Strategic management is the set of decisions and actions that result in the formulation and implementation of plans that help a company achieve its objectives. Completing these nine tasks will show you where your company stands compared to competitors and what you need to do to strengthen your position in the marketplace.
- Formulate a mission statement, including the company’s purpose and goals (e.g. Aflac, the insurance giant, says its mission is “to combine aggressive strategic marketing with quality products and services at competitive prices to provide the best insurance value for consumers”).
- Conduct an internal analysis of the companies strengths, weaknesses, and core competencies. Answer the questions: a) What are we better at than anyone else in the industry? b) What are we good at, but it doesn’t set us apart? c) What are our weak spots? Hint: the best companies spend time focusing on their strengths and minimizing their weaknesses.
- Assess the external environment including threats to revenue growth and opportunities for expansion. What are our competitors doing to grow? Are they cutting costs? Dropping rates? Improving technology? How will we respond to their actions?
- Analyze opportunities for growth based on available resources.
- Identify the best options through the lens of the available resources and the company’s mission. Based on what we have and what we want to accomplish, what options are best for us at the present moment?
- Select long-term objectives and establish a vision for the future. What measurable, broad activities do we need to implement to get what we want in the long-term?
- Develop annual objectives and short-term (monthly or quarterly) strategies that will enable the company to achieve its long-term goals. How can we break down the broad objectives into manageable, “bite sized” pieces?
- Implement business decisions by allocating resources according to personnel, technology, and reward systems. How many people to we need to accomplish our objectives? What tools will we provide and how will we reward them?
- Evaluate decisions and make adjustments as needed. What were the results of our short-term actions? If they helped us get closer to the long-term goal, how can we enhance performance? If we are farther away from our goals, what changes can we make for improvement?
business strategy incorporates these nine tasks to plan, organize, and control decisions and activities to give the company the greatest chance of long-term (3-5 year) success. It is a company’s blue print, and though it doesn’t cover everything a company will do – no one knows exactly how the market will respond to certain activities – it does provide guidance for managers and front-line employees as they go about the daily tasks of implementing the strategy.
