Strategic Management Process is an ongoing iterative process of organization implementing strategies with proper analysis and evaluation to achieve its goals. It is achieved through the 5 steps explained below. Using Strategic Management Process, an organization decides to implement a selected few strategies along with stakeholders, details the implementation plan and keeps on appraising the progress & success of implementation through regular assessment.
The process is not a one time implementation but we can think strategic management process as a loop which keeps on going to achieve the objectives as per the need.
The five stages of strategic management process are shown in the figure below.
Goal setting is one of the most crucial steps in the entire strategic management process journey as it established the foundation.
The vision and goals of the organization are clearly stated. The short-term and long-term goals are defined, processes to achieve the objectives are identified and current staff is evaluated to choose capable people to work on the processes. This can be done through proper environmental scanning.
The problem statement should be clearly defined at this step. Unclear goals can lead to issues at later stages and con cost organizations.
Data relevant to achieve the goals of the organization is gathered, potential internal and external factors that can affect the sustainable growth of the organization are examined and SWOT analysis is also performed.
Once the analysis is done, the organization moves to the Strategy Formulation stage where the plan to acquire the required resources is designed, prioritization of the issues facing the business is done and finally the strategy is formulated accordingly.
After formulation of the strategy, the employees of the organization are clearly made aware of their roles and responsibilities. It is ensured that funds would be available all the time. Then the implementation begins.
In this process, the strategies being implemented are evaluated regularly to check whether they are on track and are providing the desired results. In case of deviations, the corrective actions are taken.
As shown in the figure, the five stages are not stand-alone and constantly interact with each other in order to ensure better management of the business.
The strategic management process enables the organization of plan ahead through proper approach in order to gain competitive advantage wrt competitors. The process equips the organization to deal various internal and external factors. The process can differ for various organization depending on their size, domain, focus and core competency but the importance of strategic management process remains the same. It ensures that the implementation of any strategy is not without proper due-diligence and analysis. Also it makes sure that the evaluation is done after the implementation to test if the results are desirable or not. If not, organization can go back to the start to rectify the issues.
Strategic Management process is not an objective one time process which would yield the expected results in the first attempt. Optimizing the strategic management process for the organization may take time. The 5 steps stated above may have to be revisited multiple times and still the results may differ. The main limitation is the time it would take to completely tune and manage the process for a particular organization in order to see real benefits but having said that strategic management process if mastered properly can lead to serious advantage for the organizations.
A good example of the strategic management process can be New Product Launch in a geography. It starts with goal setting of launching a particular product along with its package and SKU details followed by the geographies. Analysis would include analyzing the markets, segment, potential etc. before finalizing on the quantity and markets. it will be followed by strategy on how it would be launched and rolled out in the markets shortlisted and what all processes need to be done prior to and after the launch. This is followed by the actual launch. This can be through a test market and then a proper launch. After the launch has been completed, the organization would evaluate the results whether the strategy worked and the required sales are being produced along with the market response. In case the results are not as expected, the processes needs to repeat to correct the product or reconsider it.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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