An overview of strategic management, its importance in organizations, and the key components of strategic management processes.
Introduction to Strategic Management
Key concepts, processes, and tools for creating and sustaining competitive advantage.
| Element | Description |
|---|---|
| Definition | The systematic analysis, planning, implementation, and control of actions that enable an organization to achieve its long‑term goals. |
| Scope | Encompasses strategy formulation (what to do) and strategy implementation (how to do it). |
| Purpose | Aligns resources with the external environment, creates value, and secures a sustainable competitive advantage. |
| Level of Application | • Corporate level – overall scope, diversification, portfolio decisions. • Business (competitive) level – how to compete in a particular market. • Functional level – translating business strategy into specific departmental actions (marketing, finance, HR, etc.). |
Environmental Scanning
Strategy Formulation
Strategy Implementation
Evaluation & Control
| Tool | Primary Use | Typical Output |
|---|---|---|
| PESTEL | Scan macro‑environment (Political, Economic, Social, Technological, Environmental, Legal). | List of external forces influencing opportunities/threats. |
| Porter’s Five Forces | Assess industry attractiveness and competitive pressure. | Rating of each force (high/medium/low) → overall industry profitability. |
| SWOT | Combine internal strengths/weaknesses with external opportunities/threats. | Strategic options: SO (growth), WO (re‑position), ST (defense), WT (withdrawal). |
| VRIO | Test resources for Value, Rarity, Imitability, Organization. | Identification of sustainable competitive advantages. |
| Value Chain | Map primary & support activities to locate cost or differentiation sources. | Cost drivers, differentiation points, improvement opportunities. |
| BCG / GE/McKinsey Matrix | Portfolio analysis for resource allocation. | Classification of business units (Stars, Cash Cows, Question Marks, Dogs). |
| Balanced Scorecard | Translate strategy into operational metrics across four perspectives (Financial, Customer, Internal Processes, Learning & Growth). | KPI dashboard aligned with strategic objectives. |
| Level | Strategy | Example |
|---|---|---|
| Corporate | Diversification – entering new industries. | A consumer‑electronics firm acquires a health‑tech startup. |
| Vertical Integration – control of upstream/downstream activities. |