Question: What Is Strategic Management And Why Is It Important?

What is the meaning of strategy?

Strategy (from Greek στρατηγία stratēgia, “art of troop leader; office of general, command, generalship”) is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty.

A strategy describes how the ends (goals) will be achieved by the means (resources)..

What are the strategic cost management techniques?

The techniques are: 1. Activity Based Costing (ABC) 2. Target Costing (TC) 3. Total Quality Management (TQM) 4.

Why is strategic cost management important?

Strategic cost management is the process of reducing total costs while improving the strategic position of a business. … It is almost never worthwhile to cut costs in strategically important areas, since doing so reduces the customer experience and therefore will eventually lead to a decline in sales.

What are the 3 role of strategic management?

Strategic management is the process of employing that kind of large-scale, objective-oriented approach through the use of three major components: environmental scanning, strategy formulation and implementation and strategy evaluation.

Who is responsible for strategic management?

The CEO is responsible for establishing a climate in the organization that is congenial to strategic management. The CEO is responsible for ensuring that the design of the process is appropriate to the unique characteristics of the company.

What is strategy with example?

As such, strategies are the broad action-oriented items that we implement to achieve the objectives. In this example, the client event strategy is designed to improve overall client satisfaction. … Any example of a strategic plan must include objectives, as they are the foundation for planning.

What are the major activities of strategic management?

Strategic management includes setting objectives for the company, analyzing the actions of competitors, reviewing the organization’s internal structure, evaluating current strategies and confirming that strategies are implemented company-wide.

What are the types of strategy?

Types of Strategies in Strategic Management:Competitive Strategy:Corporate Strategy:Business Strategy:Functional Strategy:Operating Strategy:

What are cost management techniques?

Cost management techniquesTime management. The one who owns the business definitely knows the value of time for his / her business. … Inventory management. One of the major cost as well as ways of generating revenues is through inventories. … Outsourcing. … Updated market sense. … Control of headcount.

What is strategic management and its importance?

Strategic management is an essential component of businesses. … Strategic management therefore entails evaluating business goals, the organisation’s vision and objectives as well as the future plans. In addition, a strategic management process is employed to ensure that the business runs effectively and efficiently.

What is importance of strategy?

Drives decisions – Strategy is what drives decisions in business. By helping organisations identify their strengths and weaknesses, an effective strategy will help you decide where your efforts and resources are best spent. These decisions are crucial in ensuring your business has a profitable and sustainable future.

What are the risk of strategic management?

Strategic risk management is a crucial, but often, overlooked aspect of enterprise risk management (ERM)….These risks may include:Shifts in consumer demand and preferences.Legal and regulatory change.Competitive pressure.Merger integration.Technological changes.Senior management turnover.Stakeholder pressure.

What are the 5 stages of strategic management?

The five stages of the process are goal-setting, analysis, strategy formation, strategy implementation and strategy monitoring.

What is an example of strategic management?

Examples of the functional strategy include product strategy, marketing strategy, human resource strategy, and financial strategy.

What is the process of strategic management?

Strategic management process is a continuous culture of appraisal that a business adopts to outdo the competitors. Simple as it may sound, this is a complex process that also covers formulating the organization’s overall vision for present and future objectives.

What are the four basic elements of strategic management?

The strategic management process is made up of four elements: situation analysis, strategy formulation, strategy implementation, and strategy evaluation. These elements are steps that are performed, in order, when developing a new strategic management plan.

What are the elements of strategic cost management?

3 Strategic cost management has three important pillars, viz., strategic positioning, cost driver analysis and value chain analysis.

What are the benefits of strategic management?

The Advantages of Strategic ManagementDischarges Board Responsibility. … Forces An Objective Assessment. … Provides a Framework For Decision-Making. … Supports Understanding & Buy-In. … Enables Measurement of Progress. … Provides an Organizational Perspective. … The Future Doesn’t Unfold As Anticipated. … It Can Be Expensive.More items…•

What are the characteristics of strategic management?

The Characteristics of Strategic Management are as follows:Top management involvement.Requirement of large amounts of resources.Affect the firms long-term prosperity.Future-oriented.Multi-functional or multi-business consequences.Non-self-generative decisions.

What are the 7 steps of the strategic management process?

Step 1 – Review or develop Vision & Mission. … Step 2 – Business and operation analysis (SWOT Analysis etc) … Step 3 – Develop and Select Strategic Options. … Step 4 – Establish Strategic Objectives. … Step 5 – Strategy Execution Plan. … Step 6 – Establish Resource Allocation. … Step 7 – Execution Review.