Functional areas could be; operational management, marketing management, human resource management or financial management etc. Figure 2. The hierarchy of Strategy  Enterprise-level strategies could be termed as long-term strategies as they define the mission of an organisation, business-level strategies can be termed as medium-level strategies as they focus on a product or project to gain a competitive edge. Functional strategies can be termed as short-term strategies as they are defined within a project to complete day-to-day or monthly
Generally, strategic management is based on setting an organization‘s long-term development direction. The main business objective of this is to achieve a competitive advantage over other organizations by properly controlling resources and maximizing competencies within the organization. The culture of the business, the skills
In his book Competitive strategy, Porter defines business strategy as an internally consistent configuration of activities that distinguish a firm from its rivals (Porter, 1998). Based on this definition, we deduct the importance of not only setting the techniques, ideas or tactics but also their continuous implementation in order to gain a great market positioning through differentiation. The basic definition of Strategic management that many researchers agree on, is a set of
1. Functional strategies can be defined as goal-directed plans and actions of an organizations functions areas. However, there are several functional areas that organizations needs which are: operation strategy, marketing strategy, human resources strategy, production strategy, research and development strategy, financial strategy, and organization strategy. These strategies are used to help an organization achieve their goals and objectives in an effective approach. 2.
The decisions a company makes on its way to creating, maintaining and using its competitive advantages are business-level strategies. A strategic business unit can consist of a product line, division, or other profit centers that can be planned separately from the other business units of the company. After evaluating the company’s product line, target market and competition, a small business owner can better identify where her competitive advantage lies. The strategy formulation phase at the business level deals with positioning of the business against rivals, strategy need to be changed according to the expected changes in the demand and Influence the nature of competition through vertical integration and political actions. There are three generic strategies which are cost leadership, differentiation, and focus that can be implemented at the business unit level in order to create a competitive advantage for the company.
Strategic management as a term and concept is not new. The term was first used in the 1970s, and it meant that a staff of strategic planners more or less thought up strategic programs and then tried to sell them to decision makers. In the 1990s, the view of strategic planning and strategic management is much different. Goodstein, Nolan, and Pfeiffer’s definition of strategic planning takes us away from the notion that strategic planning is a staff job and focuses us more on a process that requires the senior leaders of an organization to set its strategic direction. It is defined as the process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future .
Strategic planning plays an important role for an organization. It is a discipline and process to guide decisions, actions and shape what and why the organization is and does. Strategic planning and long-term planning cover several years. However, strategic planning requires organizations to check what it is and its working environment (Christine, 2015). Strategic planning also assists the organization to focus its attention on those key issues and challenges.
It is a mechanism that helps organizations to conduct a better performance, because it allocates resources toward achieving an organization’s ultimate objectives (Olsen, 2007). Also, Bryson (1995) stressed that strategic management enhances the process of individuals operating together, creates a forum for discussing why an organization exists and how shared values impact decisions and encourage fruitful correspondence and cooperation among directors and employees. As for Smith (1994), the concept of strategy is considered as a viable management device utilized in fortifying an organization performance through systematic strategy formulation and implementation. Strategic management assists organizations to plan and execute strategies that play the role in attaining their aspirations and goals (Rowe et al.,
Introduction Strategic management is a scientific approach of framing, administering and evaluating decisions across several functions to achieve defined objectives of an organization. It allows corporate organizations to adapt themselves to changing scenarios in the niche without diluting the focus on goals and attention to the main objective. Strategic management helps organization staying relevant to the times and makes it adaptive. In fact, an effective strategy gives an edge over competitors. The process involves planning, analysis, formulation and execution.
The organization operates as oiled machine, where each performs a separate function. Management cannot be reduced to a set of routine procedures and schemes. Objectives, strategies and plans are well communicated to employees in order to obtain from them as the understanding of what makes the company and their formal involvement in the implementation of strategies. It requires enormous effort and great expense of time and resources to ensure that the organization was launched strategic management