Strategic

Management
CBMec2
Hospitality Management & Marketing
Management 3rd Year
 Introduction to Strategic Management:
Meaning & Basic Concepts
•  
• 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.
• Mission
• 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.
•  
• Vision
• 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.
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
Strategic Management vs. Strategic
Planning:
• Every process in an organization basically begins with strategic
planning. Both the strategic planning process and strategic
management process are totally different but work for the
same goal of the organization.
• The strategic planning process in every business decides the
way the organization should lead along with its objectives.
• On the other hand, strategic management plans the process to
follow to achieve the defined objective.
Strategic Management
Process:
• In 1981, Ken Simmonds defined Strategic management process as
the collection of management accounting information about a
business and its competitors for use in developing and monitoring
the business strategy.
• Strategic management helps in processing the ways in which the
goals of the organization can be attained. The two important
objectives of using the strategic management process are
• To obtain a higher level on your competitors
• Act as a guide which helps in business development.
• It also helps in adapting new changes which are both internal as
well as external. The internal changes comprise of company
policies, procedures etc and the external factors like new changes
which affect business, customer’s likes and wishes, competitors’
strategic steps, etc.
Strategic Management
Process Model:
• Defining strategic intent:
• Establishing a vision
• Designing mission
• Setting objectives

• Strategy formulation:
• Performing environmental and organizational appraisal
• Considering strategies
• Carrying out a strategic analysis
• Making strategies
• Preparing a strategic plan
• Strategy implementation:
• Putting strategies into practice
• Developing structures and systems
• Managing the behavioural and functional implementation

• Strategic Evaluation and Control

• Performing evaluation
• Exercising control
• Recreating strategies
Importance of Strategic
Management:
• Shows the right direction to the organization
• Helps companies or organizations to turn proactive rather
than reactive
• Guides the companies to prepare and face the challenges
which may occur in future
• Plays an important factor in decision making
• Make sure to fight the competitions and have long term
survival assurance
• Have a competitive edge over the market
• Last but not least, helps in business development and success
• Steps of Strategic Management Process:
• The strategic management plan has various facets which are
being discussed here. The strategies are applied in order to
have proper planning and appropriate allocation of funds for
the accomplishment of the goals of the company.
• Step 1: Formulation:
• The formulation of the strategies essentially involves the environment within
which every company has to survive. Here various important decisions are
made in order to figure out how the company will reach out to the
competition.
• Here the external environmental analysis is done. The political, economic, legal
and social aspects are assessed during the formulation of the strategies.

• 1. Industry Environment:
• The strategic decision-maker checks for the competitor environment. They try
to assess the resources available with the rivals and also their bargaining
power with the customers. It is also important to understand the trend of the
suppliers; check if there are any latest threats of the new entrants in the
industry.
• 2. Internal Environment:

• Though most of the companies do not take care about the internal
environment this is amongst the most important while implementing strategic
management fundamentals. You should have a clear SWOT analysis about your
employees, processes, and resources.
• Step 2: Implementation:
• This is the next important step in strategic management – here
the management has to take the decision as to how the
resources will be utilized in order to reach out to the goals
formulated by the company. The implementation phase also
checks how the resources of the organization have been
structured.
Advantages of Strategic
Management Process:
• The process of strategic management is a comprehensive
collection of different types of continuous activities and also
the processes which are used in the organization. Strategic
management is a way to transform the existing static plan in a
proper systematic process.
• Strategic management can have some immediate changes in
the organization. The following mentioned are few pointers
that help you identify the relevance of strategic management
and its benefits
• 1. Creating a better future:
• There is always a difference between reactive and proactive
actions. When a company practices strategic management – the
company will always be on the defensive side and not on the
offensive end. You need to come out victorious in the competitive
situation and not be a victim of the situation.
• It is not possible to foresee each and every situation but if you
know that there are chances of certain situations then it is always
better to keep your weapons ready to fight the situation.
• 2. Identifying strategic directions:
• Strategic management essentially and clearly defines the goals
and mission of the company. The main purpose of this
management is to define realistic objectives and goals – this has
to be in line with the vision of the company.
• The strategic management provides a base for the organization on
the basis of which progress can be measured and on the basis of
the same, the employees can be compensated.
• 3. Make Better business decisions:
• It is important to understand the difference between a great idea and a good idea. If
you do have a proper and clear vision of your company – then having a mission and
methods to achieve the mission always seems to be a very good idea. You need to 
make better decisions and that too within less time.
• Here come the benefits of a strategic approach. It turns into a great idea when you
decide what is the type of project that you want to invest your money; how do you plan
to invest your time and also utilize the time of your employees.
• Once you are clear with your ideas about the project and the time each of your
employees and yourself will have to allocate, you will need to focus your attention on
the financial and human resources.
• 4. Business Longevity:
• The times are changing fast and there are dynamic changes happening every day. The
industries worldwide are changing at a fast pace and hence survival is difficult for those
companies which do not have a strong and perfect base in the industry.
• The strategic management ensures that the company has a thorough stand in the
related industry and the experts also make sure that the company is not just surviving
on luck and better chances or opportunity. When you look at various studies you would
know that the industries which are not following the strategic management will survive
for not more than five years.
• This suggests that companies should have a powerful 
focus on the longevity of the business. This suggests that without strategic
management, it is not possible for a company to survive in the long run.
• 5. Increasing market share and profitability:
• With the help of strategic management, it is possible to increase the
market share and also the profitability of the company in the market. If
you have very focused plan and strategic thinking then it is possible for all
the industries to explore better customer segments, products and
services and also to understand the market conditions of the industry
which you are operating in.
• Strategic management skills will help you to approach the right target
market. The experts will guide for better sales and marketing approaches.
You can also have a better network of distribution and also help you to
take business decisions which at the end of the day results in profit.
• 6. Avoiding competitive convergence:
• Most of the companies have become so used to focusing on the
competitors that they have started imitating their good practices. It has
become so much of competition that is becoming difficult to part the
companies or identify them differently.
• With the help of strategic management this magic is possible – try and
learn all the best practices of a company and become a unique identity
which will keep you apart from your competitors.
• 7. Financial benefits:
• The firms which follow the process of strategic management proves to
have more profits over a period of time as compared to the companies
that do not opt for strategic management decisions.
• Those firms which are involved in using strategic management use the
right method of planning – these companies have excellent control over
their future. They have a proper budget for their future projects; hence
these businesses continue for a long time in the industry.
• 8. Non-financial benefits:
• Companies using strategic management also provides various financial and
non-financial benefits of strategic management. The experts informed that
the firms which practice strategic management are always ready to defeat
the external threats.
• They have a better understanding of the strengths and weakness of the
competitor and hence they are able to withstand the competition. This
paves way for better performance and rewards for the company over a
period of time.
• The main feature of this management system is that it has the capacity of
problem prevention and problem-solving skills. It also helps in bringing
about discipline in the firm for all types of internal and external processes.
Disadvantages of Strategic
Management Process:
• The process of strategic management includes a set of long
term goals and objectives of the company – using this method
helps the company in facing the competition in a better
manner and also increases its capabilities.
• These are definitely some of the strategic management
benefits but every coin has two sides – the same is the case
with strategic management. Here are some of the limitations
of strategic planning in management.
• 1. Complex process:
• The strategic management includes various types of continuous
process which checks all type of major critical components. This
includes the internal and external environments, long term and
short term goals, strategic control of the company’s resources
and last but not the least it also has to check the organizational
structure. This is a lengthy process because a change in one
component can affect all the factors.
• Hence it is vital that one understands the issues with all the
concerned factors. This generally takes time and at the end, the
growth of the company is affected.
• Being a complex process it calls for lots of patience and time
from the management in order to implement the strategic
management.
• In order to have proper strategic management, there should be 
strong leadership and proper structured resources.
• 2. Time-consuming process:
• In order to implement strategic management, it is necessary that
the top management spends proper quality time in order to get the
process right. The managers have to spend a lot of time researching,
preparing and informing the employees about this new
management. This type of long term and time-consuming training
and orientation would hamper the regular activities of the company.
• The day to day operations are negatively impacted and in the long
term, it could affect the business adversely. For e.g. there are many
issues that require daily attention but this is not taken care because
they are busy researching the details about strategic management.
• In case, proper resolution of the problems are not done on time
then there could be a great amount of attrition increase. Besides
this, the performance of the employees will also go down because
they are not getting the required resolution of their problems. This
type of situation may lead the management to divert all their critical
resources towards employee motivation and performance – while
doing this your strategic management process will be sidelined.
• 3. Tough implementation:
• When we speak the word strategic management then it seems to be
a huge and large word. But it is also a fact that the implementation
of this management system is difficult as compared to other
management techniques. The implementation process calls for
perfect communication among the employees and employer.
• The strategic management has to be implemented in such a way that
the employees have to remain fully attentive; there should be active
participation among the employees and besides this, the employees
have to be accountable for their work. This accountability is meant
not only for the top management but for all employees across the
hierarchy. The experts mention that implementation is difficult
because they have to continuously strive to make the employees
aware about the process and benefits of this system.
• For e.g. if a manager was involved in forming of the strategic process
and he/she has not been involved in the implementation process
then the manager will never be accountable for any processes in the
company.
• 4. Proper planning:
• When we say management systems then it calls for perfect
planning. You just cannot write things on paper and leave
them. This calls for proper practical planning. This is not
possible by just one person but it is a team effort.
• When these types of processes are to be implemented then
you need to sideline various regular decision-making activities
which would adversely affect the business in the long run.