Strategic management includes strategic planning, implementation and review/control of the strategy of an organization. All most all the modern organizations engage in strategic management to ensure that they achieve the desired level of performance. There are many benefits that an organization can obtain by engaging in strategic management and they can be described as follows :
Strategic management process clearly defines what is the desired level of performance (mission/goals/objectives) and it sets the direction so that everyone in the organization knows where are they heading towards. Strategic management act as a road map to everyone in the organization and it clearly defines the way to get to the final destination/desired level of performance.
Strategic management identifies the critical factors that are strategically important to the organization. When critical factors are identifies company can analyse and take relevant measures to ensure satisfactory performance in those areas.
Strategic management predicts the future changes that can take place. Predicting future changes that can take place will help the organization to be proactive and take necessary steps to manage change with contingency planning and change management strategies.
This is the most important and the most critical benefit of strategic planning. By a successful strategic management process company should be able to build a competitive advantage over other competitors which can be sustained overtime without being imitated or outperformed by its competitors. Strategic management identifies the competitive advantages that can be generated through strengths of the organization and take necessary steps to effectively obtain it.
The successful strategic management should ensure that the company performs very well and generates profits for its owners. When the competitive advantage is built company can thrive on that to make profits and record good performance.
Strategic management identifies opportunities and threat that influence the organizational performance. It make use of opportunities and minimize threat to make sure that company can survive in the market by outperforming its rivals.
Current business world is too complex, volatile and dynamic. A firm without strategic management finds it hards to interprets the complexities faced by the organization. In contrast firm with strategic management makes the business complexities simple, predict future dynamics and take proactive steps to minimize threats and make use of opportunities.
Note of Credits : This is article is based on a lecture done by Mr. Marlon Gunasekara at APIIT-Sri Lanka on Strategic Management on 14/12/2010