Essay on Strategic Management Process

762 Words May 30th, 2012 4 Pages
The term 'Strategic Management Process' refers to the steps by which management converts a firm's mission, objectives and goals into a workable strategy. In a dynamic environment each firm needs to tailor its strategic management process in ways that best suit its own capabilities and situational requirements. Viewed broadly, the strategic management process has two parts: an information process and a decision process. The information process involves collecting and analysing information about the external and internal environments. External factors are taken into account to find major opportunities and threats that now or will confront the organisation. To survive and grow, every organisation, invariably, must find how the
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Effective strategies, of course, are those that help a superior 'fit' between the organisation and its environment and the achievement of strategic goals (Andrews). Strategies necessarily change over time to suit environmental changes but, to remain competitive, organisations develop strategies that focus on core competence, develop synergy and create value for customers.  Core Competence: An organisation's core competence is something it does exceptionally well in comparison to its competitors. It reflects a distinct competitive advantage (like superior research and development, mastery of a technology, distribution channel, manufacturing efficiency or customer service) that provides the firm (a) access to variety of products/markets (b) contributes greatly to customer benefits in the end products and (c) is an exclusive and inimitable preserve of the firm that is long-lasting and cannot be easily copied by competitors.  Synergy: When organisational parts interact to produce a joint effort that is greater than the sum of the parts acting alone, synergy occurs. Some call this the 1+1=3 effect. In strategic management, managers are urged to achieve as much market, cost, technology and management synergy as possible when arriving at strategic decisions (such as mergers, acquisitions, new products, new technology etc.). When one product or service strengthens the

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