Strategic Management Process.

Table of Contents

1. Introduction1

2. Environmental Scanning1

2.1Societal Environment2

2.2Task or Industrial Environment5

2.3Internal Environment5

3. Outward-In-Approach6

4.Societal Environmental analysis7

4.1PEST Analysis7

4.2Scenario Analysis10

5.Industry or Task Environment10

5.1Porter's Approach10

5.2Strategic Group13

5.3Competitive Intelligence14

6.Internal Environment15

6.1Resource-Based Approach15

6.2Value Chain Analysis16

7.SWOT Analysis19

8.Conclusion20

Reference

1. Introduction

Strategic management has four basic elements such as environmental scanning, strategic formulation, strategic implementation and evaluation and control. Exhibit 1 shows the interaction between these elements.

Exhibit 1. Basic Elements of the Management Process (Source: Wheelen & Hunger, 2002)

2. Environmental Scanning

Wheelen & Hunger (2002) described environmental scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the corporation. Its purpose is to identify strategic factors, i.e. those factors which will have a long term impact on the organization.

A key challenge in environmental scanning is the monitoring of the societal environment.

Marine Institute Ireland, Strategic_Planning_Symbo...

Schematic of an ESEM.

Sydney ESEM prototype -world's first

The societal environment includes economic, technological, socio-cultural and political-legal forces that do not touch on the short-run activities of the firm, but can and do influence long-run decisions. Exhibit 2 depicts key environmental variables.

The task environment includes those elements that directly affect the corporation. These are governments, local communities, suppliers, competitors, customers, creditors, labor unions, special-interest groups, and trade associations. A corporation's task environment is typically the industry within which that firm operates. Industry analysis refers to an in-depth examination of key factors within a corporation's task environment. Both the societal and task environments must be monitored to detect the strategic factors that are likely to have a strong impact on corporate success or failure.

Strategic analysis gives the clear picture of the changes in the environment and how these changes affecting the organization and its activities. It gives idea about the resources...