Business organizations devise various methods for strategy formulation. The strategic management formulation and implementation methods vary with product profile, company profile, environment within and outside the organization, and various other factors. Large organizations which use sophisticated planning use detailed strategic management models whereas smaller organizations where formality is low use simpler models. Small businesses concentrate on planning steps compared to larger companies in the same industry. Large firms have diverse products, operations, markets, and technologies and hence they have to essentially use complex systems. Inspite of the fact that companies have different structures, systems, product profiles, etc, various components of models used for analysis of strategic management are quite similar
The strategic management consists of different phases, which are sequential in nature.
What are these Phases: There are four essential phases of strategic management process. In different companies these phases may have different, nomenclatures and the phases may have different sequences, however, the basic content remains same. The four phases can be listed as below.
- Defining the vision, business mission, purpose, and broad objectives.
- Formulation of strategies.
- Implementation of strategies.
- Evaluation of strategies.
These phases are linked to each other in a sequence. It may not be possible to draw a clear line of difference between each phase, and the change over from one phase to another is gradual. The next phase in the sequence may gradually evolve and merge into the following phase. An important linkage between the phases is established through a feedback mechanism or corrective action. The feedback mechanism results in a course of action for revising, reformulating, and redefining the past phase. The process is highly dynamic and compartmentalization of the process is difficult. The changeover is not clear and boundaries of phases often overlap.
