Strategic Management

Summary

Strategic management is the ongoing process used by companies to form a vision, analyse their external and their internal environment, and select one or more strategies to use to create value for customers and other stake holders.

Three main parts of strategic management are VISION, ANALYSIS and STRATEGY. The vision inspires people, while the mission provides the direction to the firm. Firms need to analyse their external and internal environments before a strategy can be chosen and implemented. This has been demonstrated by Best Buy, analysing their external environment best buy was able to group their customers based on their different needs. After identifying their strength as supply chain management and customer relationship management systems, best buy decided to use them to serve the needs of each customer group. Strategy is an action plan designed to move an organisation towards achievement of its vision. While finding the best strategy, the firm should not use the same strategies adopted by their competitors. The firm's strategy should facilitate it to provide a unique mix of value to its customers.

Firms use the industrial organisation (I/O) model to analyse their external environment and the resource based view (RBV) for internal environmental analysis. Using the two models analysis is done by studying, identifying, selecting and implementing The I/O model assists the firm to identify the firm's strengths, core competencies, competitive advantage, resources, capabilities and distinctive competencies.

Stakeholders