In this report an explanation about the strategic management process will be given, utilizing the model illustrated below. Firstly, the different elements will be explained followed by a clarification of the different relationships, in terms of impact, between them. First of all, an explanation about strategic management is given. According to Fred R. David, 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. Additionally, four stages could be defined in the strategic management process: environmental scanning, strategy formulation, strategy implementation, and strategy evaluation. Lastly, a good strategic plan is required to compete effectively in the market.
Explanation of the elements
The mission of a company can be described in various ways. According to Wheelen & Hunger (2008), the purpose or reason for the company to exist is defined in the mission statement. Moreover, it presents what an organization is providing to society in terms of products offered and markets served. Though, Jones & Hill (2008) showed a more detailed explanation about the company’s mission in which four major elements are described. Namely, the reason of existence (mission) of a company, a desirable future position (vision), the key values of the company, and its major goals. This is in line with Wheelen & Hunger (2008) and Mary Coulter (2008), who described a company’s vision as what the company would like to become in the future. Additionally, the mission statement of a company could be either product-oriented or customer-oriented. Consequently, product-oriented mission statements are rather focused on the products sold and the markets served instead of satisfying the customer needs. As a result, customer-oriented mission statements are focusing on meeting or satisfying the customer needs. Moreover, defining a company’s mission statement is dependent on various aspects such as the type of firm, the scope of operating, products offered, and customers or markets served (Wheelen & Hunger, 2008). Eventually, a good mission statement should answer three questions: What is our business? What will it be? And what should it be? (Jones & Hill, 2008). Consequently, questions such as what the customer groups are or customers’ needs, and how these customers are satisfied are answered. Lastly, according to Lynch (2009), a mission statement also takes the values and expectations of the stakeholder into consideration. Company Profile
In a company profile a description of a company is given covering certain aspects such as the history of the company, employee information, products and services offered, revenue analysis, locations, competitors, SWOT analysis and so on. In relation to strategic management, in terms of developing or reviewing strategies, an internal analysis reflects a realistic company profile. According to Coulter (2008), an internal analysis starts by reviewing a company’s resources, capabilities, and competencies. A resource is the input in a production process which is transformed by capabilities into products and services offered. “The resources of an organisation include its human resource skills, the investment and the capital in every part of the organisation” (Lynch, 2009) Additionally, resources can be either tangible or intangible. “Tangible resources are the phsyical assets of an organisation such as plant, people, and finance. Intangible resources are non-physical assets such as information, reputation, and knowledge” (Johnson, Scholes, & Whittington, 2008) Then, “capabilities (knowledge, skills, and competences) refer to the company’s ability to make use of its resources in a highly productive way” (Coulter, 2008). Resources and capabilities can both lead to competitive advantage. On the other hand, resources and capabilities can as...