Strategic management
As per tutor2u.net "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations".
“* Where is the business trying to get to in the long-term (direction)
* Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
* How can the business perform better than the competition in those markets? (advantage)?
* What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?
* What external, environmental factors affect the businesses' ability to compete? (environment)?
* What are the values and expectations of those who have power in and around the business? (stakeholders)”
As per quickmba, “Strategic planning clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track.”
Importance of Strategic Management and Planning
Strategic management provides guidance to the organization and sets the future direction of the organization. It helps the organization in achieving the competitive advantage to the organization. It also tells about the organization about its market, values and the way to handle the resources in order to meet the objectives of the organization. Thus Strategy and planning will help the organizations in following manner:
1) Help in establishing objectives after analyzing the internal and external environment.
2) It will focus on the aspects which will make the organization unique to achieve competitive advantage. As per quickmba, Competitive advantage is a firm's ability to transform inputs into goods and services at a maximum profit on a sustained basis, better than competitors.
3) It will provide the future direction and path to the organization
4) It will help in optimal utilization of the resources
5) It will help in controlling the action of the organization
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References:
http://www.buzzle.com/articles/the-importance-of-strategic-planning-in-business.html. It is a snapshot of the page as it appeared on 7 Feb 2009 20:04:15 GMT.
http://tutor2u.net/business/strategy/what_is_strategy.htm.
http://www.tutor2u.net/business/strategy/business-planning-introduction.html
http://www.quickmba.com/strategy/strategic-planning/
http://www.quickmba.com/strategy/global/
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