STRATEGIC
MANAGEMENT
INTRODUCTION TO
STRATEGIC MANAGEMENT:
MEANING & BASIC
CONCEPTS
BASIC CONCEPT OF STRATEGY MANAGEMENT
Strategic management is the concept of identification,
implementation, and management of the strategies that
managers carry out to achieve the goals and objectives
of their organization. It can also be defined as a bundle of
decisions that a manager has to undertake which
directly contribute to the firm’s performance. The
manager responsible for Strategic Management must
thoroughly know the internal and external
organizational environment to make the right decisions.
THE BASIC
CONCEPT OF Strategy Management – Definition
Components of Strategy Management
STRATEGY Process of Strategy Management
MANAGEMENT
INCLUDES:
WHAT IS STRATEGY MANAGEMENT ?
The basic concept of strategic management
consists of a continuous process of planning,
monitoring, analyzing, and assessing everything
necessary for an organization to meet its goals and
objectives. Simply put, it is a management
technique to prepare the organization for the
unforeseeable future.
COMPONENTS OF STRATEGY MANAGEMENT
Strategic Intent
An organization's Strategic Intent clarifies its purpose and why it will continue to exist. It helps paint a picture of what an
organization should immediately do to achieve the company’s vision.
Mission
The mission component of strategy management states how an organization intends to serve its stakeholders. It
describes why an organization operates and helps provide a framework for formulating the strategies to achieve its
goals.
Vision
The visual component of strategy management helps identify where the organization intends to be. It describes the
stakeholder dreams and aspirations for the organization.
Goals and Objectives
Goals help specify, in particular, what must be done to attain an organization’s mission or vision. Goals make the mission
component of strategy management more prominent.
SEVEN STEPS OF STRATEGY MANAGEMENT PROCESS:
Setting the Goal – The first and foremost stage in the process of strategic management requires the organization to set
the short-term and long-term goals it wants to achieve.
Initial Assessment – The second stage says to gather as much data and information as possible to help state the mission
and vision of the organization.
Situation Analysis – It refers to collecting, scrutinizing, and providing information for strategic purposes. It helps analyze
the internal and external environment that influences an organization.
Strategy Formulation – Strategy formulation is the process of deciding the best course of action to achieve the
organization's goals and objectives.
Strategy Implementation – Executing the formulated strategy in such a way that it successfully creates a competitive
advantage for the company. In simple words, putting the chosen plan into action.
Strategy Monitoring – Strategy Monitoring involves key evaluation strategies, such as taking into account the internal
and external factors that are the root of the present strategies and measuring the team's performance.
SWOT Analysis – It helps in determining the Strengths, Weaknesses, Opportunities, and Threats (SWOT) of an
organization and taking remedial/corrective courses of action to fight these weaknesses and threats.
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STAGES AND KEY TERMS TO STRATEGIC
MANAGEMENT
• ANALYSIS
Understanding the internal and external environment through tools like
SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).
• STRATEGY FORMULATION
Developing a clear strategy based on the analysis, including setting
objectives and goals.
• STRATEGY IMPLEMENTATION
Executing the chosen strategy, often involving resource allocation,
organizational restructuring, and change management.
•
• EVALUATION AND CONTROL
Monitoring progress towards objectives, adjusting strategies as
needed, and ensuring alignment with organizational goals.
KEY TERMS İNCLUDES
• Mission statement • Strategic Planning
• Vision statement • Tactical Planning
• Goals and Objectives • Strategic Leadership
• Competitive Advantage • Strategic Alignment
• Core competencies
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STRATEGIC
MANAGEMENT
MODEL
STRATEGIC MANAGEMENT MODEL
-IS A FRAMEWORK OR APPROACH USED BY ORGANIZATIONS
TO MAKE STRATEGIC DECISIONS AND PLAN FOR THE
FUTURE.
SWOT ANALYSIS
SWOT (strengths, weaknesses, opportunities, and
threats) analysis is a method for identifying and
analyzing internal strengths and weaknesses and
external opportunities and threats that shape
current and future operations and help develop
strategic goals.
PORTER'S FIVE FORCES
Porter's five forces determine the
shape of an industry, from internal
competition to the negotiating
power of customers and suppliers.
BALANCE SCORECARD
A balanced scorecard (BSC) is defined as a
management system that provides feedback
on both internal business processes and
external outcomes to continuously improve
strategic performance and results.
PEST ANALYSIS
PEST analysis (political, economic, social,
and technological) is a management
method whereby an organization can
assess major external factors that
influence its operation in order to become
more competitive in the market. As
described by the acronym, those four
areas are central to this model.
BENEFITS OF STRATEGIC
MANAGEMENT
• Goal Alignment - It ensures that organizational
goals are aligned with its mission and vision.
• Competitive Advantage - Helps in gaining a competitive
edge by identifying and exploiting opportunities in the
market.
• Resource Allocation - Efficient allocation of resources,
leading to better utilization and cost-effectiveness.
• Adaptability - Facilitates adaptation to changes in the
external environment, such as market trends or
technological advancements
• Performance Improvement - Enhances overall
organizational performance through strategic planning
and implementation.
• Risk Management - Helps in identifying and mitigating
risks, thereby minimizing potential threats to the
organization.
• Innovation - Encourages innovation and creativity by
fostering a culture of strategic thinking and
experimentation.
• Decision Making - Provides a framework for making
informed decisions based on thorough analysis and
evaluation.
• Stakeholder Satisfaction: Enhances stakeholder
satisfaction by considering the interests of various
stakeholders in strategic decision-making.
• Long-Term Sustainability: Promotes long-term
sustainability by focusing on both short-term goals and
long-term objectives.
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