The strategic management process includes strategy formulation, implementation, and evaluation, with situation analysis often performed first. Methods such as SWOT or PEST can be used to determine the environment. The process is an ongoing cycle that allows for reassessment and improvement.
There are usually 3-4 components of the strategic management process, depending on how the system is being used. The process always includes strategy formulation, implementation and evaluation. In many cases, an analysis of the environment or situation is performed before the other phases.
When used, situation analysis is the first of the strategic management components. This review can be done in various ways. One of the most common is the strengths, weaknesses, opportunities and threats (SWOT) analysis. Another is the Political, Economic, Sociocultural and Technological Review (PEST). Methods like these and many others can be used to determine the type of environment in which the strategy will run.
The next component of the strategic management process is strategy formulation. This is the planning stage, where the tasks associated with implementing the strategy are outlined. This step usually also determines what resources, such as funding, tools and skills, are needed to achieve the goal. It can be helpful to imagine the complete organizational goal and then work backwards, imagining which specific steps would lead to success.
Strategy implementation is the next of the components of the strategic management process. He’s essentially putting the plan into action. This includes educating the workforce on what needs to be done, delegating tasks and getting work done. Once the plan has been set in motion, it will often be necessary to make some changes to the strategy. For the most part, the process should follow the steps determined during strategy formulation.
Once the strategy has been executed, the next step is to evaluate the process in order to determine whether the organizational objectives have been achieved. This step includes evaluating the success of the strategic plan, including the quality of the deliverables. If the results are not satisfactory, corrections will usually be made where possible. The evaluation may also include an analysis of how well the organization has implemented its strategy so that improvements can be made to future initiatives.
In its most effective form, the strategic management process is an ongoing cycle. It provides a strong opportunity for an organization to both reassess itself and take action to fix areas where it is not performing optimally. While steps are best done in order, if it’s a regular part of organizational culture, components can be rearranged into smaller areas.
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