Increasing globalization and high competition situations are challenging for organizations and businesses. strategic management has made it indispensable. What is strategic management, What are the steps in creating a strategy?, What are the stages of the strategic management process?, What is the first stage of the strategy creation process?, What is the stage at which the strategy is implemented? I wanted to create a guide content from the most basic to all the details, where you can find answers to questions such as.
What is strategy?
Strategy literally means; It means to direct, direct, send, take and herd. As expected, the word was first used in the military field. It is the science of planning and executing military operations to win a war. It entered the Turkish language as a military term at the beginning of the 20th century. strategy The word means determining what the enemy can or cannot do and making a general plan accordingly, placing his own forces and mobilizing them when necessary.
Strategy, as a term that has a place in our lives in every field, is general programs designed to take action and take action to achieve multifaceted goals. The goals of an organization, changes, correct use of resources to achieve these goals, profit management practices, determination of long-term goals, adaptation of activities to them and distribution of the necessary resources, all these processes and activities constitute the strategy of the business. Although the definitions of thinkers on this subject vary, they are gathered within the same framework.
These are activities that will ensure harmony between the internal resources and capabilities of the business and the opportunities and threats of the external environment.
Hofer and Schendel
It is the name given to what business the business does or wants to do: all of the goals, objectives and tasks that define what kind of business it is or wants to be, and the methods required to achieve them.
Andrews
What is strategic management?
strategic management; It is the science and art that aims to examine, prepare and implement multilateral decisions that will enable the company to achieve its goals. Strategic management aims to make the organization successful by operating the company’s management, marketing, finance, accounting, production, control, research and development and information processing systems in harmony.
Unlike another strategic management definition It is the science of formulating, implementing and evaluating trans-functional decisions to achieve the organization’s goals and objectives.
Philosophy of strategic managementone that explains what story there is. Managers of two rival companies operating in the same market decide to go to the forest to camp to discuss a possible merger. While they are in the forest, a big bear appears ready to attack them. One of the managers immediately throws away his bag and starts putting on his running shoes. The other one said, “What is the need? “You can’t run faster than a bear and escape,” he says. The answer is striking: “Maybe I can’t run faster than the bear, but I can outrun you!”
Strategic management is a process. The company determines the goals and objectives it wants to achieve, determines to what extent it wants to achieve them, when it wants to achieve them, and determines the tools it needs to use to achieve this. He decides how to behave. Then, he starts to implement these decisions. After the implementation phase, the control and development process begins. The results of the implementations are examined and the changes required to achieve the goals are planned and implemented. These practices are then subject to control and the circle continues to turn in this way.
Strategy creation process
Within the scope of strategy formulation; Creating the vision and mission, determining the opportunities and threats arising from outside the business, determining the strengths and weaknesses arising from within the business, determining long-term goals, creating alternative strategies and monitoring your strategies selection activities are carried out.
During the strategy formulation phase, issues such as which businesses to enter, which businesses to abandon, how to distribute the resources of the business, whether to expand its fields of activity, whether to enter international markets or not, whether to merge with another business are also discussed.
- Determining the philosophy and mission of the organization
- Identifying short and long term goals to achieve the mission
- Determining the necessary strategies to achieve these goals
Strategy implementation process
The most important step that puts the strategy into action; APPLICATION! To be effective, every member of the organization must implement the strategy, especially leadership of the organization should support. Continuous applicationis to implement part of the strategy to achieve the next step in the strategy formulation process. Strategy The rest of the formulation should be taken in order.
In addition to the items below, the most important steps such as where the operations will be carried out, market entry and business ownership strategies, and strategies of business functions (such as marketing, sales and production) are put into action at this stage.
- Establishing an organizational structure appropriate to the determined strategy
- Creating a budget, operation plan and motivation system to achieve goals
- Checking whether the determined strategy serves the company’s goals.
History of strategic management
Strategic management, which has become a concept that everyone knows today, is actually a very new management practice and the development process of strategic management can be followed from a recent date. In the 1950s, while businesses continued their activities only by planning, it was understood that this was not enough and long-term plans began to be made in order to see more distant points. In the 1965s, the inadequacy of the plans made for business departments was realized and corporate plans covering the entire organization were created. By the 1970s, it was seen that all these things did not eliminate the difficulties of companies on the way to success, and the direction to go was included. strategic planning period has entered.
In the following years, it was the first time that organizations needed to reshape themselves through evaluating the results of strategic plans and feedback. strategic management practices has started to be implemented. This period can be divided into two: The dominant understanding between 1980-2000. competitive strategy period and those that emerged after 2000 core competencies strategy It is known as the period.
Strategic management, which has developed in this way throughout the historical process, is now divided into sub-fields. The most important organization that is competent in this field is Strategic Management SocietyAccording to , strategic management is divided into 12 subgroups.
Strategic Milestone
Companies have to make many difficult decisions throughout their lives. Nowadays; The pace of social and technological change is a period in which anything can happen at any time, and it is open to positive opportunities as well as frightening. In mathematics, an inflection point is defined as the point at which the slope of a curve changes shape. Before the turning point, business was done the old ways in the industry. After the turning point, everything changes radically. Companies that can follow the curve survive, others disappear.
International strategic planning
If the business becomes global, the strategic planning process we have described takes on a new dimension. Effective strategic planning is directly related to the inputs entering the system. These inputs; It includes people, capital, managerial and technical knowledge and skills. But it is also necessary to consider the outside of the system. Of course, a business needs strategic planning in order to grow, expand into the international arena and survive in the international environment.
Strategic Planning Approaches
Strategic planning, which is used to reveal all the goals that organizations want to achieve in the long term from a strategic perspective and to determine the ways to achieve these goals, is one of the important pillars of this management philosophy. There are four basic approaches to strategic planning.
Large international companies use a mixture of all these approaches. For example, IBM applies the economic approach in the developing countries market, the political and quality approach in European countries, and the managerial assistant approach in environments where change occurs very rapidly.
Economic approach
International companies with this approach operate around the world based on price characteristics. leadership aims to establish. Generally, the products sold are products from sectors with high added value. R&D studies of the product are costly. Examples are the automobile industry and the chemical industry. Because the product usually has homogeneous characteristics, the business can implement a worldwide production and marketing strategy.
This type of strategy can also be used by companies that produce products that can be used around the world without modification. The computer industry can be a good example of this. Standards have improved in this type of products and price is at the forefront for buyers.
political approach
Companies with this approach enter the market by developing a separate strategy for each country. It is generally used for businesses operating in the service sector. The success of the product depends on the success of marketing, sales and after-sales support services. Businesses by local markets strategy determines and implements.
Quality approach
It is used by companies that think they can meet customer expectations with quality. Companies minimize production errors by using Total Quality Management principles and work to market high quality products to their customers. This practice, initiated by Japanese companies, was also implemented by other companies that saw the success of the Japanese in the market.
Managerial assistant approach
There is no definitive strategy in this approach. An effort is made to develop a strategy appropriate to the current situation.
