What is the Strategic Management Process?

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  • Written By: Jessica Bosari
  • Edited By: Bronwyn Harris
  • Last Modified Date: 03 December 2018
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The strategic management process is a way for businesses to build strategies that help the company respond quickly to new challenges. This dynamic process helps organizations find new and more efficient ways to do business. The four key elements are situation analysis, strategy formulation, strategy implementation, and strategy evaluation.

By addressing each element of the process in the order listed, companies can evaluate and re-evaluate situations as they develop, always checking to be sure the company has positioned itself optimally in the business environment. Situational analysis is the first and most vital part of business process management.

Situation analysis involves looking over the company’s external and internal environments and the context in which the company fits in those environments. It begins with observing the company’s internal environment, investigating how employees interact with each other at all levels. Often, organizations hold discussions, interviews and surveys to get a clearer picture of the current environment. To analyze the external environment, managers must look at the interactions between customers, suppliers, creditors, and competitors.

Managers should also consider which company needs are not being met. The types of challenges businesses face are numerous and varied, and they can involve processes like financial planning, staffing, employee performance, customer retention, sales projections and many others.


After a situational analysis is completed, it is time to formulate a strategy. This involves determining the company’s strengths to decide which strategies can be implemented. Strategies can be operational, competitive or corporate, depending on which part of the organization must implement them.

Operational strategies involve day-to-day operations, forming the processes and procedures by which the company does business. Competitive strategies involve finding ways to compete with a particular industry or business. Corporate strategies are long-term plans that govern the overall direction the company plans to take.

Strategy implementation is the third step in the strategic management process. It involves putting the formulated strategy into place. Management processes will focus on methods and procedures designed to execute their strategies and the order in which strategies should be implemented.

The final step in this process involves observing the results of an implemented strategy. In this strategy evaluation, the process comes full circle. This analysis is essentially the same as situational analysis, looking at the internal and external environments and the company’s context within them to determine if a plan should be reformulated.


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Post 4

strategic management process is concerned with the system by which the decisions which are rare, directive, long term etc like features. it is used in usually huge organizations or concerns.

Post 3

@bbpuff - You're right in the fact that there are literally a team of people who deal with this sort of information processing. Most of the time (and if you search around a bit, you'll see what I mean), you will find that a Master's of Science in Strategic Management is the degree that most of the heads of this department have.

It's useful finding some one with this degree because i means they are well-educated in every aspect of this process - which means better analysis for your company.

Post 2

@win199 - This process is beneficial for all companies that use it, but not many businesses outside of Retail really implement it. I think they even have teams that go out and deal with this sort of information, but I'm not too sure about what you would call those people.

Post 1

The Strategic Management Process is most commonly used with Retail-type businesses because this is where it's most effective. While it can be beneficial for all types of companies, Retail benefits the most because the process involves an in-depth look at not only their business, but the business of their competitors as well.

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