Describe the primary components of a strategic management process, and indicate why a strategic management process is needed for a company. The strategic management process can be defined as the organization’s strategy. It is the process used by managers to make a choice of a set of strategic decisions for the organization that will enable it to achieve better performance. Strategic management is a continuous process of actions that determines the long-run performance of a corporation. These processes include four different components or steps that are required to have a successful organization. These components include environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control. Environmental Scanning:
Environmental scanning can be defined as the process of collecting, scrutinizing and providing information for strategic purposes. The Environmental Scanning is a tool that helps to analyze the internal and external factors that influence the organization. After the environmental analysis process is completed, managers should keep evaluating it continuously and strive to improve it. Strategy Formulation:
Strategy formulation is the process where decisions on the best course of actions are made to accomplish the organization objectives. From this point on, the managers should formulate the strategies to be used for the corporation and the business.
Strategy implementation is when the organization’s chosen strategy is put in action as intended to work. The strategy implementation is when the organization’s structure is designed, the resources are distributed, the decision making process is developed, and when the human resources are managed. Strategy Evaluation:
Strategy evaluation is the final step of strategy management process where the original strategy and implementation are evaluated to see if meet the organizational objectives. In this step, is where the performance is measured and remedial and corrective actions are taken. Strategic management process is needed for a company because helps the company to satisfy and adjust to a changing market. According with Wheelen & Hunger (2010) “To be successful in the long-run, companies must not only be able to execute current activities to satisfy an existing market, but they must also adapt those activities to satisfy new and changing markets”.
Research at least one company and describe the strategic management process that the company uses. The strategic management process used by Amazon was to expand beyond books to other product of easy shipments and realized that they can go farther in the “white space when it devised a new value proposition, offering a commission-based brokerage service to buyers and sellers of used books. Then it moved into its white space again by developing a model to serve an entirely different customer: third-party sellers” (Johnson, 2010).
Management Study Guide. (2013). Retrieved from http://managementstudyguide.com/strategic-management-process.htm
Wheelen, T. L., & Hunger, J. D. (2010). Concepts in Strategic Management and Business Policy Achieving Sustainability [University of Phoenix Custom Edition eBook]. : Pearson Education. Retrieved from University of Phoenix, MGT/498 website.
Johnson, M. W. (2010). Amazon’s Smart Innovation Strategy. Retrieved from http://www.businessweek.com/innovate/content/apr2010/id20100412_520351.htm