What is strategic management?
Strategic management is a method of managing a company aimed at determining and implementing the long-term objectives of the company, using resources to maximize its performance and success in the market. Strategic management involves planning, implementation and analysis of results.
The economic landscape is constantly changing in the face of globalization. In order to remain competitive, any business must be able to adapt quickly and have flexible management to cope with fluctuations. By implementing a strategic management plan , companies can better adapt to their environment.
Definition and concept of strategic management
Strategic management is an integral part of running any successful business. It brings together a set of decisions aimed at achieving the objectives of a company. Focused on the long term, these objectives enable the company to ensure its growth and sustainability. This form of management is the sole responsibility of the company’s management.
To guarantee success, strategic management is activated around 5 main key stages :
- Environmental assessment: analysis of the company, competition and market trends.
- Definition of the company’s vision, mission and objectives.
- Development of the strategy: determination of the key activities to achieve the objectives, mobilization of the necessary resources, strategic choices, etc.
- Implementation of the strategy that will enable the objectives set to be achieved.
- Control: monitoring and analysis of results, readjustment of the strategy if necessary.
Also read: Definition of management
The different types of strategic management
Other forms of strategic management exist such as operational strategic management, tactical strategic management and global strategic management.
Strategic operational management constitutes the decisions taken by the hierarchy concerning the day-to-day management of the company. These decisions taken in the short or medium term aim to optimize resources to achieve set objectives. The type of management works in close collaboration with other forms of management, notably strategic management, and also includes planning, organizing, directing and controlling processes.
Although interdependent, tactics and strategy have fundamental differences. Tactical management is a set of techniques and daily actions to achieve one or more short-term or even very short-term objectives such as establishing an action plan or programming a campaign. Unlike strategy, tactical management often requires a quick decision.
Global strategy is a mode of development that consists of making strategic choices to effectively manage a company’s activity. There are 4 types of global strategies :
- Specialization: focuses on a single activity
- Diversification: doing several activities, linked or not
- Integration: taking charge of the different stages that give life to the company’s product/service, without going through suppliers or subcontractors (doing everything, alone)
- Outsourcing: entrusting the execution of certain functions to external service providers (commissioning)
Tools used in strategic management
- SWOT analysis (Strength-Weakness-Opportunities-Threats)
What does SWOT mean? A company’s objectives are based on a comprehensive analysis of its internal and external environment. Internal analysis identifies the strengths and weaknesses of the company through competitive benchmarking. As for the external analysis, it reveals the relationship between the company and its environment, which allows the company to identify the opportunities to be seized and the threats likely to affect its key success factors.
- BCG Matrix
Defined in the 1960s by the Boston Consulting Group, the BCG matrix is an analysis tool for mapping its business portfolio according to the attractiveness of the target market and the company’s relative market share.
This matrix allows any company to adapt quickly to changes in a competitive market and to make more informed decisions.
- GE matrix
The GE matrix was developed in the 1970s by the strategy consulting firm McKinsey & Company. This matrix is a precise analysis of a company’s portfolio of strategic activities. It allows the company to prioritize its investments by determining which activities should or should not be valued.
The link between strategic management and transition management
Strategic management is an ideal solution to effectively manage changes within the company. Thanks to this approach, the company is able to respond to current market trends and adapt to changing conditions. In addition, this management method also improves the company’s performance by focusing on essential tasks and by promoting communication and coordination between employees, all united around a common objective.
The interim manager is a key player in the implementation of strategic management. His experience and in-depth knowledge allow him to adapt quickly to changing internal and external environments, while providing relevant and effective solutions. In this specific case, a French transition management firm like REACTIVE EXECUTIVE supports the company in this process.
Conclusion
Strategic management is the process of creating , implementing , and monitoring an organization’s long-term strategy in order to achieve desired goals. It requires an in-depth analysis of the external and internal environment of the company, as well as the use of various tools such as the SWOT, the BCG matrix and GE. Having recourse to strategic management makes it possible to effectively maximize the potential of the company and ensure a better future for it.
