https://www.investopedia.com/terms/s/strategic-management.

asp

Strategic Management
Strategic Management Model in the Public Sector

What Is Strategic Management?

Strategic management is the management of an organization’s resources

to achieve its goals and objectives. Strategic management involves
setting objectives, analyzing the competitive environment, analyzing the
internal organization, evaluating strategies, and ensuring that
management rolls out the strategies across the organization.

Understanding Strategic Management

Strategic management is divided into several schools of thought. A
prescriptive approach to strategic management outlines how strategies
should be developed, while a descriptive approach focuses on how
strategies should be put into practice. These schools differ on whether
strategies are developed through an analytic process, in which all threats
and opportunities are accounted for, or are more like general guiding
principles to be applied.

KEY TAKEAWAYS

 Companies, universities, nonprofits, and other organizations can

use strategic management as a way to make goals and meet
objectives.
 Flexible companies may find it easier to make changes to their
structure and plans, while inflexible companies may chafe at a
changing environment.
 A strategic manager may oversee strategic management plans
and devise ways for organizations to meet their benchmark goals. 
Business culture, the skills and competencies of employees,
and organizational structure are all important factors that influence how
an organization can achieve its stated objectives. Inflexible companies
may find it difficult to succeed in a changing business environment.
Creating a barrier between the development of strategies and their
implementation can make it difficult for managers to determine whether
objectives have been efficiently met.

While an organization’s upper management is ultimately responsible for

its strategy, the strategies themselves are often sparked by actions and
ideas from lower-level managers and employees. An organization may
have several employees devoted to strategy rather than relying solely on
the chief executive officer (CEO) for guidance.

Because of this reality, organizational leaders focus on learning from

past strategies and examining the environment at large. The collective
knowledge is then used to develop future strategies and to guide the
behavior of employees to ensure that the entire organization is moving
forward. For these reasons, effective strategic management requires both
an inward and outward perspective.

 Strategic management extends to internal and external communication

practices as well as to tracking, which ensures that the company meets
goals as defined in its strategic management plan.

Example of Strategic Management

For example, a for-profit technical college wishes to increase new
student enrollment and enrolled student graduation rates over the next
three years. The purpose is to make the college known as the best buy
for a student's money among five for-profit technical colleges in the
region, with a goal of increasing revenue.

In that case, strategic management means ensuring the school has funds
to create high-tech classrooms and hire the most qualified instructors.
The college also invests in marketing and recruitment and implements
student retention strategies. The college’s leadership assesses whether its
goals have been achieved on a periodic basis.

Special Considerations
Helping their company find ways to be more competitive is the purpose
of strategic management. 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.

Frequently Asked Questions

What is strategic management?
Strategic management is the process of setting goals, procedures, and
objectives in order to make a company or organization more
competitive. Typically, strategic management looks at effectively
deploying staff and resources to achieve these goals. Often, strategic
management includes strategy evaluation, internal organization analysis,
and strategy execution throughout the company.

Why is strategic management important?

In business, strategic management is important because it allows a
company to analyze areas for operational improvement. In many cases,
they can follow either an analytical process, which identifies potential
threats and opportunities, or simply follow general guidelines. Given the
structure of the organization, a company may choose to follow either a
prescriptive or descriptive approach to strategic management. Under a
prescriptive model, strategies are outlined for development and
execution. By contrast, a descriptive approach describes how a company
can develop these strategies. 

What is an example of strategic management?

Consider a large company that wants to achieve more ambitious online
sales rates. To meet these goals, the company will develop a strategy,
communicate this strategy, apply it across various units and departments
in the organization, integrate this with employee goals, and execute
accordingly. If an effective strategy is applied, ideally, it will help the
company achieve its' targets through a single, coordinated process. 

https://www.indeed.com/career-advice/career-development/what-is-
strategic-management

Strategic Management: Definition, Purpose and

Example
March 3, 2021
Strategic management is the planned use of a business'
resources to reach company goals and objectives. Strategic
management requires ongoing evaluation of the processes and
procedures within an organization and external factors that may
impact how the company functions. The process of strategic
management should guide top-level programs and decisions.
Companies of all sizes and in all industries can benefit from the
practice of strategic management.

In this article, we will explain the benefits of strategic

management, explain how it works, discuss the types and stages
of strategic management and provide an example of it in the
workplace.

Benefits of strategic management

Achieving organizational goals takes planning and patience.
Strategic management can help companies reach their goals.
Strategic management ensures the steps necessary to reach a
business goal are implemented company-wide.

Strategic management offers many benefits to companies that

use it, including:

 Competitive advantage: Strategic management gives

businesses an advantage over competitors because its
proactive nature means your company will always be aware
of the changing market.

 Achieving goals: Strategic management helps keep goals

achievable by using a clear and dynamic process for
formulating steps and implementation.

 Sustainable growth: Strategic management has been

shown to lead to more efficient organizational performance,
which leads to manageable growth.
  Cohesive organization: Strategic management
necessitates communication and goal implementation
company-wide. An organization that is working in unison
towards a goal is more likely to achieve that goal.

 Increased managerial awareness: Strategic management

means looking toward the company's future. If managers do
this consistently, they will be more aware of industry trends
and challenges. By implementing strategic planning and
thinking, they will be better prepared to face future
challenges.

How does strategic management work?

Strategic management requires setting objectives for the
company, analyzing the actions of competitors, reviewing the
organization's internal structure, evaluating current strategies and
confirming that strategies are implemented company-wide.

Strategic management can be either prescriptive or

descriptive. Prescriptive strategic management means
developing strategies in advance of an organizational
issue. Descriptive strategic management means putting
strategies into practice when needed. Both methods of strategic
management employ management theory and practices.

While upper management is responsible for implementing

strategies, ideas, goals or organizational challenges can come
from any member of the company. Many companies employ
strategists whose job it is to think and plan strategically to improve
company function.
Types of strategic management
Strategic management as a concept can be approached in a
variety of ways. Below we will outline popular types of strategic
management:

SWOT analysis
SWOT stands for strengths, weaknesses, opportunities and
threats. This analysis allows you to investigate internal and
external factors. Internal factors include positive (strengths) or
negative (weaknesses) factors that exist within your organization
and are able to be changed or affected in some way, while
external factors include positive (opportunities) or negative
(threats) factors that exist outside of the subject you are
evaluating and cannot necessarily be changed or affected by you
or your organization in any way.

Read more: SWOT Analysis Guide (With Examples)

Balanced scorecard
A balanced scorecard helps you find which facets of your
business need improvements by breaking down the performance
evaluation process into four areas known as legs. These legs are:

 Learning and growth

 Business processes
 Customer perspectives

 Financial data
The balanced scorecard method can generate timely reporting
mechanisms that show all statistics related to the growth of the
company.

Read more: What Is a Balanced Scorecard?

Five steps of strategic management

While there are different approaches and frameworks for strategic
management, there are generally the same five steps or stages in
the process:

1. Identification
2. Analysis
3. Formation
4. Execution

5. Evaluation

1. Identification

The first step in strategic management is evaluating the

company’s current direction. This often includes understanding
the company’s goal, mission and overall strategic direction.
Assessing where the company’s current process will help you
achieve your goal.

2. Analysis

Once you understand the current process, you must analyze the
details. What is working? What is not working? What input from
organizational stakeholders can you gather? This is the time to
answer any questions that will help solidify the necessary
elements of the strategic plan. A SWOT analysis, or identification
of strengths, weaknesses, opportunities and threats, is a useful
tool.
2. Formation

Once you have the information you need, it is time to create an

action plan for reaching the goal. Make sure the steps are clear,
focused and directly related to the goal. Prepare easy-to-
understand implementation guidelines if the process or procedure
will impact many people within the organization.

3. Execution

Follow the steps outlined in your strategic plan. Make sure that all
stakeholders are implementing the plan as designed for maximum
efficiency.

4. Evaluation

Evaluate the final product. Did you achieve your goal? Was the
process implemented appropriately company-wide? Based on
your answers to these questions, you can reflect and revise as
needed.

Example of strategic management

1. Identification

Furniture company Wood's Fine Furnishings is preparing to

introduce a new line of kitchen tables. They decide to implement
strategic management to ensure that the product release goes
smoothly, efficiently and consistently across all of their retail
locations.

2. Analysis

In the past, Wood's Fine Furnishings has suffered from

inconsistent marketing and incorrect shipping costs with the
release of new products in their multiple retail locations. Before
the release of their new kitchen table line, they have decided to
run a SWOT analysis to see how they can improve the process.

Strengths:

 Quality product
 Several locations for the ease of purchase
 Flat shipping rate

Weaknesses:

 Poor communication between store managers and between

store employees
 Shipping rate applied multiple times at some stores
 Inconsistent marketing strategy

Opportunities:

 Unified marketing
 Transparent fees
 Threats:

 Wood's Fine Furnishings' main competitor released a line of

kitchen tables last quarter

3. Formation

Using their SWOT analysis, Wood's Fine Furnishings creates a

strategic plan for the release of their kitchen tables. It includes
providing consistent marketing collateral, both physical and
digital, to all retail locations. It also includes sending a
representative to each retail location to explain how to correctly
apply the shipping rate to all purchases. Finally, it sets up an
internal messaging system so store managers can communicate
with one another quickly and easily about challenges and
successes in their stores.

4. Execution

One month before the release of the new kitchen tables, the
marketing team provides the marketing collateral to all retail
stores. Every store is given the same guidance on how to
implement the marketing items effectively. Two weeks before the
launch, store managers are trained as a group on the new
messaging system. The trainers field questions and make sure
every manager has the messaging service set up on their
company cell phone and office computer to be accessible at all
times.

One week before the launch, a representative from company

headquarters trains every retail employee on how to appropriately
apply shipping costs to a sale. Managers are also present to
make sure this process is carried out correctly with customers.

5. Evaluation

Wood's Fine Furnishings reviews the data from their kitchen table
release one month after the first day of sales. They find that the
marketing plan drove consumers to the retail location closest to
them to see the tables in person. The internal messaging system
was under-utilized by most managers, many of whom did not like
customers seeing them on their phones while out on the floor.
There were no issues with shipping costs during this release. The
strategic managers take this data and use it as they begin to plan
for their next new product release.
https://www.managementstudyguide.com/strategic-management.htm

Strategic Management is all about identification and description of

the strategies that managers can carry so as to achieve better
performance and a competitive advantage for their organization.
An organization is said to have competitive advantage if its
profitability is higher than the average profitability for all
companies in its industry.
Strategic management can also be defined as a bundle of
decisions and acts which a manager undertakes and which
decides the result of the firm’s performance. The manager must
have a thorough knowledge and analysis of the general and
competitive organizational environment so as to take right
decisions. They should conduct a SWOT Analysis (Strengths,
Weaknesses, Opportunities, and Threats), i.e., they should make
best possible utilization of strengths, minimize the organizational
weaknesses, make use of arising opportunities from the business
environment and shouldn’t ignore the threats.
Strategic management is nothing but planning for both predictable
as well as unfeasible contingencies. It is applicable to both small
as well as large organizations as even the smallest organization
face competition and, by formulating and implementing
appropriate strategies, they can attain sustainable competitive
advantage.
It is a way in which strategists set the objectives and proceed
about attaining them. It deals with making and implementing
decisions about future direction of an organization. It helps us to
identify the direction in which an organization is moving.
Strategic management is a continuous process that evaluates and
controls the business and the industries in which an organization
is involved; evaluates its competitors and sets goals and
strategies to meet all existing and potential competitors; and then
reevaluates strategies on a regular basis to determine how it has
been implemented and whether it was successful or does it needs
replacement.
Strategic Management gives a broader perspective to the
employees of an organization and they can better understand
how their job fits into the entire organizational plan and how
it is co-related to other organizational members. It is nothing
but the art of managing employees in a manner which maximizes
the ability of achieving business objectives. The employees
become more trustworthy, more committed and more satisfied as
they can co-relate themselves very well with each organizational
task. They can understand the reaction of environmental changes
on the organization and the probable response of the organization
with the help of strategic management. Thus the employees can
judge the impact of such changes on their own job and can
effectively face the changes. The managers and employees must
do appropriate things in appropriate manner. They need to be
both effective as well as efficient.
One of the major role of strategic management is to incorporate
various functional areas of the organization completely, as well
as, to ensure these functional areas harmonize and get together
well. Another role of strategic management is to keep a
continuous eye on the goals and objectives of the organization.
https://www.yourarticlelibrary.com/strategic-management/strategic-
management/99700

Strategic Management is a stream of decisions and actions

which lead to the development of an effective strategy or
strategies to help achieve corporate objectives.
The Strategic Management process is the way in which
strategists determine objectives and make strategic decisions.
Strategic Management can be found in various types of
organizations, business, service, cooperative, government, and
the like.
Strategic management is an on-going 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.
https://www.managementstudyguide.com/strategic-
management-process.htm
Strategic Management Process - Meaning, Steps and
Components

The strategic management process means defining the

organization’s strategy. It is also defined as the process by which
managers make a choice of a set of strategies for the
organization that will enable it to achieve better performance.
Strategic management is a continuous process that appraises the
business and industries in which the organization is involved;
appraises it’s competitors; and fixes goals to meet all the present
and future competitor’s and then reassesses each strategy.
Strategic management process has following four steps:
 1. Environmental Scanning- Environmental scanning refers to
a process of collecting, scrutinizing and providing information
for strategic purposes. It helps in analyzing the internal and
external factors influencing an organization. After executing
the environmental analysis process, management should
evaluate it on a continuous basis and strive to improve it.
2. Strategy Formulation- Strategy formulation is the process
of deciding best course of action for accomplishing
organizational objectives and hence achieving organizational
purpose. After conducting environment scanning, managers
formulate corporate, business and functional strategies.
3. Strategy Implementation- Strategy implementation implies
making the strategy work as intended or putting the
organization’s chosen strategy into action. Strategy
implementation includes designing the organization’s
structure, distributing resources, developing decision making
process, and managing human resources.
4. Strategy Evaluation- Strategy evaluation is the final step of
strategy management process. The key strategy evaluation
activities are: appraising internal and external factors that
are the root of present strategies, measuring performance,
and taking remedial / corrective actions. Evaluation makes
sure that the organizational strategy as well as it’s
implementation meets the organizational objectives.

These components are steps that are carried, in chronological

order, when creating a new strategic management plan. Present
businesses that have already created a strategic management
plan will revert to these steps as per the situation’s requirement,
so as to make essential changes.
Components of Strategic Management Process
Strategic management is an ongoing process. Therefore, it must
be realized that each component interacts with the other
components and that this interaction often happens in chorus.
https://smallbusiness.chron.com/evaluate-strategic-management-
69102.html
The Five Stages of the Strategic Management Process

 Small Business Managing Employees/Managers

 ByJim Clayton Updated January 29, 2019

The strategic management process is more than just a set of

rules to follow. It is a philosophical approach to business. Upper
management must think strategically first, then apply that
thought to a process. The strategic management process is best
implemented when everyone within the business understands
the strategy.

Tip

The five stages of the process are goal-setting, analysis, strategy

formation, strategy implementation and strategy monitoring.

Clarify Your Vision

The purpose of goal-setting is to clarify the vision for your

business. This stage consists of identifying three key facets:
First, define both short- and long-term objectives. Second,
identify the process of how to accomplish your objective. Finally,
customize the process for your staff, give each person a task
with which he can succeed. Keep in mind during this process
your goals to be detailed, realistic and match the values of
your vision. Typically, the final step in this stage is to write a
mission statement that succinctly communicates your goals to
both your shareholders and your staff.

Gather and Analyze Information

Analysis is a key stage because the information gained in this

stage will shape the next two stages. In this stage, gather as
much information and data relevant to accomplishing your vision.
The focus of the analysis should be on understanding the
needs of the business as a sustainable entity, its strategic
direction and identifying initiatives that will help your business
grow. Examine any external or internal issues that can affect
your goals and objectives. Make sure to identify both the
strengths and weaknesses of your organization as well as any
threats and opportunities that may arise along the path.

Formulate a Strategy

The first step in forming a strategy is to review the information

gleaned from completing the analysis. Determine what resources
the business currently has that can help reach the defined goals
and objectives. Identify any areas of which the business must
seek external resources. The issues facing the company should
be prioritized by their importance to your success. Once
prioritized, begin formulating the strategy. Because business and
economic situations are fluid, it is critical in this stage to develop
alternative approaches that target each step of the plan.

Implement Your Strategy

Successful strategy implementation is critical to the success of
the business venture. This is the action stage of the strategic
management process. If the overall strategy does not work with
the business' current structure, a new structure should be
installed at the beginning of this stage. Everyone within the
organization must be made clear of their responsibilities and
duties, and how that fits in with the overall goal. Additionally, any
resources or funding for the venture must be secured at this
point. Once the funding is in place and the employees are ready,
execute the plan.

Evaluate and Control

Strategy evaluation and control actions include performance

measurements, consistent review of internal and external issues
and making corrective actions when necessary. Any successful
evaluation of the strategy begins with defining the parameters to
be measured. These parameters should mirror the goals set in
Stage 1. Determine your progress by measuring the actual
results versus the plan.

Monitoring internal and external issues will also enable you to

react to any substantial change in your business environment. If
you determine that the strategy is not moving the company
toward its goal, take corrective actions. If those actions are not
successful, then repeat the strategic management process.
Because internal and external issues are constantly evolving,
any data gained in this stage should be retained to help with any
future strategies.

How to Evaluate Strategic Management

BySteve Milano
Strategic management differs from day-to-day operational
management in that it attempts to create long-term corporate
outcome goals, rather than departmental performance goals.
Strategic goals might include diversification, adding a new
market segment, reducing debt, controlling costs, or improving
and maintaining the quality of your workforce. To evaluate the
success of your strategic plans, create a six-step management
process that helps you note objective benchmarks.

Evaluating Management Strategies

To determine whether you are reaching your strategic goals, on

schedule and on budget, or whether you need to make
adjustments, create a step-by-step process that helps you review
your performance. The first step is to set specific strategic goals,
such as expanding into a new market segment. Once you’ve set
a goal, create the steps for doing so. After you know how you’re
going to pursue your goals, set deadlines and budget as
benchmarks. Review your performance monthly or quarterly as
the fourth step in your evaluation process to determine how you
are progressing toward achieving your strategic goals. When you
see where you stand, perform an assessment to determine why
you are where you are. After your assessment, take steps to
adjust your processes.

Strategic Management Vs. Strategy

ByScott Thompson

The phrase "strategic management" is sometimes used as a

synonym for "strategy," but the two terms are not actually the
same. A company's strategy is its plan for victory in competition
with other companies. Strategic management is a process for
formulating and implementing a strategy.

The Five Steps

The strategic management process consists of five steps. First,
the business owner analyzes the barriers to organizational
success as well as any opportunities that may exist. Second, the
owner analyzes the company's current strengths and
weaknesses. Third, the owner prepares a strategy to take
advantage of the company's strengths while minimizing the
effects of its weaknesses. Fourth, the owner implements the
strategy. Fifth, the owner assesses the strategy and makes
changes as needed. All five steps are part of the strategic
management process, but only step three is the actual strategy.

Design-Plus

The design-plus approach is another way to conceptualize the

relationship between strategy and strategic management.
Design-plus has three stages instead of five. The first step is to
assess the situation. The second step is to identify the most
important strategic choices facing the company. The third step is
to decide on a course of action and implement it. In this
approach, strategy arises out of the first two steps and is
implemented in step three.

Applying Design-Plus

The design-plus approach to strategic management illustrates

the distinction between strategic management and strategy as
such. For instance, the owner of a Chinese buffet restaurant
might analyze the situation and decide that the restaurant faces
new competition from a Thai buffet. Step two is to identify the
available possible choices to deal with the situation. For
instance, the owner can decide to add a popular Thai dish such
as Pad Thai to the Chinese buffet. Step three is to learn how to
cook Pad Thai and add it to the buffet. The strategy in this case
is to compete with the new Thai buffet by offering a Thai option.
The process of deciding on that strategy and implementing it is
strategic management.
Other Models

There are other models for strategic management besides the

five-step and design-plus approaches. The rational planning
approach looks at strategic management issues in reference to
big-picture organizational goals determined from above, such as
the desire of the owner of the Chinese buffet to compete
successfully with the Thai buffet. The power-process approach
looks at strategic management as a less than completely rational
process driven by different power interests within the business.
For instance, the cook at the Chinese restaurant might be less
interested in competing with the Thai restaurant than in
expanding his own skill set and enhancing his employability by
learning how to cook Thai food. Regardless of the framework
used to analyze the process, strategy is a subset of strategic
management.
https://smallbusiness.chron.com/alignment-strategies-4649.html
Alignment of Strategies
Small Business|Business Planning & Strategy|Business
Strategies
ByLeigh Richards

The alignment of strategies in a business is important to ensure

that everybody is pulling in the same direction. Strategies are the
offshoot of business goals and direction and are designed to give
an indication to all members of the business of how the business
will achieve its goals. Strategies must work together to be most
effective. If people are pulling in different directions, resources
will be wasted.

Vertical Alignment

A company's goals and objectives will drive its strategies.

Vertical alignment of strategies will ensure that strategies are
related directly to goals which are related directly to the
organization's mission, vision and values. Strategies are
developed to indicate "how" a company will achieve its goals and
objectives. Companies generally have several strategies that
they put in place to meet multiple goals and objectives.
Importantly, these strategies must be aligned to ensure that
resources are used effectively and that success can be
achieved.

Horizontal Alignment

Horizontal alignment of strategies ensures that all strategies

work together and are not in competition. A health care
organization with one strategy to "decrease length of hospital
stays" and another to "reduce the number of hospital re-
admissions" might have strategies that are in competition with
each other. When establishing business strategies, companies
need to look at the big picture to ensure that strategies in one
part of the organization are not inadvertently and inappropriately
impacting the ability to achieve strategies in another part of the
organization.

Operational Alignment

Operational alignment of strategies ensures that the work will

actually be done. While strategies indicate how goals and
objectives will be accomplished, tactics indicate specifically what
needs to be done to accomplish them. Many companies have
scarce resources and, because of this, it is important that
strategies are carefully designed and aligned to ensure the
effective use of those resources. Operational alignment is the
point at which the planning team will determine who will do the
work, when, how and with what required resources.