Strategic management model
A strategic management model is a framework or approach used by organizations to make strategic decisions and plan for the future. It typically includes steps such as setting objectives, analyzing the internal and external environment, formulating and implementing strategies, and evaluating progress and making adjustments as needed. Some popular strategic management models include SWOT analysis, Porter's Five Forces, and the Balanced Scorecard. The choice of model will depend on the organization's specific needs and goals.
Diagram of the overall concept of strategic management model is shown in the figure below. Particular attention should be paid to the functional information and feedback indicating the dynamic nature of strategic management in the enterprise.
After implementation such model should take into account changes in business environment and their impact on the realized strategy. In the extreme case mission of the company or its chief strategic goal could be modified or adapted.
Strategic management model vs. business model
A strategic management model and a business model are both frameworks used by organizations to guide decision-making and achieve success, but they serve different purposes.
A strategic management model is a framework used to guide an organization in achieving its long-term goals and objectives. It focuses on the overall direction and strategy of the organization and involves analyzing the internal and external environment, setting objectives, formulating and implementing strategies, and monitoring and adjusting as needed.
A business model, on the other hand, describes how an organization creates, delivers, and captures value. It outlines the key elements of an organization's operations and how it generates revenue. A business model describes the products or services offered, the target market, the distribution channels, the revenue streams, and the key partnerships and resources required to deliver the products or services. Examples of business models include subscription-based models, freemium models, and pay-per-use models.
In summary, a strategic management model focuses on the organization's overall direction and strategy, while a business model describes the organization's operations and how it generates revenue. Both are important frameworks that organizations use to guide decision-making and achieve success.
Development of strategic management model
Developing a strategic management model typically involves the following steps:
- Define the organization's mission, vision, and values: These provide a clear sense of direction and purpose for the organization.
- Conduct a SWOT analysis: This will help to identify the organization's strengths, weaknesses, opportunities, and threats, which can be used to inform strategy development.
- Develop strategic objectives: These should be specific, measurable, achievable, relevant, and time-bound (SMART) and aligned with the organization's mission and vision.
- Formulate strategies: This involves identifying the actions and plans needed to achieve the strategic objectives.
- Implement and execute the strategies: This involves allocating resources, building a plan of action, and communicating the plan to all stakeholders.
- Monitor and evaluate progress: This involves tracking progress against the strategic objectives and making adjustments as needed.
- Review and update the model: This involves periodically revisiting the model to ensure it remains relevant and effective in light of changes in the organization's internal and external environment.
It's worth noting that, this is a general outline and the steps may vary depending on the complexity of the organization or the industry it operates in. Additionally, some organizations may prefer to use different strategic management models such as Porter's Five Forces, the Balanced Scorecard, or others.
Strategic management model importance
Developing the strategic management model is important because it provides the basic framework for understanding how strategic management can be operationalised at the company level. The strategic management model provides managers and strategists a greater comprehension of the iterative approach in conducting real strategic management in the organizational setting. The strategic management model begins with the development of the organizational mission and vision. The organizational vision and mission would then be translated into the organizational goals. These elements show the direction and the areas of concern to be attained by an organization. Once these elements have been determined, the role of the manager or strategist is to perform an analysis of the organization. The results of these analyses could help managers and strategists to match the niche areas to be focused, identify distinctive competence of the organization and determine the competitive position the organization should take in order to sustain its competitive edge in the industry[1].
Strategic Management
Strategic management is the process of making decisions and taking actions that will shape and guide an organization in achieving its long-term goals and objectives. It involves the development of a strategic plan that outlines the organization's mission, vision, values, and objectives, and the formulation and implementation of strategies to achieve those objectives. The process of strategic management also includes ongoing monitoring and evaluation of progress, and making adjustments as needed to stay on track.
Key components of strategic management include:
- Environmental scanning: monitoring the internal and external environment to identify opportunities and threats
- Strategy formulation: determining goals and objectives, and developing plans and actions to achieve them
- Strategy implementation: putting the plan into action, allocating resources and establishing metrics for measuring progress
- Evaluation and control: monitoring progress, making adjustments as needed, and taking corrective action to ensure that goals and objectives are met.
Strategic management is a continuous process that allows organizations to adapt to changes in the business environment, stay competitive and achieve long-term success.
Strategic Managers
Managers play a key role in the strategy-making process. They must take responsibility for formulating strategies, which the aim is to attain a competitive advantage and to putting those strategies into effect. There are two mains types of managers:
- general managers - they are bear responsibility for the overall performance of the company
- functional managers - they are responsible for supervising a particular function, for example: a task, activity, or operation.
General managers have profit and loss responsibility for a product, a business, or the company as a whole. They are responsible for deciding how to create a competitive advantage and achieve high profitability thanks the resources and capital[2].
| Strategic management model — recommended articles |
| Business motivation model — Strategic direction — Strategic planning — Goal intensity matrix — Methodology for strategy definition — Structure follows strategy — Strategic control — Organizational planning — Nature of strategic management |
References
- Dess G. G., Lumpkin G. T., & Eisner A. B. (2010). Strategic management: Text and cases.
- Hill C., Jones G., Schilling M. (2014).'Strategic management: theory’, Cengage Learning.
- Narayan B. (2000) Strategic Management, A.P.H. Publishing Corporation.
Footnotes
Author: Karolina Piotrowska
