This paper examines the strategic management process as a framework for guiding organizational performance. It outlines six sequential steps — establishing mission and objectives, external analysis, internal analysis, strategy formulation, strategy implementation, and evaluation — and identifies five essential components of strategic management: environmental scanning, strategy formulation, strategy implementation, evaluation, and control. The paper also applies these concepts to British Airways as a real-world case study, illustrating how merger strategies, technological innovation, and communications partnerships reflect sound strategic management practice. The discussion demonstrates why strategic management is critical for organizational survival and long-term success.
Strategic management entails the steps taken and combination of managerial decisions that determine the future performance of a particular company. It encompasses the four pillars of management. Strategic plans provide a framework for the entire company to use and apply. The strategic management process consists of steps that shape implementation, strategic planning, and evaluation (Wheelen and Hunger, 2004).
Step One: The initial step is to define the mission of the company along with its aims and objectives. Every company requires a mission. When the aims and objectives of an organization are clearly established, managers can work on identifying the viability of its services and products. Managers also need to recognize the goals currently in effect and the strategies being pursued. The aims and objectives of a company can define the performance criteria that employees work to attain (Wheelen and Hunger, 2004).
Step Two: The next step is external analysis. Environmental analysis is critical to the strategy process. Managers are tasked with performing an analysis of their companies' surroundings. They should be well aware of their rivals and their ambitions. In addition, they need to understand the effects of pending legislation and how it may influence the operations of an organization and the workforce in the surrounding environment. Once the external environment is analyzed, managers should be able to examine both the specific and general environments. This helps in tracking trends and changes as they occur (Wheelen and Hunger, 2004).
Step Three: The next step is internal analysis. Managers are required to identify the pool of resources and its combination of strengths and weaknesses. The size of the organization is independent in this context. The external and internal analyses are combined in what is known as a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). Building on the SWOT analysis, managers can identify a strategic niche that the organization can enter and develop further (Wheelen and Hunger, 2004).
Step Four: Formulating strategies is the subsequent step. After the SWOT analysis is complete, managers are tasked with developing and shaping strategic options. They then need to select strategies that capitalize on the strengths of an organization and leverage environmental opportunities, or alternatively address the weaknesses of an organization and deflect possible threats. Strategies must be developed not only at the corporate level but also at the business and functional levels of any firm (Wheelen and Hunger, 2004).
Step Five: This step moves into implementation. For strategies to be successful, they must be carefully planned in advance. People with the appropriate skills need to devise effective strategies. Existing structures may need to be restructured to meet the demands of new business conditions and prevailing ideologies (Wheelen and Hunger, 2004).
Step Six: The final step is to evaluate and report on the strategies implemented within the system. Performance is assessed and compared against market standards. The necessary corrective steps are then taken to address any identified gaps (Wheelen, 2010).
The essential components of the strategic management process are as follows: strategy implementation, strategy formulation, environmental scanning, evaluation, and control.
Environmental scanning is defined as the process of scrutinizing, evaluating, and distributing information from both internal and external environments to the relevant personnel within an organization (Wheelen, 2010). It is used to lay out the strategies that will function within an organization.
Strategy formulation involves developing long-term plans for the future prospects of an organization by leveraging its strengths and weaknesses, ensuring that threats and opportunities remain manageable. Strategy implementation is the process of putting the designed strategies into effect. Evaluation and control are critical for monitoring corporate activities and performance, and for comparing acquired results against targeted results.
With the help of strategic management, a company can retain a successful market share. Companies that do not employ strategic management find it increasingly difficult to survive in the market. When organizations reach a peak in performance, a subsequent decline is often observed. Strategic management can help an organization understand and accept that change is a constant. The environment continues to evolve, and an organization must focus on the necessary strategies and traits that together shape its success and long-term prospects (Wheelen, 2010).
"How British Airways applies strategic management concepts"
Strategic management is important for improving and enhancing the prospects of an organization. When taking business decisions, all of these factors must be taken into perspective. British Airways served as the case study in this paper, helping to illustrate the method of strategic management with practical examples and reasonable clarity.
You’re 75% through this paper. Sign up to read the remaining 1 section.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.