Introduction to Strategic Management
Strategic management is the process of setting goals, analyzing the internal and external environments, formulating
strategies, and implementing and controlling those strategies to achieve a desired outcome. It involves aligning a
business's goals with the resources available, adapting to the dynamic environment, and navigating the complexities of
the competitive landscape.
by Clemente L Daverao Jr., FA, MBA
Learning Objectives
Understand the Analyze the different
fundamentals of levels of strategy within
strategic management. an organization.
Explore the key Identify emerging
elements of the trends and challenges in
strategic management strategic management.
process.
Strategic Management: Navigating Organizational
Success
Holistic Approach Importance of Strategy
Strategic management guides organizations toward long- A clear strategy is crucial for navigating competition,
term goals through analysis, opportunity identification, evolving customer demands, and technological
and effective strategy implementation. advancements, leading to sustainable growth.
Key Components of Strategic
Management
Vision Mission
A clear and inspiring vision The organization's purpose
for the organization's future. and its approach to
achieving its vision.
Goals Strategies
Specific, measurable, Action plans designed to
achievable, relevant, and achieve the goals, ultimately
time-bound objectives. fulfilling the vision and
mission.
Tactics
Specific actions and initiatives to implement the strategies.
The Strategic Management Process
Strategic management transforms organizational goals into actionable results through a systematic process. This
approach enables companies to navigate complex environments while maintaining competitive advantages through
five key phases.
1 Environmental Scanning
Analyze external factors through PESTLE analysis and Porter's Five Forces to identify opportunities and
threats. Monitor industry trends, competitor moves, market dynamics, and emerging technologies to
understand the business landscape.
2 Internal Analysis
Evaluate organizational strengths and weaknesses using SWOT analysis and value chain assessment.
Review financial performance, operational efficiency, human capital, and technological capabilities to
understand internal competencies.
The Strategic Management Process
1 Strategic Formulation
Develop corporate, business, and functional strategies based on gathered insights. Create specific
objectives, evaluate alternatives, and select appropriate growth strategies like market penetration or
product development.
2 Strategy Implementation
Transform strategies into action through detailed plans, budgets, and metrics. Restructure processes,
implement change management, and establish clear communication channels while allocating resources
and responsibilities.
3 Evaluation and Control
Monitor progress using balanced scorecards and KPI dashboards. Track financial, operational, customer,
and learning metrics while conducting regular reviews to ensure strategic alignment and make necessary
adjustments.
Environmental Scanning
Environmental scanning is the process of monitoring the external environment to identify opportunities and threats that
may impact an organization.
Political Factors Economic Factors Social Factors Technological Factors
Government policies, Economic growth, inflation, Demographic trends, Innovation, technological
regulations, and stability. interest rates, and cultural values, and advancements, and
unemployment. consumer behavior. adoption rates.
Internal Analysis
Resources Capabilities Competitive Value Chain Analysis
Advantage
Financial, human, Skills, expertise, and Analyzing activities
physical, and efficient processes enable Unique strengths involved in creating,
technological assets form effective resource differentiate the producing, and delivering
the organization's utilization. organization in the products or services.
resource base. marketplace.
Strategic Formulation
Corporate-Level Business-Level
Strategies Strategies
Strategies that determine the Strategies that focus on how
overall direction and scope of the organization will compete
the organization. in its chosen markets.
Functional-Level Contingency Planning
Strategies Developing alternative
Strategies that guide specific strategies to respond to
functional areas, such as unexpected events or
marketing, finance, and changes in the environment.
operations.
Strategy Implementation
Resource Allocation Organizational Structure
Allocating resources to support Designing an organizational
the chosen strategies. structure that facilitates the
implementation of strategies.
Leadership and Performance Management
Communication Tracking progress and making
Communicating the strategies adjustments as needed.
and motivating employees to
support them.
Evaluation and Control
1 2 3
Performance Measurement Feedback and Learning Strategic Renewal
Tracking key performance indicators Gathering feedback and analyzing Updating and revising strategies
(KPIs) to assess progress. results to identify areas for based on new insights and
improvement. environmental changes.
Corporate-Level Strategies
Growth Strategies
1 Expanding the size and scope of the organization, such
as mergers and acquisitions.
Stability Strategies
2 Maintaining the current size and scope of the
organization, focusing on efficiency and profitability.
Renewal Strategies
3 Reversing declining performance, such as cost cutting or
restructuring.
Business-Level Strategies
Cost Leadership Differentiation Focus
Competing on price by offering the Competing by offering unique and Competing by targeting a specific
lowest cost products or services. valued products or services. niche market.
The Role of Leadership in
Strategy
1 Setting the Vision 2 Formulating Strategies
Communicating the Involving key stakeholders
organization's vision and in the strategic planning
mission to employees. process.
3 Implementing 4 Inspiring and
Strategies Motivating
Providing resources and Creating a culture of
support for strategic innovation and
initiatives. commitment to the
organization's goals.
Challenges and Emerging
Trends in Strategic
Management
Globalization Increasing competition, global
supply chains, and cultural
differences.
Technological Advancements Rapid innovation, digital
transformation, and
cybersecurity threats.
Sustainability Environmental, social, and
governance (ESG)
considerations, and
stakeholder engagement.
Data Analytics Using data to drive informed
decision-making and improve
operational efficiency.
Today We/Learned to:
Understand the fundamentals of
strategic management.
Analyze the different levels of strategy
within an organization.
Explore the key elements of the strategic
management process.
Identify emerging trends and challenges
in strategic management.
References
Mintzberg, H., Ahlstrand, B., & Lampel, J. (2009). *Strategy Safari: A Guided Tour Through the
Wilds of Strategic Management*. Simon and Schuster.
Porter, M. E. (1985). *Competitive Advantage: Creating and Sustaining Superior Performance*.
Free Press.
Thompson, A. A., & Strickland, A. J. (2016). *Strategic Management: Concepts and Cases*. McGraw-
Hill Education.
