The primary components of a strategic management process vary in terminology; however, to effectively implement any strategy, the core components must be sufficiently considered. In basic corporate terms, strategy is defined as the plan that the organization develops to accomplish its primary long-term goals and objectives. These goals and objectives are critical to ensure continual business success and meet expectations of all stakeholders. In terms of the shareholders this means assuring their investment returns positive dividends. So, a critical component to a strategic plan is to gain a competitive advantage over a continuously environment.
As is normally the case with any plan in order for it to be executed successfully it needs to be planned and managed efficiently. There must be a strategic management process operated by the organization that consists of three primary elements—strategic position, choices and setting the strategy into motion.
STRATEGIC POSITION
In order for strategic management to function correctly the organization must be aware of its current or strategic position and what elements potentially could affect the position. External forces must be considered appropriately and integrated in to the strategic plan. The forces usually vary over many issues and understanding them and how they will affect the business is essential to enabling management to select the opportunities and threats to its strategic plan.
Strategic Management Process Paper 3
An example might be, the legal, political and social elements experienced substantial change for the past decades; with increasing regulations introduced, particularly in respect of corporate government and the dynamic expectations of customers that include issues such as the shift towards organic products and fair trade. This is similar to commercial organizations that have been impacted by the increase in technological development and concerns with environmental issues. A clear focus on these factors will enable the organization to assess what opportunities and threats exist that need to be considered with the strategies implementation.
Another component to be considered is an effective internal review; that designed to show whether the business has the ability to execute future strategies. This assessment is designed to evaluate the strengths and weakness of the organization. They will need to know that it has the required resources to execute the plans and also what competences exist to provide the business with an advantage over its competitors. This is known as competitive advantage.
STRATEGIC CHOICE
Strategic choice is the process of decision making. This process happens after a review of all applicable data has been completed. In the business world the critical element of choice is based upon recognizing which areas of the business provide the best opportunities for