Strategic Management Process

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Definition: strategic management is the set of managerial decisions and actions that determines the long-run performance of an organization. It involves all the four functions of management. Strategic plans provide a common vision for the whole organization. The strategic management process is a series of steps that formulates the strategic planning, implementation and evaluation. Step 1: The first step is identifying organization’s current mission, objectives and strategies. Every organization needs a mission. Defining the organization’s mission forces managers to carefully identify the scope of its products and services. It is also important for managers to identify the goals currently in place and the strategies currently being pursued. A company’s goals provide the measurable performance targets that employees strive to reach. Knowing the company’s current goals gives managers a basis for assessing whether those goals need to be changed. For the same reasons, it is important for managers to identify the organization’s current strategies. Step2: The second step is external analysis. Analyzing the environment is a critical step in strategy process. Managers in every organization need to do external analysis. They need to know, for instance, what the competition is doing, what pending legislation might affect the organization, or what the labor supply is like in locations where it operates. In analyzing the external environment, managers should examine both the specific and general environments to see what trends and changes are occurring. After analyzing the environment, managers need to assess what they have learned in terms of opportunities that the organization can exploit, and threats that it must counteract. The same environment can present opportunities to one organization and pose threats to another in the same industry because of their different resources and capabilities. For example, southwest Airlines has prospered in a turbulent industry, while...
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