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Business strategy involves answering the question: “How shall we compete in this business?” In management theory and practice, a further distinction is often made between Strategic management and Operational management. Operational management is concerned primarily with improving efficiency and controlling costs within boundaries set by the organisation’s strategy.Strategic management processes and activitiesDefinitionStrategy is defined as “the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary to carrying out these goals.”  Strategies are established to set: directionfocus effortdefine or clarify the organisation, and provide consistency or guidance in response to the trading environment. Strategic management involves the related concepts of strategic planning and strategic thinking. Strategic planning is analytical in nature and refers to formalised procedures to produce data and analyses used as inputs for strategic thinking, which synthesises the data resulting in the strategy. Strategic planning may also refer to control mechanisms used to implement the strategy once it has been determined. In other words, strategic planning happens around the strategic thinking or strategy making activity. Strategic management is often described as involving two major processes: formulating andimplementing strategy While described sequentially below, in practice, the two processes are iterative and each provides input for the other.
How much attention are you giving to strategy management in your organisation?
Author: Hugh Sutherland2014/09/05
Strategy is not to be confused with Mission and Vision statements, or Budgeting. Strategy generally involves setting goals, and mobilising resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). The senior leadership of an organisation is generally tasked with determining strategy. "The essence of formulating competitive strategy is relating a company to its environment", says Michael Porter.
Road freight is a highly capital-intensive business requiring attention to Fixed cost recovery
"The essence of formulating competitive strategy is relating a company to its environment", says Michael Porter.
Strategy formulation begins with careful research at line level to fully understand the challenges and opportunities for all stakeholders. Failure to understand difficulties at this level could meet with unexpected implementation flaws.Furthermore, providing the opportunity for staff to understand shareholders' concerns will also reduce the RC factor, strengthen acceptance and shorten implementation time.Communication is essential from the start as stakeholders want to know what is in it for them.
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