formulation – In this stage the most viable course to achieve a firm’s goals and objectives is decided.
Strategy Implementation – Once a course has been decided it must be implemented in such a way that it provides the company with a competitive edge over competitors.
Strategy Monitoring – The implementation of plans is evaluated taking into consideration a firm’s internal strengths and external factors.
SWOT Analysis – The strengths, weaknesses, opportunities, and threats are analyzed to take corrective actions.
Approaches Of Strategic Management
There are different approaches to strategic management aimed at achieving different objectives. When this is used as a plan it is intended to achieve objectives set by an organization. It becomes a pattern when emerging from the past actions of a company. It is formulated over time automatically instead of being planned.
A plan can become a position when used for placing a firm’s product in the market to achieve maximum sales. It is also used as a ploy when there is a need to fight competition. Such a strategy is formulated to outwit another company to capture its market. It can emerge as a perspective when related to the ideologies of a company.
Types Of Strategies
The certificate program from IIM Kozhikode can tell you that all planning is done keeping in mind a continuation of the conditions considered while making them. This is an ideal situation. In a real-world scenario, most companies never face a stable and predictable situation. In many cases, strategies may be formed for one reason but can end up giving different results. This is why it is important to know the different types of strategies.
This type of strategy deals with the intentions with which an organization has been formed and is functioning. It is a plan that a firm hopes to implement to achieve its goals. As these are expected to be executed, action plans are made in detail for this. In the case of new firms, this may be called a business plan. It helps to keep an establishment on its tracks. These are made expecting ideal conditions from the market.
This is something that comes into play over time. The company may have formulated plans with other intentions. But various factors in the market could have forced them to act in a different manner and come out with these strategies. They are a response to external opportunities and threats. They are dynamic in nature. Such plans can end either in success or failures. It depends on how effectively a company is able to deal with changing conditions.
This is the real plan that a firm follows. This can be a mixture of its intended, deliberate, and emergent strategies. Deliberate strategies are portions of the intended plans that a company continues to follow and implement. Companies are forced to adopt realized strategies due to various factors both inside and outside it. They can keep changing with time.
When the intended one doesn’t work and is abandoned in favour of a different plan, then it is called a non-realized strategy. It could have been added as a means to make the original idea successful. But this could remain due to its effectiveness and success. Those who have done masters in strategic management can enumerate many cases of non-realized strategies that paved the way for successful alternative businesses.
Strategic management is an ongoing exercise. It can be used to achieve various long-term and short-term goals of a company. Knowing the processes or steps is not enough. One must be equipped with all capabilities needed to implement strategies. Managers who are responsible for executing the plans must make sure that all employees know their company’s goals clearly and work towards achieving them. There must be a regular evaluation of plan implementation and its success.