Strategic planning is the process an organization carries out to define its direction, and making decisions on resource allocation to pursue its strategy. The strategy explains how the end goals will be achieved and by what means. A strategy involves setting goals and laying down a clear path on how to achieve those goals through resource allocations and execution of actions. Strategic management involves mapping out a clear distinct map on goal achieving by specifying the company’s objectives, developing plans and policies, allocating resources to implement the plans.
Components of the Strategic Management Process
Strategic management is a process that keeps occurring which appraises the company in which it is involved in. This is the process by which managers decide on a specific strategy that can be used to improve performance in an organization. The process has four steps. The first one is environmental scanning. This involves decisions solely based on strategy. It entails collecting, providing information, and scrutinizing information for the strategy. It assists in evaluating the external and internal factors influencing the company. Once conducted, the process should be visited frequently to try and improve it. The second is strategy formation. After gathering relevant information on the strategy, choice is then made on the best course of action to take to accomplish the goals and objectives of the company. Here managers formulate business, corporate and functional strategies. The third is strategic implementation. This simply means putting the particular chosen strategy into action. This stage involves developing decision-making process, designing the organization’s structure, distribution of resources, and managing human resources. The final component is strategy evaluation. Here, the strategy is tested as to whether its implementation meets the company’s objectives. Its main activities are: measuring performance, taking corrective measures, and appraising internal and external factors that are the root of present strategies.
Internal and External Analysis
Internal analysis focuses on the factors inside an organization that are either advantages or disadvantages in meeting the needs and goals of that organization and its target market. Advantages refer to those factors that provide the company strengths in meeting the needs of its market. These should be customer oriented since they are only useful when they assist the firm in meeting customer needs. Weaknesses on the other hand refer to the limitations an organization faces in implementing or developing a strategy. These should also be examined and dealt with to keep the strategy firm (Rowe, J A, 1993).
External analysis focuses on threats and opportunities in a firm’s external environment. Opportunities bring with them favorable conditions to implement the company’s strategy to customers and consumers. Weaknesses bring with them the opposite: reduced sales, poor communication, and poor sales. These are factors that can be addressed on to improve the business strategy externally.
Duties and Responsibilities of the Strategic Manager
The strategic manager’s sole purpose is achieving business results. He/she does this by: project portfolio management, resource portfolio management, project management mentoring, and project management tool assessment. A strategic manager handles projects that contribute to a firm’s success through developing new products, fixing problems and launching initiatives designed to cub wastage and losses. He/she ensures that resources are managed effectively under the best personnel up for the tasks. Also, those managers with more experience get to mentor those with less experience. Through sharing of ideas and tips, improvement of quality in results might be achieved. A manager evaluating the techniques and tools used by organizations to manage projects assures data integrity, consistency in the company, and proper scheduling.
Importance of Strategic Management Planning in Companies
Strategic planning provides a sense of direction and measurable goals for an organization. It helps a company define its strategic management. This helps drive the firm’s growth over proper management methods focused on setting goals. Some qualities of an effective organization are good management, effective leadership and open communications. By setting this up, making changes when needed is effective and easy. When it comes to setting goals, nothing achieves the task better than a well thought plan. By focusing on the goal, the firm benefits unison in movement. This keeps the company motivated on future success (Sadler, 2003).