Strategic Management Model

         Strategic management is a process of strategy formulation, implementation and control. Its main aims is to achieve the organization objectives and goal. It has a certain model comprising a process from developement of vision and mission statement to strategy evaluation and control.  

1. Development of Vision and Mission Statements

2. External Environment Analysis

3. Internal Environment Analysis

4. Establish Long-term Objectives

5. Generate, Evaluate and Select Strategies

6. Implement Strategies 

7. Strategy Evaluation and control

    EXPLANATION

1. Development of Vision and Mission Statements:

                    In the first step of strategic management model, organization mission and vision are developed. Vision is the picture of desired future state of an organization. It is nicely worded one sentences statement. It specifies the direction that a company intends to follow in developing and strengthining its business. A clear vision provides the foundation for developing a comprehensive mission statement.

                  A mission statement defines the business in terms of the customers, employees, suppliers and the community. It reflects every facts of the business: the range and nature of the product the business offers, pricing, quality, service, marketplace position, growth potential, use of technology and the relationships with the customers, employees, suppliers, competitors and the community.

2. External Environment Analysis:

                    In the second stage of strategic management, external environment of the firm is analyzed. The external environment comprises the factors which are external to a firm. The external environment of a firm is composed of operating and remote environment. The operating environment consists of stakeholdres as customers, shareholders, suppliers, media, government, pressure groups and financial institutions. 

           External environment is analyzed to assess the likely oppoytunity or threats. An opportunity is a condition in the general environment that if expoloitted effectively, helps a company achieve strategic competitiveness. 

3. Internal Environment Analysis:

                     It consists of the conditions and resources which are internal to an organization. It is also called the firm or resource environment. It is controllable to firm in the longrun. It determines the relatives strength and weaknesses of the firm. 

           Strength are the positive internal characteristics that the organization can expoit to acheive its strategic goals. Weakness are internal characteristics that might inhibit or restrict the organization performance.

4. Establish long -term Objectives:

                  The expected outcomes of an organization are known as objectives. They convert the strategic vision into specific performance targets. Objectives show the managerial commitment towards performance achievement. In the process of strategic management, long-term objectives should be formulated after environment analysis. 

              They are realated to strengthening market power, competitiveness, and future business prospects.

5. Generate, Evaluate and Select Strategies:

                  After proper  analysis of the environment and establishment of long-term objectives, strategic alternatives are generated at different level:

    a. Business level

    b. Functional level

    c. Suitability 

    d. Acceptability

    e. Feasibility

6. Implement Strategies:

            In this stage, the strategies are transalated into action i.e. they are implemented. The essential elements of strategy implementation are given below.

     a. Structure design: Clear organizational structure is very important for the successful implementation of strategy.

     b. Resource planning: Implementation of particular strategy demands the commitment of resources over a long period of time.

     c. Management system: Management system is very important for the effective implementation of strategy.

7. Strategy Evaluation and Control: 

               Under this stage of strategic management model, organizational performance or activities are monitored to ensure that the direction of strategy implementation is in the right way. The assumptions about the internal and external environment in which the current strategy is based are reviewed and the actual performance is measured.