Strategic Management

2350 words 10 pages
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. Generally, strategic planning deals with at least one of three key questions: “What do we do?”, “For whom do we do it?”, and “How do we excel?”. In many organizations, this is viewed as a process for determining where an organization is going over the next year or more typically 5 years (long term), although some extend their vision to 20 years. Organizations sometimes summarize goals and …show more content…
The analysis of organization’s external environment reveals opportunities and threats for an organization. Strategic managers must not only recognize the present state of the environment and their industry but also be able to predict its future positions.
There are 11 action taken into account in strategic management. These are forward forward integration, backward integration, horizontal integration, market penetration, market development, product development, related diversification, unrelated diversification, retrenchment, divestiture, and liquidation. Each alternative strategy has countless variations. For example, market penetration can include adding salespersons, increasing advertising expenditures, couponing, and using similar actions to increase market share in a given geographic area.
Backward and forward integration are strategic initiatives companies may perform to reduce risks and interdependencies with external business partners in the supply chain. Fundamentally, companies may increase their control over a wider scope of the supply chain by performing backward and/or forward integration, and increase their own decision-making power over key resources and competencies important to the competitiveness of the organization.
Horizontal integration refers to a strategy of seeking ownership of or increased control over a firm’s competitors. One of the most significant trends in strategic management today

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