Blog

For any entrepreneur, strategic management is a state of preparedness to meet challenges emerging from unforeseen circumstances of the business. Therefore, the business plan that an entrepreneur prepares should be of a short duration that is of less than two years so as to accommodate changes in the near future and to avoid the risk of uncertainties in the distant future.

Employees’ participation should be encouraged in management so that the ground realities daily can be well understood and activities are planned and adjusted accordingly.

Strategic Management in Business Enterprises

Strategic management is based on strategic planning as already described above. But such strategic planning should be based on considerations such as clear vision and a meaningful mission of the management; the entrepreneur’s own driving force and position of the enterprise in the market.

Assessment of the firm’s strengths and weaknesses; scanning business environment and available opportunities; strategic options and selection of appropriate strategy; and using accurate control measures for assessing the results.

For an entrepreneur, it is not difficult to follow the above game plan strictly. Each of the above steps is briefly narrated below:

1. Clear Vision and Meaningful Mission
2. Driving Force and Market Position
3. Strength and Weakness
4. Scanning Business Environment
5. Strategic Options and Strategies
6. Accurate Control Measures

Clear Vision and Meaningful Mission

One must know the purpose of the business. To achieve this purpose one must have a clear path to reach it. This requires defining the jobs and designing the operational structure to set the work in a preferred coordinating spirit and manner.

Driving Force and Market Position

Unless the market position is clearly assessed and defined, no driving force will work. One must identify, within the market area, the customers aimed to be served.

Strength and Weakness

One must study the positive as well as negative internal factors and make a sincere attempt to overcome negative factors by building strong positive factors. For example lack of skill be overcome by building specific skills; a lack of know-how in any specified area be suppressed by accurate and requisite knowledge in that area and likewise.

Scanning Business Environment

The business environment plays a significant role in the success of the enterprise. Here, entrepreneurs must scan the environment viz. Macro-environment covers economic, social, political, and technological conditions prevailing in the country and changes taking place to judge their individual and combined impact on the business activity of the entrepreneur; the Microenvironment to know placement of the product in the specific industry classification.

The industry environment will reveal the strength of the competitors in the industry. The future prospects of the product, its substitutes and market share the industry commands, customers’ behavior, or competitors’ strategies both could be known through such analysis.

This enables entrepreneurs to balance their own strengths and weaknesses against the opportunities and threats these market forces present. Sources of information for the study of the business environment are plenty viz.

1. Publications of industry or trade associations;
2. Local newspapers;
3. Competitors’ press releases, literature, advertisements, brochures, etc.;
4. Attend the sales manager’s periodical meeting to get feedback on competition;
5. Purchase competitor’s products and analyze them for useful publicity information;
6. Customers’ grievances, opinions, and suggestions;
7. Government reports, publications, policy statements, etc.
8. Attend industry and trade fairs etc.

Strategic Options and Strategies

In light of the above findings, entrepreneurs should redefine their goals, revise their strategies, modify action plans, and redraft approaches. In other words, to achieve objectives, adopt competitive strategy. For example, to attain price leadership the firm must produce low-cost products than competitors.

For that purpose, reduce manufacturing costs by changing processes or inputs without compromising with quality or different products but win over the customer’s loyalty to the brand and likewise, steps could be taken.

Accurate Control Measures

For success in any field, one must know the gaps between planned objectives and the achievements and the reasons for such a gap to remedy the loopholes. Such control measures should cover different areas in the work floor i.e. production department performance through employee performance; sales department performance through turnover and revenue realization and product performance through customer satisfaction and demand analysis, etc.

The task of strategic management is rendered easier if the entrepreneur prepares a file in each of the above areas keeps on filing the collected information in each separate file and periodically analyses the information collected therein. By doing so, the entrepreneur will be nearer to the goal of strategic planning. These efforts will fetch success to the business enterprises if their entrepreneur is properly trained and his skills toned up.

FAQs Section