The Strategic Management Process

 

The Strategic Management Process

Strategic management is a continuous process that consists of nine steps:

1: DETERMINE THE MISSION, VISION, AND VALUES OF THE CORPORATION

 You should have a good understanding of the company's mission, vision, and definition of values. This is important so that the plan has a long-term perspective and respects the organization's beliefs. A mission defines what an organization is, why it exists, and why it exists. At a minimum, your mission statement should define who your key customers are, identify the products and services your company manufactures, and describe the geographic locations in which your company operates. A vision statement is a company roadmap that describes what the company wants to achieve by providing a clear direction for the company's growth. Values ​​are the fundamental beliefs that underpin a company and its actions.

2: ASSESS THE COMPANY’S STRENGTHS AND WEAKNESSES

To build a successful competitive strategy, companies must capitalize on their strengths and overcome or compensate for their weaknesses. 

 Strengths are positive internal factors that a company can leverage to achieve its mission, goals, and objectives. This includes special skills and knowledge, a positive public image, an experienced sales team, an established base of loyal customers, and many other factors. Weaknesses are negative internal factors inherent in the achievement of a company's mission, goals and objectives. Lack of capital, lack of skilled labor, lack of skill acquisition and poor location are examples of weaknesses. Identifying strengths and weaknesses helps owners  understand the current state of their business.

3: IDENTIFYING STRATEGIC OPPERTUNITIES AND THREATS

On the one hand, we identify  opportunities to achieve our goals, and on the other hand, we identify threats that hinder or hinder our goals. Both  factors must be considered for effective strategic planning. 

In short, administrators should scan both sides of their environment and use the information they gain in the course of strategic planning that may affect their organization in the future.

4: SET GOALS AND OBJECTIVES

Corporate strategy translates business goals into: 

Objectives: Individual or composite ventures that, if achieved, will create differentiated value over time. 

Example: To become the largest  renewable power provider in Europe. 

Goals: Discrete, measurable steps that describe how to achieve a specific goal. 

Example: In Europe he has 10 new wind farms  in 5 regions, with a total increase of 200% in wind capacity in 3 years. 

Once your business plan is clear, you can assess the current status of your functional activities, identify their future status, and set appropriate goals and objectives.

5: UNDERSTAND THE CUSTOMERS

In most cases, the target of the plan is the end user and is intended to engage and retain them in new purchasing decisions. For this reason, we must pay special attention to our customers and understand their buying habits. 

The planning process allows you to classify your customers into four different categories: geographic, demographic, psychological, and behavioral. By understanding their target audience, companies can develop more effective engagement strategies and  marketing campaigns.

6: DEFINE THE OVERALL STRATEGY THAT WILL BE USED

Overall strategy refers to how you achieve your results. A good strategy creates a competitive advantage and helps differentiate a company in the construction industry. 

Companies should use strategies that are best suited for their target audience and  aligned with their company's mission, vision, and values. Market conditions are dynamic, including new market entrants, new regulations, alternative products, and changing demographics, so strategies need to be constantly revised. Companies must be able to quickly assess the external business environment and its impact on their business in order to adjust their strategies as needed.

7: DEVELOP AN ACTION PLAN

An action plan symbolizes the tasks that need to be performed to achieve the initially defined goals and objectives. Generally, this plan is  based on a tool called 5W2H, which stands for seven words: 

• The 5 Ws: what (what is being done?), why (why is it being done?), where (where is it being done?), when (when is it being done?) Is it?), who (who is going to do it?) it? ). ) 

• Two Hs: How much (how much will it cost?) and how (how will it  be done?) 

A table summarizing the answers to these key questions should be developed so that the company can produce documents to support the implementation of each stage of the plan. Ultimately, the chances of successful execution are even higher.

8: MONITOR THE RESULTS

Monitoring results is a way to see if everything is going according to plan or if  execution needs to be adjusted. It is therefore important to define the tools to be used for this monitoring and to train the experts accordingly. 

Timelines and Key Performance Indicators (KPIs) are a good way to assess the progress of an action plan. Choosing the ideal metric depends on the ultimate goal of each plan.

 9: EVALUATE THE FINAL RESULTS

Properly selected and used KPIs can be used to assess the results of  strategy execution and to modify or maintain action plans based on the results. In this way, you can enter the learning process and create a feedback loop that ensures better outcomes in the future by constantly adjusting your strategies and action plans. 

It is important to record and archive the results obtained for future visibility and integration into new corporate strategies. 

By applying these steps, the company makes an ideal strategic plan.