The strategic management process aims at delineating the organization’s strategy. It is defined as the process by which managers make a choice of a set of strategies for the organization to achieve efficient functioning and higher accomplishments. It is a continuous process that appraises the business and industries where organization is involved, evaluates its competitors, defines targets to meet all the present and future challenges and finally assesses each strategy periodically. Strategic management is a particular course of action that is meant to achieve a corporate goal. By and large, the owners, founders of the company take the first step of the process. They lay down the structure responsible for carrying out several functions such as providing direction and guidance to the employees, setting up measurable goals with defined time spans and designated duties. Planning, budgeting, acquiring resources, maintaining resources and using follow-up techniques to resolve key issues are key Continue reading
Strategic Management Terms
Organizational Downsizing – Definition and Reasons
Organizational downsizing is the conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness. Downsizing is being regarded by management as one of the preferred routes to turning around declining organizations, cutting cost and improving organizational performance most often as a cost-cutting measure. Main Reasons for Organizational Downsizing Corporate downsizing has been the biggest fallout of the troubled times, the world is witnessing. As we continue our efforts to fight the global downturn, downsizing has become a stark reality. There are a number of reasons why a company downsizes its employee base. Merging of two or more firms: When a certain firm combines its operations with another firm and operates as a single entity, in order to stay in profit or expand the market reach, it is called a merger. In case of a merger, certain positions become redundant. The same work is done by two Continue reading
Strategic Planning Process – Five Stages of Strategic Planning Process
Any company who is trying to become major power in market has to have a properly defined strategy. Strategy is the term which is used to define specific outline according to which the company is going to act in future. It gives a well designed structure that the company will follow in coming time. Strategy is decided according to changing market trends, changing customer’s needs, changing stake holder’s interests and changing actions of competitors. Company need to have proper information about the target they are going to achieve. As per the target they set a strategy. Organizations have definite values and missions. Their stakeholders have several expectations from the company and its operation. Company should regulate their proceedings under some stretch or domain. The management of the company work, regulation of its actions, deciding the proper strategy for future, and successful implementation and evaluation of all the strategy comes under Continue reading
Economic Environmental Scanning
Firms that anticipate economic change and identify the constituents through which that change will be applied; can better adapt goals and action plans. Shareholder expectations of financial return are dictated in part by alternative investments and their associated return and risks. Interest rates, tax policies, shareholder incomes, availability of funds for margin-purchased equity investments, and expectations of future economic circumstances will shape changes in equity investor profiles and/or the financial performance expectations of the firm’s owners. Personal income, savings, employment, and price-level trends can have dramatic effects on the attractiveness of a firm’s products or services in output markets–not only final markets, but intermediate markets as well. Similarly, total sectoral outputs, movements in private-sector capital replacement and expansion, government spending, and the allocation of the consumer dollar can have dramatic impacts between and within industrial sectors. Each can be set off macroeconomic changes well outside the control of the firm, Continue reading
The Role of Organizational Culture on Strategic Management
The organizational culture is the basis of the Strategic Management, Strategic management is to determine its mission, according to the external environment and internal conditions to set the strategic objectives of the enterprise, in order to ensure the correct implementation of the goals and progress plan, and rely on internal capabilities implemented this kind of planning and decision-making, constraints in the implementation process of a dynamic management process. The organizational culture is the value orientation of the enterprise for a variety of internal and external affairs and resources, enterprises in the long-term organizational values, under the guidance of shared values, guiding principles and select corporate behavior. Excellent organizational culture is an important condition for business strategy development and success. It can highlight the characteristics of enterprises, the formation of the common values of the members of the enterprise, also because of its distinctive personality, more conducive to enterprise to develop Continue reading
Strategic Pricing
Pricing is a key factor in business innovation. Strategic pricing involves aligning the pricing strategy with corporate strategy. The price must be chosen carefully after considering various scenarios and possible implications. Is the price attractive enough to capture the mass of target buyers? Can the company make the offering at the target cost and still earn a healthy profit margin? Can the company profit at a price that is affordable to the target buyers? Strategic pricing is a key component of Blue Ocean Strategy pioneered by Chan Kim and Renee Mauborgne. To have strong revenue flowing, the strategic price must be set. This procedure will ensure that consumers will want to buy and will have the compelling ability to achieve it. It is fundamental, from the start, to know the price that will bring mass of target consumers. The strategic price defined must not only attract customers but also retain Continue reading