Strategic management is the organization and execution of business resources to achieve your business goals. It is not an individual initiative, but rather an ongoing process of developing, evaluating and improving strategy to gain competitive advantage.
The strategic management process includes:
- The definition of the mission and vision statement.
- Setting long-term, large-scale goals, such as BHAGs.
- A SWOT analysis.
- An evaluation of the strategy.
- An internal analysis of your organizational structure.
- An analysis of your external competitive environment.
- Strategic planning.
- Process implementation plans to achieve your organization’s goals.
- The implementation of the competitive strategy.
Essentials of strategic managment may seem identical to many other critical elements of the business. Let’s see how it fits into the business environment.
Strategic management or strategy?
At first glance, the similarity between the terms strategic management and strategy is troubling. The easiest way to distinguish between the two is to think of strategic management as the implementation of your business strategy.
In the business setting, strategy is the process of making decisions to achieve your organization’s goals. An effective strategy is vital to enable your sales team to understand what your priorities are and where you are headed. But implementing strategy requires strategic management. Strategic management takes into consideration your competitive environment and considers how you will execute your business strategy.
Strategic management or strategic planning?
A strategic plan is a tool that helps define the direction for your organization and the actions you need to take to achieve those goals. Strategic planning is the process of creating a plan to achieve your strategic goals.
Strategic management encompasses the strategic planning process, but it goes far beyond it. In addition to planning how to achieve your overall goals, strategic management helps you organize your resources and define the best courses of action to achieve your goals.
Strategic management or operational management?
Even if these two terms cover very different realities, strategic management is often confused with operational management. Operational management corresponds to the concrete activities of your company. This includes your organization’s value chain, which is the processes and practices that your organization regularly implements in order to deliver a final product, good or service.
If operational management answers the “what” question, strategic management answers the “why” and “how” questions. To begin with, strategic management helps you define why you are prioritizing different business initiatives, as well as your long-term goal. Then, during the implementation and planning phase, essentials of strategic managment also defines how you will achieve your goals.
Benefits of strategic management
Like most elements of business strategy, strategic management takes time, energy, and effort. However, the efforts you make in this context are felt at every level of your organization.
With effective strategic management, you can:
- Devise clear plans on how to achieve your organizational goals.
- Draw a roadmap and better understand your competitive advantage and what makes you stand out.
- Set up a system to track your progress against your organizational goals.
- Make the whole team understand what your organizational priorities are and why.
- Standardize the strategy within your organization.
- Create the conditions for a more dynamic company, capable of reacting to market developments more quickly and more effectively.
- Adopt a proactive, rather than reactive, business strategy.
- Establish a continuous process to analyze and improve your business processes to achieve excellence.