What is Strategic Management? | From A Business Professor
Summary
TLDRThis video offers an insightful overview of strategic management as a capstone course for business students, emphasizing its importance in achieving competitive advantage, goal attainment, sustainable growth, cohesiveness, and managerial awareness. It outlines the five-step process of strategic management: identifying direction, analyzing resources, framing strategies, implementing strategies, and evaluating effectiveness. Using a car manufacturer's example, it illustrates how these steps can be applied to develop and launch a new electric vehicle model, highlighting the continuous need for strategic planning in dynamic business environments.
Takeaways
- 📚 Strategic Management is the planned use of a company's resources to achieve its goals and objectives, requiring ongoing evaluation of internal and external factors.
- 🏆 It offers competitive advantage by keeping the company proactive and aware of market changes.
- 🎯 It helps in achieving goals through a clear and dynamic process for formulating steps and implementation.
- 🌱 Strategic Management leads to sustainable growth by improving organizational performance and enabling manageable expansion.
- 🔄 It creates a cohesive organization by necessitating communication and goal implementation across the company.
- 👀 Increased managerial awareness is fostered as managers consistently look toward the company's future, becoming more aware of industry trends and challenges.
- 🛣️ The process of strategic management generally involves five steps: identifying direction, analyzing resources, framing strategies, implementing strategies, and evaluating effectiveness.
- 🧭 Identifying direction is crucial as it sets clear vision and short and long-term objectives for the organization.
- 📈 Analyzing resources involves assessing the company's strengths and weaknesses, as well as opportunities and threats in the industry.
- 🛠️ Framing strategies is about creating an action plan with elements needed to achieve set objectives, including analysis, assessment, and supervision of processes.
- 🚀 Implementing strategies requires training and alignment of all employees to ensure they understand and execute the company's processes effectively.
- 🔍 Evaluating effectiveness involves reviewing strategies and recognizing individual efforts through performance appraisal schemes.
- 🚗 An example of a car manufacturer, Stark Auto, illustrates the five steps of strategic management in the context of introducing a new electric sedan model.
Q & A
What is the primary purpose of Strategic Management?
-Strategic Management is the planned use of a company's resources to reach its goals and objectives. It involves ongoing evaluation of internal processes and external factors that may impact the company.
How does Strategic Management benefit businesses of all sizes and industries?
-Strategic Management benefits businesses by providing competitive advantage, helping to achieve goals, leading to sustainable growth, creating a cohesive organization, and increasing managerial awareness of industry trends and challenges.
What are the five key perspectives from which companies can benefit from Strategic Management?
-The five key perspectives are competitive advantage, achieving goals, sustainable growth, cohesive organization, and increased managerial awareness.
What are the five steps in the process of Strategic Management?
-The five steps are identifying direction, analyzing resources, framing strategies, implementing strategies, and evaluating effectiveness.
Why is it important for an organization to have a clear vision and direction before developing plans?
-Having a clear vision and direction is crucial as it provides the necessary clarity on processes and procedures, ensuring that the company has a focused approach towards its short and long-term objectives.
How does analyzing resources help in the Strategic Management process?
-Analyzing resources allows the organization to assess its strengths and weaknesses, ensuring that the best resources are selected for respective processes to maximize the benefits of Strategic Management.
What is the role of framing strategies in the Strategic Management process?
-Framing strategies involves creating an action plan to accomplish the set goals. It includes the analysis, assessment, and supervision of processes at every stage to help the business resolve internal or external issues.
Why is it necessary to train employees from all levels in the execution of strategies?
-Training employees from all levels ensures they fully understand the process, bringing core competencies into action within the organization for the best possible output.
How does the evaluation of strategies help in the Strategic Management process?
-Evaluating strategies helps management identify the efforts of every individual, allowing the organization to recognize these efforts through performance appraisal schemes, which are essential for business success.
Can you provide an example of how a car manufacturer might apply the five steps of Strategic Management?
-A car manufacturer like Stark Auto can apply the steps by first identifying the direction for a new electric sedan model. They would then analyze their resources and the market, frame strategies to meet consumer needs, execute the manufacturing process while coordinating with suppliers, and finally evaluate the effectiveness of the strategies through thorough inspection and performance appraisal.
What is the significance of ongoing planning, monitoring, analysis, and assessment in Strategic Management?
-Ongoing planning, monitoring, analysis, and assessment are significant as they allow organizations to constantly assess their strategies in response to changes in the business environment, ensuring continued success.
Outlines
📚 Introduction to Strategic Management
This paragraph introduces the concept of Strategic Management as the capstone topic for management majors and a holistic tool for business majors to analyze operations. It defines Strategic Management as the planned utilization of company resources to achieve goals, emphasizing its importance for competitive advantage, goal achievement, sustainable growth, cohesive organization, and increased managerial awareness. The paragraph outlines the five-step process of Strategic Management: identifying direction, analyzing resources, framing strategies, implementing strategies, and evaluating effectiveness, highlighting the benefits for businesses of all sizes and industries.
🚗 Case Study: Stark Auto's Strategic Management
This paragraph delves into a practical example of Strategic Management through the lens of Stark Auto, a car manufacturer preparing to launch a new electric sedan. It outlines the five-step process applied by Stark Auto: identification, where the company sets clear objectives; analysis, involving internal and external assessments to understand market trends and consumer needs; strategy formation, focusing on improving the vehicle's cruise range and interior design for competitive advantage; execution, which includes close monitoring of the supply chain and effective communication with suppliers; and evaluation, ensuring thorough inspection of the final product for quality assurance. The example illustrates the application of Strategic Management principles in a real-world business scenario.
Mindmap
Keywords
💡Strategic Management
💡Competitive Advantage
💡Achieving Goals
💡Sustainable Growth
💡Cohesive Organization
💡Increased Managerial Awareness
💡Identifying Direction
💡Analyzing Resources
💡Framing Strategies
💡Implementing Strategies
💡Evaluating Effectiveness
💡Stark Auto
Highlights
Strategic Management is the planned use of a company's resources to reach its goals and objectives.
Strategic Management requires ongoing evaluation of internal processes and external factors.
Companies of all sizes and industries can benefit from strategic management.
Strategic Management provides a competitive advantage by being proactive and aware of market changes.
It helps keep goals achievable through a clear and dynamic process for formulating steps and implementation.
Strategic Management leads to more efficient organizational performance and sustainable growth.
It necessitates communication and goal implementation company-wide for a cohesive organization.
Strategic Management increases managerial awareness of industry trends and challenges.
There are generally five steps in the strategic management process.
The first step is identifying direction by having a clear vision and objectives.
Analyzing resources is essential to arrange them effectively for specific tasks.
Framing strategies involves creating an action plan with elements needed to achieve objectives.
Implementing strategies requires training employees at all levels to understand and execute the process.
Evaluating effectiveness involves reviewing strategies and recognizing individual efforts through performance appraisal.
An example of a car manufacturer using strategic management to introduce a new electric sedan model.
The importance of internal and external analysis to identify core strengths, weaknesses, opportunities, and threats.
Designing a product that meets consumers' changing needs and desires, while being attractive and functional.
Executing the manufacturing process by monitoring the supply chain and coordinating with suppliers.
Evaluating the final product for defects and inconsistencies before sending it to dealerships.
Strategic management involves ongoing planning, monitoring, analysis, and assessment to meet organizational goals.
The video provides a brief introduction to strategic management and its core contents covered in the course.
Transcripts
hello everyone welcome to business
school 101 strategic management is
normally considered the Capstone topic
or course for management major students
for other business major students
Strategic Management can also offer a
big picture to analyze business
operations so what is Strategic
Management what are the benefits and
processes of strategic management in
this video I will discuss these
questions with you
section one what is Strategic Management
strategic management is the planned use
of a company's resources to reach its
goals and objectives Strategic
Management requires ongoing evaluation
of internal processes and external
factors that may impact how a company
functions companies of all sizes and in
all Industries can benefit from the
practice of strategic management from
the following perspectives number one
competitive Advantage Strategic
Management gives businesses an advantage
over competitors because its proactive
nature means your company will always be
aware of the changing market number two
achieving goals Strategic Management
helps keep goals achievable by using a
clear and dynamic process for
formulating steps and implementation
number three sustainable growth
Strategic Management has been shown to
lead to more efficient organizational
performance which leads to manageable
growth number four cohesive organization
Strategic Management necessitates
communication and goal implementation
company wide an organization that is
working in unison towards a goal is more
likely to achieve that goal number five
increased managerial awareness Strategic
Management means looking toward the
company's future if managers do this
consistently they will be more aware of
Industry Trends and challenges by
implementing strategic planning and
thinking they will be better prepared to
face future challenges
section 2 process of strategic
management for Strategic Management
there are generally five steps in the
process step one identifying Direction
the first step requires the organization
to have a clear vision and Direction
before developing plans a business
should determine its short and long-term
objectives the company will not have any
Clarity on processes and procedures
unless it sets its goals beforehand step
two analyzing resources an organization
must first arrange its resources to
carry out specific tasks to reap the
Strategic Management benefits for
example someone who excels at marketing
May struggle to manage the
organization's public relations hence
the management should assess its
resources and select the best one for
respective processes step 3 framing
strategies after selecting the best
resource for every process the
organization frames its action plan for
accomplishing the goal this strategic
planning consists of elements needed to
achieve the set objectives of
effectively the analysis assessment and
supervision of processes at every stage
help the business resolve issues whether
internal or external step 4 implementing
strategies following the strategy
development based on the organization's
objectives the next stage is to execute
them every business must train its human
resources from entry-level employees to
managers to ensure they fully understand
the process it will bring core
competencies into action within the
organization for the best possible
output step 5 evaluating Effectiveness
the review of strategies is the final
step in the process looking into each
aspect of the business during the
strategy formulation and implementation
helps the management identify the
efforts of every individual the
organization can recognize these efforts
through performance appraisal schemes
which are essential aspects of the
business
Section 3 an example let's use a car
manufacturer as an example to understand
the five steps of strategic management
step one identification a car
manufacturer named Stark Auto is
preparing to introduce a new model of
the electronic sedan to meet the
increasing demand for electronic
Vehicles they decide to implement
Strategic Management to ensure that the
product release goes smoothly
efficiently and successfully Step 2
analysis in the past Stark Auto's
electronic vehicles have suffered from
short Cruise range and poor Driving
Experience before designing their new
model they decided to run both internal
and external analyzes to check their
company's core strengths and weaknesses
as well as industry opportunities
threats and market trends for example
Stark Auto have to know what resources
they have which brands on the market are
its major competitors who are their
target consumers which core functions do
their Target customers care about the
most step 3 form formation Stark Auto
has a tough job as the design must meet
the consumers consistently changing
needs and desires and the process often
involves many revisions to find the
perfect fit the interior and exterior
must also be attractive and functional
to potential buyers while including
Innovative Technologies that make the
car newsworthy and competitive for
example to gain a competitive Advantage
Stark Auto should focus more on
increasing the cruise range and
improving the interior design to make
the new model more attractive
step 4 execution once the design and
Engineering specifications have been
checked the car manufacturing process
officially starts Stark Auto must
monitor the whole supply chain closely
to ensure all different parts arrived at
the plant at the right place and right
time it also must Implement management
strategies and sophisticated engineering
to make sure the manufacturing and
assembling process runs smoothly as we
know producing a car is not an easy job
for example Tesla's Model S uses over 2
000 purchased Parts which we Source
globally from over 300 different
suppliers it is extremely challenging to
manage a plant with so many business
partners to better execute the plan
Stark Auto has to work coordinately and
communicate effectively with all of its
suppliers step 5 evaluation when all the
stages of production have been completed
the fully assembled card then has to be
thoroughly inspected to ensure there are
no defects before sending it to car
dealerships this process also involves
checking for any imperfections or
inconsistencies with the exterior or
interior
section 4 summary let's wrap up today's
topic strategic management is the
ongoing planning monitoring analysis and
assessment of all Necessities an
organization needs to meet its goals and
objectives changes in business
environments will require organizations
to constantly assess their strategies
for success as the course introduction
this video just wants to give you a
brief idea about what strategic
management is and what core contents are
covered in the course you can find more
detailed content with explanations from
other videos in the playlist if you have
any questions regarding this video
please leave your thoughts in a comment
below I hope that you guys have enjoyed
this video and if you did make sure you
give it a thumbs up and subscribe to my
channel thanks for watching and I will
see you next time
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