STRATEGIC MANAGEMENT DEFINED : The set of managerial decisions and actions that detrimines the long run performance of a corporation. It includes : Environment scanning (internal: organizational culture, human resource, physical assets, profit, cash flow, management & external: climate, economy, technology, political, legal, completion, media, fashion) Strategy formulation: the process of developing long range plans to deal effectively with environmental opportunities and threats in light of corporate strengths and weakness. Strategy implementation: implementation is putting in place the planned or formulated strategy into action. Evaluation & control: the process of monitoring corporate activities and performance results so that actual performance can be compared with desired performance.It focuses on integrating management, marketing, finance/accounting, production/operation, research and development and computer information system to achieve organizational success. BENEFITS OF STRATEGIC MANAGEMENTThere are many benefits of strategic management and they include identification, prioritization, and exploration of opportunities. For instance, newer products, newer markets, and newer forays into business lines are only possible if firms indulge in strategic planning. Next, strategic management allows firms to take an objective view of the activities being done byit and do a cost benefit analysis as to whether the firm is profitable.The business is strategically aligned to its goals and priorities.1. Financial BenefitsIt has been shown in many studies that firms that engage in strategic management are more profitable and successful than those that do not have the benefit of strategic planning and strategic management.When firms engage in forward looking planning and careful evaluation of their priorities, they have control over the future, which is necessary in the fast changing business landscape of the 21st century.It has been estimated that more than 100,000 businesses fail in the US every year and most of these failures are to do with a lack of strategic focus and strategic direction. Further, high performing firms tend to make more informed decisions because they have considered both the short term and long-term consequences and hence, have oriented their strategies accordingly. In contrast, firms that do not engage themselves in meaningful strategic planning are often bogged down by internal problems and lack of focus that leads to failure.2. Non-Financial BenefitsThe section above discussed some of the tangible benefits of strategic management. Apart from these benefits, firms that engage in strategic management are more aware of the external threats, an improved understanding of competitor strengths and weaknesses and increased employee productivity. They also have lesser resistance to change and a clear understanding of the link between performance and rewards.The key aspect of strategic management is that the problem solving and problem preventing capabilities of the firms are enhanced through strategic management. Strategic management is essential as it helps firms to rationalize change and actualize change and communicate the need to change better to its employees. Finally, strategic management helps in bringing order and discipline to the activities of the firm in its both internal processes and external activities.3. Closing ThoughtsIn recent years, virtually all firms have realized the importance of strategic management. However, the key difference between those who succeed and those who fail is that the way in which strategic management is done and strategic planning is carried out makes the difference between success and failure. Of course, there are still firms that do not engage in strategic planning or where the planners do not receive the support from management. These firms ought to realize the benefits of strategic management and ensure their longer-term viability and successin the marketplace4. Clear sense of strategic vision5. Sharper focus on what is strategically important6. Improved understanding of rapidly changing environment THREE QUESTION ALWAYS ARISE 1. Where is the organization now?2. If no changes are made, where will the organization be in one, two , five or ten years ? Are the answer acceptable ?3. If the answer not acceptable, what specific action should management undertake ?OBJECTIVESThe end results of planned activity. They state WHAT is to be accomplished by WHEN. They should be qualified, if possible.Should be specific, measurable and obtainable.??????????????????????Tiger entered into the Australian aviation from 2007. And it developed rapidly with the appropriate implementation of strategy. The development is mainly by two ways: the application of internal resources and external transactions from corporate strategy. The potential benefits are as following through the implementation of internal and external strategic management.?????????????????????????????????????????????Tiger is already in talks with state governments to find an Australian hub. The state tourism bodies are falling over themselves, vying to house the airline’s domestic base for both the inbound and domestic tourism benefits Tiger could bring (“Rumble in the jungle”, 2007). As we know, it would be more effective, in particular, a new company to get the state support.Capital expansionAs a new entrant into the airline, Tiger has a very strong financial support. AUD$10 million and 5 aircraft have been committed to start the subsidiary. Adequate funding made Tigers could determine more clearly the objectives of corporate strategy, business direction and consistency ofbusiness objectives. And Tigers would have enough capital to bring strategy management into effect.Economic forcesAustralian market continued to be attractive for existing operators based on strong economic growth these years. Australia will maintain a sustained and stable development of the situation inthe current international situation and economic environment. Tiger Airways appreciates the opportunity to be involved in the Commonwealth Government’s aviation policy process. (“Response to the National Aviation Policy Green Paper”, n.d.,p.2). Domestic passenger traffic figures are growing in percentage terms around twice the level of existing national GDP or overall growth of the Australian economy (“Lion in wait”, 2008, p.6).Tiger chose appropriate time to enter. It is then expected to move aggressively into the domestic sector before the end of the year. (“Rumble in the jungle”, 2007)The application of internal resourcesPosition needs to be supplemented with other views of competitive advantage and forms of competition, with different time horizons and characteristics in order to cope with the hypercompetitive dynamics of the new competitive landscape. (Hamel & Prahalad, 1994, p.214).Tiger enters the Australian aviation market with low-cost strategy. The benefits can be discussed in four aspects.To competitorsPorter (1985) firstly attempted to define competitiveness what could be to take a look at value to the customer derived from the products and services of the firm (as cited in Anders Drejer, 2004, p.514). Entering the aviation industry, Tiger Airways have to face competition from Virgin Blue, Jetstar and the Malaysian carrier Air Asia. Tiger entered the market with lower cost than Virgin Blue and Jetstar. The key determining factor for low-cost is the cost per available seat kilometer or CASK. Tiger is based on Europe’s successful Ryanair model to keep low cost. (“Rumble in thejungle”, 2007).To SuppliersSuppliers include aircraft manufacturers and providers. Suppliers are overwhelmingly dominant at this point. Tiger can bear pressure of price increasing from the raw materials and parts capacity because of the low cost to win suppliers compared with competitors. It can withstand a variety of unstable factors.To Potential entrantsThe airline industry is a high-end technology industry, and it has high barriers to entry.Barriers to entry were increased due to low-cost strategy, so new entrants will not constitute a threat to the Tigers. Tigers pledged to enter into the Australian market with continually lower fares (“Rumble in the jungle”, 2007), which would stop potential entrants.The key to achieve competitive advantage is to develop appropriate competitive strategies. Tiger did well in the use of external and internal resources. It has a very strong financial support to operate companies. And it took low-cost strategy which is suitable for its development in the competition. All the strategies make it avoid weaknesses to obtain a competitive advantage.Advantages of Strategic Management Process:The process of strategic management is a comprehensive collection of different types of continuous activities and also the processes which are used in the organization. The strategic management is a way to transform the existing static plan in a proper systematic process.The strategic management can have some immediate changes in the organization. The following mentioned are few pointers that help you identify the relevance of strategic management and its benefits1. Creating a better future:There is always a difference between the reactive and proactive actions. When a company practices the strategic management – the company will always be on the defensive side and not on the offensive end. You need to come out victorious in the competitive situation and not be a victim of the situation. It is not possible to foresee each and every situation but if you know that there are chances of certain situations then it is always better to keep your weapons ready to fightthe situation.2. Identifying strategic directions:The strategic management essentially and clearly defines the goals and mission of the company. The main purpose of this management is to define realistic objectives and goals – this has to be in line with the vision of the company. The strategic management provides a base for the organization on the basis of which progress can be measured and on the basis of the same, the employees can be compensated.3. Make Better business decisions:It is important to understand the difference between a great idea and a good idea. If you do have a proper and clear vision of your company – then having a mission and methods to achieve the mission always seems to be a very good idea. Here comes the benefits of strategic approach. It turns into a great idea when you decide what is the type of project that you want to invest your money; how do you plan to invest your time and also utilize the time of your employees. Once you are clear with your ideas about the project and the time each of your employee and yourself will have to allocate, you will need to focus your attention on the financial and human resources.4. Business Longevity:The times are changing fast and there are dynamic changes happening every day. The industries worldwide are changing at a fast pace and hence survival is difficult for those companies which do not have a strong and perfect base in the industry.The strategic management ensures that the company has a thorough stand in the related industry and the experts also make sure that the company is not just surviving on luck and better chances or opportunity. When you look at various studies you would know that the industries which are not following the strategic management will survive for not more than five years.This suggests that the companies should have a powerful focus on the longevity of the business. This suggests that without strategic management, it is not possible for a company to survive in the long run.5. Increasing market share and profitability:With the help of strategic management, it is possible to increase the market share and also the profitability of the company in the market. If you have very focused plan and strategic thinking then it is possible for all the industries to explore better customer segments, products and services and also to understand the market conditions of the industry which you are operating in.The strategic management skills will help you to approach the right target market. The experts will guide for better sales and marketing approaches. You can also have a better network of distribution and also help you to take business decisions which at the end of the day results in profit.6. Avoiding competitive convergence:Most of the companies have become so used to focusing on the competitors that they have started imitating their good practices. It has become so much of competition that is becoming difficult to part the companies or identify them differently. With the help of strategic management this magic is possible – try and learn all the best practices of a company and become a unique identity which will keep you apart from your competitors.7. Financial benefits:The firms which follow the process of strategic management proves to have more profits over a period of time as compared to the companies that do not opt for the strategic management decisions. Those firms which are involved in using the strategic management use the right method of planning – these companAdvantages:1. Discharges ResponsibilityThe process of strategy formulation satisfies the expectation from shareholders, stakeholders andthe general public at large, that a strategically managed organization will discharge its dutiessuccessfully.2. Allows an Objective AssessmentStrategic management provides a CONTROL that allows the senior management team to take astep back from the day-to-day business and CONTEMPLATE about the future of theorganization.3. Faciliatates to Make Wise Business DecisionsStrategy provides the framework within which EXECUTIVES at lower and middle levels canmake day-to-day operational decisions that are aligned with the accomplishment of theorganization’s goals.4. Enables Understanding and Improves co-ordination between different departmentsAllowing participation in the strategic management process enables better understanding of thedirection, why that direction was chosen, and the associated benefits. Good strategy formulationand communication process are vital steps in enabling effective and efficient strategydeployment.5. Simplifies Measurement of ProgressStrategy sets the direction and empowers an organization to bring into line its objectives andperformance measures. These objectives and performancemeasures allow meaningful information to be provided to decision-makers regarding theorganization’s progress through such tools as scorecards and dashboards.6. Enhances Strategic Agility (Innovation)When a firm can successfully capitalize upon opportunities resulting from unanticipated andsignificant change, it is said to be innovative as it has a competitive edge over other firms7. Ensures Allocation of Resources:The limited resource is properly allocated to different functional levels so as to create value for all stakeholders. A targeted approach to markets and opportunities obviously strengthens your bottom line
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