Essay: Importance and Process of Strategic Management

Business Management
Part 1
A) Importance of Strategic Management
Strategic management process refers to the extended planning, monitoring, analysis, and assessment that is mandatory to meet its goals and objectives profitably. Plan, managerial decisions and actions are demanding to determine the organizational long-run performance. It also requires regular monitoring for any external changes, opportunities or threats.
An effective organization often initiated programs and services within its structure that ensure effective leadership, good management and open communication (Ryszard Barnat, 2014). These hallmarks of corporate governance can easily manage strategically with the basic framework of goal-setting and decision-making. Strategic management is important because it helps in setting specific goals, analyse all our internal and external resources, our external environment, as well as stakeholder views. A productive strategic management process is needed by good corporate governance.
Strategic Management is the reflection of the company policy. In alternative words, before we start a business we should know that what is our direction, propose, business strategy, and with all those elements. More procedure should be set to reflect the company policy, program must be also investigated and reviewed systematically and addressed in the right way and according to the new diversity (Roohul Amin, 2015).
 
Strategic management can help company to identify and capitalize on its core competencies (Jeremy Bradley, 2016). A core competency has three key factors which are it is not easy for competitors to equivalent, company can use it in a number of different products or services and it provides a gain to the customers. For some companies, a core competency is the brand name. People buy the products directly because they carry the organization’s signature, which is correlate with quality and prestige. Last but not least, the core competency might be the cost of manufacturing. If you think your business has strengths in multiple areas, it’s necessary to get at the root of what sources of these successes.
Strategic management is vitally significant even on the small scale within a business. However, strategic management is tough to carry out without a clearly defined set of goals for the business transaction. Knowing what company core competencies are is great from the point of view of understanding your strengths in the marketplace, but this also helps company to diagnose areas for enhancement and set goals and objectives based on those weaknesses. For instance, company is underdeveloped behind in utilizing the power of the Internet to trade its products, one of your goals can be to recommend an online trading platform within the next six months. Generally, the goals that the company sets should be measurable, precise and have a time frame attached to them. Setting goals and objectives in this way helps company to strategically position your business for future success.
B) Process of Strategic Management
Strategic Management Process is illustrating the organization’s strategy. It is also a process where an organization or a manager thinks of effective strategies or plan to achieve a better performance. There are five stage processes in strategic management.
The first stage is setting a goal. The top management must clarify or identify the mission and vision statement. Without planning for the company’s future, managers would not know where they want to go and what they have to target (Ovidijus Jurevicius, 2013). When long-term goals or short-term goals are set, a company will have a vision and also a direction for the employees with a task given. Most importantly in this process, the goal must be realistic, detailed and match with the value of the vision (Jim Clayton, 2012).
Next is analysis. In this stage, all information and data relevant will be gathered or gain to help to accomplish organizational goals. Examining the internal and external factors that may affect the company and how to avoid such difficulties also will be done at this stage too (Paul C. Nut & Robert W. Backoff, 2007). The SWOT analysis is performed to identify both the weaknesses and strength of the organization as well as any opportunities and threat that may arise during the process.
Once the analysis stage is done, the organization will switch to strategy formulation where they review the information obtained during the previous stage. They will study the effect of different actions towards these goals and the way in which these actions should be implemented (Rainer Feurer, 2010). The issues facing the company should be prioritized by the importance to their success. Once prioritized, formulating the strategy will begin.
The implementation strategy is also known as the action stage in the strategic management stage, in which a new structure should be installed in the beginning of this stage. At this stage managerial skills are more important than using analysis. The managers must ensure their employees know their own duties and roles in the organization. Funds or resources will be available all the time so once the funding is in place, the implementations will be executed.
Lastly, is the strategy evaluation stage. They will evaluate the strategies regularly to check if they are on the right track in order to accomplish organizational goals. If it is determined that the strategy is not moving the company toward its goal, take corrective actions and if those actions are not successful, repeat the management process.