Strategic management process can be referred to as the planning and decision making process which involve strategic planning, implementation and evaluation. It consists of eight interrelated and integrated steps which may vary according to business. These steps are:
- Establishment of Organization’s Mission, Vision and Goals: Strategic vision is a roadmap to an Organization’ future. It provides a perspective of a business’ direction and means of getting there. Mission Statement is the declaration of any business’ purpose of existence. Organizational Goals are targets that an organization wants to achieve. Goals must be realistic, challenging, achievable, quantifiable and time bound.
- Analysis Of The External Environment: A thorough evaluation of the external environment begins with the examination of the task environment. And identification of the influence of the Organization’stakeholders (buyers, competitors, suppliers, creditors, Union employees).
- Identifying Opportunities and Threats: SWOT(strength, weakness, opportunity, threat) analysis is the most popular and appropriate strategic tool used in analyzing business environment.
- Analysis Of The Business’ Resources: This deals with the evaluation of the skills, knowledge and abilities of the organization’s employees, resources, degrees of success in product innovation, financial worth of the business and means of providing quality products to meet consumers need.
- Identifying Strengths and Weaknesses: Strengths are the activities that have the potential of improving the organization’s competitive situation. Weaknesses are the activities that an organization is not good at, making it potentially vulnerable to strategic moves by competitors.
- Formulation of Strategy: Strategists get required information needed to formulate corporate, business, functional and operating strategies from analyzed internal and external environment factors. An effectively formulated strategy blends, integrates, co-ordinates and utilizes the company’ internal resources and makes appropriate use of external information.
- Strategy Implementation: If a well formulated strategy is not properly implemented, it becomes nothing.
- Measurement and Evaluation of Results: This final process deals with the assessment and evaluation of strategic control, in order to know if the outcomes meet expectations.
Strategic management process helps an organization to set both short-term and long-term goals, involving every employee in the organization to work together as a team.