strategic mgt process

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Prepared By:Muhammad Riaz Khan

M.Com (Final)Government College Of Management Sciences Peshawar

Cell: +923139533123mriazkhan91@yahoo.com

STRATEGIC MANAGEMENT PROCESS

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STRATEGIC MANAGEMENT

The art and science of formulating, implementing

and evaluating cross-functional decisions that

enable an organization to achieve its objectives.

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What is strategy?

Strategy is the direction and scope of an organization over the long term: ideally,

whichmatches its resources to its changingenvironment, and particular its markets, consumers or clients so as to meet

stakeholderexpectations.

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Developing vision and mission Identifying external opportunities and threats Determining internal strengths and weaknesses Establishing long term objectives Generating alternative strategies Choosing particular strategies to pursue Deciding what new business to enter How to allocate resources Expand or diversify operations Entering or not international market Merge or form joint venture How to avoid a hostile takeover

Strategy formulation

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STRATEGIC MANAGEMENT PROCESS

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“Process of formulation, implementation, evaluation and control of strategies to realize the organization's strategic intent.” The strategic management process encompasses three phases, which together involve a number of systematic steps.

1.Strategy formulation

2.Implementation

3.Evaluation & control.

STRATEGIC MANAGEMENT PROCESS

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EVALUATION AND CONTROL

STRATEGIC MANAGEMENT PROCESS

FORMATION OF MISSION & OBJECTIVES

SWOT ANALYSIS CONSIDERATION

OF STRATEGIC ALTERNATIVES

IMPLEMENTATION CHOICE OF STRATEGY

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Strategic formation involves four important steps which are,

1. Determination of mission and objectives

2. Analysis of strengths and weakness of the firm

3. Environmental opportunities and threats

4. Generation of alternatives strategies and choosing the most appropriate strategies.

STRATEGIC FORMULATION

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Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enables an organization to achieve its objectives.

In short, strategy is a means to achieve the objectives. It is, therefore, quite obvious that determine the mission and objectives, is the first step in the strategic formation.

1.DETERMINATION OF MISSION AND OBJECTIVES

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The mission defines the board social purpose and scope of the organization whereas objectives more specifically define the direction to achieve the mission

Objectives help translate the organization mission into results while objectives may be generic in their expression, goals sets specific targets to be achieved with in a time frame.

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In strategic management, the term strategic is used to mean “pertaining to the relation between the firm and its environment” this indicates the role of SWOT in strategic management.

In strategic management the strength and weakness of the firm and opportunities and threats in the environment will indicate the portfolio strategy and other strategies it should pursue.

2.SWOT ANALYSIS

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Given the mission and objectives and having analyzed the strength and weakness of the firm and environmental opportunities and threats. This strategies should proceed to generate possible alternatives strategies. There may be different strategies options for accomplishing a particular objectives.

3.STRATEGIC ALTERNATIVES

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The purpose of considering different strategic options is to adopt the most appropriate strategy. This necessitates the evaluation of strategic alternatives with reference to certain criteria.

Criteria such as suitability, feasibility and acceptability are commonly employed to evaluate the strategic options.

4.EVALUATION AND CHOICE

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Operationalizing the strategy requires transcending the various components of strategy to different levels, mobilization and allocation of resource, structuring authority, responsibility, task and information follows, and establishing polices.

Implementation of strategy involves a number of administrative and operational decisions.

5.IMPLEMENTATION

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Evaluation and control is the last phase of the strategic management process. The objective is to examine whether the strategy as implemented is meeting its objectives and if not to take corrective measures.

Continuous monitoring of the environment and implementation of the strategy is essential.

6.EVALUATION AND CONTROL

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1. Strategic management helps to envision an

organization’s future, formulate mission and make objectives clear.

2. Strategic management makes the management dynamic, appropriate to the environment and future oriented.

BENEFITS AND RELEVANCE OF STRATEGIC MANAGEMENT

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3. It make people realize what are they working for, what is expected of each SBU, division, functional department and, to some extend, individuals.

4. Strategic management facilitates better delegation, organization monitoring, performance evaluation and control.

5. Strategic management would enable a company to meet compensation more effectively.