Harris KhanStrategic management, especially when done well, is important for a business’ long-term success. … The business will then create clear, well-defined plans that it will then put in action to achieve its goals and to align its business activities, so that the business will be in harmony with those goals.
What is Strategic Management For Small Business?
Strategic Management is a concept that focuses on organisation’s ability to choose and implement strategic options and actions so that it will successfully meet the challenges posed by the changing world, other organisations and its own goals and objectives.
In business, the term “strategic management” is often used as synonymous with “strategic planning”. Strategic planning is an important component of strategic management in business organisations. But there are other equally important components, and these include strategic human resource management , and strategic marketing. Therefore, to be clear, strategic management for small businesses will involve a combination of the above processes and activities.
What are the main objectives of Strategic Management For Small Business?
Strategic Management helps organisations to identify the goals and objectives they need to achieve and then create strategies that will enable the organisation to actively achieve these goals and objectives. The term goal refers to a specific result that management wants to achieve, whereas objective refers to a specific process that management needs to incorporate into the organisation’s routine processes and activities, so that it will be able to achieve the goals effectively.
So strategic management for small business will assist you to set well-defined goals and objectives, and tailor your existing processes and activities, as well as introduce new processes and activities, to ensure that the business is in alignment with the goals and objectives.
Before strategic management for small business can begin, the development of a strategic plan is necessary.
What is strategic management planning?
Strategic planning is a process of identifying the goals and objectives that must be attained, and then creating strategies that will enable the business to achieve these goals and objectives.
In the past, strategic planning for small business used to be done by a group of senior officers and managers, who all made decisions about goals and objectives, and the strategies required to achieve them. Then the strategies were passed to experts to create the necessary plans and programmes.
Today, managers and decision-makers are expected to use strategic management planning as a tool for developing strategies to achieve their organisations’ goals and objectives. They should be able to decide on the goals and objectives they want to achieve, and they should be well-equipped and trained to develop the strategies required to achieve them.
That said, there are several popular options for strategic management planning; each with its own merits, and some are more suited to small businesses than others.
How do you conduct strategic management planning?
There are basically two main options; you conduct your strategic management planning with the help of a small, pre-determined group of people, or you conduct it without the help of a pre-determined group.
In both cases, you will need to identify the goals and objectives that you want to achieve, and then develop strategies that will enable you to achieve these goals and objectives.
If you want to conduct your strategic management planning with the help of a pre-determined group of people, you should identify the group of people you need. Make sure that they are competent, mature, and that they will be able to reach consensus when making decisions. Once you identify the group, you should specify the tasks that they need to perform, and you should write down the group’s objectives, decision procedures and workflow, and also determine how the group will coordinate and control the planning process.
The alternative is to conduct your strategic management planning without the help of a pre-determined group of people. An individual (the manager) must identify the goals and objectives and then the possible strategies that the business can use to achieve them. The manager should then develop a plan (strategic plan) that will allow the business to execute the strategy, which will in turn enable it to achieve the goals and objectives. This strategic plan may, or may not, include specific tasks.
Remember that the planning process itself, and the strategic plan that you develop, should not be seen as the instructions for action; they should be regarded more as guidelines that the manager and the business should adhere to. Therefore, the manager will still need to regularly monitor progress and changes in the environment, and then use the strategic plan as a tool to make necessary adjustments to the business’ plans and activities.
What is strategic marketing?
Strategic Marketing, also referred to as marketing planning, or business planning, is the process of creating a marketing plan for the organisation that will guide its development of strategies and tactics for implementing and executing the relevant marketing functions.
The marketing plan should help the organisation to achieve its marketing goals and objectives, and it should also include a 3-5 year business plan, which will outline the goals and objectives of the business.
What is the aim of strategic marketing?
It is important to note that a marketing plan, or strategic marketing, is one of the main components of strategic management for small business. In most cases, it is the first process that delivery has to conduct when launching a new project or undertaking a new initiative.
There are very few businesses that can afford to operate without a marketing plan, or a strategic marketing plan. This is because the planning process ensures that the business is in harmony with government-legislated regulations, social needs, and legal requirements. It is also necessary, because the plan will help the business to develop strategies and tactics that will allow it to achieve its goals and objectives in relation to its overall needs and customers.
Strategic marketing plans need to have a clear structure that is well-defined. It should have clearly articulated goals and objectives. Very often, marketing is regarded as a service function, so the structure of the plan will reflect this.
The marketer should identify the areas within the business that should be considered as when developing the marketing plan. The plan should also include information on products and services, the firm’s promotional strategy, and how the marketing function will be developed and executed. It should also include a roadmap that specifies the necessary skills that are required and the sequence of action.
What is strategic human resource management?
This is another important process of strategic management for small businesses.
Strategic human resource management is basically the process of creating a Human Resource Plan (HR Plan) that incorporates the company’s strategies and objectives.
The HR Plan should outline the goals, strategies, and actions (programmes, policies, procedures, etc.) that the human resource function will use to achieve the goals and objectives of the organisation, built on the strategies and goals and objectives of the organisation. It should highlight the priorities, objectives, strategies and tactics, and also highlight the skills and resources that are required for effective delivery, and it should include a roadmap specifying the sequence of actions.
The HR Plan should be adaptable, innovative and flexible. For example, it should be , so that it can be changed and adjusted at any stage.
It is important to note that the HR Plan is just one of the components of strategic management for small businesses. The other components include marketing, operations, information technology, finance, and several other management functions.
Strategic management involves identifying and defining the organization’s goals and objectives, and then developing strategies that will allow it to achieve these goals and objectives. This is the process that you should follow when conducting your strategic planning.
What is the role of strategic management for small business?
Strategic planning enables the organisation to clarify its goals, objectives, and strategies. It is the process that determines the long-term direction of the business.
Strategic management’s most important function is the identification and analysis of internal and external environments. Only when these external and internal factors are considered can you formulate the right strategies that will allow you to achieve your goals and objectives. For example,
The review and analysis of internal and external environments will also indicate where the business needs to focus its effort and resources. Some areas of the business will require more attention and effort, while other areas will require less attention and effort.
It is important to note that the planning process will not always yield a “perfect solution”.
The development and execution of a strategic management plan can take a long time, and it can often be difficult to secure the necessary approvals.
The strategic management planning process may indicate that the business will need to implement additional resources into the business functions or it may require you to develop a new business function or to introduce a new type of production activities.
In both cases, the implementing or implementing the changes and developing new strategies will take a long time, and there is a strong possibility that the firm’s budget will be exceeded, although the long-term effects of the planning process will be seen when the firm’s goals and objectives are achieved.
The strategic management process is an ongoing procedure. Hence, it should be continued throughout the existence of the business (as long as the business continues to exist), so as to ensure that the organisation remains in harmony with the external and internal environments, and that it is able to achieve its high-level goal and objectives.
What are the steps in the strategic management planning process?
The steps in the Strategic Management planning process are:
- The identification of the organisation’s goals and objectives.
- The analysis of the external environment, especially the business environment.
- The development of strategies that will enable the organisation to achieve its goals and objectives.
- The development of objectives that will enable the organisation to achieve its strategies.
- The development of tactics that will enable the organisation’s objectives to be achieved.
- The implementation and execution of the strategies and tactics that will enable the organisation to achieve its goals and objectives.
- The establishment of processes which will ensure that the business is in harmony with the external environments.
- The continuous assessment of the organisation’s strategies, objectives and plans to ensure that they are in line with the current external environment.
What are the major problems in strategic management planning for small businesses?
There are several problems that a business will encounter as it plans for a future in which it will need to achieve objectives and strategies that greatly exceed budgets and resources.
The first problem that a business will encounter in strategic management planning is the time factor. Strategic management planning is a continuous procedure that is ongoing. In addition, the development of long-term strategies and visions is a lengthy, detailed process. Several factors and dimensions must be considered during this process.
The development of long-term strategies and visions will allow the organisation to increase its chances of being successful, especially when the business is required to make gradual changes in order to meet the changing needs of the business environment.
The second problem that a business will encounter in strategic management is the process of attempting to balance many concerns that are crucial to the business, including:
The provision of products and services that are offered to its customers (although there has been a recent shift in the focus of many businesses from the needs of the customer to the business’ own goals and needs).
- The business’ strategies for using resources and financial efficiency.
- The cost of resources and production.
- The ability to develop a workforce to ensure effective production processes.
These are just some of the concerns that a business organisation will need to consider while it is developing a strategic management plan or while it is implementing strategic management.
These and other concerns can be summarised as external and internal environments. The strategic management process will give the organisation the opportunity to identify and analyse the external environment, so as to identify and clarify the external environment. Once the business decides on the strategies that will enhance its position in the marketplace, the strategic management process will give the business the opportunity to identify and analyse the internal environment, so as to identify and clarify the internal environment.
In essence, the analysis of the external environment will allow the organisation to identify external forces and influences that may affect its future (the period in which the organisation will operate in the future is referred to as the planning horizon).
The identification and analysis of the business environment will help the organisation to make important strategic decisions to ensure its survival or growth in the future. The identification and analysis of the internal environment will allow the organisation to identify internal factors and influences that may affect its success in the future. The time period in which the planning horizon will operate is referred to as the planning horizon. Although the development of a strategic management plan will not result in a “perfect solution”, it will permit the organisation to develop a course of action that allows it to move in the direction of long-term goals and objectives, with a good opportunity of achieving success, and with a good chance of survival.
The analysis of external and internal environments is the second step in the planning process
What are the important roles in strategic management planning?
Strategic management planning is not a solo process. The process is a group process that involves external and internal stakeholders in the organisation.
The roles in the strategic management planning process are:
- The leader of the organisation (its president or CEO).
- The employees who are involved in strategic management.
- The decision makers who are involved in strategic management.
- The customers who are involved in strategic management.
The leader of the organisation (the organization’s president or CEO) is one of the most important individuals in the strategic management planning process. He or she will have the final say in what types of strategies the organisation will adopt. On the other hand, the leader will need to be concerned that:
The organisation’s strategies are in line with its goals and objectives, taking into account all external and internal forces that may affect the organisation’s future.
The organisation’s goals and objectives are realistic and attainable, and that they won’t create additional stress for the organisation’s employees, customers, or its other stakeholders.
The person who will be involved in the strategic management planning process is each employee of the organisation. All employees can make valuable contributions to the planning and implementation of strategic management activities.
For example:
Each employee can make valuable contributions to the development of new strategies for achieving the organisation’s goals and objectives.
Each employee can suggest ways to upgrade the organisation’s current strategies.
Each employee can suggest areas where recruitment needs will need to be met.
Each employee can recommend discussion topics which will be very relevant to the planning process.
Decision makers (the people who have the authority to make strategic management decisions) are a group of individuals who will influence the strategic planning process.
For example, the leadership or groups that are elected by employees can participate in the strategic management planning process.
The customers are the individuals who are most affected by the operation and success of the organisation. The customers can participate in decision-making activities, including strategic management activities, by providing feedback on the types of activities that they believe need to be reviewed and adjusted.
What is the third step in the planning process of strategic management?
After the organisation has identified and analysed the external environment (the business and non-business aspects that are external to the organisation) and the internal environment (the business and non-business aspects that are internal to the organisation), the organisation will be in a position to:
Observe the way in which the external and internal environments can relate and influence each other.
Identify the main factors that can affect the organisation’s future.
Identify the main areas where the organisation’s resources and capabilities are lacking.
With these findings in mind, the organisation can develop strategies for achieving its goals and objectives in the future.
What happens next in the strategic management planning process?
The development of strategies often involves the identification of the objectives of these strategies. For example:
The development of strategies may involve the identification of the objectives of these strategies and the time period, referred to as the planning horizon, in which the organisation wishes to achieve the objectives.
The development of strategies may involve the identification of the strategies that should be implemented (based on the organisation’s objectives and available resources).
The development of strategies may involve the development of a step-by-step procedure or plan to ensure that the objectives of the strategies are met during the planning horizon.
The step-by-step procedure or plan that is developed by the organisation is referred to as the organisation’s plan, referred to as the plan.
What procedures or steps is the organisation required to follow in the strategic management planning process?
The organisation’s plan must:
Consider the three Ps of business (profit, people, and planet).
For each of the three Ps, success can be defined (and different definitions can be assigned to each of the three Ps).
For example, for the “profit” dimension of business, the organisation has to:
Define what success means for the organisation.
Identify the resources which are necessary to ensure that success will be achieved.
Develop step-by-step procedures for achieving success.
Identify the roles which individuals in the organisation should play in the achievement of success.
Identify the time period in which the success should occur.
Identify the conditions which must exist for success to occur.
After the organisation has developed strategies for achieving its goals and objectives, and the plan to ensure that the objectives are achieved, the organisation should monitor how the strategies, and the plan, are working.
What do the results of the monitoring enable the organisation to do?
The organisation should make adjustments to its strategies and its plan (based on the results of the monitoring).
In other words, if the strategies are not working, or if the plan is not working, the organisation’s leaders must take corrective action.
What can the monitoring identify?
The performance of the strategies.
The performance of the plan (in terms of the steps that are recommended in the plan).
How the organisation’s strategies and plan are related to its goals and objectives.
How the organisation’s strategies and plan are in line with the organisation’s vision and mission.
How the organisation’s strategies and plan are in line with the organisation’s strengths and weaknesses.
How the organisation’s strategies and plan have the support of individuals inside and outside the organisation.
How the organisation’s strategies and plan can be revised to ensure that they will meet the organisation’s goals and objectives.
What are the benefits in adopting the strategic management planning process?
The organisation will be in a better position to deal with its goals and objectives if it adopts the strategic management planning process.
Also, the organisation will be in a better position to deal with the external and internal environments if it adopts the strategic management planning process. Viewed from the outside, the organisation will have a more positive image (based on its strategies and plans), and it will have a better chance of surviving if it adopts the strategic management planning process. Viewed from the inside, the organisation will have a better chance of success (based on the strategies and plans that have been adopted by the organisation).
Which problems can occur if the organisation does not adopt the strategic management planning process?
When the organisation does not adopt the strategic management planning process, its leaders will not be in a position to make strategic decisions about the organisation.
The leaders of the organisation will also not be in a position to manage the organisation, as the leaders will not be in a position to know what the organisation is planning to do.
For example, if the organisation has not developed strategies and a plan, the organisation’s leaders will not be in a position to understand what the organisation stands for; the organisation’s leaders will not be in a position to understand what the organisation will do in the future; the organisation’s leaders will not be in a position to develop resources that will be necessary to meet the organisation’s goals and objectives; and the organisation’s leaders will not be in a position to develop a step-by-step plan that ensures that the organisation will achieve its goals and objectives.
The organisations that adopt the STRATEGIC MANAGEMENT PLANNING PROCESS are in a better position to make important strategic decisions about their organisations’ futures.
Which factors will influence whether the organisation will want to adopt the strategic management planning process?
- Strategic factors.
- Tactical factors.
- Environmental factors.
What kind of factors will influence the organisation to adopt the planning of the strategic management process?
The strategic factors are the way the organisation will:
Understand its purpose (which will enable the organisation to determine which markets it will target).
Develop a vision that will ensure that the organisation will achieve its mission.
Establish goals and objectives that will ensure that the organisation will reach its mission.
The tactical factors are the way the organisation will:
- Determine the strategies that will ensure that the organisation will reach its mission.
- Develop a step-by-step plan that will ensure that the organisation will reach its mission.
The environmental factors are the way the organisation will:
- Consider the external environment.
- Consider the internal environment.
- Address issues which could hinder the organisations capability in the workplace.
What kinds of factors will influence the organisation to adopt the strategic management planning process?
The strategic factors help the organisation to determine:
- What the organisation stands for.
- What the organisation will do.
- What the organisation’s strengths and weaknesses are.
- The tactical factors help the organisation to determine:
- The strategies that the organisation should adopt.
- The types of strategies that the organisation should adopt.
- The roles that individuals should perform.
- The resources which the organisation will need to achieve success.
- The steps that the organisation will have to follow to reach its goals and objectives.
- The environmental factors help the organisation to determine:
- The external environment the organisation will have to deal with in the future.
- The internal environment the organisation will have to deal with in the future.
- How the organisation will be positioned to make strategic decisions about its organisation.
- How the organisation will be positioned to make strategic decisions about its future.
- How the organisation will be prepared to meet the challenges of the future.
- How the organisation will be prepared to meet the opportunities that will be presented to it in the future.
- How the organisation will be prepared to take advantage of the future.
Which are some contributions of the STRATEGIC MANAGEMENT PLANNING PROCESS?
Businesses need to understand how they will achieve their goals and objectives; which is what the PEST factors will help them to do.
Businesses need to understand environmental factors which will influence their business strategies; which is what the PEST factors will help them to do.
Businesses need to understand which business strategies are most appropriate for their products and industries; which is what the PEST factors will help them to do.
Businesses need to understand factors which will influence consumer preferences; which is what the PEST factors will help them to do.
Businesses need to focus on the business strategies which will help them to meet the needs of their target markets; which is what the PEST factors will help them to do.
Businesses need to focus on the business strategies which will help in the development of their products and services; which is what the PEST factors will help them to do.
Businesses need to develop strategies to help them to increase their market share; which is what the PEST factors will help them to do.
