Professional Documents
Culture Documents
BBA
SEMESTER V
ANS: Strategic management is formulation and implementation of the major goals and
initiatives taken by company’s top management on the behalf of owners, based on
consideration of resources and an assessment of internal and external environments in which
the organization competes.
Importance:-
1:- Setting goals: Strategic planning is the process that produces key decisions that dictate
the identity and purpose of a company or organization. This includes the formulation of goals.
These goals will direct the energy of a company in a specific direction. Without strategic
management and planning, most of the organizations will not achieve success.
2:- Designating resources: Once you have determined your goals and processes, you
should have an idea of what resources are required for both. The term “resources” can be
applied to anything you need to achieve your goals, for instance manpower; funding,
knowledge or skill sets etc. Strategic planning allows you to determine which resources’ you
require from the get-go, drastically easing the whole process of attaining your goals.
3:- Expecting the un-expected: As with any situation in life, unexpected scenarios arise;
same is the case with the business organizations that anything can happen in future which can
be either in the favour of business organizations in the form of opportunity, gains, profit or
sometimes it can be against the favour of business organization in the form of loss, risk etc. But
with the help of strategic management, it tells the business organization that you may need to
react to dynamic situations that you didn’t foresee. It prepares the business organization for
anything and everything for which they were not prepared.
5:- Improving overall performances: Apart from faster and effective decision making,
pursuing opportunities and directing work. Strategic management assists with cutting back
costs, employee motivation and gratification, converting threats into opportunities, predicting
probable market trends and improving overall performance.
1:- Initial assessment: The starting point of the process is initial assessment of the firm. At
this phase managers must clearly identify the company’s vision and mission statement.
2:-Situational analysis: When the company identifies its vision and mission, it must
assess its current situation in the market. This includes evaluating an organizations external and
internal environments and analyzing its competitors.
During an external environment analysis managers look into the key external forces i.e.
macro and micro environments and competition. PEST OR PESTEL frameworks represent all the
macro environment factors that influence the organization in the global environment. Micro
environment affects the company in its industry. It is analyzed by using poters 5 forces frame
work.
Internal analysis includes the assessment of company’s resources, core competencies and
activities.
As a result, situation analysis identifies strengths, weakness, opportunities and threats for
the organization and reveals a clear picture of company’s situation in the market.
Strategy formulation is based on the inputs gathered through the environmental analysis
and specifically the strengths, weakness, opportunities and threats generated through the
SWOT analysis.
4:- Strategy implementation: Strategy implementation is the process that turns strategies
and plans into actions in order to accomplish strategic objectives and goals. At this stage
managerial skills are most important than using analysis. Communication in strategy
implementation is essential as new strategies must get support from all over the organization
for its best implementation.
To successfully implement your strategy several items must be in place. The right
place must be ready to assist you with their unique skills and abilities; you need to have the
resource, which includes time and money to successfully implement the strategy. The structure
o management must be communicative and open, with scheduled meetings for updates and
the environment in the workplace must be such that everyone feels comfortable and
motivated.