Stages of Strategic Management
“Efforts and courage are not enough without purpose and direction” (John F. Kennedy). When any person is about to make new decision in life he/she must have plans that helps in making the right decision. Those plans direct the person to accomplish the job very well and with no regrets. In the case of businesses, the owners want to meet their goals and objectives and make wise decisions, but sometimes they don’t know where to start. In this case they need strategic management. It’s an important concept in the business for the managers and owners in order to achieve the business goals. Strategic management is the science and art of formulating, implementing, and evaluating cross-functional decisions that allow an organization to achieve its goals and objectives. it is also about driving the firm’s growth through effective management techniques focused on goal-setting. Moreover, Strategic Management consists of three stages which are strategy formulation, strategy implementation, and strategy evaluation. The aim of this essay will be discussing the three stages of strategic management.
The first stage of strategic management is formulation. Formulation strategy is about analyzing the environment where the company operates, and then making strategic decisions about how the company will compete. Also, it’s includes developing a mission and vision, identifying an organizations external threats and opportunities, identifying internal strengths and weaknesses, making long-term objectives and making alternative strategies. However, formulation strategy is an important process for the organization in order to choose the most appropriate or accurate action to achieve the organization objectives. This process is a key to an organization’s success because, it leads to anticipated results by providing a framework to the actions that the organization take. All the employees should be communicated to strategic plans that aware them of the organization’s mission, purpose and objectives. Furthermore, in order to make an organization to be prepared for any possible changes that may happen, the formulation strategy forces to look carefully at the environment changes. However, the strategic plans help the organization to evaluate its resources and identify the most effective plan. So, the company that doesn’t have a strategic plan will not able to direct the employees and make them focus on the company goal and that will lead the company to be at a competitive disadvantage. So, the perfect solution to make an organization to be successful is to follow the strategies. Moreover, Strategy formulation involves set of six steps for effective implementation. Those steps are: define the organization, define the strategic mission, define the strategic objectives, define the competitive strategy, implement strategies, and evaluate progress. The first step of formulation strategy is defining the organization which requires a company to determine its customers by technology, by specific target markets, or by end benefits sought. For example, if an airline defined itself by only being in the business of making the people fly from one place to another place, then it would show its competition as being only other airlines. However, if it views itself as being in the transportation business, then it will know that its competition includes not only other airlines, but also buses, trains, car rental companies, and other ways of transporting people from one place to another. An airline must highlight the benefits of using its method of transportation as a means of influence customers to purchase its service by persuading them. Furthermore, any company can explain how its product works or how it is built. The second step is defining the strategic mission which ensures that the organization is able to identify the nature of its business, its competitive advantage, its values and its vision for the future. The third step is defining strategic objectives that should be defined based on performance targets and may include the increases in market share, sales increases, production methods, customer service improvements and corporate expansion. The fourth step is defining competitive strategy that includes an evaluation of the marketplace and overall industry, the company’s internal strengths and weaknesses, and the nature of the competition’s position. The fifth step is that the organization must implement its strategic plan to achieve success. It’s essential to develop suitable tactics, which are the action steps for meeting the strategies orders. The final step is that strategies must be revised on a regular basis to meet the varying needs and challenges of the marketplace and business environment.
The second major stage of strategic management is implementation strategy, which is the action stage. Implementation strategy includes decisions according to how the organization’s resources such as, process, people and, IT systems will be aligned towards the goals and objectives. It’s the process that puts strategies and plans into action to reach desired goals and putting the formulated strategy into action. Implementing the strategic plan is as significant, or even more important, than the strategy. It’s the most difficult stage of the three strategies. The strategic plan addresses the what and why of activities, but implementation addresses the who, where, when, and how. The fact is that both of them are important to success, but firms can gain competitive advantage through implementation if it’s done effectively. Strategy implementation is basically an operational process. thee formulated strategy that isn’t implemented lead to no useful purpose. One of the important things to implementation strategy is the interpersonal skills. Every department and division of the organization must answer the question that are “what must we do to implement our part of the organization’s strategy?” and “how best we can get the job done?” the implementation strategy challenge is to encourage the managers and employees through an organization to work with passion, enthusiasm and pride to achieve the desired goals and objectives. The main steps in implementing a strategy are: evaluation and communication of the Strategic Plan, development of an implementation structure, development of implementation-support policies and programs, budgeting and allocation of resources, and discharge of activities and functions.
The final stage of strategic management is evaluation strategy. In this stage, the managers want to identify which strategy is not working well. The internal and external factors of any organization are constantly changing so, the modification of strategies is needed. Evaluation strategy is the process of identifying the effectiveness of a strategy that is given to achieve the organization’s objectives and taking corrective action when is required. There are several fundamental activities that strategy evaluation should take such as, revising the internal and external factors that are basis of current strategies, also taking corrective actions, and measuring performance. However, the evaluation stage is important because, there is no guarantee of the tomorrow success of the organization. Whenever there is success that will create different and new problems. The nature of the evaluation strategy is to examine the effectiveness of a strategy. It performs the crucial task of keeping the company in the right track. Also, it can help to determine whether the decisions match the strategy requirements or not. Moreover, it provides the strategists with information and experience that can be used in new strategic planning.
In conclusion, strategy formulation, strategy implementation, and strategy evaluation are the three stages in the strategic management. Each stage of those complement each other. The first stage which is the formulation includes planning and decision-making involved in developing organization’s strategic goals and plans. The second stage which is implementation is the operational process. But, the third stage which is evaluation strategy that assesses the appropriateness of the current strategy. Finally, my recommendation is that every organization must follow these strategies in order to achieve the company’s objectives.