strategic management involves the formulation and implementation of the major goals and initiatives taken by a company.
Top management on behalf of owners based on consideration of resources and an assessment of the internal and external environment in which the organization competes strategic management provides overall direction to the enterprise and involve specifying.
The organization’s objectives
Developing policies and plans designed to achieve these objectives and allocating resources to implement the plans academics and practicing manager shave developed numerous models and frameworks to assist in strategic.
Decision making in the context of complex environments and competitive dynamics strategic management is not static in nature the models often include a feedback loop to monitor execution and inform the next round of planning.
Michael Porter identifies three principles underlying strategy creating a unique and valuable position making trade-offs by choosing what not to do and creating fit by aligning company activities with one another to support the chosen strategy.
Dr. Vladimir convinced defined strategy as a system of finding formulating and developing a doctrine that will ensure long-term success if followed faithfully corporate strategy involves answering a key question from a portfolio perspective.
What business should we be in business strategy involves
How shall we compete in this business in management theory and practice a further distinction is often made between strategic management and operational management
Operational management is concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization’s strategy.
Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company’s.
Top management on behalf of owners based on consideration of resources and an assessment of the internal and external environments.
In which the organization competes strategy is defined as the determination of the basic long-term goals of an enterprise and the adoption of courses of action and all location of resources necessary for carrying out these goals strategies.
Are established to set Direction focus effort to define or clarify the organization and provide consistency or guidance in response to the environment strategic management involves the related concepts of strategic planning and strategic thinking.
Strategic planning is analytical in nature and refers to formalized procedures to produce the data and analyses used as input for strategic thinking which synthesizes the data resulting in the strategy.
Strategic planning may also refer to control mechanisms used to implement the strategy once it is determined in other words strategic planning happens around the strategic thinking or strategy making activity strategic management is often described as involving two major processes formulation and implementation of strategy while described sequentially below in practice the two processes are iterative and each provides input for the other.
Need for SCM
- It is an updated form of cost analysis, in which the strategic elements are more clear and formal and improves the overall position of the company.
- It is used to analyze cost information, and use it to develop various measures to achieve sustainable competitive advantage.
- It provides a better understanding of the overall cost structure in the quest of gaining a sustainable competitive advantage.
- It uses cost information specifically to govern the strategic management process – formulation, communication, implementation, and control.
- It helps in identifying the cost relationship between value chain activities and its process of management to gain a competitive advantage.
The strategic cost management must be implemented at the initial stages of production, so as to reduce heavy cost failure.
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