• Describe the primary components of a strategic management process, and indicate why a strategic management process is needed for a company. • Research at least one company and describe the strategic management process that the company uses.
In corporate terms, strategy is the plan that the business devises in order to achieve its long-term goals and objectives. These objectives are essentially to secure continued business success and meet the demands and expectations of the business stakeholders. In terms of shareholders, this would mean adding value to their investment. Therefore, an essential element of the strategic plan is to gain competitive advantage in an ever-changing commercial, political and social environment.
As with all plans, to ensure success it needs to be managed efficiently and effectively. In this case, it means that there has to be a strategic management process operated by the business, which comprises of three main component parts, strategic position, strategic choices and translating the strategy into action
For strategic management to work the business has to be fully cognizant of its current or strategic position and what elements may affect that position. No business is an island and therefore it cannot operate independent of external forces. These forces range over a number of issues and understanding what they are and how they will affect the business is essential to enabling the management to decide where the opportunities and threats to its strategic plan lay.
For example, the political, legal and social climate has seen considerable change over the past few decades, with more regulations being introduced, particularly in respect of corporate governance and, additionally, the changing expectations of the consumer, which includes issues such as the move towards organic products, corporate governance and fair trade. Similarly, commercial organizations have been affected by the rapid increase in technological development and concerns regarding environmental issues.
A clear picture of these forces will enable the business to evaluate what opportunities and threats exist that need to be taken into account within its strategy.
Another element of position has to be determined by assessing the capability of the organization. This is an internal review, which is designed to reveal whether the business has the ability to fulfill the future strategies. In essence, this assessment is designed to evaluate the strengths and weakness of the business. For example, it will need to know that it has the required physical and human resources to carry out its plans and also what areas of competence exist that will provide the business with an advantage over competitors,known as competitive advantage.
Choice is the process of decision-making that occurs once a review of all available data and information has been conducted. Strategic choice is no different. In the commercial environment, the key element of choice is based upon recognizing which areas of the business give it the most opportunity for competitive advantage. This could be the product, service, or other elements such as price and technology.
TRANSLATING STRATEGY INTO ACTION
Translating the business strategic plan into actions that are positive and successful is the final element of the strategic management process.The first part of the translation process is to ensure the organization structure is designed and organized in a way that will lead to the successful implementation of the strategic plan. This means ensuring resources are in the right location and, more importantly, that the interaction and relationship between the component parts of the business are efficiently co-ordinated.
We can take example of BRITISH AIRWAYS. You can have it at http://bizcovering.com/business/strategic-management-of-british-airways-company/
I am sure this would help...
Graduated in law with Emphasis on Finance and have have been working in financial sector for over 8