With the continual evolution within the business market, it is apparent that companies need to develop and improve their strategies to remain afloat. Lager companies typically pay competitive salaries to hire a Chief Executive Officer who will develop a plan to accomplish its goals. This plan is commonly referred to as “strategic management.” According to Wheelen and Hunger (2010), strategic management refers to decisions and actions taken to establish the long term performance of a company (p. 3). Undoubtedly, without a well formulated strategy any company will set to fail. This short paper will list the primary components of strategic management process and importance. In addition, it will provide a real-life example to describe the process.
Components and importance Strategic management includes four primary components. Said components are environmental scanning, strategy formulations, strategy implementation, evaluation, and control. The process begins with environmental scanning as its purpose is to “identify strategic factors” within internal and external environments (Wheelen and Hunger, 2010, p. 16). A common and simple method to prepare an environmental scanning is through an SWOT analysis of the company. With the SWOT analysis set into place, strategy formulation follows as the second step in the process. Strategy formulation “is the development of long-range plans” that include “defining the corporate mission, specifying achievable objectives, developing strategies, and setting policy guidelines” (Wheelen and Hunger, 2010, p. 17). Strategy implementation is the “day-to-day decision in resource allocation” and often conducted by “middle- and lower-level mangers” (Wheelen and Hunger, 2010, p. 17). Evaluation and control are tools to monitor current versus desired performance. Although the aforementioned simplified the main components of strategic management process in actuality it is more complex. Nonetheless, its
References: Citi (2011). CitiGroup Inc. Corporate Governance Guidelines . Retrieved from www.securedsite.citigroup/employeeportal Wheelen, T. L., & Hunger, J. D. (2010). Concepts In Strategic Management and Business Policy (12th ed.). Retrieved from The University of Phoenix eBook Collection database. entry. Coyne, K. P. (2007, April). Strategic Planning Vs. Citi Planning. Forbes, (April 2007), 1. Retrieved from http://www.forbes.com/2007/04/11/coyne-citi-planning-oped-cx_kpc_0412coyne.html