Strategic Management Process

Strategic Management Process

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Strategic Management Process

Strategic management is a planning process that entails the formulation and execution of initiatives and objectives carried out by top-level management. The process takes into consideration the available resources and assesses the external and internal structures in which a company operates. The main aim of the strategic management process is to provide direction to a corporation towards attainment of derived goals and objectives (Certo & Peter, 1990). In modern time business environment, budget based scheduling and forecast based scheduling mechanisms are deficient for large companies to remain competitive in the market. The strategic management process adjusts a business to the required flexibility for it to remain competitive. Strategic planning makes use of five steps in its formulation (Certo & Peter, 1990). The five steps of strategic planning include, the statement of mission and objectives, environmental scanning procedure, formulation of strategy, implementation of strategy and evaluation and control.

The statement of mission and objectives communicates the company’s dream. The vision includes the values, purpose and long-term goals of the company in an effort to attain the future opportunities and competitive position that are desired. The environment scan involves an internal analysis of the company structure, analysis of the business environment that the company operates and the external macro environment. The internal analysis recognizes the company’s strength and weaknesses while the external analysis reveals niches and threats to the company. The third step of strategy formulation encompasses the use of data from the environment scan. Given the data, the company merges the opportunities revealed with its strengths while acting to remove the threats and weaknesses. Strategy implementation employs a set of programs and budgetary boundaries. The formulated strategy is implemented within the scope of the available resources. Evaluation and control entails parametric measurement of the company’s performance under the formulated strategy. Adjustments in the strategic plan are done at this stage to eliminate weaknesses in the plan. (Certo & Peter, 1990)

Johnson & Johnson is an example of a company that employed the strategic management process to certify its competitive position in the petroleum products market. The company employed then strategic management process to expand the range of products that the company produces (Macmillan & Tampoe, 2000). In 1997, the company formulated its expansion vision. The company outsourced the Isys group to perform an internal and external analysis of the company. The Isys group under the support of the board of directors placed a report of the company’s weakness that lay in centralization of management and strength that lay in productivity (Macmillan & Tampoe, 2000). Revenue generation was sufficient to facilitate expansion and diversification in production. Two decades after strategy formulation, the company is operational in 60 countries worldwide. The company has 275 operational branches and produces products in pharmacy, biology and diagnostic consumer markets (Macmillan & Tampoe, 2000). Most of the 275 branches are independent with decentralized management.

The major limitation of the strategic management process is that the process does not allow modification of process until the fifth stage. This means a company cannot enter new requirements for change or respond to new external stimuli until the evaluation and control stage. The merits gotten from implementation of strategic management are improved product quality, reengineering, adaptation to change and businesses expansion. The strategic management process is seen as a rational move towards business as it is not just a asset of rules and regulations. The top to bottom business adjustment approach compels adherence from board of directors to small employees and is best implemented with unanimous cohesion in a company.
References

Certo, S. C., & Peter, J. P. (1990). Strategic management: A focus on process. New York: McGraw-Hill.

Macmillan, H., & Tampoe, M. (2000). Strategic management: Process, content and implementation. Oxford: Oxford University Press.