STRATEGIC MANAGEMENT PROCESS

Strategic management is defined differently by different authors. Strategic Management process

includes activities related to the formulation and implementation of strategies. It is meant to achieve
organizational objectives.
Phases in strategic management are:

A. Formulation of strategies
B. Implementation of strategies
C. Evaluation and control of strategies.

A. FORMULATION OF STRATEGIES:Organizational mission and objectives:

Organisastions are specially created to achieve some specific mission. All the efforts of a company are
directed towards achieving that mission.
The mission of an organisation is the purpose that makes if different from other organizations. The
mission is the image that an organisation tries to achieve.
In order to decide a strategy, objectives are also needed. Objectives are generally the final results which
the organisation tries to achieve.
Environmental analysis:
The second important part of the strategic management process is the environmental analysis. The
environment is made up of external part and internal part.
An organization operates within the environment which consists of many factors such as society,
competitors, technology and legal framework, political, psychological and cultural factors. An
organisation has to continuously interact with these environmental factors. This interaction process
provides opportunities or threats to the organisation.

Organisational Analysis:
Organisations strengths and weaknesses will decided whether it will be able to take on opportunities or
threats.
Every organisation must evaluate its strengths and weakness so that it can relate itself with the external
environment.
Hence environmental analysis will produce SWOT. SWOT means strengths, weaknesses, opportunities
and threats.
Identification of strategic alternatives:
When an organisation interacts with its external environment with the help of strengths and
weakenesses, it will result into various strategic alternatives. This process may result into many
alternatives.
So the managers will have to make a choice from among these alternatives. Hence, we can say that
strategic alternatives are identified based on strengths, weaknesses, opportunities and threats.
Choice of Strategy:
After identifying all the possible strategic alternatives, managers will have to make a choice from among
them. Any strategy that is chosen will surely affect the functioning of an organisation.
It is not necessary that the best strategic alternative is always chosen. There are many factors that affect
the choice of strategy.
Hence this stage A is considered to be a creative phase. It is called creative because strategy is
created in this stage.
B. IMPLEMENTATION STRATEGY
Once the creative and analytical aspect of strategy formulation has been completed, the organization
tries to convert the strategy into action. To bring results, the strategy should be put to action.
In strategy implementation, various activities involved are design for organizational structure according
to the chosen strategy, leadership, development of policies regarding marketing, finance, human
resource, production; allocation of resources etc.
C. EVALUATION AND CONTROL
Evaluation and control is a continuous process. For better implementation of the strategy it is necessary
that there is continuous monitoring of the implementation of the strategy so that suitable action is taken
whenever something goes wrong.
Actions may be required for correcting the implementation of strategy, choice of the strategy and change
in organizational mission and objectives.
Therefore strategic management process should never be taken as stable but as dynamic so that new
action is taken whenever there is change in any of the factors affecting strategy.

Implications of Strategic Management Process:

All the stages of the strategic management process are of sequential nature. It means that each
step must be undertaken in a sequence. In case of new organisations, all the stages might be in
sequence. But it may not be true for old or existing organisations. In existing organisations
mission, objectives are already decided. So it is not required to be done in the first stage.
The various stages of the process are inter-related. This means that each stage affects the other
and also gets affected by others. For example, first stage affects the second stage. Similarly
second stage affects the first stage. Hence all stages of the process are inter-related.
Feedback is necessary at each stage. This is because feedback will make sure that the strategic
management process is correctly moving ahead.
Strategic management is dynamic. This means that it is continuously changing. Since the
environment keeps changing, strategic management process will also have to change according
to the changing evvironment.