Understanding The Benefits Of Strategic Management

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Most Significant Understanding the benefits of strategic management is one of the key themes of the chapter and strategic management emphasizes long-term performance and operational success of a firm. A firm must rapidly adapt to the changing market and technological environment is another concept that is introduced in the chapter. Strategic management provides a clear sense of strategic vision for the firm, sharper focus, and an improved understanding of a rapidly changing environment. The importance of innovation is another important concept explained in the chapter using the example of a struggling retailer, Sears. Sears succumbed to the lack of innovation, which shows that if a firm stands still, it will be run over by the…show more content…
Walmart and Target are now worried, and is planning for a strategic change to improve their online presence. Recently, Walmart closed some of their stores and is investing more money to improve their online platform and thereby online presence. Most significant fact is that companies are realizing that they must shift from a vertically organized, top down type of organization to a horizontally managed, interactive organization. They are trying to adapt more quickly to changing conditions as “learning organizations.” A learning organization is very quick in creating, acquiring, and transferring knowledge and modifying its behavior to reflect new information and insights. Strategic management consists of four basic elements, which are environmental scanning, strategy formulation, strategy implementation and evaluation and control. Discussion on the basic model and the basic elements of strategic management helps to make strategic decisions. This model is important as it is rational and prescriptive. This model predicts that as the environmental uncertainty increases, corporations work more diligently to analyze and predict more accurately. Environmental scanning is critical to the strategic management to identify strategic factors. Environmental scanning can be conducted using SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. Environmental analysis provides a
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