The four phases of strategic management are formulation, implementation, evaluation and modification. A basic model of strategic management, SWOT stands for Strengths, Weaknesses, Opportunities and Threats. This technique is essential for determining growth strategies. By evaluating available opportunities and addressing weaknesses, organizations can build on their strengths and overcome threats.
By using this basic strategic management model, organizations can gain a competitive advantage over others. Establishing the vision, mission and objectives of the organization is the starting point for formulating the strategy. Organizations strive to achieve the end results, which are “vision”, “mission”, “purpose”, “objective”, “goals”, etc. The hierarchy of strategic intention lays the foundation for the strategic management of any organization.
Strategic intention makes clear what an organization represents. It is reflected through vision, mission, business definition and objectives. The vision serves to establish what an organization wants to achieve in the long term. The process of assigning a part of a mission to a particular department and then further subdividing the task between sections and individuals creates a hierarchy of objectives.
The objectives of the subunit contribute to the objectives of the larger unit of which it is a part. From the standpoint of formulating strategies, an organization must define “why” it exists, “how” it justifies that existence, and “when” justifies the reasons for that existence. The answers to these questions are found in the organization's mission, business definition and objectives (26%). These terms become the basis for strategic decisions and actions.
The development of an organizational strategy involves five main elements: strategic analysis, environmental analysis, strategic choice, implementation of the strategy and evaluation and control of the strategy. The analysis phase provides the basis for the strategic choice. It allows managers to consider what the organization could do taking into account the mission, environment and capabilities, a choice that also reflects the values of managers and other stakeholders. These choices relate to the general scope and direction of the company.
Implementation depends on ensuring that the organization has an appropriate structure, adequate resources and competencies (skills, finance, technology, etc.). The implementation of the strategy depends on the implementation of operational factors. After that, the organization has to assess its external environment and what affects its strategy. The strategy formulation process is considered a dynamic process in which corrective measures are taken and changes occur in any of the factors affecting the strategy.
If it is determined that the deadlines are not met, the processes are not working or the results are not in line with the real objective, then the strategy can and should be modified or reformulated. With this information, the company can develop a strategy to gain a competitive advantage over these competitors. Strategy development requires a person with vision, while implementing strategy requires a person with administrative capacity. Depending on the stage of the company's product lifecycle, a strategic choice can be made for a different portfolio.
Therefore, after developing strategic intention, environmental analysis becomes the next important step in the strategy formation process. For example, when developing the human resources strategy involving employee training, things that must be considered include how the training will be delivered, when the training will take place, and how the cost of training will be covered. The company must consider how the strategies will be implemented at the same time they are created. For a business group, it may be possible to choose all strategic alternatives, but for a single company it is quite difficult.
Both management and employees are involved in evaluating the strategy, because everyone can view the implemented strategy from different perspectives. . It used two dimensions: the perspectives of the business sector and the company's competitive capabilities to choose strategies. Evaluation of the strategy involves examining how the strategy has been implemented, as well as the results of the strategy.
Competitive strategies are those associated with the methods of competing in a particular business or industry. .