Strategic Management is that set of managerial decisions and actions that determine the long-run performance of a corporation and includes environmental scanning, strategy formulation, strategy implementation and evaluation and control. The study of strategic management therefore emphasizes the monitoring and evaluating of external opportunities and threats in the light of corporation’s strength and weaknesses.
Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.
As this definition implies, strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success. The term strategic management in this text is used synonymously with the term strategic planning.
The latter term is more often used in the business world, whereas the former is often used in academia. Sometimes the term strategic management is used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation. The purpose of strategic management is to exploit and create new and different opportunities for tomorrow; long-range planning, in contrast, tries to optimize for tomorrow the trends of today.
The strategic management consists of different phases, which are sequential in nature. There are four essential phases of strategic management process. In different companies these phases may have different, nomenclatures and the phases may have different sequences, however, the basic content remains same. The four phases can be listed as below.
- Defining the vision, business mission, purpose, and broad objectives.
- Formulation of strategies.
- Implementation of strategies.
- Evaluation of strategies.