STRATEGIC MANAGEMENT

 Meaning Of strategic Management

Strategic Management is a process involving number of stages from strategy formulation of strategy is not enough it has to implemented properly as well as evaluated to implemented properly as well as evaluated to review the performance.

Definition strategic Management

Strategic Management is a continous process of formulating, implementing and evaluating the strategies that are framed to enable the organization to achieve its objectives.

Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Features of strategic Management

1) Top Management involvement

2) future oriented

3) Requirement of large amounts of resources

4) It ensures the long-term survival

5) It assists the firm in becoming proactive, rather than reactive

PROCESS OF STRATEGIC MANAGEMENT

1) Strategic intent 

2) strategy formulation

3) strategy Implementation

4) strategic Evaluation

Meaning of Strategy 

is defined to be "the long-term purpose of an enterprise and the course of action and the resources necessary to attain the purpose."

Components of strategy:

 Purpose - What is desired.

Course of action - How you gain what you desire

Allocation of resources - Tools and materials available for use

Features of Strategy

1)It relates to an environment (external/internal) 

2)It  is a combinations of actions

 3)Strategy is forward looking (shows directions)

  Level of strategy–  

1)Corporate level strategy (highest level of strategic decision making as decisions are made by top managers). Such strategy describes the company’s overall corporate strategy defines the long-term objectives and generally affects all the business-units under its umbrella.

2)Business level strategy (SBU – strategy business unit). This strategy emphasizes the strengthening of the company’s competitive position of products or services

3)Functional level strategy.(particular functional area of oragnisation) It is formulated to achieve some objectives of a business unit by maximizing resource productivity.

  Strategies at all the three levels are interlinked in which a higher level strategy generates a lower level strategy and a lower level strategy contributes to the achievement of the objectives of higher level strategy.

The following are the major differences between tactics and strategy

1)Tactics involve lower risk as compared to strategy. 

2)Tactics are preventive in nature while Strategy is competitive in nature

3)Tactics is a subset of strategy, i.e. without the strategy, tactics can do nothing.

4)Tactics are made for coping with the present situation. strategy, they are made for future

5) Tactics frequently change with the changes in the market conditions; , the strategy remains same for a long period.

Benefits of Strategic Management

Following are the major benefits of Strategic management:

Financial benefits:

1) Improved productivity

2) Improved sales

3) Improved profitability

Non-Financial benefits

1)  Increased employee productivity

2) Greater awareness of external threats

3) Understanding of performance reward relationships

Limitations of Strategic Management

1) Lack of clarity

2)  Lack of top management commitment

3) Employee involvement

4)  Risk or rigidity

5) System and process reorientation

6) Lack of supportive organizational climate