How Businesses Make Better Decisions with Strategic Management Process

Learn how the strategic management process works and find out why it is important for businesses of any size.

An organisation must implement and evaluate its strategic objectives to compete in the dynamic business environment. Competition is even fiercer in the modern-day scenario with technological advances and fast emerging markets. These affect all sizes of businesses. 

Business entities must be willing to adapt to such changes and have a strategic framework to move forward. The idea is to differentiate themselves so that competitors cannot copy ideas too easily.  Companies must have a strategic process model that provides value to customers also. 

Published studies on the analysis of strategic management in the International Journal of Commerce and Management Research discuss these important questions.

• What are the products that the business sells?
• What are the services that the business is able to provide?
• What are the prices the businesses are offering?
• Where are they selling?
• What are the values that they are actually committed to?

It is important that the companies are able to position themselves in such a way that the unpredictable business environment is not able to stop their success. 

Also read: Objectives of Strategic Management

This is where a step-wise and interconnected strategic management process comes into play. 

Steps in the Strategic Management Process

Below is a detailed overview of the strategic management process as per the organisation’s sequence. 

Establishing Goals

An organisation needs to establish a direction first of where it will be headed in the future. For that, a roadmap is created. This is the first stage of the process of strategic management.

Reviewing this roadmap will show a list of short- and long-term goals that need not be measurable at this phase. It is about establishing the vision and the goals associated with it. 

For instance, the roadmap may determine what the business currently needs – it may focus on expanding its customer base or expanding its personnel in a specific department. 

To summarise, at this stage, developing vision and mission statements are important. These help anyone who comes across the company answer the questions ‘why the company exists’ and ‘where it is heading’. 

Analysis of the Business Environment

Here the internal and external factors are looked into so that the organisation knows where it stands at a specific time in the market. 

Analysing how the internal operations work, the customers the business has, how the public views the business, and the current competitors is required at this phase. SWOT analysis or similar is used at this phase. 

Formation of Strategy 

This is the stage when the strategy is actually formulated. 

The goals that were formulated at the first phase now become more concrete. 

Let’s take the same above example of growing the customer base as a goal. Here, the organisation should decide how much the customer base should grow to generate expected revenue. Based on such an expectation, the organisation may decide to grow the customer base by 50% within two years. 

Implementation of Strategy

At this stage, it should be clear that the organisation has enough resources. That means, there would be different teams that are given the responsibilities of accomplishing that defined goal through delegating the defined tasks for each team. 

Again, taking the same example of growing customer base by 50% within two years, departments such as marketing and sales should be able to acquire more customers. The organisation also needs to have skilled personnel in each of those departments, that the human resources department is responsible for. 

Evaluation of Strategy

After implementing the strategy, it is time to assess what works and doesn’t. This is crucial because strategies need to be adjusted accordingly. 

The strategy needs continuous revision if the goals are not met. Most of the time, goals are not reached because they are unrealistic. It is essential to revisit the strategy after delegating tasks and monitoring them. 

What Makes the Strategic Management Process Important?

Following a strategic management process based on any strategic school of thought makes a business competitive. It helps the organisation recognise where it can succeed and how long it will possibly take to find success. 

Ultimately, it is about the best decision-making that makes an organisation achieve long-running success. Without implementing a strategy, resources are likely not utilised to the fullest extent. 

Having a strategic process at hand ensures that the strategy is assessed from time to time. This way, bottlenecks are not allowed to grow or be overlooked, which makes operational activities smoother. 

A strategic management process also creates a better outline for future planning and decisions. By learning from past errors, better decisions can be made. 

Top Courses to Learn Strategic Management

Top MOOC platforms and B-schools provide many online strategic management courses. A few are mentioned below. 

• IIM Lucknow – Executive Programme in Strategic Management on Emeritus
• IIT Delhi – Executive Management Programme in Strategic Management on TimesPro
• XLRI Executive Development Program in Strategic Management on Talentedge

Parting Thoughts

Hope this blog has given you a fair idea about the strategic management process and what strategic management is. It is recommended that when you are at any managerial level, learning it from industry experts and understanding and applying the best practices will help your career and the organisation you are in.