Professional Documents
Culture Documents
Strategists:
Those people
in the organization who are fully responsible for the failure r success of the organization are
referred to as strategists. Strategies are formed by strategists. Examples of strategists include
chief executive officer, chair of board, chief executive officer, president & owner, entrepreneur or
dean etc.
The information is gathered, analyzed and organized with the help of strategists. They identify
industry & competitive trends, establish scenario analysis & forecasting model, evaluate
corporate & divisional performance, and point out new marketing opportunities, highlight new
threats for the organization & preparation of potential action plans. They further assist in
supporting or staffing role. The decision making at the top level of management in the
organization is mostly taken by these strategists. The most crucial & visible strategic manager in
the organization is the CEO. Moreover every manager in the organization who has the
responsibility for profit or loss results, responsibility for division or unit, or having clear authority
over some element of organization is said to be strategist or strategic manager.
Different organizations have different kinds of strategists whose working alter in the phase of
formulation, implementation & evaluation of strategies. The personal philosophies of strategists
also affect the selection of certain strategies. There are some other foundations that differentiate
one strategist from other like attitudes, ethics, values, concern for social responsibility,
willingness to take risks, management style, concern for profitability, concern for long term
versus short term objectives etc.
2.
Vision Statement:
Vision statement is quite necessary for the operation of the organization as it provides answer to
the question that should be the organization wants to become? The first step in the strategic
planning is to develop the vision statement and after that mission statement is prepared. Mostly
the organizations develop single sentence vision statements.
Mission Statement:
Mission statement is long lasting statement that differentiates one organization from other similar
organization. The scope of the operations of the organization in terms of market & product is
identified through mission statement. The basic question faced that is related to the activities of
the business is cleared with the help of mission statement. It guides the nature & scope of
current operations of the business as well as the future aspects of the market conditions &
opportunities. The future direction of the organization is highlighted by the mission statement.
3.
External opportunities and threats are also one of the part of strategic management key terms.
All those trends & events those are related to the social, economic, environmental, cultural,
demographic, political, legal, technology & technology & competitive that can harm or benefit an
organization constitute external opportunities & threats. One major fact about the opportunities &
threats is that they are out of control of the organization to much extent and hence they are
external for the organization. Following are some examples of external opportunities & threats.
Computer revolution
Population shifts
Space exploration
Space exploration
The external opportunities & threats are significant for the organization as opportunities need to
be availed while threats should be avoided. For this purpose there is strong need to identify,
monitor & evaluate external opportunities & threats so that the organization becomes successful
in the long run.
4.
Those activities of the organization that are under control of the organization, and may show
good and bad impact on the organization are known as internal strengths & weaknesses of
organization. These are present in the marketing, management, production/operation,
finance/accounting, and information technology & research & development activities of the
organization. It is quite essential strategic activity for an organization to identify & evaluate
organizational strengths & weaknesses. Organizations need to adopt those strategies that
capitalize their strengths while improve their weaknesses. Moreover strengths & weaknesses of
the organization can also be ascertained in relative to the competitors.
5.
Long term objectives are also from one of the important strategic management key terms. Long
Term Objectives are referred to as particular results that organization wants to accomplish in
targeting the mission. Expected results by targeting certain strategies are represented by long
term objectives. Strategies include those actions that are executed for the accomplishment of the
long term objectives. There should be consistent time frame for strategies & objectives which
range from two to five years.
The objectives are important for the success of the organization because of the following reasons.
Provide direction
Helps in evaluation
Create synergy
Reveal priorities
Focus coordination
Assist in making plans, organizing data, motivating employee & controlling each and
everything
There should be some objectives for overall organization & some for separate division. Moreover
these should be measurable, challenging, realistic & understandable. There should be a time line
associated with each objective. There may be different forms of objectives like growth in sales,
growth in assets, market share, profitability etc. There are many benefits of clearly established
objectives. Moreover the long term objectives considered as the necessity for the success of the
organization because of the following reasons.
The stakeholders of the organization see their future role through long term objectives of
the organization.
The managers with different attitudes & values are assisted in consistent decision
making.
The priorities of the organization are specified by the long term objectives which further
stimulate the action & accomplishment.
In short, the organization moves towards unknown end when it lacks long term objectives.
6.
Strategies:
The means through which allow us to achieved long term objectives. Following are included in the
business strategies.
Geographic Expansion
Diversification
Product development
Acquisition
Retrenchment
Market penetration
Large amount of the resources of organization are required along with the decisions of top
management for the application of strategies in the form of actions. Strategies are future
oriented as these will affect the long term prosperity of the organization. Both internal as well as
external factors should be considered and therefore the strategies are multi-divisional
consequences for the organization.
7.
Annual Objectives:
Those short term targets that are helpful in achieving long term objectives of the organization are
called annual objectives. The annual objectives must be quantitative, measurable, realistic,
challenging, consistent & prioritized. These must be developed at functional, divisional &
corporate levels in large organizations. These objective must be stated in terms of marketing,
management, production/operations, finance/accounting and research & development. Each long
term objective always demand a set of annual objectives for its successful accomplishment. The
allocation of resources is represented by annual objectives. Annual objectives are significant
for Strategy Implementationwhereas Strategy Formulation phase contains long term
objectives.
8.
Policies:
Annual objectives are accomplished by the means of policies. Policies contain rules, guidelines &
procedures developed to assist efforts to accomplish stated objectives. Decision making is guided
through policies & recurring and repetitive situations are also addressed through policies.
Policies are usually mentioned in terms of marketing, finance/accounting, management, and
production/operation, activities related to information technology and Research and
Development. Policies may also established at functional level for certain department or at
divisional level or at corporate level for entire organization. Policies play an important role in the
implementation phase because the expectations of organization about its managers & employees
are specified through policies. The coordination & consistency between different departments &
within the departments is ensured through policies. Remember that for developing a successful
strategic management plan, these all above strategic management key terms are important to
understand and you cant develop a successful strategic management plan without learning all
these strategic management key terms.
Table 1: Factors in the internal environment and their affect on the business/organisation
Factor
Human Resource
Organisational
Culture
OrganisationStructur
e
Management
Assets
Financial Strength
Table 2: Factors in the external environment and their affect on the business/organisation
Factor
Economicconditions
Market(competition
)
Technology
to technological change, they risk losing market share. It's not just that
technological change affects the design of products, but even the
delivery of services can change.
Climatechange
Legal
Media
Political
Demographic
suggests that the companies should have a powerful focus on the longevity of the
business. This suggests that without strategic management, it is not possible for a
company to survive in the long run.
5. Increasing market share and profitability: With the help of strategic
management it is possible to increase the market share and also the profitability of
the company in the market. If you have very focused plan and strategic thinking
then it is possible for all the industries to explore better customer segments,
products and services and also to understand the market conditions of the industry
which you are operating in. The strategic management skills will help you to
approach the right target market. The experts will guide for better sales and
marketing approaches. You can also have better network of distribution and also
help you to take business decisions which at the end of the day results in profit.
6. Avoiding competitive convergence: Most of the companies have become so
used to focusing on the competitors that they have started imitating their good
practices. It has become so much of competition that is becoming difficult to part
the companies or identify them differently. With the help of strategic management
this magic is possible try and learn all the best practices of a company and
become a unique identity which will keep you apart from your competitors.
7. Financial advantages: The firms which follow the process of strategic
management proves to have more profits over a period of time as compared to the
companies that do not opt for the strategic management decisions. Those firms
which are involved in using the strategic management use the right method of
planning these companies have excellent control over their future. They have
proper budget for their future projects; hence these business continue for a long
time in the industry.
8. Non-financial advantages: Besides the financial benefits the companies using
the strategic management also provides various non-financial benefits. The experts
informed that the firms which practice strategic management are always ready to
defeat the external threats. They have better understanding about the strengths
and weakness of the competitor and hence they are able to withstand the
competition. This paves way for better performance and rewards for the company
over a period of time. The main feature of this management system is that it has
the capacity of problem prevention and problem solving skills. It also helps in
bringing about discipline in the firm for all types of internal and external processes.
Conclusion:
In the recent years most of the firms have understood the importance of strategic
management it plays a key role in the upbringing and downfall of any company. In
a nutshell we can conclude that strategic management is possible if a company can
provide dedicated resources and staff in order to formulate and implement the
entire system. If strategic management is implemented in the company thoroughly
then there is no doubt that the company will survive all types of odds and
competition and remain in the market for a long period of time. This is required in
the present situation for all companies. It just calls for proper planning and right
people in order to implement them in the company. You need to keep a regular
check on all external and internal factors affecting your industry; besides this check
all your financial resources whether they are enough to expand your business. If you
could keep in mind these things the implementation will become very easy and
quick for any organization irrespective of their sizes.