Organizations today are continuously evolving and employing new strategic management techniques to meet their potential. It is common for companies to regularly evaluate their performance through a gap analysis of where they are now and where they wish to be. This instructs their change in strategies and guides them to their goals. Organizations employ strategic management concepts to fill the gap between their actual performance and their potential.
Strategic management is concerned with a set of decisions and actions intended to improve the long-run performance of an organization (Boddy, 2009). It draws from the company’s will to adapt and survive in varying external and internal environments. Strategic management incorporates rationalization, planning ahead, setting clear goals, designing logical structures and monitoring systems for efficiency. It helps to determine a model of investment of resources, time, effort and capital. Thus it is a plan to reduce uncertainty about the future and to choose viable and potential solutions for growth.
Gap analysis is a measure of a company’s current performance as compared to its potential or predicted performance (Gap Analysis, n.d.). It is a useful gauge and assists companies in planning and organizing their teams, strategies, resources or products to move towards their potential performance. It identifies the gaps and reveals areas that can be improved. Hence, as seen in fig. 1, it is a means of classifying how well a product or solution meets a targeted need or a set of requirements with respect to time.
Figure 1: Gap Analysis, n.d.
The first question that gap analysis answers is ‘where are we now?’. It provides a basis for measurement of money, time, and human resou...
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Dess, G. G., Lumpkin, G. T., Eisner, A. B., & McNamara, G. (2012). Strategic Management: Text & Cases (6th Ed.). New York, NY: McGraw-Hill.
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According to Wheelen & Hunger, strategic management “is that set of managerial decisions and actions that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control” (2004, p2). All eleven good to great companies are benefit from strategic management and gain long term strategic advantage then lead to outperforming compared companies.
Generally, strategic management is a set of managerial decisions and actions that determines the long-term performance of a company, involving both internal and external environmental scanning, strategy formulation, strategy implementation, and evaluation and control. According to the study of strategic management, the corporation should concentrate on monitoring and appraising outside opportunities and threats based on an organization’s strengths and weaknesses (Thomas Wheelen and David Hunger, 2012).
John G. S., 2008: Strategically thinking about the subject of Strategy [e-journal] 9(4) p.2 Available through:
Throughout the global economic environment the desire to out-perform the competition is always present. In every situation, the companies who do better are the ones with superior strategy (Rothaermel, 2013). Strategic management is therefore important in every company, no matter what industry or market they operate in; and as stated by M. Carpenter and G. Sanders, 2013, is described as "The process by which a firm manages the formulation and implementation of its strategy". Strategic management is a constant topic under discussion with different schools of theorists with different beliefs and attitudes which is described as "A tense array of disagreement" (Rees, 2012).
Strategic management is the ongoing process of ensuring a competitively superior fit between the organization and its ever-changing environment (Kreitner, G13). Strategic management serves as the competitive edge for the entire management process. It effectively blends strategic planning, implementation, and control. Organizations that are guided by a coherent strategic framework tend to execute even the smallest details of their mission in a coordinated fashion. The strategic management process includes the formulation of a strategy/strategic plans, implementation of the strategy, and strategic control. A clear statement of the organizational mission serves as the focal point for the entire planning process. People inside and outside the organization are given a general idea of why the organization exists and where it is headed. Working from the mission statement, management formulates the organization's strategy, a general explanation of how the organization's mission is to be accomplished. Then general intentions are translated into more concrete and measurable plans, policies, and budget allocations. Implementation is the most important part of the strategy. Strategic plans must be filtered down to lower levels to be success. Strategic plans can go astray, but a formal control system helps keep strategic plans on track. In the strategic management process general managers who adopt a strategic management perspective appreciate that strategic plans require updating and fine-tuning as conditions change. Given today's competitive pressures, management cannot afford to let strategic plans sit as is. A strategic orientation encourages farsightedness. Sun Microsystems Inc. is one company that developed a strategy to become the competitive leader and become the most reliable in the net business. I will explain how Sun's strategy integrates their marketing, management, technology, and service functions into one effective strategy. First I'll discuss who Sun is and what encouraged them to develop their strategy.
...c management or planning presents a structure or agenda for dealing with issues and solving problems, therefore, understanding potential risks or pitfalls of strategic management and being prepared to deal with them is critical and vital to success. Strategic management not only permits top leaders and managers to be more proactive than reactive in building or developing their own potential or outlook in an organization, and it also lets them to make the first move and influence activities, consequently, executives and management can control or in charge of the company’s own future, and achieve its main goals and objectives. Overall, increasing cost-effectiveness and efficiency, improving the value for its stakeholders, and advancing customer services and management excellence are the key objectives of strategic management and decision making in an organization.
This indicates the importance of strategic management for organisations in making appropriate decisions and selecting strategies which will assist them to gain strategic competitiveness and as a result earn above-average returns.