These are related to production. Over the next three years, the company increased its market share by 30 % and doubled its net profit. At a minimum, leadership characteristics necessary for this stage in the strategic management process include the ability to operationalize strategic plans, craft innovative solutions, consider long-term goals and how leadership's decision-making affects stakeholders. And in such situations strategic decisions rely mainly on judgment and intuition. Many managers come and many managers go away from the task of formulation.
If someone asks any businessperson to define his business, almost everyone sill give a manufacturing definition. In fact the internal environment is forced by the external environment to specify the goals and along with the guidance of external environment to achieve these goals. The value of teamwork, which leads to task-oriented organizational flexibility. Administrative decisions are routine decisions which help or rather facilitate strategic decisions or operational decisions. Following are some of important considerations that should be followed for best strategy formulation.
Business runs in a cyclical mode: There are periods of stability interrupted by periods of radical and revolutionary change. This set of ideas places some limits on the sweeping task just sketched as the role of strategy. Risks Some of the risks involved with strategic information management systems include implementation challenges, incompatibility with client databases and human error. Present businesses that have already created a strategic management plan will revert to these steps as per the situations requirement, so as to make essential changes. Strategic management is a process. A strategic plan is only as useful as the quality of information that goes into it. Customers, suppliers, new competitors, substitute goods and rivalry are the five forces behind business-level strategies.
An industry analysis can provide business owners with information regarding effective business-level strategies currently in use in by other companies. Repeatedly, they have been winning market shares away from more traditionally managed competitors. In this phase, resource allocation is both dynamic and creative. Incoming and outgoing data can be sorted and cross-referenced according to a wide range of individually specified controls and parameters, which include the company's business verticals and horizontals, individual clients, demographics, geographic location and business function. Too Much Data: Sometimes strategy formulation may suffer due to too much data but not enough information. Strategic Management Process Before talking about the stages of strategic management process, it is important to know what is Strategic management process? International business, new manufacturing process technology, the value of our products to customers, and alternative channels of distribution have all been used successfully.
It even resisted the move of the trade association to reduce government-mandated safety requirements for handling the newer products. Normally, the way people define their business has been termed by a marketing scholar as marketing myopia. Based on their knowledge of their own cost structure, can they estimate what the impact of a product or marketing change will be on their plants, their distribution system, or their sales force? All this may have blurred the concept of strategy, but it has also helped to shift the attention of managers from the technicalities of the planning process to substantive issues affecting the long-term well-being of their enterprises. It is the duty of the managers to have sufficient know-how about the problems and improper working of strategies. Formulation of strategic Alternatives: In its journey towards its destination the strategy formulation has to find and evaluate different strategic alternatives. An organisation can reach its destiny vision only if it can create value for the firm and its stakeholders mission.
This progression can be segmented into four sequential phases, each marked by clear advances over its predecessor in terms of explicit formulation of issues and alternatives, quality of preparatory staff work, readiness of top management to participate in and guide the strategic decision process, and effectiveness of implementation see the Exhibit. Exhibit Four Phases in the Evolution of Formal Strategic Planning The four-phase model evolution we shall be describing has already proved useful in evaluating corporate planning systems and processes and for indicating ways of improving their effectiveness. Benefits The benefits of strategic information management can be felt from the executive level right down to the functional staff level. Integration: Integration means joining activities related to the present activities of a firm. It involves a systematic analysis of the internal strengths and weaknesses financial, managerial, marketing, or technological and of external opportunities and threats like change in demand, law, or technologies. Implementation of strategy involves a number of interrelated decisions, choices, and a broad range of activities.
The quality of financial analysis is generally very poor. Ask a railway company the reply will be in railway business. Situational Analysis: The three kinds of environments need to be scanned — External, to know of Opportunities and Threats , Internal to know of strengths and weaknesses , and Industry to determine competitive scenario c. Operational decisions are not frequently taken. Green has special expertise in the areas of health, recreation, travel, home and garden, and personal finance. In fact the two are mutually reinforcing. In retrospect, one chairman confided that he had overestimated the value of confidentiality.
No investment, and only minimal share loss. Manu Melwin Joy Assistant Professor Ilahia School of Management Studies Kerala, India. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it. Operational decisions are technical decisions which help execution of strategic decisions. The concept of strategic management described in this article differs somewhat from that of H. Objectives represent the ends which the firm is seeking to attain, while the strategy is the means to these ends.