In any industry, for a business to successfully succeed it has to incorporate the components of both strategic planning and strategic management. These two elements are complementary to each other, but still, they differ in some aspects. To strategically plan for a business a person has to come up with a mission and a vision statement, estimation of the resources that will be needed, and an abstract of how the initiative will fit the companys general mission (David, 2011). In simple term, a strategic plan is what triggers a companys action. Furthermore, the most important feature of a strategic plan is the financial objective or the operational objective and these two features need to be very specific. On the other hand, strategic management entails the cycle of planning annually and implementation which is mostly established as the organizational culture. Especially, after developing vision and mission statement, an estimation of the resources needed among others. Also, a strategic management assists a company to identify their areas of success to sustain them also recognize their areas of weakness so as to improve and this is usually conducted annually (David, 2011)
The Primary Components of the Strategic Management Process
Strategic management is a process that is continuous and involves evaluating a business and the industry in which the organization is part of. Also, it entails evaluating the competitors, and transforming goals to meet the current and the futures competitors and then re-evaluate each strategy. The process contains five steps which are goal setting, analysis, strategic formulation, strategic implementation, and evaluation and control (Hill, Jones, & Schilling, 2014). In the goal setting stage, a person is required to come up with goals that are clear, detailed, and realistic since it helps in clarifying the vision of the company. The stage consists of three things defining the short and long term goals, determining the process to achieve the objectives and to customize the workers and assign each the tasks they can successfully achieve. The next stage is analysis, and it involves gathering as much relevant information as possible to achieve the vision. The data should look at the internal and external factors that may affect the business and also check on the strengths and weaknesses of the organization. The third stage is strategy formulation it should be started by reviewing the data collected from the analysis. Then determine the resources at hand that the company has to fulfill its goals and also identify external areas in which the company can seek resources. The fourth stage is strategic implementation which is putting the companys chosen strategy into action and entails coming up with organizations structure, distributing resources among others. Lastly, is the strategic evaluation, which entails re-evaluating internal and external factors that affect the current strategy, measuring performance, seeking corrective actions among others (Hill, Jones, & Schilling, 2014).
The Internal and External Analysis
The best tool that any company can use to internally and externally analyze a company is the SWOT analysis. SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats (David, 2011). A SWOT represents the core competencies of an organization at the same time it identifies the opportunities that in cannot use currently due to reasons such as financial problems. The SWOT analysis helps the company to assess their market, company, and competition. Internal analysis of strengths and weaknesses concentrates on internal factors that give the company certain merits and demerits in meeting the needs of the population. On the other hand, the external analysis looks at the threats and opportunities that exist in the environment of the organization (David, 2011).
The Responsibilities and Duties of the Strategic Manager
In most cases, the work of the strategic manager is to achieve the business results. One of the responsibilities of a strategic manager is defining the strategy (David, 2011). Also planning for the strategy which entails corporate planning and budget planning. Strategic performance management is another responsibility that a strategic manager has. Another duty is strategic risk management that involves identifying strategic threats and evaluating processes and overseeing their adoption into the business. A strategic manager also has the responsibility of analyzing, where he manages analyses and provide significant standards for management as well as timely discernments to different departments (David, 2011).
Importance of Strategic Management Planning
There are several reasons why a company needs to a strategic management plan. Among the reasons is to prioritize and set direction, to make sure all the partakers are on the same page, to make the process of decision making simple, and to communicate the message. To set direction, an organization will need a plan that defines the views of success and priorities of the organization and makes the view come to reality. The plan also helps everyone is on the same page by making sure all the departments are moving forward to achieve the organizations goal. In some instances, the leaders have issues in making a decision, but with a plan, this process gets easier. A written plan that is accessible to every staff communicates the message that the manager has in mind, and the staff will be aware of where they are going hence maximizing the organizations success (Steiner, 2010).
Even though there is a slight difference between strategic management and strategic planning both are significant to any organization as they assist in the formulation of goals that need to be achieved. Also, they aid in formulating approaches that are focused towards the fulfillment of the goal. These approaches are goal setting, analysis, strategic formulation, strategic implementation, and evaluation. Also, another important aspect is the SWOT analysis that helps an organization to discover the strength, and threats of the organization both internally and externally. The strategic manager oversees that all these aspects are followed so as to get better results.
David, F. R. (2011). Strategic management: Concepts and cases. Pearson/Prentice Hall.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Steiner, G. A. (2010). Strategic planning. Simon and Schuster.
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