Stages Of Strategic Management

The strategic management process represents a logical, systematic, and

objectiveapproach for determining an enterprise's future direction. However, a clear

separation isneeded between the managerial process by which an organization

formulates, evaluates,implements, and controls the relationships between its objectives,

its strategies, and its environment.Researchers usually distinguish three stages in the

process of strategic management:strategy formulation,strategy implementation, and evaluation

and control

.

Strategy FormulationStrategy formulation is the process of establishing the organization's mission,

objectives,and choosing among alternative strategies. Sometimes strategy formulation

is called" strategic planning ."

Strategy ImplementationStrategy implementation is the action stage of strategic management. It refers

to decisions that are made to install new strategy or reinforce existing strategy. The

basic strategy -implementation activities are establishing annual objectives, devising

policies, and allocated resources. Strategy implementation also includes the making

of decisions with regard to matching strategy and organizational structure; developing

budgets, and motivational systems.

Strategy Evaluation And Control The final stage in strategic management is strategy evaluation and control. All strategies

are subject to future modification because internal and external factors are constantly

changing. In the strategy evaluation and control process managers determine whether

the chosen strategy is achieving the organization's objectives. The fundamental strategy

evaluation and control activities are: reviewing internal and external factors that are

the bases for current strategies, measuring performance, and taking corrective actions.

Strategic Management ModelsStrategic management is a broader term that includes not only the stages already

identified but also the earlier steps of determining the mission and objectives of an

organization within the context of its external environment. The basic steps of the

strategic management can be examined through the use of strategic management

model.The strategic management model identifies concepts of strategy and the

elements necessary for development of a strategy enabling the organization to satisfy

its mission.Historically, a number of frameworks and models have been advanced which

propose

Types of strategiesGrowth StrategiesTHERE ARE THREE MAIN TYPES OF GROWTH STRATEGIES

forward integration backward integration horizontal integration

forward integration|forward strategies|vertical strategiesGAINING OWNERSHIP OR CONTROL OVER DISTRIBUTOR, WHOLE SELLER

backward integrationTO SEEK OVER OWNERSHIP OR CONTROL OVER FIRM SUPPLIER

horizontal integrationTO SEEK OWNERSHIP OR CONTROL OVER THE FIRM COMPETITOR

intensive strategiesTHERE ARE THREE MAIN TYPES OF INTENSIVE STRATEGIES

market penetration market development product development

market penetrationSEEK TO INCREASE MARKET SHARE OF PRESENT PRODUCT OR SERVICES IN THE PRESENT MARKET THROUGH GREATER MARKETING EFFORTS

market developmentINTRODUCING PRESENT PRODUCT OR SERVICES IN NEW GEOGRAPHICAL AREA

product developmentINCREASE THE SALES BY IMPROVING OR MODIFYING PRESENT PRODUCT OR SERVICES

diversification strategiesTHERE ARE TWO MAIN TYPES OF DIVERSIFICATION STRATEGIES

related diversification strategies unrelated diversification strategies

related diversification strategiesADD NEW PRODUCTS OR SERVICES RELATED TO CURRENT BUSINESS

unrelated diversification strategiesADD NEW PRODUCTS OR SERVICES UNRELATED TO CURRENT BUSINESS

defensive strategiesTHERE ARE THREE MAIN TYPES OF DEFENSIVE STRATEGIES

retrenchment strategies diversification strategies liquidation strategy

retrenchment strategiesIT OCCUR WHEN AN ORGANIZATION REGROUPS THROUGH COST OR ASSET DEDUCTION TO

INCREASE THE REVENUE AFTER DECREASE CURRENT SALES OF PRODUCT OR SERVICES

diversification strategiesA PART OF THE ORGANIZATION SOLD OUT TO RAISE THE CAPITAL

liquidation strategyIN THE LIQUIDATION ASSETS ARE SALE OUT OF THE BUSINESS FOR RAISING CAPITAL