## Strategic Management
### Definition
Strategic management refers to the managerial process of:
1. Developing a strategic vision
2. Setting objectives
3. Crafting a strategy
4. Implementing and evaluating the strategy
5. Initiating corrective adjustments where deemed appropriate
> The process does not end — it keeps going in a cyclic manner.
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### Objectives of Strategic Management
| Objective | Detail |
|---|---|
| Create Competitive Advantage | Build something unique and valued by customers so the company outperforms competitors |
| Guide through Environmental Changes | Help the company react correctly to all changes in the business environment |
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### Importance / Benefits of Strategic Management
1. Direction & Definition — Gives direction and helps define realistic objectives and goals.
2. Being Proactive — Organisations analyse and act rather than merely react. They become proactive instead of reactive.
3. Provides Frameworks — Offers frameworks for all major decisions and guidance to the entire organisation.
4. Prepares for the Future — Acts as a pathfinder to business opportunities and prepares the organisation to face the future.
5. Corporate Defence Mechanism — Helps avoid costly mistakes in product-market choices or investments.
6. Longevity of Business — Enhances the lifespan of the business. Actions over expectations is what strategic management ensures.
7. Core Competencies & Competitive Advantage — Helps develop core competencies and sustainable competitive advantages.
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### Limitations of Strategic Management
1. Complex and Turbulent Environment — The environment is highly complex; it is difficult to predict how it will shape up in the future. Strategy cannot overcome a turbulent environment.
2. Time-consuming Process — Preparing and communicating strategies takes significant time, which can impede daily operations and negatively impact routine business.
3. Costly Process — Requires expert strategic planners, environmental analysis, and implementation efforts — all of which involve significant costs.
4. Competitive Responses — It is difficult to clearly estimate how competitors will respond to a firm's strategies or to gauge competitors' own strategic planning.