STRATEGIC MANAGMENT
1. List the significance of strategic management :
 It guides the company to move in a specific direction. It defines organization’s goals and
fixes realistic objectives, which are in alignment with the company’s vision.
 It assists the firm in becoming proactive, rather than reactive, to make it analyses the
actions of the competitors and take necessary steps to compete in the market, instead of
becoming spectators.
 It attempts to prepare the organization for future challenges and play the role of pioneer
in exploring opportunities and also helps in identifying ways to reach those opportunities.
 It ensures the long-term survival of the firm while coping with competition and surviving
the dynamic environment.
 It assists in the development of core competencies and competitive advantage that helps
in the business survival and growth.
 The basic purpose of strategic management is to gain sustained-strategic competitiveness
of the firm. It is possible by developing and implementing such strategies that create
value for the company. It focuses on assessing the opportunities and threats, keeping in
mind firm’s strengths and weaknesses and developing strategies for its survival, growth
and expansion.
2. List and discuss the stage of strategic management
A. Clarify Your Vision
 The purpose of goal-setting is to clarify the vision for your business. This stage consists
of identifying three key facets:
 First, define both short- and long-term objectives.
 Second, identify the process of how to accomplish your objective.
 Finally, customize the process for your staff; give each person a task with which
he can succeed. Keep in mind during this process your goals to be detailed,
realistic and match the values of your vision. Typically, the final step in this stage
is to write a mission statement that succinctly communicates your goals to both
your shareholders and your staff.
B. Gather and Analyze Information
 Analysis is a key stage because the information gained in this stage will shape the next
two stages. In this stage, gather as much information and data relevant to accomplishing
your vision.
 The focus of the analysis should be on understanding the needs of the business as a
sustainable entity, its strategic direction and identifying initiatives that will help your
business grow.
 Examine any external or internal issues that can affect your goals and objectives. Make
sure to identify both the strengths and weaknesses of your organization as well as any
threats and opportunities that may arise along the path.
C. Formulate a Strategy
 The first step in forming a strategy is to review the information gleaned from completing
the analysis.
 Determine what resources the business currently has that can help reach the defined goals
and objectives.
 Identify any areas of which the business must seek external resources.
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3.
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The issues facing the company should be prioritized by their importance to your success.
Once prioritized, begin formulating the strategy. Because business and economic
situations are fluid, it is critical in this stage to develop alternative approaches that
target each step of the plan.
D. Implement Your Strategy
 Successful strategy implementation is critical to the success of the business venture.
 This is the action stage of the strategic management process. If the overall strategy does
not work with the business' current structure, a new structure should be installed at the
beginning of this stage.
 Everyone within the organization must be made clear of their responsibilities and
duties, and how that fits in with the overall goal.
 Additionally, any resources or funding for the venture must be secured at this point.
Once the funding is in place and the employees are ready, execute the plan.
E. Evaluate and Control
 Strategy evaluation and control actions include performance measurements, consistent
review of internal and external issues and making corrective actions when necessary.
 Any successful evaluation of the strategy begins with defining the parameters to be
measured.
 These parameters should mirror the goals set in Stage 1.
 Determine your progress by measuring the actual results versus the plan.
 Monitoring internal and external issues will also enable you to react to any substantial
change in your business environment.
 If you determine that the strategy is not moving the company toward its goal, take
corrective actions.
 If those actions are not successful, then repeat the strategic management process. Because
internal and external issues are constantly evolving, any data gained in this stage should
be retained to help with any future strategies.
At least write the seven key terms of strategic management?
Strategists
Vision & Mission Statement
External Opportunities & Threats
Internal Strengths & Weaknesses
Long Term Objectives
Strategies
Annual Objectives and policies
List and discuss the characteristics of strategic management?
Characteristics of Strategic Management
Following are the 8 characteristics of strategic management:
1) Long-Term Issues
 The issues that strategic management handles are usually of long-term nature.
 These issues do not necessarily affect the organization immediately but will benefit the
organization in the future.
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
For example, if a company spends on the education of its employees, it may not witness
increases in productivity in the short-run, but in due course, highly educated employees
will deliver better results and will also help in increasing the returns.
2) Competitive Advantage
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Strategic management assists the managers in looking for fresh avenues for achieving
sustainable competitive advantage.
When strategic management principles are applied regularly in the proceedings of the
organization, managers can increase the number of satisfied customers, provide goods
and services at economical prices, and can develop a highly satisfied workforce.
3) Impact on Operations
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An effective strategic management process affects operational issues positively.
For example, if increases in salary and performance are correlated then this would
increase the operational productivity, as the employees will be motivated to put more
effort into their work.
Operating decisions are the ones that involve topics like deciding the best way to handle
sales with a particular segment of customers or making decisions regarding selling
products on credit.
Decisions concerned with operational issues are made by lower-level managers.
4) Future-Oriented
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Strategic management makes decisions regarding situations that would occur in the future
and are not a part of the day-to-day activities.
Managers are ignorant about the after-effects of their decisions because of the dynamic
and uncertain business environment.
5) Complex
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Since strategic management is uncertain, it becomes complex as well.
Managers come across situations related to the business environment that is not easy to
understand.
There is a need for analyzing internal and external environments.
6) Organization-Wide
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The implementation of strategic management affects the entire organization and not
merely the operation on which strategic management principles are applied.
It entails strategic choices and is a systematic approach. So, business organizations need
to implement strategies carefully and wisely because it affects an organization as a whole
and also gives results that benefit the organization as well.
7) Long-Term Implications
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The implications of strategic management are long-term and do not affect the routine
operations of the organizations.
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
The concepts of strategic management are concerned with the mission, vision, and
objectives of the organization.
8) Facilitates Strategic Implementation
 Strategic management makes sure that strategies are effectively executed and
implemented with the help of action-oriented plans and it is a very very important step
because if strategies are good enough but are not implemented properly then they will not
give the results the company expects.
5. List and discuss the approach of strategic management?
General approaches
In general terms, there are two main approaches, which are opposite but complement each other in some
ways, to strategic management:
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The Industrial Organizational Approach
based on economic theory — deals with issues like competitive rivalry, resource allocation, economies of
scale
assumptions — rationality, self-discipline behavior, profit maximization
The Sociological Approach/resource based model
deals primarily with human interactions
Assumptions — bounded rationality, satisfying behavior, profit sub-optimality.
6. Explain the benefit of strategic management?
Benefits of Strategic Management with Examples
What are the Financial Benefits of Strategic Management?
 Strategic management results in higher profits, sales, and productivity in firms. Main financial
benefits include:
A. Profitability Management
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Strategic management enables senior executives to get feedback from department heads.
This feedback helps them understand the bottlenecks at different hierarchy levels in the
organization and take relevant action to improve profits.
Based on existing conditions, the senior management can develop their strategic
vision and improve financial gains.
Its pricing strategy to offer products at lower costs in rural areas helped increase revenue
and sales volumes.
B. Solvency Planning
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Since strategic management deals with long-term goals, leaders analyze the existing assets,
liabilities, and net worth in the balance sheet to know whether they can meet expenses in the long
run.
The organization takes all necessary measures to optimize the asset-debt ratio and maintain
solvency. Solvency planning is necessary to accomplish goals like growth and expansion.
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C. Liquidity Monitoring
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Strategic management allows companies to ensure that their cash flow aligns with their long-term
goals. They check it by constantly tracking cash flow statements or liquidity reports.
A company facing the liquidity crisis often strains its relationship with vendors due to delayed
payments. Businesses can undertake activities that result in monetary gains for performing
operations by knowing about the situation on time.
D. Improved Revenue Generation
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Strategic management enables the senior management to make necessary changes in the existing
operating processes. By looking at competitors’ strategies, the company can develop better ideas
and tweak its processes to outperform them.
It helps them look for innovative ideas that can bring long-term benefits to the company in terms
of revenue. It also helps bring more investors and maintain relationships with the existing ones.
E. Prevents Legal Risks
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The companies can include employee-related policies, conflict of interest policies for board
members and other partner stakeholders, and other internal controls as part of the strategic
management process.
They can consult their insurance provider, attorney, and other professionals who can help
maintain legal compliance. Consultation helps avoid the risk of penalties due to failure in
fulfilling legal obligations.
What are the Non-Financial Benefits of Strategic Management?
 Strategic management allows an organization to be more logical, rational, and systematic in its
strategies.
A. Revitalize Human Resources
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Strategic management often includes proactive staffing practices that help hire the best talent and
be more competitive. Companies can prepare detailed job descriptions, improve recruiting
practices, provide 360-degree feedback, and take other steps that reduce turnover and boost
employee satisfaction.
B. Identify Problems
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Strategic management enables a detailed analysis of the organization’s strengths, weaknesses,
opportunities, and threats. Based on the problems, the company can take relevant actions like
changing the pricing model, recruiting more staff, adding distribution channels, etc.
C. Better Decision Making
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You can make better decisions in a shorter time with strategic management.
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For example, if you get the opportunity to take up a new project, you can make a better decision
whether to invest resources in it or not.
Given that a project aligns with your ideas, you can plan and allocate resources to the project.
D. Improved Understanding of Competitors’ Strategies
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Strategic management enables organizations to learn all the practices followed by their
competitors.
They can then implement their strategies without imitating them. This move can help in
strengthening your business and meeting brand awareness goals.
For instance, HP maintained competitive advantage over the years by refining the marketing strategy and
re-branding from time to time. This helped ensure that its products met its customers’ evolving
technological needs.
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E. Higher Stability
By selling into new markets, acquiring new businesses, and adding new products, you reduce
your dependency on individual entities. Your profits do not depend on the success of a single
product or client.
If you have just a few clients, you might have to work completely on their terms to prevent
your business from shutting down.
7. How to write a mission statement are 5 easy steps?
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Here are five steps to write a great mission statement:
Ask yourself why your company exists and what you value.
Choose your words carefully.
Be ambitious.
Revise your mission statement.
Live it.
8. What is the difference between the goals and objectives?
Examples of Business Goals vs. Objectives
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While goals and objectives work in harmony to maximize your business strategy and produce
results, they have clear differences that must be recognized to use them effectively.
Goals are:
Broad in nature
Valuable for setting a general direction or vision
Difficult to measure
Abstract ideas
Longer term
The end result
Examples of goals include:
I want to become known as an expert in business strategy
I will commit to my career development and learn how to increase sales
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I want to be more confident
Objectives are:
Narrow in scope
Specific steps
Associated with a schedule and time frame
The means to the end result
Easy to measure
Short term or medium term
Examples of objectives include:
I will speak at five conferences in the next year
I will read one book about sales strategy every month
I will work with a coach to practice my networking skills by the end of this month
While goals create a vision with a wide range, objectives focus on the individual, achievable
outcomes. Objectives are the concrete deliverables that make the goal come to life. Progress
towards them helps measure advancement to reaching the larger end goal.
9. The difference between policy and strategy?
Key Differences between Strategy and Policy
The following are the major differences between strategy and policy
1. Strategy is the best plan opted from a number of plans, in order to achieve the organizational
goals and objectives. Policy is a set of common rules and regulations, which forms as a base to
take day to day decisions.
2. Strategy is a plan of action while the policy is a principle of action.
3. Strategies can be modified as per the situation, so they are dynamic in nature. Conversely,
Policies are uniform in nature; however relaxations can be made for unexpected situations.
4. Strategies are concentrated toward actions, whereas Policies are decision oriented.
5. Strategies are always framed by the top management but sub strategies are formulated at the
middle level. In contrast to Policy, they are, in general made by the top management.
6. Strategies deal with external environmental factors. On the other hand, Policies are made for
internal environment of business.
10. A few main traits /characteristics / features/ qualities of effective strategic leaders that do
lead to superior performance?
A few main traits / characteristics / features / qualities of effective strategic leaders that do lead to
superior performance are as follows:
Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their words and
actions.
Keeping them updated- Efficient and effective leaders keep themselves updated about what is
happening within their organization. They have various formal and informal sources of information in
the organization.
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Judicious use of power- Strategic leaders makes a very wise use of their power. They must play the
power game skillfully and try to develop consent for their ideas rather than forcing their ideas upon
others. They must push their ideas gradually.
Have wider perspective/outlook- Strategic leaders just don’t have skills in their narrow specialty but
they have a little knowledge about a lot of things.
Motivation- Strategic leaders must have a zeal for work that goes beyond money and power and also
they should have an inclination to achieve goals with energy and determination.
Compassion- Strategic leaders must understand the views and feelings of their subordinates, and
make decisions after considering them.
Self-control- Strategic leaders must have the potential to control distracting/disturbing moods and
desires, i.e., they must think before acting.
Social skills- Strategic leaders must be friendly and social.
Self-awareness- Strategic leaders must have the potential to understand their own moods and
emotions, as well as their impact on others.
Readiness to delegate and authorize- Effective leaders are proficient at delegation. They are well
aware of the fact that delegation will avoid overloading of responsibilities on the leaders. They also
recognize the fact that authorizing the subordinates to make decisions will motivate them a lot.
Articulacy- Strong leaders are articulate enough to communicate the vision (vision of where the
organization should head) to the organizational members in terms that boost those members.
Constancy/ Reliability- Strategic leaders constantly convey their vision until it becomes a component
of organizational culture.
To conclude, Strategic leaders can create vision, express vision, passionately possess vision and
persistently drive it to accomplishment.
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