INTRODUCTION TO STRATEGIC MANAGEMENT

STRATEGIC MANAGEMENT

Strategic management can be described as the identification of the purpose of the organization and the plan action to achieve that purpose.

It implies that it’s possible to plan strategy in advance and carry out that strategy over time.

At the corporate level basic decisions need to be taken over what business the company is in or should be in.

The questions to be answered at this level are

1.      What businesses are we in or should be in?

2.      What are our basic directions for the future?

3.      What is our attitude to strategic change?

4.      What is our culture and leadership style?

Strategic management can be identified as pattern of major objective purpose or goals and essential policies or plans for achieving those goals stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be.

At the business level Strategic management is concerned with competing for customers generating value from resources and the underlying principle of sustainable competitive advantages of those resources of rival companies.

The strategy of the firm is to match between its internal capabilities and external relationships.

It describes how it responds to its suppliers, its customers, its competitors and the social economical environment within which it operates.

Strategic management can be defined as finding market opportunities, experimenting and developing competitive advantage overtime.

Strategy evolves as the events both inside and outside the organization change overtime.

Strategy , this is the direction and the scope of an organization over the long term which achieve advantage for the organization through its configuration or resources within a challenging environment to meet the needs of market and to fulfill stakeholders expectation.

Strategy is the practice of figuring out the best way to get from here to there.

THE FIVE P’s OF STRATEGY

They were developed by management expert Henry Mintzberg.

This are the five different definitions approaches developed for strategy.

1.      Strategy as a plan

It needs to be developed in advance and with a purpose,

By this definition strategy are made in advance of the action to which they apply and are developed consciously and purposefully.

2.      Strategy as a ploy

It is a means of outsmarting the competition, it involves getting the better of competitors, by plotting to disrupt, discourage or otherwise influence them.

This is where a strategy can be a ploy as well as a plan e.g. a company might buy patents that a competitor could potentially use to launch a rival product.

3.      Strategy as a pattern

Strategic plans and ploys are both deliberate exercises (they are intended) sometimes however strategy emerges from past organizations behavior rather than being an intentional choice, a consistent and successful way of doing business can develop into a strategy.

4.      Strategy as apposition

This is how you decide to position yourself in the market place.

In this way the strategy helps you explore the fit between your organization and your environment and it helps you develop a sustainable competitive advantage.

5.      Strategy as a perspective

Perspective emphasizes the sustainable influence that organization culture and collective thinking can have on strategic decision making within a company, just as pattern of behavior can emerge as strategy, pattern of thinking will shape an organization perspective and things its able to do well e.g. an organization that encourages risk taking and innovation from employees might focus on coming up with innovative products as the main thrust behind its strategy

CHARACTERISTIC OF STRATEGIC MANAGEMENT

1.      Uncertain

Strategic management deals with future oriented non routine situation.

Mangers are unaware about the consequences of their action.

2.      Complex

Strategic decision are complex maybe uncertainty brings complexity for strategic management which is difficult to comprehend and therefore internal and external environmental analysis is important.

3.      Organizational wide

Strategic management as organizational wide implication, it is not operation specific, it involves strategic choice.

4.      Fundamental

Strategic management is fundamental for improving the long term performance of an organization.

5.      Long term implication

Strategic management is not concerned with day to day operation, it deals with vision, mission and objectives.

IMPORTANCE OF STRATEGIC MANAGEMENT

1.      It takes into accounts the future and anticipate for it

2.      A strategy is made on rational and logical manner thus its efficiency and its success are ensured.

3.      Strategic management reduces frustrations because it has been planned in such a way that it follows procedures.

4.      It brings growth to an organization because it seeks opportunities.

5.      It also adds to the reputation of an organization because of consistency that results from organizations success.

6.      Often companies’ draws to a close because of lack of proper strategy to run it, with Strategic management companies can foresee the events in the future that way they can remain stable in the market.

7.      It looks at threats in the external environment and thus companies can either work to get rid of them or else neutralize the threats in such a way that they become an opportunity for their success.

8.      It focuses on proactive approach which enables organization to take advantage of every opportunity that is available in the market.