Posted in Corporate Finance on 15. Jun, 2012
Strategic management deals with the activities that the companies take to deal with the possibilities, risks, changes, difficulties, etc. in inner & exterior atmosphere. Strategic management is an continuous process of developing techniques for the company that delivers revenue to the company and makes balance between company and its atmosphere. It details the strong points that the company already have for the success of its objectives; flaws that restrict in fulfillment of goals; possibilities and marketplaces that can be utilized in favor; and risks that are present in inner and exterior environment: in short this is called as SWOT research. strategic management is a level of managing action under goal establishing techniques and applying the plans so as to achieve it.
Like described before, strategic management can and will effect the company’s efficiency during overall economy. The following are the ways by which strategic management will be helpful in financial crisis:
Mission, goals and strategies:
Objective describes the corporation’s objective, their purpose for being in business. It is also essential to recognize objectives, because they are the groundwork of preparing and give supervisors a way to evaluate the efficiency their achievements. Lastly, an administrator needs to know the companies techniques, to assess them and make the necessary changes.
Strategic management here is performed as per the overall economy. A research of all the factors relevant to overall economy must be done as it functions as a platform for the supervisors to take the next phase.
The administrator must know all the ecological changes that are developing so he can accommodate it accordingly.
The administrator has to go through SWOT research. It contains an research related to the corporation’s options, abilities, and identify the pros and cons in order to increase his choices.
The managers can now formulate various corporate, business and functional strategies.
The next step after formulation of strategies is to implement them. The plan that is made must be executed.
Evaluate the output:
All the efforts that are taken to implement the strategies will go in vain if the results are not evaluated. The results must be constantly evaluated to improve and to sustain in economic crisis.
Strategic management includes various other strategies that can be integrated to endure in the economic disaster. An administrator may go for downsizing, increasing the history of credit through financial institutions, offer special reduced prices for early receivables, contend on quality, cutting on costs, etc. Thus the value of strategic management has to do with the constantly changing situation that companies face these days, because it helps supervisors to analyze appropriate factors before determining their course of action, thus helping them to better deal with uncertain factors like the macro picture concerning overall economy.