By Rupal Jain
Let me begin by asking u a simple question. Do you think any organization can survive without any appropriate strategy? Definitely NOT! So let’s analyze what is Strategy, what is Management and what is Strategic Management.
Strategy is a well defined roadmap of an organization. It aids in bridging the gap between “where we are” and “where we want to be”. The objective of a strategy is to maximize an organization’s strengths and to minimize its weaknesses. Management is defined as all the activities and tasks undertaken for archiving goals by performing management functions like planning, organizing, leading, co-ordination, motivation and controlling. Strategic management is the management of an organization’s resources to achieve its pre-determined goals and objectives. Strategic management involves setting objectives, analyzing the external business environment, exploring the internal organization, evaluating strategies, implementing those strategies and ensuring proper monitoring and controlling for smooth implementation of those approaches.
External environment analysis is a study and scrutiny of macro-environmental forces which are beyond the control of any organization. After inspecting the external environment organizations adjust their business plans and draft their policies. Impact of micro environment can be accessed through PESTLE Analysis. PESTLE stands for political, economic, social, technological, legal and environmental. Companies like Compaq, Motorola, General Motors and Kodak were unable to adapt with the changing business scenario and hence suffered a huge setback. Indian companies like Ambassador and Fiat which were once a market leader in automobile sector failed to adapt and therefore perished. If the macro element brings positive effects to company, it is considered as Opportunity for the business house, on the other hand, if a factor prevents the development of the company, it is a potential Threat.
Internal factors are under the control of the company. It includes elements like Human resources, Capital/financial resources, Operational/ production efficiency, Organizational structure/ hierarchy, Infrastructure and communication facilities, Innovation/ R&D activities etc. After detailed examination by the management these factors can either be Strengths or Weaknesses for the organization. If one component fetches affirmative effects to a business house, it is considered as Strength and if any of the above factors averts the development of the corporation, it is regarded as a Weakness. SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis helps the organization to identify and compare their in-house Potency and Limitation with the macro Prospects and Dangers/risks.
In nutshell, in addition to various financial and non-financial benefits study of strategic management helps the organization to achieve their desired goals and objectives by focusing on their Vision and Mission statement in a well structured and focused way.