In a competitive world like ours, every step you take is a crucial one and should be well thought about. This statement is not only applicable to personal lives but also to the corporate world.
Every decision made or every strategy implemented by the managers in a company can either make or break the future of the company. Here comes the role of strategic management, which clears a path for managers as well as employees to ensure their next step for a better future of the organization.
Let us discuss more about strategic management.
What is Strategic Management?
Strategic management can be defined as the bundle of strategies implemented, decisions and acts made by the managers to enhance the performance of the firm and achieve the desired goals of the organization.
It is basically about the identification and description of strategies carried out by managers to achieve a competitive advantage for their organization. The managers set goals, develop strategies and put them into action.
There are some crucial steps in between such as strategy evolution, resource allocation, competition analysis and internal structure assessment.
Strategic management helps managers to ensure the smooth and hurdle-free working of an organization along with employee satisfaction and optimum utilization of resources.
Strategic management plays a crucial role in the flourishing of any organization.
From financial planning to market positioning to employee handling, Strategic management has its role in the working of an organization from top to bottom. It foresees the upcoming challenges and helps in facing them without many difficulties.
Need of Strategic Management
1. SWOT Analysis of the company
Strategic management is a necessity for the identification of opportunities, strengths and weaknesses by analyzing the internal structure of the firm.
It helps us to recognize the unrealized potential of the firm or even give new ways to implement existing strategies.
2. Future preparations
As a business environment is dynamic, it is important to adapt accordingly. Strategic management helps the company to be prepared for the future by evolving strategies to keep abreast of changes in the business.
3. Sets a clear direction for employees
Strategic management allows the company to set a goal for its employees and give them a direction to work in.
It makes feasible methods to increase alertness in employees and setting a clear vision for them allows employees to bring more value to the work.
4. To gain competitive edge
By committing to strategic plans, organizations can strengthen their competitive position. Managers who have strong knowledge and an in-depth view of what their major competitors will do next can forecast timely business decisions. It also means they can prepare for future opportunities and possible risks.
5. Keeps the company updated
Implementing strategies involves managers more keenly with the firm and keeps them updated with industrial trends. Strategic management also helps in identifying the ongoing trends in the market for the company to adapt and fulfill the customer needs accordingly.
6. For better governance
Strategic management also involves how an organization is governed and works. It keeps track of how managers need to handle the employees and the business and also how a business needs to contribute to the economy and society.
7. Identifying new opportunities
The strategic management function works on finding new opportunities for the business to flourish more. They give the managers information about those unexplored markets and in doing so, they open doors to new opportunities for the organization.
So the role of strategic management also involves identifying newer avenues of growth for the business to increase its market.
Regain your competitive edge!
Goals of Strategic Management
Strategic goals are long-term achievable goals set by the companies for their future. These are essential in managing a business as they provide a direction to work in and a clear path to walk upon to the employees, reducing confusion and enhancing efficiency.
Usually, these big goals are divided into sub-goals and are assigned to division managers to work upon. To achieve their specified goals, managers tend to develop a strategic plan. A proper plan helps in achieving goals more steadily.
Without goals, a lot of time could be spent on things that don’t matter. A company must be aware of its strengths and weaknesses to achieve the desired goals.
Some of the main strategic goals of any organization are
1. Increase employee effeciency
In the process of implementing the strategies, employees are involved in every step. This gives them a feeling of belongingness and engagement which acts as a motivation to work.
With an increase in the efficiency of the work, the performance management of an organization is beneficial. If employees of a company feel seen and appreciated, they are willing to give their best to the company.
2. Increases profitability
Strategic management helps managers to fully utilize the available resources, be they financial or human. Optimum utilization of resources eventually leads to an increase in the profitability of an organization.
3. Reduces expenses
Strategic management helps in reducing the unnecessary expenses of an organization.
With the help of strategic management, managers can decide whether an investment is worth doing or not.
4. Customer Satisfaction
The most important role in the flourishing of any company is played by its customers. Happy customers lead to a successful business.
The main goal of any company is to satisfy its existing customers to the fullest and to attract more.
5. Creating new products or services
It’s very important to be adaptive to your surroundings for a business to work out. Based on the changing demands of the customers, a company should mold its products to fulfill the needs and wants of the consumers.
6. Building brand image
The brand name is the name of the company recognized by the public.
A good brand name attracts more and more customers every day and the market trusts the company with a recognizable brand name.
Steps involved in Strategic Management
Just like every other process, the process of strategic management is also carried out by following certain steps:
1. Identification of issue
This step involves reading the environment carefully to identify the issue. A clear analysis of the threats and opportunities is involved in this step along with the preparation of an environmental profile.
2. Selection of strategy
This step of strategic management focuses on generating and aiming certain strategies to find the most suitable one to address the specified problem.
3. Implementation of strategy
This phase is concerned with creating an adequate organizational climate for the execution of strategy.
4. Evaluation of strategy
After the implementation, it’s important to make sure whether the implemented strategy is giving the desired results or not. In this step, a suitable information system is maintained for accessing the effectiveness of the strategy.
Strategic management is a need to achieve the goals and objectives set by an organization. This not only helps the companies to build a competitive edge but also expand further by analyzing new opportunities available in the market.
To obtain every goal set by an organization, a strategy is needed, built and implemented.
Companies must identify and adopt a strategic management technique that works best for their company and its customers.
Strategic management does not only end with the implementation of the techniques but continues till the life of the business.