Strategic Management

Strategic Management is originated in the 1950s and 60s.

SM can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organisation to achieve its objectives.  

Strategy definition by different authors:

Michael Porter

For the leading strategy guru, Michael Porter (1996), strategy is about achieving competitive advantage through being different – delivering a unique value added to the customer, having a clear and enactable view of how to position yourself uniquely in your industry

Mintzberg and Waters

The entirety of strategic management can be abridged as

the sequence of activities, what Mintzberg termed as ‘streams of behaviour’

(Mintzberg and Waters, 1985), undertaken by an organization in the following stages:

·         formulating and choosing its business strategy,

·         implementing the chosen strategy to achieve its envisioned objectives,

·         managing and sustaining the implemented strategy to maintain its competitive advantage in the market

Thompson & Strickland

An organisation’s strategy consists of the moves and approaches devised by management to produce successful organisation performance.

Strategy is management’s “action plan” to

·         Attract and satisfy its customers

·         Run its operations

·         Compete successfully against rival firms

Achieve organizational objectives and targets

The strategic management process

A mission statement focuses on current business activities.

Concerns “who we are and what we do”

·         Current product and service offerings

·         Customer needs being served

·         Technological and business capabilities

Strategic vision

Effective strategy making begins with a vision of where the organisation needs to head.

Tasks include:

·         Creates a roadmap for the future

·         Provide long term direction

·         Give firm a strong identity

Concerns a firm’s future business path -“where we are going”

·         Markets to be pursued

·         Future technology-product-customer focus

·         Kind of company that management is trying to create

A vision should be exciting and inspirational and communicated in a way that challenges and motivates a workforce. It should also arouse a strong sense of organizational purpose and galvanizes people to live the business.