Strategic Management Process

The Strategic Management Process

• Leadership is required to build an appropriate organizational structure, develop a management culture, control strategic processes, and steer the organization through corporate governance.

Environmental Scanning

• Involves collecting, scrutinizing, and providing information for strategic purposes.

SWOT Analysis

• A framework used to identify an organization's strengths, weaknesses, opportunities, and threats.

PEST Analysis

• A tool used to analyze the external environment of an organization.

Strategy Formation

• The process of choosing the most appropriate course of action to achieve organizational goals and objectives, thereby realizing the organizational vision.
• Involves examining an organization's resources, providing a financial plan, and establishing the most appropriate action plan to increase profits.

Mission and Vision of an Organization

• Mission: defines the organization's business, objectives, and how it will reach them.
• Vision: defines where the organization aspires to go.

Steps of Strategy Formation

• Factors affecting the choice of strategy, including organizational goals, strengths, potential, limitations, and external opportunities.

Levels of Strategy

• Corporate Level: a long-range, action-oriented, integrated, and comprehensive plan formulated by top management.
• Business Level: relates to a particular business and is developed by general managers who convert mission and vision into concrete strategies.
• Functional Level Strategy: involves decision-making at the operational level concerning particular functional areas like marketing, production, and human resources.

Corporate Level Strategies

• Stability: involves keeping operations within normal parameters to focus on core competencies and increase profit while minimizing risk.
• Expansion: involves expanding the company's business operations and activities to achieve long-term goals.
• Retrenchment: involves reducing the size and scope of the company's operations to cut costs and improve efficiency.
• Combination: involves simultaneously implementing two or more strategies.

Porter's Five Forces

• A model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths.

Strategy Implementation

• The process of turning plans into action to reach a desired outcome.
• Implementation is vital to success.

Strategic Evaluation

• The process of assessing the effectiveness and efficiency of a strategic plan or initiative.
• Involves setting objectives, collecting data, developing KPIs, analysis, interpretation, and action.

Strategic vs Operational Decisions

• Strategic decisions are long-term decisions concerned with the overall planning of an organization.
• Operational decisions are short-term decisions concerned with the day-to-day operations of an organization.
• Administrative decisions are medium-term decisions concerned with the management of an organization.