Strategic management

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  • 1. Introduction Definition Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of the firms objectives and nurturing policies to achieve the firms objectives
  • 2. Strategic Management Model
  • 3. The model in the figure represents the strategic management process, which consist of seven interrelated management tasks.Major components of this model1. Develop vision and mission statement2. analyze external environment3. Analyze internal environment4. Establish long-term objective5. Generate ,analyze and select strategies6. Implement and chosen strategies7. Evaluate and control implementation
  • 4. Develop vision and mission 1st step in Strategic Management processOrganization should have vision and missionVision- what it want to become ( long run) Mission – define company reason for its existenceVision and mission provide guideline for setting objectives and generating alternative strategies
  • 5. Analyze external Environment2nd step in management processInvolve analysis of macro-environment for accessing opportunities and threatsMacro-environment – Political, Social, economic, demographic, technological factors which effect the businessOperating environment- Suppliers, Customers, creditors, competitors etc.Analyze industry character & competitive forces
  • 6. Analyze Internal Environment3rd step in Strategic Management processOrganization access the internal environmentIdentifying the strength and weakness of resources and functional areas of organizationAnalyze- financial, physical, human & technical resources – helps to build competencies and competitive advantages
  • 7. Establish Long term objectivesBased on internal, external and vision and mission the firm has to set long term objectives and goals- must be specific, measurable and achievable.Generate Evaluate and Select strategies5th step in Strategic Management processDevelop a no. of strategic opinion at corporate and business level.Alternatives are analyzed through portfolio analysis, industry life cycle etc..
  • 8. Implement the chosen strategiesImplementation of strategies involves a number of decisions and actions.Basically involve change in management within the organization .involves:1.Allocation of resources2.Functional & operational strategies3. Formulating policies4.Change in organization structure, climate & leadership
  • 9. Evaluate and control strategy Last step in Strategic Management process. Overall evaluation of the activities Critical examination by top authorities. It helps in the achievement of the organizational goals.