1.

What is Business Strategy

A business strategy is the combination of all the decisions taken and actions performed by the business to accomplish
business goals and to secure a competitive position in the market.
It is the backbone of the business as it is the roadmap which leads to the desired goals. Any fault in this roadmap can
result in the business getting lost in the crowd of overwhelming competitors.

Importance Of Business Strategy

A business objective without a strategy is just a dream. It is no less than a gamble if you enter into the market without a
well-planned strategy.

With the increase in the competition, the importance of business strategy is becoming apparent and there’s a huge increase
in the types of business strategies used by the businesses. Here are five reasons why a strategy is necessary for your
business.

 Planning: Business strategy is a part of a business plan. While the business plan sets the goals and
objectives, the strategy gives you a way to fulfil those goals. It is a plan to reach where you intend to.
 Strengths and Weaknesses: Most of the times, you get to know about your real strengths and
weaknesses while formulating a strategy. Moreover, it also helps you capitalise on what you’re good at
and use that to overshadow your weaknesses (or eliminate them).
 Efficiency and Effectiveness: When every step is planned, every resource is allocated, and everyone
knows what is to be done, business activities become more efficient and effective automatically.
 Competitive Advantage: A business strategy focuses on capitalising on the strengths of the business and
using it as a competitive advantage to position the brand in a unique way. This gives an identity to
business and makes it unique in the eyes of the customer.
 Control: It also decides the path to be followed and interim goals to be achieved. This makes it easy to
control the activities and see if they are going as planned.

2. Describe Strategic Management with the help of a model.

Strategic management involves making decisions and taking actions that can help organizations reaching the goal by
adopting systematic way of formulating the strategy, implementing the strategy, evaluating and controlling the strategy
implemented. Strategic management integrates various functional areas like

 marketing,
 management,
 finance,
 accounting,
 human resources,
 production
 information systems in a formal and systematic manner consistent with the objectives of the organization and
better performance.

Strategic management comprises three key components

 Strategy formulation - component the key elements are vision, mission and goals of the organization. The
other elements are the external and internal analysis, industry analysis and competitive analysis.
 Strategy Implementation - there are a three key elements that affect strategy implementation. These
are organizational structure, people, leadership, processes and organizational systems.
 Strategy Evaluation and Control - the key elements are the evaluation model, processes and criteria and
control methods and mechanisms for improving organizational performance and meeting the organizational
objectives.
Strategic Management Model

Developing the strategic management model is important because it provides the basic framework for
understanding how strategic management can be operationalised at the company level. The strategic management model
provides managers and strategists a greater comprehension of the iterative approach in conducting real strategic
management in the organizational setting. The strategic management model begins with the development of the
organizational mission and vision. The organizational vision and mission would then be translated into
the organizational goals. These elements show the direction and the areas of concern to be attained by an organization.
Once these elements have been determined, the role of the manager or strategist is to perform an analysis of the
organization. This involves the major types of analysis:

 External analysis of the environment,

 Internal analysis of the organization,
 Industry analysis.

Each of these analyses will provide information on strengths and weaknesses and opportunities and threats. The results of
these analyses could help managers and strategists to match the niche areas to be focused, identify distinctive competence
of the organization and determine the competitive position the organization should take in order to sustain its competitive
edge in the industry

Strategic Management Model

 3. Why is Strategic Management needed for business organization?
Strategic management is the management of a firm's resources to successfully achieve its goals and objectives. It’s an
action plan to ensure performance targets are met, and the business continues to grow. Strategic management provides
overall direction by developing plans and policies designed to achieve objectives and then allocating resources to
implement the plans. Ultimately, strategic management is for organisations to gain a competitive edge over their
competitors.

The concept of strategic management has its roots in 1950s economic theory based on industrial-organisational
approaches. Peter Drucker, also known as the Father of Modern Management Theory, believed that setting objectives and
monitoring company growth should permeate the entire organisation, top to bottom.

Whether an organisation is small or large is irrelevant when it comes to strategic management. Even the smallest
companies need to know how effective they are within their industry and take the appropriate actions to achieve their
desired outcome for the future.
STRATEGIC MANAGEMENT TO GAIN A COMPETITIVE EDGE
In a marketplace where workplaces are continually being disrupted through technological innovation, strategic
management can be the key to delivering a solid bottom line. Company executives who have a strong grasp of their own
organisation’s products or services and an in-depth view of what their major competitors will do next, can forecast and
plan timely business decisions. It also means they can prepare for future opportunities and possible risks.
Developing a strategic vision requires an understanding of global trends, the competitive landscape and stakeholder
expectations. Once a firm knows what its mission is, the right resources can be allocated to achieve that plan. Through
strategic decision-making and commitment to strategic planning, organisations can strengthen their long-term competitive
position.
Apart from financial gains, strategic management can also boost workplace motivation. Setting effective goals for
employees and involving them in organisational objectives can improve overall performance. Studies show a dramatic
increase in both employee and business performance when goals are aligned.
But it’s not enough to just craft and execute a strategic management plan. Firms that continuously measure and review the
results of their strategic approach are more likely to achieve success and see improved financial performance. Firms that
continually assess whether they are performing according to their corporate blueprint can respond to fast-changing market
forces. They can move the company along the strategic course that has been charted for it.