The Strategic Management Process
Strategic management is a group of actions and decisions created by a management team to help determine the long range outcome of the company. In this paper one will learn about the four phases of the strategic management process as well as why it is important for companies to have one.
Basic financial planning
Phase one of the strategic management process is Basic Financial Planning. The basic financial planning phase is also known as the formulation phase in the strategic management process because it is during this phase where the company forms and develops a well thought out strategy to help achieve the company’s main objectives for the next year and then propose a budget and develop a strategy based on little information from the sales force. While this ...view middle of the document...
This is a very time consuming part of the process as management will continuously collect feedback from others working on the project as well as they need to make sure that they are staying within their budget for that project.
Externally oriented (strategic) planning
The Externally Oriented (strategic) planning is the third phase in the strategic management process. The externally oriented (strategic) planning phase is also known as the evaluation phase because it is during this phase when senior management meet to evaluate and update their current strategic plan without much input from lower level management. It is also during this phase where management generally takeover the process of initiating the strategic management process because they are frustrated with the results. To help them better address and evaluate the success of the current strategic plan it is best that they use a gap analysis. It is this tool that will help them determine their current results verses where they would like to be.
The fourth and final phase of the strategic management process is Strategic Management also known as the modification phase. This phase is used by management to when the company has not reached all of their desired goals. It is during this phase when new ideas are presented and modifications are made to help the company reach their ultimate goal. Often companies will look to internal and external consultants for help in the modification of their current strategic plans.
In conclusion it is important for a company to have a strategic management process in place so they can evaluate the long- term performance of their business. It also gives the company a better understanding of their strategic vision as well as helps them to focus more on what is important to the company, and gives them a better understanding of the rapidly changing environment.