Strategic Management Tools

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TOPIC 2 Give a critical consideration of five strategic management process tools and their contribution to strategic management and strategic thinking. It has been argued that management needs the resources to create core competencies to develop a strategy that has sustainable competitive advantage (Marti, 2004, p1), so the definition of a strategy as an ‘integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage’ fits this argument. The strategic management process follows the lines of strategy, while also earning above-average returns (Hanson et al, 2008, p4, 25). Strategy, strategic management, and strategic thinking are all important factors that…show more content…
It could then measure the results against the same period for the year before, and assess where the company is doing profiting, as well where improvement is needed. In addition, financial ratio analysis can be used to evaluate where a company is positioned against its competitors. Benchmarking is the ‘identification of best practices among competitors and non-competitors that make them superior performers’ (Stone, 2006, p650); ‘the practice of comparing a company to a standard set by other companies, with a view toward improvement’ (Horngren et al, 2008, p90). A large number of firms within Australia and the rest of the world are now applying benchmarking to their organisation, particularly when it comes to managing the human resources (HR). Benchmarking serves a number of purposes: it enables managers to audit how effectively HR meets the needs of the organisation; it enables an organisation to learn from those who excel in an HR practice; it identifies HR areas where performance can be improved; and it can be used to create a need for change (Stone, 2006, p623). Benchmarking can be linked with financial statement and ratio analysis, which was discussed previously, in that by comparing it with other company’s financial statements, it can benchmark against the industry average as well as against key
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