As environment itself is subject to fast change, the strategy too has to be dynamic to move in accordance to the environment. In fact the two are mutually reinforcing. Focus may rely on either cost leadership or differentiation, but its market size is very small, where large competitors do ignore them. Always update yourself about customers’ needs and technology. Characteristics of Strategic Management. The strategic plan includes specific and tangible actions assigned to individuals. Diversification strategies can be of following types: Adding new, but related products or services is known as concentric diversification. It means cooperation among competitors. Often we find the two terms – strategy and tactics – being used simultaneously. Universit of Florida: George A. Smathers Libraries: Strategic Management: SWOT Analysis, Harvard Business Review: Strategic Leadership: The Essential Skills. In this regard Michael Porter has given three generic strategies, which can be converted into four. Strategic Analysis 2. An organisation can reach its destiny (vision) only if it can create value for the firm and its stakeholders (mission). The three kinds of environments need to be scanned – External,(to know of Opportunities and Threats), Internal (to know of strengths and weaknesses), and Industry (to determine competitive scenario). 2. Image Guidelines 4. Sometimes strategy formulation may suffer due to too much data but not enough information. Privacy Policy 9. As times move, senior managers may be out of touch with the environment either because of becoming lazy or due to overconfidence. The quality of financial analysis is generally very poor. 9. It includes computerization, electronisation, and digitalization (conversion of analogue electrical signals into digital signals). Essays, Research Papers and Articles on Business Management, Strategic Planning Process: 4 Key Benefits | Management, Process of Strategic Planning: 5 Stages | Management, Nature and Scope of Corporate Strategy | Strategic Management, Linear Programming: Meaning, Characteristics, Assumption and other Details, Organizing: It’s Process, Structure, Importance and Other Details, Specific and situational guidance to specific section of organisation, Gradual Political & Economic Reforms Political Stability, Terrorism Regional stability Corruption Inflation, Excess production capability (can be used for exports). If someone asks any businessperson to define his business, almost everyone sill give a manufacturing definition. Strengths refer to competencies, weaknesses refer to constraints, opportunities refer to favourable condition in the business environment of the firm, and threat means an unfavourable condition in the firm’s environment creating a risk. It involves creating organizations which generate value even in turbulent environment over a sustained period of time. (b) To highlight the strengths, which the company would try to exploit. The way to satisfy that need may change, and business will opt the new methods. Strategy involves a series of action plans, no way contradictory to each other because a common theme runs across them. These strategies may be Operations Strategy, Marketing Strategy, Finance Strategy, and Human Resource Strategy. Normally, the way people define their business has been termed by a marketing scholar as marketing myopia. A strategic plan is only as useful as the quality of information that goes into it. It is the strategy which provides the reason to initiate tactics. The term strategy has been borrowed from military. Strategic management has now become invincible. If the vision is to be industry leader, increases sales is part of this strategy, but to sell in bulk to achieve the vision, the discount given to a bulk buyer is tactic. Prior Bad Experience and Fire-Fighting: If the managers had a previous bad experience with strategy, as the plans have been long, cumbersome, impractical, or inflexible or if presently it is so engrossed with the crisis management and fire-fighting that it has no time for strategy formulation any more. Old Mindset. On-Going Process: Strategic Management is the continuous process that takes place to the existence of the organization. It is true that we treat the CEO as the person responsible for formulating strategy. Strategic management has now become invincible. Ask a railway company the reply will be in railway business. It involves a systematic analysis of the internal strengths and weaknesses (financial, managerial, marketing, or technological) and of external opportunities and threats (like change in demand, law, or technologies. The SWOT analysis is a common tool for analyzing external and internal factors. It is an internal evaluation to be in fit with external world.