Strategic Management is all about identification and description of strategies that managers can carry so as to achieve better performance and competitive advantage for their organization.An organization is said to have competitive advantage if its profitability is higher than average profitability for all companies in the industry.
Strategic Management can also be defined as bundle of decisions and acts which a manager undertakes and which decides the result of firm’s performance.The manager must have a thorough knowledge and analysis of the general and organizational environment so as to take right decisions.They should conduct SWOT ANALYSIS (stenghts, weakness, opportunities and threats) i.e.,they should make best possible utilization of strengths ,minimize the organizational weaknesses,make use of arising opportunities from the business environment and shouldn’t ignore the threats. Strategic Management is nothing but planning for both predictable as well as unfeasible contingencies.It is applicable for both small as well as large organizations as even smallest organizations face competition and by formulating and implementing appropriate strategies,they can attain sustainable competitive advantage.It is a continuous process that evaluates and controls the business and industries in which an organization is involved; evaluates its competitors ,set goals and strategies to meet all existing and potential competitors;and then reevaluates strategies on a regular basis to determine how it has been implemented and whether it is successful or does it needs replacement.
· COMPONENTS OF STRATEGIC MANAGEMENT
The strategy statement of a firm sets the firm’s long-term strategic direction and broad policy directions.It is a blue print of firm,s activities for upcoming years.The main components are:
Mission statement is the statement of role by which an organization intends to serve it’s stakeholders.It describes what organization does (i.e., present capabilities), who all it serves (i.e., stakeholders), it’s uniqueness(i.e., reason for its existence).It talks about organizations present (i.e.,what we
are).For instance MICROSOFT’S MISSION “is to help people and businesses throughout the world to realize their full potential.”
FEATURES OF MISSION
· Must be feasible and attainable
· Should be clear enough so that action can be taken
· Should be inspiring for the management ,staff and society at large
· Should be unique
A vision statement identifies where the organization wants to be in future or where it should be to best meet the needs of stakeholders.It describes dreams and aspirations for future.For instance MICROSOFT’S VISION is “to empower people through great software,any time ,any place or any device.
FEATURES OF VISION STATEMENT
· It must be clear
· The dreams and aspirations must be rational/realistic
· The should be shorter
A goal is a desired future state or objective that an organization tries to achieve.Goal specify in particular what must be done if an organization is to attain vision or mission.
They are defined as goals that an organization tries to achieve within specified time. These are also said to be QUANTITATIVE GOALS because they are restricted to specific time-frame.
These are various components of strategic management which are to be taken care before starting business.
One of the major role of strategic management is to incorporate various functional areas of organization completely.Another major role strategic management is to keep continuous eye on goals and objectives of organization.