Quality Management

Steps in Strategic Management

The following are specific steps involved in the strategic management process. These steps are

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arranged according to the sequence in which they are performed in a real-life situation.

1. Strength, Weakness, Opportunity, and Threat (SWOT) Analysis This analysis is the key to the strategic management and planning processes. It is impossible for a business to know where it wants to go if it doesn’t know its present position in relation to itself, its products, and other businesses that affect it. SWOT analysis helps evaluate the present situation of a business in terms of its strengths, weaknesses, opportunities, and threats. An example of the process for evaluating a potential service or product using the SWOT analysis may be the following: A company wants to open a new division that will introduce a new product. The strength of this product is it will diversify the product line for the organization. The weakness of this venture may be the limitation of capital available for the expansion. The opportunity may be used to structure other divisions and even promote franchises for the company. Competitors offering products similar to the new product may be a threat.

2. Vision Statement Based on the present position of the business, as analyzed through SWOT, the vision statement is developed. The vision statement explains why and where the business wants to go. The vision statement may discuss how introducing a new product will be a challenging job of creating a tangible addition to the organization. In addition, it may also describe how the new product will affect the stakeholders and employees.

 

3. Mission Statement This statement describes the objectives and direction of a business. For example, the mission statement of a company launching a new product may describe the product and its importance, and it may also identify the objectives the company wishes to achieve through this product.

4. Guiding Principles

These principles establish a framework that works around the mission statement. For example, the guiding principles of a company launching a new product would be aligned with the standards, customer satisfaction factors, and quality improvement areas delineated in the mission statement.

5. Strategic Objectives

These measurable objectives are derived from the vision and mission statements and the guiding principles. These objectives should address eight key areas: market standing, innovation, productivity, resource levels, profitability, manager performance and evaluation, worker performance and attitude, and social responsibility.

6. Action Plan

This plan includes defined strategies to implement the strategic planning process and to meet the identified objectives. These strategies may focus on operations, finance, marketing, and human resource. The action plan may include details of how to achieve the strategic objectives, how the objectives will be measured, how they will be accomplished in a specific time, who will be assigned the responsibility of ensuring the objectives are reached, and who will monitor the implementation and control of the plan.

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