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Features of strategic management

INTRODUCTION

Strategy is a expression, which is associated with military technology. From a armed service stand point win in war is determined by strategy such as reformulating the plan to meet the new enemy. The term strategy produced from a Greek phrase 'strategia' which means the knowledge, tact, artwork, and quality of directing armed service of causes.

We can determine the strategy interpretative planning. It offers evaluation and determination of action, and collection of the best course of action, to attain the objectives.

Regarding to Randal B. Dunham and jon. L. Pierce "strategic management is organized, long-term planning that positions an company with its external environment. It is concerned with achieving a standard integration of the organisation internal section with concurrently integrating the company with its exterior environment".

Thus strategic management requires various activities such as willpower, formulation, execution and evaluation of strategy.

Features of strategic management

Strategic management is today's approach to control business enterprise effectively and also to face future difficulties. Listed below are the primary features.

  1. Organized and systemised method of managing: proper management is an structured and systemized method of managing enterprises it involves two stages. Strategic planning and execution.
  1. strategic planning stage involves determination of organisation targets, strategies to attain aims, and selecting the best plan of action to deploy resources to exploit present and future opportunities and to counter function present and future risks.
  2. the implementationphase over-all activities necessary to execute the proper plan. It involves development of action plan, implementation and monitoring, recycling and reformulating plan of the organization.
  • Based on structure of strategies: it comprises if strategies like strategic plans, functional plans, operating ideas, and organisational strategies.
  • Follow systems procedure: proper management principles follow system way. It is a treated as a system. In this technique, the organisational goals take precedence over departmental objectives.
  • Future focused: it is related to impact of present decisions on the near future product- market journey of the organisation.
  • Dynamic process: it is just a continues powerful process it reviews the complete planning process regularly.
  • Long range span of time: enough time plan of proper planning is long range. It means the organisation should arrange for an interval of 5 to a decade.

Dimension of proper management

Strategic management add a set of decisions and actions leading to the formulation and implementation of strategies made to achieve the best objectives of your organisation. The proper management encompasses responsibilities pertaining tactical planning, implementation planning and monitoring.

    1. Strategic planning: Planning is deciding in advance the future plan of action. It requires projecting the future course of action for the business enterprise as a whole and also for different parts of the organisation. Planning is thus the first step for action. It can help to bridge the distance between future and present.

Strategic planning includes all the practical areas of a company and is affected within the exiting and long term frame work of financial, political, technological, and public factors.

  1. Implementation planning: Implementation planning is related with optional aspects of strategic management. To implement strategies suitable company structure should be suitably designed. It is designed on the basis of overall goals of the company. While designing company composition environmental factors like financial, social and politics technological, ethical, competitive, factors should be studied in to factor. The composition should be designed in such a way that it is in a position to attain over-all objectives on the basis of strategies dependant on the very best level management.
  2. Monitoring: Effective formulation of strategy, its execution through making of ideal organisational structure, and development of organisation strategies are required for the success of an company. Apart from this, to know whether strategy is effective or not, monitoring is necessary. The management should screen action plans, and also to see whether real results are complementing with programs. It there is certainly any deviation; corrective operating should be taken to change strategy. Thus monitoring is the essence of tactical management.

Steps in tactical management.

The tactical management phase will involve the next steps.

  1. Creating the hierarchy of strategic intent.
  2. Formulation of strategies.
  3. Implementation of strategies.
  4. Performing strategic analysis and control.

Hierarchy of strategic intent.

Strategic intent refers to the purpose that the company is constituted. These may be targets and goals of the company. The hierarchy of proper purpose lays of the foundation of the proper management. The organisation expresses its strategic intent through a series of formulations on eyesight, mission, business description, goals and strategies.

a) eye-sight.

Each organisation should have vision. It's the goal or future aspiration of the organisation.

Kotler defines "perspective as a description something (an company, corporate culture, a business, technology, a task) in the future. Vision is a robust motivator for action. It inspires the management to do something".

b) Quest.

mission is an important part of proper objective. Thomson defines objective is the " essential reason for the organisation, regarding especially why it is an existence, the type of the business enterprise it is within, and the customers it seeks to provide and meet "

Mission statement

Mission statement can be prepared based on the vision of the company. The mission declaration indicates the essential reason of the life of organisation. Once it is formulated, it serves the organisations a long time. A mission should have the next features.

  1. Feasibility: A quest should be reasonable & achievable. Which means it ought to be feasible. The feasibility is based upon the option of resources with the organisation to achieve the vision.
  2. Precise: it will not too small or extensive.
  3. Clear: it should be clear.
  4. Motivator: it will motivate the company to work.
  5. Distinctive: it should not be indiscriminative.
  6. Sign of major the different parts of strategy: it will show the major components of the strategy to be implemented by the organization.

c) Business.

For defining the business enterprise, first of all the organisation should know very well what is the business enterprise it is going to be conducted. The business is identified at different levels.

d) Goals and objectives

Goals denote what an organisation is likely to complete in future time frame.

The goal is the long-term results an organisation seeks to accomplish in basic objective. Objective should not be static they should be dynamic. They are the expected results. Which have to be achieved usually within a specified time frame.

Formulation of strategies

It is the next step in tactical management. In this task the next process should be carried out.

  1. Environment appraisal
  2. Organisational appraisal
  3. Consider different strategies
  4. Analysis, section of the strategies, formulation of strategies and preparation of proper plan.

External research or environmental appraisal

Environmental appraisal helps to discover the opportunities and hazards operating in the environment and organisational appraisal or inside analysis helps to learn the power and weakness of organisation in order to create a match between them. A number of the basic targets of strategy are to combine the company with environment. For this function understanding of environment is necessity. So an environmental appraisal to be done. It includes assortment of relevant information from the surroundings or environmental issues, interpreting its impact in the foreseeable future working of the organisation and determines the opportunities offered and menace confronted by the company in future.

Environmental scanning. To recognize opportunities and dangers affecting the business enterprise it should be monitored properly and to acquire data to derive information about opportunities and risks that affect the business enterprise. The process by which organisation screen their significant environment to recognize opportunities and dangers impacting their business is recognized as environmental scanning.

Internal analysis of organisational structure

Organisational appraisal related to appraisal of interior environment. The purpose of organisational appraisal is to determine the organisational potential in terms of the durability and weakness that rest in the different functional areas. That is necessary since the strength and weakness need to be matched with the environmental opportunities and dangers for strategy formulation. Organisational appraisal helps the company to decide in what it can do. The important method used for internal analysis is value string analysis, bench marking etc.

SWOT Analysis

SWOT examination is under taken to understand the firm's external and internal conditions. A conscious identification of the relevant environment enables an organisation to focus its attention on those factors, that are intimately related to its objective, purpose, goals, and strategies.

The power and weakness of the organization is the cornerstone of business plan formulation. SWOT means analysis and comparative strengths and weakness of a company with regards to competition, and environmental opportunities and hazards, which a company may likely to handle. So that it is a organized study and identification of those aspects and strategy that best suit the individual company position in a given situation. An effective strategy should improve company business power and opportunities and at exactly the same time reduces its weakness and hazards. Strength is the power and excellence, which resumes skills and advantages in relationship with competitors and the requirements of the community a company functions. It identifies the competitive advantages and excellence, which a business can exert in a market place.

Weakness is the incapability, limitation and deficiency of resources. It hinders the development of the company.

Consideration of proper alternatives

After formulating aims, and having examined the power and weakness of the firm and environmentally friendly opportunities and risks, the next thing is to create possible alternation strategies. Environmental appraisal and organisational appraisal led to the generation of strategic alternatives. There may be different alternative ways of achieve aims must be looked at to make the choice to be huge.

Strategic research and choice

Strategies should be chosen at the organization level, business level and efficient level. Different types of strategic alternatives are believed to adopt the right strategy. This necessitates the evaluation of option strategies with reference to certain criteria like suitability and feasibility, adaptability, etc. A strategic choice needs to be created from among these alternatives.

Strategic choice is a decision making process. It's the decision to choose the best strategy from among the list of grand ways of meet the organisation objectives. The procedure of strategic choice includes focusing on alternatives, considering the selection factors, evaluation of strategic alternatives and making the proper choice.

Strategy implementation

After the selection of appropriate strategy it is usually to be implemented. It is the operation part. Execution strategy is the procedure by which a chosen strategy is put into action. It involves the look and management of systems to attain the best integration of individuals, framework, process and resources in reaching organisational objectives. The term implementation of can be used in a wider sense. In order that is includes the formulation of plan put into action to strategy. Formulation of different level of strategies can be an essential and essential requirement of important implementations in a multi - product business.

Three level of strategies should be formulated.

  1. Commercial level strategy
  2. Business level strategy
  3. Functional level strategy

Corporate strategy

Corporate strategy the complete process of identifying major business activities, the near future productsa and services, the marketplace, concentrate on customer group, supply, financiers and the techniques to be used to concern the competitors, it is also related to the major outside interest group, prospects of stake holders, information for future years projected performance, and analysis of the environment and logical behind the company. All these are necessary for formulations of organisation's purpose, mission, targets, goals insurance policies and strategies. It really is a permanent strategy it is decided by top level management.

Business strategy or competitive strategy

It is the managerial arrange for jogging and directing a small business unit. It identifies what's the product-market pose of a person business product. Business strategy can be involved with strategies regarding the product blend. Market sections, competitive edge, how to position the business in the market, positioning of different components of business etc. The very best - level executives of the tactical business device are in charge of deciding of business strategies.

Functional strategies

it is the plan to manage a main subordinate activity inside a business. Strategies are determined for each efficient activities of, an organisations like marketing strategies etc. All of the efficient strategies should support to the fulfillment of overall business strategy.

Michael Porter's five forces

In his five makes model, market factors can be analysed in order to make a proper assessment of competitive position of a given supplier in a given market. The five causes that the porter suggests the drive competition are:

  1. Existing competitive problem between suppliers.
  2. Threat of new market entrants.
  3. Bargaining ability of purchasers.
  4. Ability of suppliers.
  5. Threat of alternative products( including technology change)

Typically this five forces model is shown as a series of five bins.

(http://www. shopzone. co. nz/mworld/porter. htm

Generic ways of counter the five forces

Strategy can be produced on three levels- corporate and business level, business device level and efficient level. The business enterprise unit level is the primary framework of industry rivalry. Michael porter recognized three generic strategies (cost management, differentiation, and concentrate) that may be implemented at the business enterprise init level to produce a competitive advantage. The correct common strategy will position the solid of leverage its strength and reduce the chances of the undesireable effects of the five pushes.

Cost leadership strategy

This generic strategy for a given quality level. The firm markets its products either at average industry prices to earn a earnings higher than that of opponents, or below the average industry prices to gain market share. In the event of a price conflict, the company can maintain some profitability while the rivalry suffers loss. Even with out a price conflict, as the industry matures and prices refuse, the firms that can produce more cheaply will remain profitable for a longer period of time. The cost control strategy regularly focuses on a broad market.

Differentiation strategy

A differentiation strategy demands the introduction of something or service that implies unique accredited that are valued by customers and this customers perceive to be better than of different from the merchandise of competition. The worthiness added by the uniqueness of the merchandise may permit the firm to fee a premium price for it. The organization hop that the higher price will more than cover the extra cost incurred in offering the unique product. Due to the product's unique traits, if suppliers increase their prices the organization may in a position to pass along the price to its customers who cannot find alternate products easily.

Focus strategy

The concentration strategy give attention to a narrow section and within that section makes an attempt to get the cost gain or differentiation. The need of the group can be better serviced by focusing entirely onto it. A firm using emphasis strategy often loves a high amount of customer loyalty, which ingrained devotion discourages other firms from challenging straight.

Example: Strategies of Reliance Sectors Limited.

Here is given an types of reliance showing how strategies are chalked out to take the maximum benefits of the situation. The success of reliance has perhaps no parallel in the recent years in the history of Indian business. It is continuing to grow almost out of proportion. The fantastic expansion of company may be related to one factor, that is, expansion strategy implemented by the business, thus relating itself properly to its environment. The major components are described below.

1. Analysis of environment.

The company's success is based on the fact which it identified the opportunities made available from the environment and acted appropriately. The business was mainly available of export and transfer, export mainly high quality and importing nylon yarn. Over the period of energy, it realised that the Indian market was offering gradually the opportunity for introducing high - priced high quality fabrics. Other produces didn't take up this because they thought that the full total market was quite limited. Without doubt, market was narrow but little by little it was offering potential for immediate increase. There Reliance inserted the field at the right time.

2. Building inner strength

Reliance developed strengths over the period of their time. At the initial stage, it experienced the benefits of doing business in the area of high-priced fabric because of its export. Its development capacity was limited. There for the company required the steps to increase the production capacity. Following will be the various actions considered: expansion of filament yarn twisting capacity, growth of crimped yarn twisting capacity, expansion of twisting capacity, Enlargement of processing team by installing aircraft dyeing machines, enlargement of producing facilities, development of spinning capacity.

3. Marketing strategy

The company followed unique marketing strategy. It concentrated in those area where the competitors were not successful, that is, operation in high-priced, high quality, modern designed materials. For this purpose, it offered products of matching requirements. Further it offered family buying of textiles in one store, that is suiting, shirting, sarees and dress materials.

4. Financial strategy

The company needed huge fund for its enlargement programme quite frequently. For this function it didn't rely upon the loan from financial institutions. It entered many times in the capital market with convertible debenture issues. Since the capital market was buoyant, it did not have any issue in providing its securities.

CONCLUSION

Through the above conversations we can understand that a strategy is an essential part of any business environment. Business enterprises in a competitive environment, the very best level management may have to bring an alteration in strategies and policies in accordance with tactics followed by its competitors. So the company should follow the above strategies corresponding to change in rivals strategy, social, politics and economical strategies.

The business enterprise organisation should change their vision, objectives and portfolio of business, marketplaces and competitive ways of face competitive challenges and also to exploit work at home opportunities. The most notable level management should adopt the proper management to handle challenges emerging in the management field.

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