In strategic management, goal setting is the key component. Strategic management is about setting goals that are SMART – Specific, Measurable, Achievable, and Time-Bound. Goals should be realistic, and should consider the external environment, such as the SWOT analysis, strengths, weaknesses, opportunities, and threats. A vision statement should be crafted to set expectations for the business. Strategic management also requires managers to make a plan to achieve the goals.
An organization may benefit from strategic management by gaining a glimpse into the future, and being prepared for a possible adverse scenario. Proactive organizations stay ahead of competition by staying current with changing market trends, which improves their chances of survival. Incorporate senior management into the strategic planning process, so they understand the implications of the goals and the process, and they’ll be more likely to support proposed plans. Here are the advantages of strategic management:
The first phase of strategic management is analysis. It includes analysis of the current environment, planning of future actions, and data analytics. This process is the key to achieving organizational goals. Once the organization has established a vision, it can start exploring and planning activities. Effective strategy development and execution will create better market share and profitability. It also helps organizations to become more efficient and competitive. The process is generally divided into five distinct phases. In order to make the most of strategic management, a company must focus on identifying and implementing the best plan for the organization.
Strategic management makes an organization more cohesive and proactive. It prepares it for challenges. Consider the business strategy of Amazon, the largest online retailer. Their strategy is driven by a desire to stay ahead of competitors. Their key focus is serving end customers, with rapid shipping and exceptional customer service. A clear strategy will help management stay alert and effective and handle new challenges. It will keep management and employees on alert. A clear strategy will empower management and employees to develop and implement ideas that are better than the status quo.
Different types of strategies have emerged over time. The modern discipline of strategic management can be traced back to the 1950s and 1960s. Peter Drucker is regarded as the founding father of management studies. He is credited with introducing the concept of distinctive competence. It is a concept that highlights an organization’s core competencies and competitive advantage. This process is referred to as SWOT analysis. In the following sections, we look at the various types of strategic management strategies.
The SWOT analysis helps companies understand their current situations and draw concrete conclusions about how to change and improve. The ultimate goal of this analysis is to match the resources of a company to the market’s needs. Strategic actions should be aimed at correcting important weaknesses and defending against external threats. Ultimately, strategic management helps organizations create and implement goals that are realistic and achievable. It provides a structured and clear process for setting and implementing goals.