Three important Elements in Strategic Management

1) Strategic Analysis

Strategic analysis helps you understand your company´s strategic position. It is important to analyse environmental changes and find out how they can affect you and your employees. Strategic analysis aims to create a view of the key factors which can have an impact on the present and future performance of your company. If strategic analysis is carried out in a correct manner then it will help you choose the right strategy.
Some key factors in strategic analysis are discussed briefly below. Understanding them can help you overcome difficulties.

  1. The environment:
    Your company cannot exist without being able to interact with a complex commercial, economic, political, technological, cultural and social environment. Your company is faced with changes to the environment and a clear understanding of their impact is of great importance for the formation of your strategic plan. These external effects are called threats and weaknesses and they are part of the SWOT analysis which will be presented in a later module.

  2. The resources of your organisation:
    Resources of the organization are internal influences. This strategic capability of your company can be seen as your strengths and weaknesses which can also be a part of your SWOT analysis (which will be discussed in unit III).

  3. The expectations of different stakeholders:
    The development of your company also depends on the expectations of the stakeholders of your company. Their beliefs and assumptions constitute the culture of your company. For example, the thinking of two managers of different divisions may result in different conclusions about your strategy, tough they are facing the same environmental conditions. Hence, many influences come from your stakeholders and the magnitude of their impact upon your strategy depends on the respective power of each group of stakeholders (i.e. the greater the power of a division in your company, the strongest their influence upon your strategic analysis).

A reflection upon these key factors; your company environment, resources, expectations and objectives within the cultural and political framework of your company should be the starting point for the execution of your strategic analysis.

2) Strategic Choice

After undertaking strategic analysis you will be ready to make a strategic choice. A strategic choice is defined as the selection of the best possible course of action based on the evaluation of your available strategic options.

3) Strategy Implementation

The final step, strategy implementation is defined as the way in which you will translate your strategy into actions. Strategic implementation requires careful planning and proper deployment of your company´s resources, careful handling of possible changes in your organisation structure and effective change management. Implementation of your strategy can take place in several stages.