Corporate strategic management includes activities that an organization will and will not do. Aim to achieve specific goals in the future. Those goals must be related to the mission statement and vision that the business has set. Strategy provides an organization with measures of competitive advantage in the marketplace.
What is corporate strategic management?
Strategic management is the process of planning, implementing, evaluating and managing activities. To achieve the strategic goals of organizations and businesses. This activity is to ensure that businesses can meet the continuous fluctuations of the business market. Organize activities effectively and achieve long-term goals.
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Strategic management is closely related to the management and use of organizational resources. To maximize profits, increase market share and sales. Achieve long-term brand values. This process requires leaders to make important decisions. Especially in analyzing and evaluating market data, competitors, customers, economics, culture, society, etc. To serve product development activities, market expansion, etc. .
The role of corporate strategic management
Strategic vision orientation
Through strategic management activities. Businesses can direct their strategic vision, mission, tasks and goals. Systems that update business market conditions help administrators forecast trends. At the same time, determine the direction the business is heading in the future. Things to do to achieve the goal. When you know the destination to aim for and your future goals. Administrators and staff can clearly understand what they need to do to achieve their goals. As well as a stronger bond.
Adapt to constantly changing environments
Strategic management helps businesses prepare the best strategies to adapt to continuous market fluctuations. Strategic management is formed based on information inside and outside the enterprise. Therefore, it is objective, scientific, and oriented to help organizations achieve long-term goals.
Through this, leaders can closely monitor market fluctuations. Make adjustments when necessary. This is especially important in today’s complex, changing and fiercely competitive environment.
Seize opportunities, prevent risks
Strategic management also helps businesses make decisions to take advantage of opportunities. Prevent risks in the market. Promote strengths and minimize weaknesses in internal activities.
Achieve greater efficiency
In fact, businesses that apply strategic management will achieve more positive results than previous results. And compared to businesses that do not practice strategic management. Although many businesses apply strategic management, they can still encounter problems. Even falling into crisis. However, if applied properly, this can reduce the risks encountered. At the same time, increase the competitiveness of the business compared to other competitors.
Effective corporate strategic management process
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Step 1: Research and analyze the actual situation
The first step in the strategic management process is to research and analyze the actual market situation. Includes business operations from internal factors to external impact factors. Through that, leaders can easily make objective assessments. Comment on development potential as well as difficulties and challenges in the future.
Some factors that businesses need to pay attention to. Such as politics, environment, society, technology, engineering, legal policies, etc. During the analysis process, business administrators need to provide accurate data. The more specific and detailed the business’s operating situation, the better. Clearly seeing the remaining problems in the business will help to better understand the possibility of future development.
Step 2: Create a strategy
After having the necessary data from research, analysis and statistics. Administrators need to conduct strategy development. It needs to be based on the organization’s most important vision, mission, and goals. Aim to create meaningful values in the future. Besides, strategy building must ensure feasibility. Stick closely to business trends and actual market situations.
Step 3: Implement the strategy
Once you have a strategy, at this stage you will implement the strategy. Including designing organizational structures and developing decision-making processes. Distribute resources and budget. , program to implement the strategic goals set out earlier.
Step 4: Evaluate and adjust
After implementing the strategy, managers need to recognize and evaluate the results. At the same time, make necessary adjustments. This includes performance measurements, looking at internal and external consistency issues. Implement corrective actions when the project encounters problems or unexpected occurrences.
Successful assessment must begin with identifying the parameters to be measured. These parameters reflect the goals set in the first phase. Determine progress by comparing actual results with initially set goals.
Levels in the strategic management system
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Each system has a hierarchy to perform work corresponding to the responsibilities and positions of that level. The strategic management system is often divided into the following levels
Corporate level strategic management
Corporate-level strategic management by the Board of Directors and Board of General Directors. In particular, the Chairman of the Board of Directors or General Director is responsible for monitoring the entire process of the strategy. Including providing a vision and mission statement. Direct, guide implementation, allocate resources, etc. For other positions, ensure that the strategy is implemented in accordance with the values of the leadership. At this level are classified into the following strategies
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Stable strategy
This is a strategy that has not changed significantly throughout the implementation process. Administrators still maintain the business areas they are operating in. And I’m very hesitant about having to switch to doing business in another field. Stability strategy is applied when the organization’s business operations are satisfactory and the business market is less volatile.
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Growth strategy
Growth strategies seek to find ways to increase the level of performance of an organization.
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Decline strategy
This is a strategy with the aim of minimizing scale. Or the diversity of the business’s fields of activity. This strategy is applied when the company encounters difficulties in business operations. This strategy helps the company operate stably, consolidate resources and production capacity. To be ready to develop and compete in the market.
Strategic management at business unit level
At this level, business project leaders and personnel at the business unit level will be responsible for management. Project leaders will hold strategic management roles. Their task is to develop corporate-level goals into business goals for the entire department. This level is classified into the following strategies
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Low cost strategy
This strategy is applied when a business goes in the direction of producing at lower costs than its competitors. Price is an important factor that consumers care about. The products are relatively homogeneous and production will be carried out on a large scale.
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Differentiation strategy
This strategy creates a difference when businesses provide products with different features and characteristics. Or stand out from competitors’ products/services. When applying this strategy, businesses can price their products higher. Cost is not the most important factor at this time. However, to apply this strategy, businesses need to find out the needs and expectations of customers. And find ways to satisfy them.
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Strategic focus
Focus strategy is based on cost advantage. Or the advantage of differentiation in narrow market segments. This strategy aims to exploit the potential of a market segment. Based on the number of products, distribution channels, geographical location, and end consumers.
Strategic management at functional level
Administrators are responsible for overall responsibility for specific activities within a business unit. Such as human resources, Marketing, Sales, logistics,… To achieve the goals set by the company and business levels. This level includes 2 strategies as follows
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R&D Strategy (Research & Development)
This is a research and development strategy, aiming to identify issues of resources, budget, and key research and development activities.
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Human resources strategy
This is a strategy based on industry-level competition to identify human resource issues, including recruitment, staff placement, testing, human resource evaluation, training and career development for employees, …
Some frequently asked questions
Who is responsible for strategic management?
Strategic management is primarily due to business administrators and senior executives in the organization finding opportunities for new operating methods, to help businesses recognize changing problems, and at the same time aware of the need to reorganize the organization when strategic direction changes.
In addition, the staff must also be responsible for carrying out tasks and evaluating strategies within the enterprise.
What is the purpose of strategic management?
The purpose of strategic management is to determine the roadmap, direction, outline the tasks that need to be performed, and prepare resources to complete the work and achieve strategic goals.
Limitations of strategic management?
Although strategic management plays an important role and has great significance for businesses, it also has some limitations, including:
- Lack of flexibility: The strategic plan is long-term oriented, which means it can become rigid and inflexible to emergency situations.
- Lack of interaction: Strategic plans are often given top-down by management, lacking interaction and cooperation with staff, leading to them not being motivated to implement that plan.
- Impossible to predict the future: Although analyzing the environment and predicting the future is an important part of strategic management, there can be no guarantee that the prediction is accurate and that future changes will occur. can make the strategy obsolete.
- Expensive: Strategic management requires a large investment of time, resources and human resources to implement and maintain, especially when plans must change frequently.
- Can cause some conflicts: When management and staff do not agree on strategy, it can cause conflicts and affect the effectiveness of operations.
Summary
Hopefully you have a clear understanding of the company’s strategic management model in general. If your business needs training or guidance on using analytical tools to plan and implement business strategies, please contact Apexcorp immediately.
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