Strategic Analysis, Choice and Implementation

As environment changes, companies need to change their strategies to adapt to the environment not only to prosper but also to survive. Based on the multiple strategic choices, each choice is analyze and the best one is selected and implemented.

Strategic analysis and choice are two important components of the implementation stage of the strategic management plan. These two components are crucial links in the strategic management implementation procedure.

The strategic management process has three main components as shown below

Strategic analysis is all about analyzing the strength of businesses’ position and understanding the important external factors that may influence that position. Factors Taken into Consideration for Strategic Analysis and Choice

Key Internal Factors

• Marketing
• Management
• Operations/Production
• Accounting/Finance
• Computer Information Systems
• Research and Development

Key External Factors

• Political/Governmental/Legal
• Economy
• Technological
• Social/Demographic/Cultural/Environmental
• Competitive
• Techniques Used in Strategic Analysis

The following devices or techniques are used in the procedure of strategic analysis:

• Five Forces Analysis
• PEST Analysis (Political, Economic, Social and Technological Analysis)
• Market segmentation
• Scenario planning
• Competitor analysis
• Directional policy matrix
• SWOT Analysis (Strength, Weaknesses, Opportunities, and Threats Analysis)
• Critical Success Factor Analysis

Strategic choice involves understanding the nature of stakeholders expectations, identifying the strategic option and evaluating and selecting the best/optimal choice amongst all.

Strategic implementation is the penultimate stage of strategic management and strategic analysis and choice are two significant constituents of that process.

Characteristics of Strategic Analysis and Choice

Following are the features of strategic analysis and choice:

• Establishment of long term goals
• Producing strategy options
• Choosing strategies to act on
• Selecting the best option and accomplishing mission and g

At the time of performing strategic analysis and arriving at strategic choices, long term goals are fixed and different types of strategies are chosen that are most appropriate for the mission of the company and the variable conditions.

Strategic analysis and choice of strategies are done with the help of a number of techniques. If the appropriate strategy is chosen, a company would become more efficient to establish sustainability in competitive advantage and maximize firm valuation.

Business Long Term Objectives in Strategic Management

Long term objectives are prepared from the mission statement of the organization on the basis of which all other activities depend. Long term objectives highlight the expected consequences that emerged from application of certain strategies. All the strategies of the Business Organization are formulated & implemented in the guidance of the long term objectives. These objectives are for longer period of time ranging from two to five years & this time frame should also be consistent for the resulting strategies.

Nature of Long Term Objectives

The nature of long term objectives is better explained from the following features.

1. Should be quantitative
2. Should be realistic
3. Should be measurable
4. Should be challenging
5. Should be obtainable
6. Should be hierarchical
7. Should be according to other functional units of organization

There must be a time line that is associated with each objective. Moreover following are some of the forms of Long Term Objectives.

1. Growth in sales
2. Growth in assets
3. Market share
4. Profitability
5. The nature & degree of diversification
6. The nature & degree of vertical integration
7. Social responsibility
8. Earnings per share

The long term objectives should be clearly established and communicated. Following are some of benefits that are associated with the clear & effective development of long term objectives.

1. Synergy is created between all the functional areas of organization
2. Clear direction is provided that assist all the functioning of the organization.
3. The exertion of activities are stimulated
4. The resources are better allocated that generates more productive results
5. The designing of jobs is made effective

There are separate long term objective for corporate, divisional & functional levels in an organization. But all of them should indicate the same direction. Managerial Roles and performances are measured through these objectives by comparing the actual performance of the managers with the standard performance level set in the light of these long term objectives.

There are many reasons that associate the success of the organization with the clearly established & communicated long term objectives. The first reason is that all the stakeholders of the organization identify & understand their roles keeping in view the future of the organization. Those mangers whose values & attitudes differ are motivated for consistent decision making in the organization. Almost every manager is involved in the strategy formulation process and gives his opinion in shaping the final strategy for the organization. When finalized strategy is formulated by consensus then there remains no element of conflict among different managers during the strategy implementation stage. The priorities in the organization are set by the long term objectives which further stimulate the exertion efforts so that the desired targets can be achieved. In fact the long term objectives serve as performance evaluation standard through which the performance of individual, group, department, division & overall organization is effectively evaluated. The designing of jobs function & organization of required activities for the performance of those designed jobs are based on the long term objectives of the organization. All the activities in the functional areas of the organization are directed towards some desired position. There is complete synergy among all the activities & employees of the organization when effective long term objective are developed & properly communicated.

What are 'Core Competencies'

Core competencies are the main strengths or strategic advantages of a business, including the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace. Theoretically, a core competency should allow a company to expand into new end markets as well as provide a significant benefit to customers. It should also be hard for competitors to replicate

BREAKING DOWN 'Core Competencies'

A business just starting out must try to first identify, and then focus on, its core competencies, allowing it to establish a footprint while gaining a solid reputation and brand recognition. Using and leveraging core competencies usually provides the best chance for a company's continued growth and survival, as these factors are what differentiate the company from competitors.

Origins of Core Competency

The term core competency is relatively new, originating in an article titled “The Core Competence of the Corporation” published in the Harvard Business Review. In the article, the authors, C.K. Prahalad and Gary Hamel, review three conditions a business activity should meet in order to be considered a core competency. First, the activity must provide a benefit to the consumer. Additionally, a core competency should not be easily replicated or imitated by competitors and should be widely leveraged across various markets and products.

Development of Core Competencies

Once an organization identifies its core competencies, internal investment should be directed toward maintaining these skill areas and ensuring they remain unique within the industry sector. If particular functional areas are outside of the core competencies of the business, consideration as to whether the operations can be outsourced should be given.

Core Competency Areas

A business is not limited to just one core competency, and preferred areas of competency often change based on the industry in which the institution operates. For example, a government agency involved in unemployment case management may include core competencies in the areas of information technology management and budget and finance. Hospitals and clinics may focus on patient care and medical knowledge, while childhood education agencies may prioritize growth and development as well as health and nutrition.

Other core competencies may include, but are not limited to, brand recognition, marketing excellence, innovation, leadership or customer service.

Core Competency and Retail Business

While customer service could apply as a core competency in both the goods are services industries, certain areas are more exclusive to those businesses involved in the distribution and sale of goods. For example, with over $480 billion in sales in 2015, Wal-Mart exhibits the core competencies of buying power and supply chain management to keep prices low while maintaining a high availability of products within its stores.

 Core Competencies http://www.investopedia.com/terms/c/core_competencies.asp

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Strategic Management - Meaning and Important Concepts

Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry.

Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance. The manager must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), i.e., they should make best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats.

Strategic management is nothing but planning for both predictable as well as unfeasible contingencies. It is applicable to both small as well as large organizations as even the smallest organization face competition and, by formulating and implementing appropriate strategies, they can attain sustainable competitive advantage.

It is a way in which strategists set the objectives and proceed about attaining them. It deals with making and implementing decisions about future direction of an organization. It helps us to identify the direction in which an organization is moving

Strategic management is a continuous process that evaluates and controls the business and the industries in which an organization is involved; evaluates its competitors and sets goals and strategies to meet all existing and potential competitors; and then reevaluates strategies on a regular basis to determine how it has been implemented and whether it was successful or does it needs replacement.

Strategic Management gives a broader perspective to the employees of an organization and they can better understand how their job fits into the entire organizational plan and how it is co-related to other organizational members. It is nothing but the art of managing employees in a manner which maximizes the ability of achieving business objectives. The employees become more trustworthy, more committed and more satisfied as they can co-relate themselves very well with each organizational task. They can understand the reaction of environmental changes on the organization and the probable response of the organization with the help of strategic management. Thus the employees can judge the impact of such changes on their own job and can effectively face the changes. The managers and employees must do appropriate things in appropriate manner. They need to be both effective as well as efficient.

	Strategy Implementation
	Strategy Formulation vs Implementation
	Strategy Evaluation
	Strategic Decisions
	Business Policy
	BCG Matrix
	SWOT Analysis
	Competitor Analysis
	Porter’s Five Forces Model
	Strategic Leadership
	Corporate Governance
	Business Ethics
	Core Competencies

#SOURCES:  https://managementstudyguide.com/strategic-management.htm