What is Strategic Management? | From A Business Professor

Summary

This 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

00:00

📚 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.

05:02

🚗 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.

Keywords

💡Strategic Management

Strategic Management is defined as the planned use of a company's resources to achieve its goals and objectives. It is the core theme of the video, emphasizing the proactive nature of businesses in adapting to market changes. The script explains that it involves ongoing evaluation of internal processes and external factors, which is crucial for companies of all sizes and industries to gain a competitive advantage, achieve goals, ensure sustainable growth, foster a cohesive organization, and increase managerial awareness.

💡Competitive Advantage

Competitive Advantage refers to the attributes that enable a company to outperform its competitors. In the context of the video, Strategic Management provides businesses with this advantage by keeping them aware of market changes, thus allowing them to formulate proactive strategies. The script mentions that being proactive helps in maintaining a competitive edge, which is a key benefit of strategic management.

💡Achieving Goals

Achieving Goals is about using a clear and dynamic process to formulate steps and implement them effectively. The video script illustrates this by stating that Strategic Management helps in keeping goals achievable, which is essential for the success of any business venture.

💡Sustainable Growth

Sustainable Growth is the concept of managing growth in a way that can be maintained over the long term. The script mentions that Strategic Management has been shown to lead to more efficient organizational performance, which in turn leads to manageable growth, highlighting the importance of strategic planning for long-term business health.

💡Cohesive Organization

A Cohesive Organization is one where all parts work together harmoniously towards a common goal. The video script explains that Strategic Management necessitates communication and goal implementation across the company, which helps in creating a unified direction and effort, thus increasing the likelihood of achieving set goals.

💡Increased Managerial Awareness

Increased Managerial Awareness pertains to managers consistently looking toward the company's future and being aware of industry trends and challenges. The script emphasizes that by implementing strategic planning and thinking, managers will be better prepared to face future challenges, which is a significant aspect of strategic management.

💡Identifying Direction

Identifying Direction is the first step in the strategic management process, which requires an organization to have a clear vision and direction before developing plans. The script uses this term to explain the importance of setting short and long-term objectives as a prerequisite for clarity on processes and procedures.

💡Analyzing Resources

Analyzing Resources involves assessing what a company has at its disposal to carry out specific tasks effectively. The video script mentions this step to highlight the importance of resource allocation and selection for respective processes, which is crucial for reaping the benefits of strategic management.

💡Framing Strategies

Framing Strategies is about developing an action plan to accomplish goals after selecting the best resources for every process. The script describes this step as part of strategic planning, which includes the analysis, assessment, and supervision of processes at every stage to resolve issues.

💡Implementing Strategies

Implementing Strategies is the execution phase of the strategic management process, where the developed strategies based on the organization's objectives are put into action. The script explains that this step requires training of human resources and ensuring they understand the process to bring core competencies into action for the best possible output.

💡Evaluating Effectiveness

Evaluating Effectiveness is the final step in the strategic management process, involving a review of strategies to assess the efforts of every individual in the organization. The script mentions that this step helps identify the contributions of team members through performance appraisal schemes, which are essential for business success.

💡Stark Auto

Stark Auto is used as an example in the script to illustrate the five steps of strategic management in the context of a car manufacturer preparing to introduce a new model of electronic sedan. The example serves to contextualize the strategic management process, showing how it can be applied in a real-world business scenario to ensure a successful product release.

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