Question

I want ro know about Strategic Management

Answer 1

In an organisation, often there is a segmentation between the ownership and the management of the firm, especially in the case of all the firms that are not sole-proprieterships. In such firms, the management is respoensible for formulating and implementing the policies and strategies on behalf of the owners of the firm. This involves the in-depth analysis of the firm's working anf external environment and also the amount of resrouces at the disposal of the firm.

The following can be outlined as the main objectives of strategic management, as given by Michael Porter -

1. Establishing a unique market position for the firm

2. Clearly drawing a distinction between what to do and what not to do

3. Ensuring there a clear flow of the various different activities that are chosen by the firm

The following are the processes involved in strategic management of a firm -

1. Formulation of the strategies: Formulation involves a clear analysis of the various PESTLE factors - policitical, economic, social, technological, legal and environmental factors of the firm so as to come up with the most appropriate strategy for the firm that will aid in the long-term goals and objectives of the firm.

2. Implementation of the strategies: This is the part where the formulated objective is put into implementation. This involves the allocation of resources into the implementation, allocation of personnel and income streams, and also establishing the essential mechanism for the smooth flow and monitoring of the activities.