What Is Strategic Management And Its Phases

Strategic Management : Now, more than ever, in times of uncertainty and instability, it is crucial to define a course on which to guide the company. Managing strategically is the key for the organization to achieve its objectives, but what is strategic management? Why is it important? What are its stages?

What Is Strategic Direction?

To speak of strategic direction is to refer to the process of formulating functional strategies that allow the development of the organization. Its maxim is to enhance the strategic competitiveness and performance of the company, seeking customer loyalty. Thus, strategic management is the most important part of business management. 

This strategic plan takes into account five basic activities: 

• the scope or field of activity;
• distinctive capabilities or competencies;
• competitive advantages;
• synergy and cooperation and
• How to add value to the customer.

Defining and applying a good strategic direction is not an easy task. It implies accompanying the actions of added value and innovation taking into account the unstable and changing contexts in which the business finds itself. 

Keys To Strategic Management: Mission, Vision, Values ​​And Philosophy Of The Company

All strategic management must seek to fulfill the vision, mission, philosophy and values ​​of the company, generating a differential value proposal for the client adapted to each market situation and environment. The vision, mission and values ​​are stable and long lasting. The strategy must be flexible and adapted to each moment, seeking to generate value for the client with a sustainable response that is respectful of the SDGs.

Mission

Closely linked to the objectives, the mission describes the company’s reason for being, as well as its main objective. It must be unique and in accordance with the principles of the business. 

View

This point refers to the aspirational, that is, it responds to who we want to be. The vision of a company or business has a motivating and inspiring character, but it must also contain realistic and feasible goals. 

Philosophy And Values

It consists of the ethical principles, beliefs or qualities on which the company culture will be based. 

SMART Formula, Intelligently Define Your Goals 

As in any strategy, the objectives are the alma mater. It is important that in the strategic direction of the company the objectives are as clear and realistic as possible. For this, the SMART formula is usually used , which means intelligent in English, and at the same time it is the acronym of the adjectives:

• Specific . 
• Measurable w/Measurement.
• Achievable (Achievable).
• Relevant (Relevant).
• Time-Oriented (Limited in Time).

Thus, the objectives must be concrete and very defined; quantifiable; feasible; relevant; and with expiration date. If it is not possible to define goals that meet these characteristics, the company will sail aimlessly, and this will cause a greater risk of losses.

Phases Of The Strategic Management Process

This process is made up of three basic and interrelated phases throughout its development:

Strategic Analysis

In this first phase or stage, the factors that make up the SWOT analysis are determined : the set of threats and opportunities that can affect the company (external analysis), as well as its strengths and weaknesses (internal analysis). The definition of the mission and objectives of the company is also taken into account.

Strategy Formulation

Once the strategic analysis has been carried out, alternatives are formulated and designed so that the company can achieve its mission and objectives. It is in this phase when corporate strategies define the directions of business models and growth methods of the company. For this, functional strategies will be defined that allow its rapid implementation.

Implementation And Control Of Strategies

Once analyzed and defined, it is time to implement and put the strategy into practice. In this phase, in addition to having a well-defined plan, it will be essential how you lead and how you communicate. The manager’s ability to lead and stimulate his team will be key to achieving the objectives. Leading is not commanding or ordering, it is inspiring, delegating, measuring and acting by example . It is managing with the “ Managing by walking around ” method.

This last phase is also composed of the stage of planning and control of strategies. All actions must be defined taking into account the measurement of results. Thus, mechanisms must be established to quantify the effects of the actions.

Also Read : Growth Marketing