Strategic management analyzes the major initiatives taken by a company's top management on behalf of owners, involving resources and performance in internal and external environments.
In management theory and practice, a distinction is often made between operational management and strategic management. Operational management is concerned primarily with responses to internal issues such as improving efficiency and controlling costs. Strategic management is concerned primarily with responses to external issues such as in understanding customers' needs and responding to competitive forces. Widely-cited Harvard Business School professor Michael Porter identifies three principles underlying strategic positioning: creating a "unique and valuable position", making trade-offs by choosing "what not to do", and creating "fit" by aligning company activities to with one another to support the chosen strategy.
Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In short, it entails specifying the organizations objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision making and in understanding infinitely complex macro-economic environments. Strategic management is not static in nature; the models often include a feedback loop to monitor execution and inform the next round of planning.
The strategic management discipline originated in the 1950s and 1960s. Among the numerous early contributors, the most influential were Alfred Chandler, Philip Selznick, Igor Ansoff, and Peter Drucker. The discipline draws from earlier thinking and texts on 'strategy' dating back thousands of years
PORTER FIVE FORCES ANALYSIS