Strategic Management Process

Introduction to Strategic Management

• Strategic Management: The process of establishing strategic objectives to achieve organisational success.
• Objectives:
  • Align strategic goals with overall organisational aims.
  • Adapt actively to environmental changes for long-term sustainability.
• Example: A company may strive to become a leader in eco-friendly products by ensuring strategies are in compliance with environmental policies.

Strategy Formulation

Introduction to Strategy Formulation

Role in Strategic Management

• Offers essential guidance for reaching strategic goals.
• Precedes active implementation and control within the strategic framework.

Defining Strategic Goals and Objectives

Vision and Mission Statements

• Vision Statement: Describes what an organisation aims to become in the future.
  • Example: "To be the leading provider of eco-friendly energy solutions."
• Mission Statement: Details the fundamental purpose and objectives of an organisation.
  • Example: "To supply affordable, renewable energy solutions that empower communities globally."

SWOT Analysis Tools

• SWOT Analysis: A framework for setting strategic goals.
  • Strengths: Internal attributes that facilitate achieving objectives.
  • Weaknesses: Internal attributes that obstruct objectives.
  • Opportunities: External factors that can be leveraged to the organisation's advantage.
  • Threats: External challenges that may threaten organisational success.

Environmental Analysis Tools

PESTLE Analysis

• PESTLE Framework: Utilised to examine external influences.
  • Political: Government policies, stability.
  • Economic: Economic growth, exchange rates.
  • Social: Cultural trends, demographics.
  • Technological: Innovations, technological developments.
  • Legal: Regulations, compliance matters.
  • Environmental: Climate change, sustainability concerns.

Porter's Five Forces

• Porter's Model: Analyses competitive forces within an industry.

Steps in Formulation of Strategies

Data Gathering

Brainstorming and Consultation

• Engage in brainstorming sessions with stakeholders to generate strategic options.

Evaluation Process

• Conduct a thorough evaluation of each strategic option.

Strategy Implementation

Introduction

Strategy Implementation: This stage focuses on turning strategic plans into actionable steps. This process is directly connected to achieving strategic goals and constitutes a pivotal phase in ensuring organisational victory.

Developing an Action Plan

• Objective Setting: Apply the SMART criteria:

  • Specific: Clearly defined targets (e.g., "Increase sales by 10%").
  • Measurable: Establish criteria to measure progress.
  • Achievable: Set realistic objectives.
  • Relevant: Ensure alignment with company strategy.
  • Time-bound: Determine deadlines.

• Timelines: Stress urgency by setting clear deadlines.

Resource Allocation and Responsibility Distribution

• Resource Identification: Identify necessary resources.
• Responsibility Allocation: Utilise the RACI Chart.

Communication Strategies

• Role of Communication: Crucial for effective conveyance of strategic directions.
• Tools for Communication: Employ reports, emails, and platforms such as Slack or Trello.

Motivation and Empowerment Techniques

• Motivational Theories: Explore frameworks such as Maslow's and Herzberg's.

Strategy Control

Introduction to Strategy Control

Strategy Control: Monitoring and evaluating a strategy's performance is fundamental to success.

Why is Strategy Control Important?

• Ensures alignment with long-term objectives.
• Assists in making well-informed decisions.

Establishing Performance Metrics

• Key Performance Indicators (KPIs): Metrics that reflect strategic goal achievement.

Monitoring Performance

• A systematic approach to compare actual performance against set targets.

Deviation Identification and Corrective Actions

Identifying Deviations

• Conduct regular reviews of performance.

Detailing Corrective Actions

• Corrective Actions: Steps taken to rectify deviations.

Continuous Improvement and Adaptation

• Implement the PDCA Cycle (Plan-Do-Check-Act).

Feedback Loops in Strategy Control

• Feedback loops facilitate continuous strategic refinement.