STRATEGIC MANAGEMENT

I. Strategic Management - Definition, Purpose, and Examples

II. What is Strategic Management and Why is it important?
III. Strategic Management – Wikipedia
IV. Strategic Management Field of Study
V. Strategic Management - An overview

I. Strategic Management

• Definition

-Strategic management involves developing and implementing plans to help a company achieve its
business objectives. This can include building an annual strategy, planning organizational structure and
resource allocation, leading change initiatives, and controlling processes and resources.

• Purpose

-The purpose of strategic management is to help an organization achieve its goals and gain a competitive
edge over its competitors:

1. Set goals and direction

Strategic management helps establish a clear, long-term vision and direction for the organization.

2. Create plans and policies

Strategic management helps create plans and policies to achieve goals.

3. Allocate resources

Strategic management helps allocate resources effectively to make the most of what's available.

4. Measure performance

Strategic management helps measure the organization's performance against its goals and objectives.

5. Identify strengths

Strategic management helps organizations identify their unique strengths and differentiate themselves
from competitors.

6. Capitalize on opportunities

Strategic management helps organizations capitalize on market opportunities and stay ahead of industry
trends.
7. Improve operational efficiency

Strategic management can help improve operational efficiency by streamlining processes and eliminating
inefficiencies.

8. Increase managerial awareness

Strategic management can help managers better understand business trends and challenges so that they
can take appropriate steps.

9. Ensure organizational alignment

Strategic management can help ensure that every department of the company is working well together to
achieve organizational goals.

• Examples

1. Implementing and overhauling information systems and technology

Let's say Company A is a startup that has been scaling rapidly. They hired a strategy consultant to come
in and conduct an audit. The consultant finds that the company is paying for apps and tools that it doesn't
use. They conduct survey research to understand employee needs and compile a list of 20 apps (out of 100)
that can be discontinued with little negative impact. After implementation, the company surveys employees
again in two months to gauge their needs. Overall, it turned out to be an efficient, cost-cutting strategy.

2. Shifting resources (budget) toward more successful revenue streams

Company B's Chief Marketing Officer asked its department to assess its brand marketing strategy. The
head of marketing found that their email marketing efforts were generating more conversions than any other
channel, so they diverted some of their print budgets toward investing in expanding the email marketing
team. The email marketing team developed a strategy and plan to reach new audience segments. After six
months, more budget was shifted toward email to support the program's success.
II. What is Strategic Management and Why is it important?

Strategic management is the ongoing planning, monitoring, analysis, and assessment of the resources and
processes an organization should have in place to meet its goals and objectives. Because business
environments are dynamic, an organization must constantly assess its strategies to stay competitive and
meet its long-term objectives.

The strategic management process helps organizations consider their present situation, develop action
plans, deploy those plans, and analyze their effectiveness. The process typically includes five basic stages,
but the goals and outcomes can vary significantly depending on an organization's goals as well as its internal
and external environments. Strategic management enables an organization to have a clear understanding of
its mission, its vision for where it wants to be in the future, and the values that will guide its actions. The
process requires a commitment to strategic planning, which is a subset of business management that
requires an organization to identify its short- and long-term goals. Strategic planning also includes the
planning of the processes and resources needed to achieve those goals.

Having a defined process for managing an organization's strategies can help leadership make better
decisions and develop new goals quickly to keep pace with evolving technology, market, and business
conditions. Strategic management can help an organization gain a competitive advantage, improve its
market share, and plan for the future.

• What are the benefits of strategic management?

-Strategic management offers financial and non-financial benefits. It helps an organization's leadership
better plan and meet its long-term objectives. Strategic management also provides additional benefits:

1. Clear direction. Strategic management sets a direction for the organization and its personnel. It clarifies
the organization's mission and vision and helps it reach its goals. Resources and operations are prioritized
based on those goals and planned with an eye toward the organization's long-term objectives.

2. Operational improvement. Strategic management helps to define a clear purpose and direction. The
organization's efforts are more cohesive because everyone is focused on the same objectives, with successes
tracked and carefully measured. Strategic management also incorporates an objective review of internal
operations, resulting in greater efficiency.

3. Resource optimization. With strategic management, resources of all types are better planned and
managed, resulting in more efficient resource utilization. Resource usage is also prioritized based on stated
objectives and goals.

4. Competitive advantage. The ongoing analysis of external forces makes it possible to respond to
competitive threats more quickly and efficiently as well as capitalize on potential opportunities. The
organization becomes more proactive in carrying out
 business, potentially increasing its market share and profitability. Ongoing analysis also helps the
organization differentiate itself more clearly from its competitors.

5. Sustainable growth. Strategic management requires the ongoing analysis of internal and external forces.
The analysis includes a wide range of factors, from social to environmental to the competitive landscape.
This process can help mitigate risks and make it easier to adapt to market changes, while improving the
overall decision-making process.

Unlike once-and-done strategic plans, effective strategic management requires continuous planning,
monitoring, and testing of an organization's processes and resource utilization.

• What are the 5 steps in the strategic management process?

There are many schools of thought on how to implement strategic management. Academics and managers
have developed numerous frameworks to guide the strategic management process. Despite the differences,
the process typically includes five stages:

1. Identify direction. Assess the organization's current strategic direction. Identify its mission and long-
term vision along with its objectives and goals. Leadership should be able to clearly articulate what the
organization is trying to achieve.

2. Analyze environment. Identify and analyze factors in the internal and external environments. Use tools
such as SWOT analysis to examine the strengths, weaknesses, opportunities and threats in those
environments.

3. Develop strategy. Formulate an action plan that defines how the organization will reach its goals and the
resources to get there, considering what was learned from the analysis stage. Also establish performance
metrics that measure success.

4. Execute strategy. Put the plan into action using the resources defined in the previous step. Strong
leadership and clear communication are essential. Each phase of the plan's execution should be carefully
monitored, with issues addressed as they arise.

5. Evaluate implementation. Continuously assess various aspects of the plan to determine how successful
each one has been using the performance metrics identified in the development stage. Adjust the strategy if
the desired results have not been achieved.

Effective communication, data collection and organizational culture also play important roles in the
strategic management process, especially at large, complex organizations. Lack of communication and a
negative corporate culture can result in a misalignment of the organization's strategic management plan and
the activities undertaken by its various business units and departments. Leadership should also assess cross-
functional business decisions prior to implementing them to ensure they are aligned with strategic plans.
III. Strategic Management - Wikipedia

In the field of management, strategic management involves the formulation and implementation of the
major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on
consideration of resources and an assessment of the internal and external environments in which the
organization operates. Strategic management provides overall direction to an enterprise and involves
specifying the organization's objectives, developing policies and plans to achieve those objectives, and then
allocating resources to implement the plans. Academics and practicing managers have developed numerous
models and frameworks to assist in strategic decision-making in the context of complex environments and
competitive dynamics. Strategic management is not static in nature; the models can include a feedback loop
to monitor execution and to inform the next round of planning.

Michael Porter identifies three principles underlying strategy:

• creating a "unique and valuable [market] position"

• making trade-offs by choosing "what not to do"
• creating "fit" by aligning company activities with one another to support the chosen strategy

Corporate strategy involves answering a key question from a portfolio perspective: "What business
should we be in?" Business strategy involves answering the question: "How shall we compete in this
business?" Alternatively, corporate strategy is strategic management of a corporation (a particular legal
structure of a business); business strategy is the strategic management of a business.

Management theory and practice often make a distinction between strategic management and operational
management, where operational management is concerned primarily with improving efficiency and
controlling costs within the boundaries set by the organization's strategy.

• Application

Strategy is defined as "the determination of the basic long-term goals of an enterprise, and the adoption
of courses of action and the allocation of resources necessary for carrying out these goals.") Strategies are
established to set direction, focus effort, define or clarify the organization, and provide consistency or
guidance in response to the environment.

Strategic management involves the related concepts of strategic planning and strategic thinking. Strategic
planning is analytical in nature and refers to formalized procedures to produce the data and analyses used
as inputs for strategic thinking, which synthesizes the data resulting in the strategy. Strategic planning may
also refer to control mechanisms used to implement the strategy once it is determined. In other
 words, strategic planning happens around the strategic thinking or strategy-making

activity.

Strategic management is often described as involving two major processes: formulation and implementation
of strategy. While described sequentially below, in practice the two processes are iterative and each provides
input for the other.

• Formulation

Formulation of strategy involves analyzing the environment in which the organization operates, then
making a series of strategic decisions about how the organization will compete. Formulation ends with a
series of goals or objectives and measures for the organization to pursue. Environmental analysis includes
the:

• Remote external environment, including the political, economic, social, technological, legal and
environmental landscape (PESTLE);
• Industry environment, such as the competitive behavior of rival organizations, the bargaining power
of buyers/customers and suppliers, threats from new entrants to the industry, and the ability of buyers
to substitute products (Porter's 5 forces); and
• Internal environment, regarding the strengths and weaknesses of the organization's resources (i.c., its
people, processes and IT systems).

Strategic decisions are based on insight from the environmental assessment and are responses to strategic
questions about how the organization will compete, such as:

What is the organization's business?

• Who is the target customer for the organization's products and services?
• Where are the customers and how do they buy? What is considered "value" to the customer?
• Which businesses, products and services should be included or excluded from the portfolio of
offerings?
• What is the geographic scope of the business?
• What differentiates the company from its competitors in the eyes of customers and other stakeholders?
• Which skills and capabilities should be developed within the firm?
• What are the important opportunities and risks for the organization?
• How can the firm grow, through both its base business and new business?
• How can the firm generate more value for investors?

The answers to these and many other strategic questions result in the organization's strategy and a series
of specific short-term and long-term goals or objectives and related measures.
Definition

In 1988, Henry Mintzberg described the many different definitions and perspectives on strategy reflected
in both academic research and in practice. He examined the strategic process and concluded it was much
more fluid and unpredictable than people had thought. Because of this, he could not point to one process
that could be called strategic planning. Instead Mintzberg concludes that there are five types of strategies:

• Strategy as plan - a directed course of action to achieve an intended set of goals; similar to the strategic
planning concept;
• Strategy as pattern - a consistent pattern of past behavior, with a strategy realized over time rather than
planned or intended. Where the realized pattern was different from the intent, he referred to the strategy
as emergent;
• Strategy as position - locating brands, products, or companies within the market, based on the
conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors
outside the firm;
• Strategy as ploy - a specific maneuver intended to outwit a competitor, and Strategy as perspective -
executing strategy based on a "theory of the business" or natural extension of the mindset or
ideological perspective of the organization.

Nature of strategy

In 1985, Ellen Earle Chaffee summarized what she thought were the main elements of strategic
management theory where consensus generally existed as of the 1970s, writing that strategic management:

• Involves adapting the organization to its business environment;

• Is fluid and complex. Change creates novel combinations of circumstances requiring unstructured
non-repetitive responses;
• Affects the entire organization by providing direction;
• Involves both strategy formulation processes and also implementation of the content of the strategy,
• May be planned (intended) or unplanned (emergent); these may differ from each other and also from
the realized strategy which results from them (Chaffee, p. 89)
• Is done at several levels: overall corporate-level strategy, and individual business- level strategies;
and
• Involves both conceptual and analytical thought processes.
 Chaffee further wrote that research up to that point covered three models of strategy, which were not
mutually exclusive:

1. Linear strategy: A planned determination of goals, initiatives, and allocation of resources, along the lines
of the Chandler definition above. This is most consistent with strategic planning approaches and may have
a long planning horizon. The strategist "deals with" the environment but it is not the central concern.

2. Adaptive strategy: In this model, the organization's goals and activities are primarily concerned with
adaptation to the environment, analogous to a biological organism. The need for continuous adaption
reduces or eliminates the planning window. There is more focus on means (resource mobilization to address
the environment) rather than ends (goals). Strategy is less centralized than in the linear model.

3. Interpretive strategy: A more recent and less developed model than the linear and adaptive models,
interpretive strategy is concerned with "orienting metaphors constructed for the purpose of conceptualizing
and guiding individual attitudes or organizational participants". The aim of interpretive strategy is
legitimacy or credibility in the mind of stakeholders. It places emphasis on symbols and language to
influence the minds of customers, rather than the physical product of the organization.

VI. Strategic Management Field of Study

Strategic management is a field of study that involves the development and implementation of plans to
help an organization achieve its goals. It's a part of the business and management field, and overlaps with
other business disciplines like finance, marketing, and statistics.

Strategic management includes:

• Goal setting: Establishing the organization's objectives

• Planning: Developing policies and plans to achieve the objectives Resource allocation: Assigning
resources to implement the plans
• Decision-making: Making critical decisions and anticipating outcomes
• Risk analysis: Identifying risks and external factors that could be roadblocks

Strategic management research often involves studying both traditional and contemporary phenomena in
the corporate world. It also involves developing models and frameworks to help with strategic decision-
making.

Some subdisciplines of strategic management include: Strategic marketing, Strategic communication,

Strategic entrepreneurship, and Strategic project management.
 Some career prospects for graduates with a degree in strategic management include:

Administrator, Organizational manager, Marketing manager, Business consultant, Planning specialist,

Brand manager, Corporate service manager, Development manager, and Executive assistant.

V. Strategic Management - An overview

Strategic management is a management system that enables organizations, such as libraries, to prioritize
and make better decisions by formulating, applying, and evaluating strategies. It involves creating a
strategic plan, which serves as a roadmap to help organizations achieve their goals and objectives. Strategic
management helps organizations address challenges, communicate their value, and create value for the
institution they depend on.
Reference

Sheldon, R., Tucci, L., & Roy, M. (2024, May 9). strategic management. Search CIO.
https://www.techtarget.com/searchcio/definition/strategic-management

Staff, C. (2024, December 18). What is strategic management? Approaches, benefits, and careers. Coursera.
https://www.coursera.org/articles/strategic-management

Wikipedia contributors. (2024, December 31). Strategic management. Wikipedia.

https://en.wikipedia.org/wiki/Strategic_management