Reviewed by Sep 30, 2020| Updated on
Strategic management is the constant planning, tracking, review, and evaluation of all that an organization requires to accomplish its objectives and goals. Changes in the market climate demand that companies continually review their performance strategies. The strategic management process helps companies take stock of their current situation, chalk plans out, execute them, and assess the efficacy of the implemented management strategies.
In the initial days, typically in the early 1920s till the 1930s, managers used to follow day-to-day planning methods. However, later, managers have tried to anticipate the future. They used tools for budget preparations; control systems, such as capital budgeting and management by objectives; and other tools.
There will be three levels of strategy in a multi-business organization with many SBUs, i.e. corporate strategy, SBU strategy, and functional strategy. There can only be two types of strategy in companies that do not have SBUs, i.e. organizational strategy and functional strategies.
The following are a few important objectives of strategic management.
Taking advantage of and building new, different prospects for tomorrow.
Providing the conceptual structures which will help a manager understand the main relationships between behaviour, meaning, and results.
To put an organization in a successful role.
To retain and enhance the role by deploying and obtaining necessary resources, and by tracking and reacting to changes in the environment.
To ensure that the business meets its customer's expectations and desires, which is a pillar in providing the best product or service that customers really want.
To sustain a competitive position.
To utilize the company's strengths and take advantage of its competitor's weaknesses.
To understand the different concepts involved, such as strategy, policies, plans, and programmes.
Often businesses allow their activities to fall into a rut, executing business functions as per routine to fulfil a commitment rather than using them as purposeful strategic drivers. For example, a top leading consumer electronics company remained focused on building growth in its conventional segments without understanding that the market around it was transforming or that multinationals were challenging it.