1.

Strategists:

Those people

in the organization who are fully responsible for the failure r success of the organization are
referred to as strategists. Strategies are formed by strategists. Examples of strategists include
chief executive officer, chair of board, chief executive officer, president & owner, entrepreneur or
dean etc.
The information is gathered, analyzed and organized with the help of strategists. They identify
industry & competitive trends, establish scenario analysis & forecasting model, evaluate
corporate & divisional performance, and point out new marketing opportunities, highlight new
threats for the organization & preparation of potential action plans. They further assist in
supporting or staffing role. The decision making at the top level of management in the
organization is mostly taken by these strategists. The most crucial & visible strategic manager in
the organization is the CEO. Moreover every manager in the organization who has the
responsibility for profit or loss results, responsibility for division or unit, or having clear authority
over some element of organization is said to be strategist or strategic manager.
Different organizations have different kinds of strategists whose working alter in the phase of
formulation, implementation & evaluation of strategies. The personal philosophies of strategists
also affect the selection of certain strategies. There are some other foundations that differentiate
one strategist from other like attitudes, ethics, values, concern for social responsibility,
willingness to take risks, management style, concern for profitability, concern for long term
versus short term objectives etc.
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 & product is
identified through mission statement. The basic question faced that is related to the activities of
the business is cleared with the help of mission statement. It guides the nature & scope of
current operations of the business as well as the future aspects of the market conditions &
opportunities. The future direction of the organization is highlighted by the mission statement.
3.

External Opportunities & Threats:

External opportunities and threats are also one of the part of strategic management key terms.
All those trends & events those are related to the social, economic, environmental, cultural,
demographic, political, legal, technology & technology & competitive that can harm or benefit an
organization constitute external opportunities & threats. One major fact about the opportunities &
threats is that they are out of control of the organization to much extent and hence they are
external for the organization. Following are some examples of external opportunities & threats.

Computer revolution

Population shifts

Changing work values & attitudes

Space exploration

Increased competition from foreign companies

Space exploration

Recycle able packages etc

The external opportunities & threats are significant for the organization as opportunities need to
be availed while threats should be avoided. For this purpose there is strong need to identify,
monitor & evaluate external opportunities & threats so that the organization becomes successful
in the long run.
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 & weaknesses of
organization. These are present in the marketing, management, production/operation,
finance/accounting, and information technology & research & development activities of the
organization. It is quite essential strategic activity for an organization to identify & evaluate
organizational strengths & weaknesses. Organizations need to adopt those strategies that
capitalize their strengths while improve their weaknesses. Moreover strengths & weaknesses of
the organization can also be ascertained in relative to the competitors.
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 & controlling each and
everything

There should be some objectives for overall organization & some for separate division. Moreover
these should be measurable, challenging, realistic & understandable. There should be a time line
associated with each objective. There may be different forms of objectives like growth in sales,
growth in assets, market share, profitability etc. There are many benefits of clearly established
objectives. Moreover the long term objectives considered as the necessity for the success of the
organization because of the following reasons.

The stakeholders of the organization see their future role through long term objectives of
the organization.

The managers with different attitudes & values are assisted in consistent decision
making.

The potential conflicts in the implementation stage can be eliminated by consensus on

the long term objectives in formulation stage.

The priorities of the organization are specified by the long term objectives which further
stimulate the action & accomplishment.

In short, the organization moves towards unknown end when it lacks long term objectives.
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. Strategies are future

oriented as these will affect the long term prosperity of the organization. Both internal as well as
external factors should be considered and therefore the strategies are multi-divisional
consequences for the organization.
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 & prioritized. These must be developed at functional, divisional &
corporate levels in large organizations. These objective must be stated in terms of marketing,
management, production/operations, finance/accounting and research & development. Each long
term objective always demand a set of annual objectives for its successful accomplishment. The
allocation of resources is represented by annual objectives. Annual objectives are significant
for Strategy Implementationwhereas 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. Policies may also established at functional level for certain department or at
divisional level or at corporate level for entire organization. Policies play an important role in the
implementation phase because the expectations of organization about its managers & employees
are specified through policies. The coordination & consistency between different departments &
within the departments is ensured through policies. Remember that for developing a successful
strategic management plan, these all above strategic management key terms are important to
understand and you cant develop a successful strategic management plan without learning all
these strategic management key terms.

Environmental Factors in Strategic Planning

For any business to grow and prosper, managers of the business must be able to anticipate, recognise and deal with change in the
internal and external environment. Change is a certainty, and for this reason business managers must actively engage in a process
that identifies change and modifies business activity to take best advantage of change. That process is strategic planning.
The following diagram provides examples of factors that are agents of change and need to be considered in the strategic
planning process. Explanation of these factors is found below.

Internal and External Environment

All businesses have an internal and external environment. The internal environment is very much associated with the human
resource of the business or organisation, and the manner in which people undertake work in accordance with the mission of the
organisation. To some extent, the internal environment is controllable and changeable through planning and management
processes.
The external environment, on the other hand is not controllable. The managers of a business have no control over business
competitors, or changes to law, or general economic conditions. However the managers of a business or organisation do have
some measure of control as to how the business reacts to changes in its external environment.

Internal Environment Factors

Table 1 below identifies important aspects of the internal environment that can significantly impact on the well-being of a
business or organisation. Generally the strategic planning process will examine the strengths and weaknesses of the organisation
(see SWOT analysis), and it is likely that significant discussion will center on the relative strength of internal environment
factors.

Table 1: Factors in the internal environment and their affect on the business/organisation
Factor

Influence on the organisation

Human Resource

The knowledge, experience and capability of an organisation's

workforce is a determining factor of success. For this reason,

organisations pay particular attention to the recruitment of staff and

also to engage in the training of staff and volunteers to build the
organisation's capability. In pursuing both recruitment and training
strategies, an organisation is often limited by its financial strength.
Nevertheless, training of staff is an essential aspect of good business
management, and even in difficult financial circumstances is an
achievable strategy.

Organisational
Culture

The culture within the organisation is a very important factor in

business success. (see More about organisation culture). The attitudes
of staff and volunteers, and their ability to "go the extra mile" makes a
very significant difference. Negative attitudes can severely impact on
the organisation's ability to implement strategies for development
despite however thorough the planning processes. Positive attitudes of
staff and volunteers will not only make the management task easier but
also will be noticed and appreciated by customers of the business or
members of organisation.

OrganisationStructur
e

Businesses and organisations may be impeded by their

structure, constitution and/or forms of governance. Organisation
structure is essentially the way that the work needed to carry out the
mission of the organisation is divided among its workforce. (see more
about organisation structure)
In a non-profit organisation, the organisation will include the
management board or committee
(i.e. President, Secretary, Treasurer and Ordinary Committee Members),
the salaried staff of the organisation and all the volunteers that have
roles as coordinators of various business functions (e.g. Event
Coordinator, Promotions Coordinator and Coaching Coordinator).When
an organisation is a for-profit business that operates in a very
competitive environment, its organisation structure may help or hinder
the ability of the organisation to react to change. For example, when
the organisation structure has many levels of management, decision
making can be slow as information is carried up and down the hierarchy.
For this reason, "flatter" organisation structures are often preferred i.e.
people who work "at the coal face" and one level of management
above. Volunteers are normal part of the non-profit organisation but
not the profit-business. Although it is often hard to find volunteers, the
organisation structure of the non-profit organisation can be very
flexible by appointing volunteers as needed.

Management

Assets

The capability of the management team and the leadership styles

employed by managers will also have a major impact on the morale of
staff (and volunteers in a non-profit organisation) and organisation
culture. More contemporary forms of management involve workers in
decision making processes and trusting that, although managers and
workers have different viewpoints, they largely benefit by working
together to achieve the business objectives.
The internal environment of the organisation can be made richer or
poorer by its assets. For example, the organisation's premises can be
pleasant and uplifting, or demure and depressing. The availability of
equipment is another asset that can significantly impact on the internal
environment. If equipment is in short supply or not of the expected
standard, then staff may be hindered in the performance of their
duties, or if equipment is used by customers then customer satisfaction
will fall.

Financial Strength

Financial strength is a factor in its own right that influences the

internal environment of the organisation. Despite however good other
internal factors may be, it is very difficult for an organisation that is
too short of cash to implement strategies within the strategic plan. If
the organisation struggles financially this can impact on staff morale as
budgets need to be excessively tight.

External Environment Factors

Table 2 below identifies important aspects of

the external environment in which the business
operates. The business cannot control these
aspects but can respond to change if needed.
The main problem for business managers is to
be able to respond early to change in the
external environment, and this depends on how
soon any change is identified. Some external
environmental factors such as economic
conditions are reported daily in the media and
managers have a wealth of information on
which to develop strategic plans. However,
some external factors may be difficult to
identify, particularly of the pace of change is
very slow or is hidden from view.

Table 2: Factors in the external environment and their affect on the business/organisation
Factor

Economicconditions

Market(competition
)

Technology

Influence on the organisation

Prevailing economic conditions of the nation will have an effect on the
spending patterns of citizens. Increases in interest rates and/or a high
level of unemployment will depress consumption of non-essential goods
and services. For example. when people experience financial hardship,
they will spend much less on sport and recreation, holidays, new cars
and luxury goods. Economic conditions are global as well as national,
and when there is a global financial crisis as in 2007, changes in the
external environment can be dramatic.
The strength of business competition is a constantly changing factor in
the external business environment. Not only will competitors come and
go, but they will also change marketing strategies, product lines and
prices. Often such changes are not heralded and business managers
must be alert as to what competitors are doing.
Technological change has been rapid in the last 50 years and is a factor
in the external environment that constantly exerts pressure on the
business or organisation. If businesses do not adapt sufficiently quickly

to technological change, they risk losing market share. It's not just that
technological change affects the design of products, but even the
delivery of services can change.

Climatechange

Legal

Media

Political

Demographic

Climate change is an insidious threat because the pace of change may

be recognisable only if considered on a decade-by-decade basis. The
effect of climate change will not fall equally on all nations and all
businesses. Businesses that depend directly on a good supply of water
e.g. agriculture, field sports will be adversely effected if climate
change results in reduced rainfall. However the flow on affects of
drought will eventually work their way through to all businesses in the
effected community.
Taxation is one of most obvious changes in law through legislation.
Sometimes taxation changes occur overnight with little warning and
sometimes there is plenty of time for the business to prepare. Other law
changes that commonly affect business include Workplace Health and
Safety, Industrial Relations, Consumer Protection and Environmental
Law,
The media is undergoing rapid and significant change. The main driver
of this change is technology and the rise of the internet. Newspapers
once carried many pages of job adverts but now this business is
conducted by online recruitment companies such as Seek.
Like law, changes in government policy can be well notified and
discussed, or without warning. As an example of how government policy
has an effect, is that many organisations depend on government
financial assistance. When there is a change of government, such
funding assistance can disappear in a short space of time.
There is constant change in the make-up of the population. Some of
these changes include an increasing proportion of elderly citizens,
increasing number of two-income families, the age at which people
marry is increasing, increasing ethnic diversity, suburbs which were once
dominated by young families now have few. These demographic changes
can have a significant effect locally. For example, a sport club which
once prospered can begin to decline as the local area has less and less
children.

Advantages of Strategic Management Process:

The process of strategic management is a comprehensive collection of different

types of continuous activities and also the processes which are used in the
organization. The strategic management is a way to transform the existing static
plan in a proper systematic process. The strategic management can have some
immediate changes in the organization.
1. Making better future: There is always a difference between the reactive and
proactive actions. When a company practices the strategic management the
company will always be on the defensive side and not on the offensive end. You
need to come out victorious in the competitive situation and not be a victim of the
situation. It is not possible to foresee each and every situation but if you know that
there are chances of certain situations then it is always better to keep your weapons
ready to fight the situation.
2. Identifying the directions: The strategic management essentially and clearly
defines the goals and mission of the company. The main purpose of this
management is to define realistic objectives and goals this has to be in line with
the vision of the company. The strategic management provides a base for the
organization on the basis of which progress can be measured and on the basis of
the same, the employees can be compensated.
3. Better business decisions: It is important to understand the difference
between a great idea and a good idea. If you do have a proper and clear vision of
your company then having a mission and methods to achieve the mission always
seems to be a very good idea. It turns into a great idea when you decide what is the
type of project that you want to invest your money; how do you plan to invest your
time and also utilize the time of your employees. Once you are clear with your ideas
about the project and the time each of your employee and yourself will have to
allocate, you will need to focus your attention on the financial and human resources.
4. Longevity of the business: The times are changing fast and there are dynamic
changes happening everyday. The industries worldwide are changing at a fast pace
and hence survival is difficult for those companies which do not have a strong and
perfect base in the industry. The strategic management ensures that the company
has a thorough stand in the related industry and the experts also make sure that
the company is not just surviving on luck and better chances or opportunity. When
you look at various studies you would know that the industries which are not
following the strategic management will survive for not more than five years. This

suggests that the companies should have a powerful focus on the longevity of the
business. This suggests that without strategic management, it is not possible for a
company to survive in the long run.
5. Increasing market share and profitability: With the help of strategic
management it is possible to increase the market share and also the profitability of
the company in the market. If you have very focused plan and strategic thinking
then it is possible for all the industries to explore better customer segments,
products and services and also to understand the market conditions of the industry
which you are operating in. The strategic management skills will help you to
approach the right target market. The experts will guide for better sales and
marketing approaches. You can also have better network of distribution and also
help you to take business decisions which at the end of the day results in profit.
6. Avoiding competitive convergence: Most of the companies have become so
used to focusing on the competitors that they have started imitating their good
practices. It has become so much of competition that is becoming difficult to part
the companies or identify them differently. With the help of strategic management
this magic is possible try and learn all the best practices of a company and
become a unique identity which will keep you apart from your competitors.
7. Financial advantages: The firms which follow the process of strategic
management proves to have more profits over a period of time as compared to the
companies that do not opt for the strategic management decisions. Those firms
which are involved in using the strategic management use the right method of
planning these companies have excellent control over their future. They have
proper budget for their future projects; hence these business continue for a long
time in the industry.
8. Non-financial advantages: Besides the financial benefits the companies using
the strategic management also provides various non-financial benefits. The experts
informed that the firms which practice strategic management are always ready to
defeat the external threats. They have better understanding about the strengths
and weakness of the competitor and hence they are able to withstand the
competition. This paves way for better performance and rewards for the company
over a period of time. The main feature of this management system is that it has
the capacity of problem prevention and problem solving skills. It also helps in
bringing about discipline in the firm for all types of internal and external processes.

Disadvantages of Strategic Management Process :

The process of strategic management includes setting of long term goals and
objectives of the company using this method helps the company in facing the
competition in a better manner and also increase its capabilities. These are
definitely some of the benefits but every coin has two sides same is the case with
strategic management. Here are some of the drawbacks of implementing the
strategic management.
1. Complex process: The strategic management includes various types of
continuous process which checks all type of major critical components. This includes
the internal and external environments, long term and short term goals, strategic
control of the companys resources and last but not the least it also has to check
the organizational structure. This is a lengthy process because change in one
component can affect all the factors. Hence it is vital that one understands the
issues with all the concerned factors. This generally takes time and at the end, the
growth of the company is affected. Being a complex process it calls for lots of
patience and time from the management in order to implement the strategic
management. In order to have proper strategic management there should be strong
leadership and proper structured resources.
2. Time taking process: In order to implement the strategic management it is
necessary that the top management spends proper quality time in order to get the
process right. The managers have to spend lot of time researching, preparing and
informing the employees about this new management. This type of long term and
time consuming training and orientation would hamper the regular activities of the
company. The day to day operations are negatively impacted and in the long term it
could affect the business adversely. For e.g. there are many issues which requires
daily attention but this is not taken care because they are busy researching the
details about the strategic management. In case, proper resolution of the problems
are not done on time then there could be great amount of attrition increase. Besides
this, the performance of the employees will also go down because they are not
getting required resolution of their problems. This type of situation may lead the
management to divert all their critical resources towards employee performance
and motivation while doing this your strategic management process will be
sidelined.

3. Tough implementation: When we speak the word strategic management then

it seems to be a huge and large word. But it is also a fact that the implementation of
this management system is difficult as compared to other management techniques.
The implementation process calls for perfect communication among the employees
and employer. The strategic management has to be implemented in such a way that
the employees have to remain fully attentive; there should be active participation
among the employees and besides this the employees have to be accountable for
their work. This accountability is meant not only for the top management but for all
employees across the hierarchy. The experts mention that implementation is
difficult because they have to continuously strive to make the employees aware
about the process and benefits of this system. For e.g. if a manager was involved in
forming of the strategic process and he/she has not been involved in the
implementation process then the manager will never be accountable for any
processes in the company.
4. Proper planning: When we say management systems then it calls for perfect
planning. You just cannot write things on paper and leave them. This calls for proper
practical planning. This is not possible by just one person but it is a team effort.
When these types of processes are to be implemented then you need to sideline
various regular decision making activities which would adversely affect the business
in the long run.

Conclusion:
In the recent years most of the firms have understood the importance of strategic
management it plays a key role in the upbringing and downfall of any company. In
a nutshell we can conclude that strategic management is possible if a company can
provide dedicated resources and staff in order to formulate and implement the
entire system. If strategic management is implemented in the company thoroughly
then there is no doubt that the company will survive all types of odds and
competition and remain in the market for a long period of time. This is required in
the present situation for all companies. It just calls for proper planning and right
people in order to implement them in the company. You need to keep a regular
check on all external and internal factors affecting your industry; besides this check
all your financial resources whether they are enough to expand your business. If you
could keep in mind these things the implementation will become very easy and
quick for any organization irrespective of their sizes.