Key terms in strategic management are key to defining how one manages his business. They help make sense of a complex problem, and they give one a starting point from which to build a better solution. Often they lead you down a new path that seems so obvious. The one with the most key terms in strategic management is most likely the manager with the most key terms in strategic management.
This guide is your companion in exploring the 8 important strategic management key terms to understand for developing a successful strategic plan in business.
Key terms in strategic management
Strategic Manager
The strategic manager is responsible for crafting and implementing the organization's strategies. The strategic manager collaborates with top management to apply strategies and oversees the organization's operation. They are involved in the decisions of top management and play a crucial role in the organization's control.
Strategic Planning
Strategic planning is developing strategies for achieving the organization's objectives. It's an essential strategic activity for an organization regarding market positioning, resource allocation, and future planning. It involves understanding the organization in terms of market forces, internal capabilities, and external challenges.
Vision and Mission Statements
A vision statement is necessary for the organization's operation as it provides a clear direction. The vision statement addresses the fundamental question that faces the organization: What does the organization want to become? Once the vision statement is clear, a mission statement is prepared. A mission statement is a statement that differentiates one organization from another and outlines the scope of the operations.
Objectives
Objectives signify what the organization wants to accomplish in targeting the mission and vision. Long-term objectives refer to particular results an organization wants to accomplish and form the backbone of any strategic plan. Annual objectives are significant milestones towards achieving these long-term goals.
SWOT Analysis
In strategic management, SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) is one of the important strategic tools used. The internal strengths and weaknesses of the organization are known as internal factors. Foreign companies are examples of opportunities, while local competitors can be examples of threats.
Strategy Formulation
Strategy formulation involves creating strategies that will help achieve the organization's objectives. The strategy formulation phase includes market research, competitor analysis, and goal setting. Strategies include those actions that are executed for the accomplishment of objectives.
Implementation and Control
Once strategies are formed, they are put into action using various activities. These could be recurring and repetitive situations that must be considered at the beginning of the strategic planning process. The organization's development activities are required, along with monitoring mechanisms, to ensure that annual objectives are accomplished.
Evaluation
Strategies in the form of actions are analyzed to see if they are meeting the expected results by targeting specific strategies. Evaluations may show good and harmful impacts on the organization. If a strategy isn't working as planned, corrective measures are taken.
Conclusion
Strategic management involves various elements, from vision setting to the organization's day-to-day operation. Understanding these essential strategic management terms is crucial for anyone aspiring to make informed decisions as a strategic manager. This also helps develop a successful business strategic plan involving the right mix of planning, implementation, and evaluation. Therefore, a comprehensive understanding of these management key terms that need to be considered is essential for the successful operation and control of the organization.