Strategic Management Concepts

Strategic Management

• Strategic Management is a branch of management that deals with formulating, implementing, and evaluating cross-functional decisions to achieve an organization's objectives.

Definition of Strategy

• Henry Mintzberg defined strategy as 5 Ps: Plan, Ploy, Pattern, Position, and Perspective.
• Alfred Chandler defined strategy as the determination of an organization's long-term goals and objectives, and the allocation of resources to achieve them.
• Peter Drucker defined strategy as a pattern of activities that achieve an organization's objectives and adapt to environmental changes.
• Johnson, Scholes, and Whittington defined strategy as the direction and scope of an organization over the long term, achieving advantage in a changing environment through resource configuration and competencies.

Levels of Strategy

• Corporate Strategy: determines how value is added to various strategic business units, carried out by top managers.
• Business Strategy: determines how to compete successfully in the market, considering different strategic business units, carried out by middle-level managers.
• Functional Strategy: employed at the operational level to support other two elements of strategic management.

Elements of Strategic Management

• Strategic Position: where the company is presently in the market and where they are trying to get to.
• Strategic Choices: highlighting different possible strategies and making a choice on the preferred one to adapt.
• Strategy into Action: implementing the chosen strategy.

Strategic Position

• Environment: threats and opportunities around the entity, beyond the entity's control.
• Strategic Capability: internal strengths and weaknesses, within the entity's control.
• Expectation and Purposes: mission of the entity, where they expect to be.

Strategic Choices

• Corporate Level and International Strategies
• Business Level Strategies
• Development Directions and Methods

Strategy into Action

• Organisational Structure: type of structure to suit the chosen strategy.
• Managing Change: managing the transition from old to new style.
• Enabling: making effective use of resources.

Levels of Planning

• Strategic Planning
• Tactical Planning
• Operational Planning