Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers

on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments. It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. Strategic management is a level of managerial activity under setting goals and over Tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. “Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.”

Strategic Choices
International business firms can use 4 basic strategies: • • • • International Multidomestic Globalization Transnational

"An international strategy is a strategy through which the firm sells its goods or services outside its domestic market" (Hill 378). One of the primary reasons for implementing an international strategy (as opposed to a strategy focused on the domestic market) is that international markets yield potential new opportunities. Multidomestic strategy is a strategy by which companies try to achieve maximum local responsiveness by customizing both their product offering and marketing strategy to match different national conditions. Production, marketing and R&D activities tend to be established in each major national market where business is done. Multinational companies gain economies of scale through shared overhead and market similar products in multiple countries. Multi domestic companies have separate headquarters in different countries, thereby attaining more localized management but at the higher cost of forgoing the economies of scale from cost sharing and centralization.

This analysis can be performed using several techniques. strategy implementation. and surveys can be used to analyze the internal environment. A global strategy may be appropriate in industries where firms are faced with strong pressures for cost reduction but with weak pressures for local responsiveness. Global strategies require firms to tightly coordinate their product and pricing strategies across international markets and locations. This includes employee interaction with other employees. discussions. The transnational strategy is an international marketing method that. "seeks to combine the benefits of global-scale efficiencies with the benefits of local responsiveness" rather than settling for the limitations of either strategy. manager interaction with other managers. To begin this process. These elements are steps that are performed. The situation analysis provides the information necessary to create a company mission statement. in order. and strategy evaluation. In addition. and management interaction with shareholders. when developing a new strategic management plan. suppliers. Situation Analysis Situation analysis is the first step in the strategic management process. organizations should observe the internal company environment. in order to make necessary changes and improvements. the external environment. Strategic Management Process The strategic management process is made up of 4 elements: situation analysis. because it is able to mass-produce a standard product which can be exported (providing that demand is greater than the costs involved). Situation analysis involves "scanning and evaluating the organizational context. These firms are able to take advantage of economies of scale. strategy formulation. and competitors. it allows these firms to sell a standardized product worldwide.Global strategy as defined in business terms is an organization's strategic guide to globalization. Existing businesses that have already developed a strategic management plan will revisit these steps as the need arises. Organizations also need to analyze the external environment. What is the relationship between the company and its customers? What is the relationship between the company and its . Therefore. and the organizational environment". interviews. Several questions can be asked which may help analyze the external environment. This would include customers. and therefore firms that pursue a global strategy are typically highly centralized. Observation and communication are two very effective methods. creditors. according to the Institute for Working Futures. employee interaction with management.

means that the organization wants to remain the same size or to grow slowly and in a controlled manner. human resource strategies would be concerned with the act of hiring and training employees with the goal of increasing human capital. The company should first . Corporate strategies are long-term and are associated with "deciding the optimal mix of businesses and the overall direction of the organization" In general there are 4 categories:  Growth: These strategies can be promoted internally by investing in expansion & can be promoted externally by acquiring additional business divisions. With this information. the company can develop a strategy to gain a competitive advantage over these competitors. and production.  Combintaion: These strategies include all possible combinations of the strategies. Strategy Implementation Strategy implementation involves putting the strategy into practice. It also includes determining which strategies should be implemented first. Knowledge of competitors is required in order to formulate a competitive strategy.  Stability: Stability. Business strategies are those associated with methods of competing in a certain business or industry. methods.suppliers? Does the company have a good rapport with its creditors? Is the company actively trying to increase the value of the business for its shareholders? Who is the competition? What advantages do competitors have over the company? Strategy Formulation Strategy formulation involves designing and developing the company strategies. The strategies should be prioritized based on the seriousness of underlying issues. Strategy formulation is generally broken down into three organizational levels: • Functional • Business • Corporate Functional strategies are short-term and are associated with the various operational departments of the company. For example. such as human resources. finance.  Retrenchment: Forced decline either by shrinking current business units or selling off or liquidating entire business. This includes developing steps. The company must learn who its competitors are and how they operate. as well as identify the strengths and weaknesses of the competition. marketing. and procedures to execute the strategy. Determining company strengths aids in the formulation of strategies. These strategies are department specific. sometimes called a pause strategy.

Both management and employees are involved in strategy evaluation. processes are not working. then move onto the other problems once those have been addressed. and whether the expected results have been achieved. reward system  Budget allocations  Information systems  Rules/procedures  Human resources:  Recruitment/selection  Transfers/promotions  Training  Layoffs/recalls Strategy Evaluation Strategy evaluation involves "examining how the strategy has been implemented as well as the outcomes of the strategy". or results are not in line with the actual goal. then the strategy can and should be modified or reformulated. . because each is able to view the implemented strategy from different perspectives. The strategy evaluation should include challenging schedules and timetables that are achievable. If it is determined that deadlines are not being met. task design  Information and control systems:  Pay. then the expectations are unrealistic and the strategy is certain to fail. Implementing strategy tools:  Leadership: n Persuasion n Motivation n Culture/values  Structural design:  Organization Chart  Teams  Centralization  Decentralization.  Facilities. An employee may recognize a problem in a specific implementation step that management would not be able to identify. whether the implementation steps and processes are working correctly.focus on the worst problems. This includes determining whether deadlines have been met. If it is impossible to achieve the schedules and timetables.

.organizational members assess the implications and adjust the strategies as needed" (Coulter. 9). as the company grows and changes. 2005. p. "As performance results or outcomes are realized . Existing strategies will change and new strategies will be developed.Conclusion The strategic management process is a continuous process. This is all part of the continuous process of improving the business in an effort to succeed and reach company goals. so will the various strategies. Strategic management is of vital importance as CEOs and managers have to constantly reassess their strategy management models and implement change and improvement wherever needed.at any level of the organization . In addition.

Sign up to vote on this title
UsefulNot useful