What is strategic management?

ENVIRONMENTAL SCANNING:

Strategic management involves developing and implementing plans to help an Environmental scanning is a process that systematically surveys and interprets
organization achieve its goals and objectives. This process can include relevant data to identify external opportunities and threats. An organization gathers
formulating strategy, planning organizational structure and resource information about the external world, it's competitors and itself.
allocation, leading change initiatives, and controlling processes and
resources * The following is the need and importance of environmental scanning:

Strategic planning involves identifying business challenges, choosing the 1) Identification of strength.
best strategy, monitoring progress, and then making adjustments to the
executed strategy to improve performance. Tools like SWOT (strengths, 2) Identification of weakness.
weaknesses, opportunities, and threats) analysis are used to assess where
opportunities and threats lie between the organization, its competition, and
3) Identification of opportunities.
the overall market.
4) Identification of threat.
Steps:
5) Optimum use of resources.
Goal Setting-Making a road map to assist you in achieving your vision is the
central focus of the strategic management process. Therefore, you must be
clear about the goals your firm has before moving forward. A vision statement 6) Survival and growth.
is a common first step in the strategic management process for businesses
7) To plan long- term business strategy.
Analysis -Analysis is the next important strategic management step. Knowing
your existing position is absolutely necessary before defining strategy and 8) Aids decision-making.
other actions. This encompasses both internal and external factors,
including your location, structure, and talent that are internal factors, as well Importance of Environmental Scanning
as external factors like your competition and market forces.
• Goal Accomplishment: The objectives of an organization cannot be
Strategy Formulation-Utilizing the knowledge readily at hand, the process of fulfilled unless it adapts itself to environmental changes. One has to
developing a strategy include noting the predicted trajectory of a business adjust the strategies to fit in the changing demands of the environment.
and the practical steps to meet its goals. This procedure is used to allocate
resources, set priorities, align the entire organisation, and validate business • Threats and Weakness Identification: For an organization to grow, it must
objectives. minimize its threats and identify its weaknesses. This is made possible
with the help of environmental scanning with which better strategies can
Strategy Implementation-Strategy implementation is the process of setting be developed.tz
plans into action to obtain a desired result. In essence, it’s the art of
accomplishing things. Every organisation’s ability to make choices and carry • Future Forecast: Environmental changes are often unpredictable. An
out crucial procedures effectively, consistently, and efficiently determines organization cannot anticipate all the future events but based on the
how successful it will be analysis, it can make better strategic decisions in the future. Hence,
environmental analysis helps to forecast the prospects of the business.

• Market Knowledge: Every organization must be aware of the ongoing

corporate level strategy changes in the market. If it fails to incorporate strategic changes due to
changing demands, it will not be able to achieve its objectives.
1. Understand the business and its objectives
Talk to people throughout the organization to gain a full • Focus on the Customer: Environmental scanning and analysis make an
understanding of the business’s past achievements, the products organization sensitive to the changing needs and expectations of the
or services that it offers today, and what it hopes to accomplish customer.
in the future.
• Opportunities Identification: With the analysis of the current
2. Evaluate employee skillsets environment, an organization will be able to identify the possible
Review employee performance, resumes, project history and opportunities and take necessary steps
continuing education to assess the collective workforce skill
level. A SWOT analysis is a strategic planning tool used to identify and evaluate the
Strengths, Weaknesses, Opportunities, and Threats of an organization, project, or
3. Conduct a gap analysis business initiative. This analysis helps businesses and individuals understand both
Determine if employees have what they need to maximize their internal and external factors that can impact the success of their strategy or decision-
productivity or if investments in additional resources are making.
necessary.
Components of SWOT Analysis:
HR
1. Strengths (Internal Factors)
Finance These are the internal attributes or resources that provide a competitive
advantage. They represent what the organization does well.
Marketing Examples:

Resource allocation refers to the process of efficiently distributing available o Strong brand reputation/ Skilled workforce/Unique
resources (such as time, money, personnel, equipment, or raw materials) to technology or intellectual property
various projects, departments, or tasks within an organization to achieve
specific goals. Effective resource allocation ensures that resources are used
optimally to maximize output, minimize waste, and meet organizational o Loyal customer base
objectives.
2. Weaknesses (Internal Factors)
Key components of resource allocation include: These are internal limitations or areas where the organization lacks
capability or struggles, which could hinder success.
1. Identifying Resources: This involves recognizing what resources Examples:
are available, such as human resources, capital, technology, and
materials. o Lack of funding or capital/Gaps in expertise or
technology/Poor location or facilities
2. Prioritization: Not all tasks or projects may require the same level
of attention. Prioritizing them based on factors like urgency,
importance, and potential returns helps in allocating resources
o Weak online presence
effectively.
3. Opportunities (External Factors)
These are external factors or trends that the organization can exploit to
3. Resource Scheduling: Ensuring that resources are available at
its advantage, representing possibilities for growth and improvement.
the right time and in the right quantities to meet the needs of
Examples:
different projects or departments.

4. Monitoring and Adjusting: Resource allocation is dynamic, and o Emerging markets or trends
adjustments may be required based on changing circumstances
or new information.
o Advances in technology
5. Tools and Techniques: Techniques such as the Pareto Principle
(80/20 rule), Gantt charts, or resource management software (e.g., o Changes in regulations that benefit the business
Asana, Trello, Microsoft Project) are often used to support
effective resource allocation. o Strategic partnerships

4. Threats (External Factors)

These are external challenges that could pose risks or obstacles to the
organization’s performance or strategy.
Examples:

o Increased competition

o Economic downturns

o Changing customer preferences

o New regulations or political instability

o Strong brand message around environmental

consciousness