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MANAGING STRATEGIC DEVELOPMENT PROCESS

Meaning.

Managing Strategic Development Process involves the formulation and


implementation of the major goals and initiatives taken by a company's top
management on behalf of owners, based on consideration of resources and
an assessment of the internal and external environments in which the
organization competes.

Definition.

Strategic management involves setting objectives, analyzing the


competitive environment, analyzing the internal organization, evaluating
strategies, and making sure that the strategies are rolled out across the
organization.

Managing Strategic Development process.


1.Environmental Scanning.
Environmental scanning refers to a process of collecting, scrutinizing and
providing information for strategic purposes. It helps in analyzing the
internal and external factors influencing an organization .
2.Strategic Formulation.
Strategy formulation is the process of deciding best course of action for
accomplishing organizational objectives and hence achieving organizational
purpose. After conducting environment scanning, managers formulate
corporate, business and functional strategies.
3.Strategic Implementation.
Strategy implementation implies making the strategy work as intended or
putting the organizations chosen strategy into action. Strategy
implementation includes designing the organizations structure, distributing
resources, developing decision making process, and managing human
resources

4.Strategic Evaluation.

Strategy evaluation is the final step of strategy management process. The


key strategy evaluation activities are:
Appraising internal and external factors that are the root of present
strategies, measuring performance, and taking remedial / corrective actions.
Evaluation makes sure that the organizational strategy as well as its
implementation meets the organizational objectives.

Components of the Managing Strategic Development Process Model


1.Company Mission.

The mission of a company is the unique purpose that sets it apart from other
companies of its type and identifies the scope of its operations.

2.Internal Analysis.

The company analyzes the quantity and quality of the companys financial,
human, and physical resources. It also assesses the strengths and weaknesses of the
companys management and organizational structure.

3.External Environment.

A firms external environment consists of all the conditions and forces that affect
its strategic options and define its competitive situation.

4.Strategic Analysis and Choice.


Strategic analysis and choice in single or dominant product/service
businesses center around identifying strategies that are most effective at
building sustainable competitive advantage based on key value chain
activities and capabilitiescore competencies of the firm.

Benefits Of Managing Strategic Development Process.


Strategy

formulation activities enhance the firms ability to prevent problems.


Managers who encourage subordinates attention to planning are aided in their
monitoring and forecasting responsibilities by subordinates who are aware of the
needs of strategic planning.

Group-based

strategic decisions are likely to be drawn from the best available


alternatives. The strategic management process results in better decisions because
group interaction generates a greater variety of strategies and because forecasts based
on the specialized perspectives of group members improve the screening of options.

The

involvement of employees in strategy formulation improves their understanding


of the productivity-reward relationship in every strategic plan and, thus, heightens
their motivation.

Gaps

and overlaps in activities among individuals and groups are reduced as


participation in strategy formulation clarifies differences in roles.

They present several benefits of strategic management:

It provides a way to anticipate future problems and opportunities.


It provides employees with clear objectives and directions for the
future of the organization.
It results in more effective and better performance compared to nonstrategic management organizations.
It increases employee satisfaction and motivation.
It results in faster and better decision making and
It results on cost savings.

Principles

of Strategic Development Process

1. It must start with the right goal: superior long-term return on investment. Only by
grounding strategy in sustained profitability will real economic value be generated
2. A companys strategy must enable it to deliver a value proposition, or set of
benefits, different from those that competitors offer.
3. Strategy needs to be reflected in a distinctive value configuration. To establish a
sustainable competitive advantage, a company must perform different activities
than rivals or perform similar activities in different ways.
4. A strategy involves making choices throughout the value configuration that are
independent; all a companys activities must be mutually reinforcing.
5. Strategy involves continuity of direction. A company must define a distinctive
value proposition that it will stand for, even if that means foregoing certain
opportunities.

Nature

of Managing Strategic Development Process

1. Formulate the companys mission, including broad statements about


its purpose, philosophy, and goals.

2. Conduct an analysis that reflects the companys internal conditions


and capabilities.
3. Assess the companys external environment, including both the
competitive and general contextual factors.
4. Analyze the companys options by matching its resources with the
external environment.
5. Identify the most desirable options by evaluating each option in light
of the companys mission.

6. Select a set of long-term objectives and grand strategies that will


achieve the most desirable options.
7. Develop annual objectives and short-term strategies that are
compatible with the selected set of long-term objectives and grand
strategies.
8. Implement the strategic choices by means of budgeted resource
allocations in which the matching of tasks, people, structures,
technologies, and reward systems is emphasized.
9. Evaluate the success of the strategic process as an input for
future decision-making