Definition of Strategic management
Strategic management is a set of management involves in achieving the set goals and objectives of an organization.
Strategic management involves the standard following five set of steps:
- Setting goals
- Strategy Formulation
- Strategy Management
- Evaluation and Control
Brief Explanation of Strategic management
SETTING GOALS: This set of strategic management involves setting goals of the company and steps to achieve them.
– The objective of goal settings is to set the vision and mission of the company
– Goals can be short term and long term.
– Also identify the processes and steps to achieve them.
- Analysis can be external and internal both.
- Doing Market research, gathering data and information to achieve the mission.
- Understanding the need of industry, business and market.
- Check the issues which may affect the business goals and objectives.
After the goals are defined and analysis is done the next step is to formulate a strategy to achieve them.
- This involves required resources both external and internal.
- Prioritize the goals according to their importance.
When the goals are defined, analysis are done and plan is form, it is now time to implement that plan.
- It includes assigning responsibilities, resources, guiding and training etc.
EVALUATION AND CONTROL: When strategy is implemented the results finally are out.
This is now time to evaluate the results, compare with the set standards and check the variances, also their reasons.
- When reasons are identified control should be implemented and analyzed next time.
BENEFITS OF STRATEGIC MANAGEMENT:
- Clarifying goals and objective and hence whole picture of what jobs to perform.
- Continuous analysis reduces the defects and errors.
- Cost reduction in long term.
- Market sustainability and competition
- Empowering every level of employees in the company and hence giving them importance and sense of responsibility.
- Innovation and development.
- Allocation of budget in effective manner and less wastage of money.
- Company goal liaising.