Benefits of Strategic Management

• Intrinsic Benefits
• Financial Benefits
• Nonfinancial Benefits
 Intrinsic Benefits
• Enhanced Communication
• Deeper/Greater Understanding
• Greater Commitment
 Financial Benefits
• According to research, companies that uses
strategic management concepts become more
profitable and successful than those that do
not
 Non-financial benefits
• Enhanced awareness of external threats
• Improved understanding of competitor’s
strategies
• Increased employee productivity
• Reduced resistance to change
• Clearer understanding of performance-reward
relationships
• Better quality of product and service
Pitfalls in Strategic Management
• Lack of Ownership and Commitment by
Management
• Failing to involve key employees in all phases
of planning
• Lack of focus on customer value creation
External Environment: Effects on the
Planning Process
Factor Effect

Political or Legal Changes in tariff rates will force the business to review
or change its procurement strategies

Economic A rise in inflation rate would affect the way companies

price their products & services

Social Buying trends, lifestyle choices, population rates,

education level and social classes affect how
consumers buy

Technological A certain technological change affects the design of

products, but even the delivery of services can change.