There are some of basic strategic
management key terms that need to be considered at the beginning in order to
completely understand strategic management. These strategic management key
terms are eight in numbers and are the base of strategic management.
1. Strategists
2. Vision & Mission Statement
3. External Opportunities & Threats
4. Internal Strengths & Weaknesses
5. Long Term Objectives
6. Strategies
7. Annual Objectives
8. Policies,
> 8 Important Strategic Management Key Terms :
Below is the detail all the 8
important strategic management key terms, which are important to understand for
developing a successful strategic plan in business.
1. Strategists :
Strategists are individuals who are most responsible for the
success or failure of an organization. Strategists
are individuals who form strategies. Strategists have various job
titles, such as chief executive officer, president, and owner, chair of the
board, executive director, chancellor, dean, or entrepreneur. Strategists help
an organization gather, analyze, and organize information.
2. Vision
& Mission Statement :
Vision
Statement: Vision statement is quite
necessary for the operation of the organization as it provides answer to the
question that should be the organization wants to become? The first step in the
strategic planning is to develop the vision statement and after that mission
statement is prepared. Mostly the organizations develop single sentence vision
statements.
Mission
Statement: Mission statement is long lasting
statement that differentiates one organization from other similar organization.
The scope of the operations of the organization in terms of market and product
is identified through mission statement.
3. External
Opportunities & Threats :
External
opportunities and external threats refer to economic, social, cultural,
demographic, environmental, political, legal, governmental, technological, and
competitive trends and events that could significantly benefit or harm an
organization in the future. Opportunities and threats are largely beyond the
control of a single organization, thus the term external. The computer revolution, biotechnology, population
shifts, changing work values and attitudes, space exploration, recyclable
packages, and increased competition from foreign companies are examples of
opportunities or threats for companies. These types of changes are creating a different type of consumer and
consequently a need for different types of products, services, and strategies.
4. Internal Strengths & Weaknesses:
Those activities of the
organization that are under control of the organization, and may show good and
bad impact on the organization are known as internal strengths and weaknesses
of organization. These are present in the marketing, management,
production/operation, finance/accounting, and information technology research and
development activities of the organization. It is quite essential strategic
activity for an organization to identify and evaluate organizational strengths
and weaknesses.
5. Long Term
Objectives :
Long term objectives are also from
one of the important strategic management key terms. Long term objectives are
referred to as particular results that organization wants to accomplish in
targeting the mission. Expected results by targeting certain strategies are
represented by long term objectives. Strategies include those actions that are
executed for the accomplishment of the long term objectives. There should be
consistent time frame for strategies & objectives which range from two to
five years.
The
objectives are important for the success of the organization because of the
following reasons:
– Provide direction
– Helps in
evaluation
– Create
synergy
– Reveal
priorities
– Focus
coordination
– Assist in
making plans, organizing data, motivating employee and controlling each and everything
6. Strategies :
The
means through which allow us to achieved long term objectives. Following are
included in the business strategies.
– Geographic
Expansion
– Diversification
– Product
development
– Acquisition
– Retrenchment
– Market
penetration
– Liquidation
& Joint venture
Large amount of the resources of organization are required along with the decisions of top management for the application of strategies in the form of actions.
7. Annual
Objectives :
Those short term targets that are
helpful in achieving long term objectives of the organization are called annual
objectives. The annual objectives must be quantitative, measurable, realistic,
challenging, consistent and prioritized. These must be developed at functional,
divisional & corporate levels in large organizations. Annual objectives are
significant for strategy implementation whereas strategy formulation phase
contains long term objectives.
8. Policies :
Annual
objectives are accomplished by the means of policies. Policies contain rules,
guidelines & procedures developed to assist efforts to accomplish stated
objectives. Decision making is guided through policies & recurring and
repetitive situations are also addressed through policies.
Policies
are usually mentioned in terms of marketing, finance/accounting, Management and production/operation, activities related to information technology and research
and development.
A vision
statement sets out a company's long-term goals and aspirations clearly and
concisely. A vision statement is intended to inspire and motivate the company's
workforce by providing a picture of where the organization is heading. It also
provides a reality check for managers, who can compare their strategic
objectives and operational plans to the vision statement. If a planned course
of action doesn't move the company toward its vision, it may need to be
revised.
