1 When Planning Business Strategies, What Are the Most Important Elements for Firms to Focus On?
2 The Role of the Organization's Policies
3 Definition of Cost Containment
4 Types of Business Investment
Strategic Management and Strategic Planning Process. This Chapter on the strategic management and strategic planning process provide an insight on the basic knowledge on what is strategy and strategic management. It further provide the strategic planning process theory and indicate the importance and benefits of strategic planning and provide the limitations of strategic management.
While every business decision you make ultimately affects your bottom line, not every strategy that a business pursues provides a direct sales increase or expense decrease. Strategy focuses more on what you want to achieve over the long term rather than how you want to accomplish something, which you do through specific tactics. Including non-financial strategies in your management planning will help you improve your overall operations and strengthen your company.
Improves Stability
Some management strategies strengthen your business by expanding your opportunities. For example, if most of your business comes from one or two large clients, losing one of those customers can shut you down. They also have the leverage to cause you to lower your prices, extend long credit terms, negotiate onerous sales contract provisions or add significant customer service. A strategic management goal for your business might be to secure new customers to decrease your dependence on these two clients. Strategies such as acquiring a new business, selling into new market segments or adding a new product line also help improve your stability.
Decreases Risks
Strategic management should include implementing corporate governance, internal controls and policies and procedures that reduce your legal exposure. These can include conflict-of-interest policies for partners or board members, employee policies and the use of external audits of your contracts. Meeting with your attorney, insurance provider and an employment expert can help you meet your legal obligations.
Strong Labor Supply
Strategic management can include proactive staffing practices that improve your workforce. These might cover creating a long-term organization chart, writing detailed job descriptions for employees, providing annual reviews, adding training, taking steps to reduce turnover, planning succession, improving recruiting practices, expanding your compensation and benefits to become more competitive and complying with state and federal labor regulations.
Strengthens Brand Management
Just because you can make a profit doing something doesn’t mean that activity will benefit your company in the long run. Adding a new product or buying a company that doesn’t fit in with your image in the marketplace can damage your brand. Strategic management takes into account your brand-management goals and guides you in each business decision you make. Creating a specific brand as part of your strategic management plan will help you identify which opportunities will strengthen your business and which you should avoid.
Identifies SWOT
Strategic management includes examining the strengths, weaknesses, opportunities and threats facing the overall company and individual components of it. Identifying these can help you spot problems with your company’s product line, pricing model, distribution channels, online presence, marketing or staffing.
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About the Author
Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.
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Ashe-Edmunds, Sam. 'Non-Financial Benefits of Strategic Management.' Small Business - Chron.com, http://smallbusiness.chron.com/nonfinancial-benefits-strategic-management-67154.html. Accessed 06 June 2019.
Ashe-Edmunds, Sam. (n.d.). Non-Financial Benefits of Strategic Management. Small Business - Chron.com. Retrieved from http://smallbusiness.chron.com/nonfinancial-benefits-strategic-management-67154.html
Ashe-Edmunds, Sam. 'Non-Financial Benefits of Strategic Management' accessed June 06, 2019. http://smallbusiness.chron.com/nonfinancial-benefits-strategic-management-67154.html
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