The strategy is a roadmap of commercial concern; it defines the mission and vision of the company. The objective of the policy is to maximize the strengths of the industry and minimize the advantages of competitors. The top-level management should clear the vision first from where we are to where we want to go. The corporate success depends on the fact that each and every person understands the strategy of the business.
The strategic management process took place in five basic steps:
Establishing Mission, Vision and Goals
The main step in strategic management is to mention the vision of your business clearly. The vision includes both short term and long term objectives of the trade. After that, necessary processes are designed to achieve these objectives and tasks are assigned to people to complete tasks effectively. In strategic management, the goals set for business should be realistic and well defined in vision and mission statement for the business shareholders and workers.
This is the most important stage of strategic management because in this stage, all the information is gathered, which is required to complete the vision of the company. This stage also paves the path for the next two stages.
The analysis stage gives all the information and understanding of the needs of the profession. The data for the strategic direction and growth of the trade is gathered in this stage. All the issues and weaknesses are gathered and the competitive edge is also mentioned in the analysis. This will help to know how realistic the goals of the corporate are.
Strategy Formation (SWOT analysis)
After the first two steps then come strategy formation, in which all the information gathered is reviewed and strategy is formed to achieve the corporate goals. In this stage, all the resources are examined to achieve the goals of industry and all the external sources are gathered, wherever these are required.
Business and economic situation go hand in hand, so it is essential to create alternative approaches that support each and every level of plans. All the strengths, weaknesses, opportunities and threats (SWOT) to corporate is considered in this step.
Successful implementation of the strategy is critical for the success of commerce. At this stage, all the processes are put in action according to the structure of the trade. If the fabric doesn’t work with the strategy, then new construction should be developed at the stage of implementing the strategy.
All the duties and responsibilities are assigned and everyone in the organization should be well aware of their tasks and responsibilities. All the funds and resources are placed in order. Once everything is in place and everyone is well aware of his duties the plan should be implemented.
Once the strategy is implemented it is necessary to control all the actions and take corrective steps whenever required. Internal and external controls should be monitored by making sure that the strategy implemented is helping in achieving the goals of the company. All the issues which arise can be controlled on time and if the implementation of the strategy is going towards any other way, on time, corrective action could be taken.
Linking Finance with Strategic Management
Study shows that the corporate concerns which are engaged in the strategic management process are more successful as compared to other companies. When firms have a strong look over their resources and priorities they have full control over their future which is very necessary for the existing in the changing world and Aston University Online is one of the best choices for commerce studies.
Strategy making links the Management process and finances of trade. In strategic management, all the related parts of management and allocation of resources are decided and forecasted already.
Financial Benefits of Strategic Management
Strategy making helps corporate to forecast all the aspects of trade and properly allocate the resources of the industry. It can provide some financial benefits and some no economic benefits to the corporate and helps grow industry according to the goals and set strategies. Researchers indicate that proper strategic management can help in superior performances of the profession.
Strategic management helps in increasing the sales and productivity of the industry, which overall increases the profits of the company. Those trades which are performing highest in the market of competitors work through proper systems and alter the internal and external environments whenever and wherever required.Following are some of the financial benefits of strategic benefits.
The stakeholders of corporate show their anger when financial reports are showing negative numbers consistently. To avoid this anger top management take necessary steps to prevent negative numbers. They also alter operating processes and make them related to complete goals of the company. In strategic management, leaders do not get afraid of making necessary changes to the policies and environment for the better performance of commerce.
Producing the end product is the primary goal of corporate either its manufacturing trade or services corporate. Strategic management helps in the production process. The resources used for the production process are appropriately managed through strategic management. All the workers are assigned to their tasks and there is no chance of wasting resources of the firm. Whenever it is required, more resources are gathered through strategic management.
Through strategic management, the top leadership has a keen eye on all the processes of corporate. When manufacturing and productivity are increased in trade, this will directly affect the sale of industry. The deals are improved which increased the motivation of workers and ultimately increased the profits of the business. Advanced purchases are profitable for every stakeholder.
The profits of the company are increased by sales, and these profits are needs to be appropriately managed. Managers create profit and loss statements for a clear picture of expenses and incomes of trade. These profits are correctly distributed among the stakeholders and workers in the shape of dividends and remuneration.
Liquidity status of corporate is very important for the leaders. If it is unable to pay on time, it will face difficulties from suppliers. Strategic management helps managers to make the cash of trade used in the line of achieving goals. Liquidity monitoring also helps top management to insert more capital whenever required by the production processes.
Through Strategic management, assets-debt is maintained to maintain the solvency of corporate. Managers and balance sheet review the assets is that financial statement that can help in reviewing assets and liabilities of commerce.
In the emerging era of corporate industry, every trade has realized the importance of strategic management. Understanding the significance is not the only thing but also how the process of strategic management is carried out is more important because this will help in the success of the trade. Those forms which do not give importance to strategic management should realize the fact that this is the most important thing these days to make trade successful.