Strategic Management

 

Definition Of Strategic Management

 

There are many definitions for strategic management I chose four of them. 

       Strategic management is defined as “the set of managerial decision and action that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control.

   This means that the primary job of strategic management is to examine a business firm as a whole.

   Another definition:

    strategic management is derived from the concept of enterprise policy. This concept explains the organization as a system in which economic resources are applied effectively with the company’s functional activities coordinated around generating profit.

 

This definition focuses on using economic recourses effectively.

 

A Third Definition:

   States that strategic management is “the continuous process of determining the mission and goals of an organization within the context of its external environment and its internal strengths and weaknesses, formulating appropriate strategies, implementing those strategies, and exerting strategic control to ensure the organization’s strategies are successful in attaining its goals

  

This definition coordinates the goals , visions, and internal and external environment in a business firm to achieve success.

 

  A fourth definition: 

 

     strategic management in an organization must become a process and a single path guiding actions throughout the organization. It consists of organizational analysis, decisions and actions creating and sustaining competitive advantage.

 

This definition also focuses on competition as a challenge for any organization and combines decisions with actions to sustain continuous progress and achieve growth.

 

All the definitions agree that strategic management includes 

 

A combination of decision making and actions taking in the direction that determines the organization’s performance.

Continuous process of formulation, implementation, and evaluation of decisions.

Putting the organization’s resources whether financial or human to the best use to sustain development.

 

Importance

          The major importance of strategic management is that it gives organizations a framework for developing abilities for anticipating and coping with change.

 It also helps to develop the ability to deal with uncertain futures by defining a procedure for accomplishing goals.

      If an organization has a clear and obvious objective, it will emphasize what the organization wants to accomplish or to be in the future.

 

 For Example: 

 Rebranding Facebook into meta was a step to enlarge the company to include WhatsApp and Instagram and maybe other platforms in the future.

 

     The purpose of strategic management is helping companies to find ways to be more competitive. To that end, putting strategic management plans into practice is the most important aspect of the planning itself. 

Plans in practice involve identifying benchmarks, realigning resources—financial and human—and putting leadership resources in place to oversee the creation, sale, and deployment of products and services.

 

     For Example: 

     Amazon acquired Souq.com, a similar company with Middle Eastern origins seeking global world domination in the ecommerce marketplace to eliminate competitors such as  Alibaba.

 

    Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence (rather than just respond to) activities and thus to exert control over its own destiny. 

 

For Example:

Microsoft is acting in a proactive manner to increase its market share by buying Bethesda software company and activision blizzard, Sony are already losing players to Xbox. 

 

      The three most highly rated benefits of strategic management are a clearer sense of a firm’s strategic vision, a sharper focus on what is strategically important, and an improved understanding of a rapidly changing environment. 

      As the world's environment becomes increasingly complex and changing, strategic management is used by today's corporations as one way to make the environment more manageable.