Advantage Of Strategic Management

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Strategic management is a set of decisions and activities that directs the long-term performance of an organisation, which includes environmental analysis, strategy formulation, strategy implementation, strategy evaluation and control (Wheelen & Hunger, 2010). And strategic management, which will assure its continuous success and make it secure from changing situation, is an approach to connect the management of organisation with its environment (Ansoff, 1984). Strategic management can provide coordination between actions, objectives and direction for organisation to achieve organisational goals. 1.1 Core competencies Strategy is the direction and scope of an organisation over the long-term, which need use its resources to achieves advantage…show more content…
In order to build core competencies, it is necessary to meet 3 criteria: market access, benefits consumers, unique and difficult to imitate, which can lead to competitive advantages. Cost leadership strategy and differentiation strategy are 2 important strategies to gain competitive advantages. 1.2 three levels of strategy Strategic management is a combination of strategy formulation and strategy implementation, which categories into three level of strategy: corporate-level strategy, business-level strategy, and functional-level strategy. A strategy of organisation makes strategic plan to achieve its mission and objectives. The typical organisation usually uses 3 types of strategy: corporate, business and functional (Wheelen & Hunger, 2010). Corporate strategy is a firm’s theory of how to gain competitive advantage by operating in several businesses in the same time (Barney, 2012). In other words, corporate strategy focus on the whole business of an organisation, and it concentrates on how to add values to businesses of the organisational (Johnson, et al.,…show more content…
Business strategies focus on the individual businesses, and it concentrates on how to compete in the single market or industry (Johnson, et al., 2014). Business strategies can classify into competitive and cooperative strategies (Wheelen & Hunger, 2010). There are 3 generic business strategies: cost leadership, differentiation, and focus strategy. The functional strategies are the level of the operating divisions and departments in organisation (Mintzberg, Lampel & Ahlstrand, 2009), and functional strategies focus on how to deliver the corporate and business strategies effectively in terms of resources, processes and people (Johnson, et al., 2014). Functional strategies are directed to improve the effectiveness of functional operations of the firm such as manufacturing, finance, R&D, marketing and human resources. Corporate-level strategy and business-level strategy is about formulating strategy of an organisation, while the functional-level strategy is about how to implement strategies into
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