What is the challenge of strategic management?

Essay by king_hieCollege, UndergraduateB, August 2004

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Achieving the strategic competitiveness and earning above average returns is one of the strategic management challenges. It is very difficult to be achieved even if the firm is very big and it is even harder for those companies that are in small scale. Eventually the profits are usually hard to find or gain.

The rigours of change and also competition catch are another challenge. For instance, in 2000, only 10 of Australia's largest 100 enterprises had been in business at the beginning of the century. And according to Business Review Weekly's annual list of the "Top 1000" companies, more than 30% of the companies drop off in each decades. This shows that more and more company will be drop out for the years to come and it provides a good indication of attrition. Not only that, it also shows that there are too many competitor for a certain firm to compete with in a certain market and it is a very hard challenge for the firm to implement their strategic management.

Profit is one of the aim or goal for most of the firm or company. However, in strategic management, strong and consistence profit is not the main priority or concern. A strong and well-thought-out strategy was the top concern. This was followed by maximizing consumer satisfaction and loyalty, business leadership and product or service quality. And it is very hard to achieve actually because each consumer is different from one another in terms of the satisfaction towards a certain product or service quality. So, this could be one of the challenges of strategic management.

Some company or firm do creates their own problems by formulating the wrong strategy or implementing a strategy poorly. This will cause the company to make a loss rather than a profit.