Prepare a paper on what you have learnt from strategic management and make

recommendations were applicable in your organisation or any organisation of

your choice.

Introduction

As of now, there are different internal and external factors that can affect the entire
performance of each and every firm in its respective industry. Currently, the primary
factors that can affect the business sector in different countries are technology and
globalization. Technology helps to improve the flow of data, information and money
inside and out the business; however, it can also cause different problems due to
changes that can affect the performance of the employees. On the other hand,
globalization gives businesses an unlimited market that can cause expansion in
terms of size as well as profit. However, like the application of technology, it can also
affect the business in terms of communication and management process due to the
different barriers such as cultures, traditions and even language.

Aside from that, there are also different aspects that are related to economic
condition of each and every nation as well as the different factors that are related to
laws and regulations. That is the reason why, it is very important to focus on
strategic management. This can be done by the process of analyzing the different
factors and issues that can be found in the external environment, as well as the
different characteristics or attributes of a given industry in order to use the different
strengths and weaknesses of the business in the process of decision making and
match it to the different issues that are present in the business environment.

That is the reason why more and more companies in the world are becoming aware
of the benefits of aligning the different strategies with the current business
environment and organization’s capabilities. The firm must engage in strategic
planning that clearly defines objectives and assesses both the internal and external
situation to formulate strategy, implement the strategy, evaluate the progress, and
make adjustments as necessary to stay on track.

Definitions of Strategic Management

“Strategic management is an ongoing process that evaluates and controls the

business and the industries in which the company is involved; assesses its
competitors and sets goals and strategies to meet all existing and potential
competitors; and then reassesses each strategy annually or quarterly [i.e. regularly]
to determine how it has been implemented and whether it has succeeded or needs
replacement by a new strategy to meet changed circumstances, new technology,
new competitors, a new economic environment , or a new social, financial, or
political environment.” (Lamb, 1984: ix)
Strategic management is about the management in ambiguous, uncertain and
complex situations where the objective of the organisation may be explicitly defined
but the ways and means to achieve these objectives may not be clear. Thus
strategic management involves a proper insight into all functions of the management
as a whole for example finance, accounts, marketing, human resource etc. So that
by keeping an overview of all, strategy can be developed. Strategies should be
carefully designed as they have got long-term implications and provides a sense of
direction to the organisation.

Strategic management is a field that deals with the major intended and emergent
initiatives taken by general managers on behalf of owners, involving utilization
of resources, to enhance the performance of firms in their external environments. It
entails specifying the organization’s mission, vision and objectives, developing
policies and plans, often in terms of projects and programs, which are designed to
achieve these objectives, and then allocating resources to implement the policies
and plans, projects and programs. A balanced scorecard is often used to evaluate
the overall performance of the business and its progress towards objectives. Recent
studies and leading management theorists have advocated that strategy needs to
start with stakeholders expectations and use a modified balanced scorecard which
includes all stakeholders.

My organization’s (District Development Fund) drive is to establish rural road

networks, provide clean water through drilling of boreholes, and aid the agricultural
process through building of dams and provision of tillage services to the emerging
farmers and the rural community and reselling fuel. This is expounded by its mission
statement which is, to provide and maintain sustainable rural development
infrastructure, resettlement, tillage, transport and other services so as to uplift
the living standards of the rural people. Hence I am going to look at the
organizations’ application of the strategic management through the strategic
planning process.

Why Strategy Planning is important?

• Other things being equal, the best strategy wins, making the organisation a
competitive force.

• Opponents also do extensive strategic planning, hence there has to counter action.

• A good strategy helps focus limited resources on effective means so nothing is

wasted.

• Counters movement trashers: burnout, squandering vital resources, infighting and

hopelessness.
The Strategic Planning Process

The strategic planning process is a step by step guide, created by a business or

organization, to map out how it will reach goals, and set a foundation so the entire
company knows what will happen and what is expected of them. Essentially, it
provides a "recipe" or of how to achieve a stated vision, for the chosen target market,
and how a company serves customers consistently, effectively and profitably every
single time.

The plan also serves as a systematic, management tool for problem solving, market
planning, product development and preparing business plans. The goal is to
integrate all aspects of the business's activities in a mutually supportive system. It
generally comprises of the following stages which are; setting of mission statement
and objectives, environmental scan, strategy formulation, strategy implementation
and evaluation and control.

Mission and Objectives

The mission statement describes the company's business vision, including the
unchanging values and purpose of the firm and forward-looking visionary goals that
guide the pursuit of future opportunities. The formulation of the organisational vision,
mission, aims and objectives are crucial for the firm to having a clear strategic
direction. However, the composition and content of the vision, mission, aims and
objectives is always open to interpretation.

Guided by the business vision, the firm's leaders can then define measurable
financial and strategic objectives. Financial objectives involve measures such as
sales targets and earnings growth. Strategic objectives are related to the firm's
business position, and may include measures such as market share and reputation.
For example my organisation’s mission statement states that; to provide and
maintain sustainable rural development infrastructure, resettlement, tillage,
transport and other services so as to uplift the living standards of the rural
people.

From this statement one could clearly see that the organization is concerned with
uplifting the living standards of those who are living in the rural areas, through
sustainable rural development infrastructure. To achieve this, the organization would
have to carry out an environmental analysis/scan.

Environmental Scan

The environmental scan includes the following components:

 Internal analysis of the firm

 Analysis of the firm's industry (task environment)
 External macro environment (PEST analysis)

The internal analysis can identify the firm's strengths and weaknesses and the
external analysis reveals opportunities and threats. A profile of the strengths,
weaknesses, opportunities, and threats is generated by means of a SWOT analysis

An industry analysis can be performed using a framework developed by Michael

Porter known as Porter's five forces. This framework evaluates entry barriers,
suppliers, customers, substitute products, and industry rivalry. Threat of Entry refers
to the ease of new firms entering the market. Thus if it is very easy to get entry into
the market then it will surely influence the demand and the profitability of the existing
firms in the industry. Threat of substitutes on the other hand refers to the threats
caused to the particular class of products as the customer can switch to the
substitutes. Power of buyers implies to the sweeping away of the profits and
revenues from the firms in the market by the buyers as they have the bargaining
power through which they can extract the benefits out of the firm. Power of suppliers
refers to the suppliers of the essential resources who can dominate the market upon
their own terms. Competitive rivalry is the competition arising amongst the
competitive rivals. They are the organisation targeting at the same customers and
with the same goods and services.

An analysis of the external environment can be carried out using the PESTEL
framework which seeks to determine the varying factors found in the industry in the
organisation operates. The framework consists of six main types of environmental
influences; they are political, economic, social, technological, environmental and
legal. Political influence comprises of the standing of the government in the country,
the policies and rules for governing business in the country, its domestic and foreign
trade regulations, taxation and other licensing requirements. Economic influence
includes the market and interest rates of any particular country, inflation and
employment policies, business and product life cycle. Social factors on the other
hand include the demographics, attitudes of the people in the country, education
levels. Technological influence consists of pace of research and development in the
country, innovations, rate of obsolescence. Environmental Influence mainly refers
to the social laws of the community around for instance disposal of the waste,
protection of the environment around. Legal influence comprises of the health and
safety rules of any country, essential quality standards, regulation of monopolies.

DDF being a quasi-government organisation does not carry out such analysis and
this has since caused loss of business in areas such as borehole drilling, because
there has been quite an increase in the number of organisations offering the service.
There are no structures to carry the environment analyse, hence the organisation is
being pushed out by new entrants.

Strategy Formulation

Given the information from the environmental scan, the firm should match its
strengths to the opportunities that it has identified, while addressing its weaknesses
and external threats. Strategy formulation, the process of planning strategies, is
often divided into three levels: corporate, business, and functional. One of the most
important roles of corporate- level strategy is to define a company’s domain of
activity through selection of business areas in which the company will compete.

Business - level strategy formulation pertains to domain direction and navigation,

or how businesses should compete in the areas they have selected. Sometimes
business - level strategies are also referred to as competitive strategies.

Functional - level strategies contain the details of how functional resource areas,
such as marketing, operations, and finance, should be used to implement business -
level strategies and achieve competitive advantage. Basically, functional - level
strategies are for acquiring, developing, and managing organizational resources.

These characterizations are oversimplified, but it is sometimes useful to think of

corporate - level strategies as “where to compete,” business - level strategies as
“how to compete in those areas,” and functional - level strategies as “the functional
details of how resources will be managed so that business - level strategies will be
accomplished.”

To attain superior profitability, the firm seeks to develop a competitive advantage

over its rivals. A competitive advantage can be based on cost or differentiation.
Michael Porter identified three industry-independent generic strategies from which
the firm can choose and there are as follows;

Cost Leadership Strategy

This generic strategy calls for being the low cost producer in an industry for a given
level of quality. The firm sells its products either at average industry prices to earn a
profit higher than that of rivals, or below the average industry prices to gain market
share. In the event of a price war, the firm can maintain some profitability while the
competition suffers losses. Even without a price war, as the industry matures and
prices decline, the firms that can produce more cheaply will remain profitable for a
longer period of time. The cost leadership strategy usually targets a broad market.

Some of the ways that firms acquire cost advantages are by improving process
efficiencies, gaining unique access to a large source of lower cost materials, making
optimal outsourcing and vertical integration decisions, or avoiding some costs
altogether. If competing firms are unable to lower their costs by a similar amount, the
firm may be able to sustain a competitive advantage based on cost leadership.

Firms that succeed in cost leadership often have the following internal strengths:

 Access to the capital required to make a significant investment in production

assets; this investment represents a barrier to entry that many firms may not
overcome.
 Skill in designing products for efficient manufacturing, for example, having a
small component count to shorten the assembly process.
 High level of expertise in manufacturing process engineering.
 Efficient distribution channels.

Differentiation Strategy

A differentiation strategy calls for the development of a product or service that offers
unique attributes that are valued by customers and that customers perceive to be
better than or different from the products of the competition. The value added by the
uniqueness of the product may allow the firm to charge a premium price for it. The
firm hopes that the higher price will more than cover the extra costs incurred in
offering the unique product. Because of the product's unique attributes, if suppliers
increase their prices the firm may be able to pass along the costs to its customers
who cannot find substitute products easily.

Firms that succeed in a differentiation strategy often have the following internal
strengths:

 Access to leading scientific research.

 Highly skilled and creative product development team.
 Strong sales team with the ability to successfully communicate the perceived
strengths of the product.
 Corporate reputation for quality and innovation.

The risks associated with a differentiation strategy include imitation by competitors

and changes in customer tastes. Additionally, various firms pursuing focus strategies
may be able to achieve even greater differentiation in their market segments.

Focus Strategy
The focus strategy concentrates on a narrow segment and within that segment
attempts to achieve either a cost advantage or differentiation. The premise is that the
needs of the group can be better serviced by focusing entirely on it. A firm using a
focus strategy often enjoys a high degree of customer loyalty, and this entrenched
loyalty discourages other firms from competing directly.

Because of their narrow market focus, firms pursuing a focus strategy have lower
volumes and therefore less bargaining power with their suppliers. However, firms
pursuing a differentiation-focused strategy may be able to pass higher costs on to
customers since close substitute products do not exist.

Firms that succeed in a focus strategy are able to tailor a broad range of product
development strengths to a relatively narrow market segment that they know very
well.

Strategy Implementation

Once an organisation has been through the process of analysing the external macro
and micro environment and has conducted a rigorous analysis of its internal
resources and culture, then the organisation is in a position to formulate strategies in
pursuit of a competitive advantage. The classical strategy approach often utilises
Porter’s (1980) generic strategy framework of focus, cost leadership, and
differentiation to understand the particular strategic direction an organisation may
pursue. However, alternative frameworks such as the growth share matrix and
Ansoff’s (1968) directional matrix are also useful in determining an organisation’s
strategic direction.

The selected strategy is implemented by means of programs, budgets, and

procedures. Implementation involves organization of the firm's resources and
motivation of the staff to achieve objectives.

The way in which the strategy is implemented can have a significant impact on
whether it will be successful. In a large company, those who implement the strategy
likely will be different people from those who formulated it. For this reason, care must
be taken to communicate the strategy and the reasoning behind it. Otherwise, the
implementation might not succeed if the strategy is misunderstood or if lower-level
managers resist its implementation because they do not understand why the
particular strategy was selected.

A closer look at the strategic planning process of the organisation up to this point it
would show that it is quiet irregular and unsystematic. There are no clear cut
procedures followed to formulate strategies and the staff are not educated or
informed about these processes.
Evaluation & Control

Strategic management assumes continual change. Therefore mechanisms must be

developed for monitoring and analyzing the performance of the organization with
respect to achieving the goals and objectives set in the action plan. As the
environment undergoes changes, as ministers change, elections occur, or budgets
go up or down, priorities will also change. Resource flows may aslo be uneven. All
of these elements can alter performance, priorities, and the desirability of certain
policies. If the organization wants to maintain a good “fit” with the environment, it
must first be able to track these changes in order to adjust. The monitoring process
should be continuous, regular and capable of feeding into the decision-making
process. The manager should develop control mechanisms to gauge the efficiency
of resources used and impact mechanisms to gauge the effectiveness of its actions.
.

The evaluation and implementation of a strategy is important for understanding

future strategy formulation. There are many alternative perspectives on how a
strategy can be evaluated but it is not unusual for this to be broadly classified under
the headings of suitability, acceptability and feasibility. The implementation of the
strategy must be monitored and adjustments made as needed. Evaluation and
control consists of the following steps:

1. Define parameters to be measured.

2. Define target values for those parameters.

3. Perform measurements.

4. Compare measured results to the pre-defined standard.

5. Make necessary changes.

Finally, it is vital that the monitoring process be timely and usable.

Conclusion

One purpose of strategic management is to mediate between the organization and

the environment. Public management necessarily requires attention to the
organization’s environment because the influence of external political authority
emanates from the environment [for this reason, effective public management
requires attention to strategy adapting to the environment] but anticipating and
shaping of environmental change. Strategic public management adds an additional
ingredient: strategic thinking must be cognizant of the exercise of political authority.
Hence after looking at the strategic planning process at DDF I have came with the
following recommendations.
Recommendations

1. Implement a web page which reports to everyone on the progress of the

planning process and which allows for input/comments, etc.

2. solicit more input from farmers and rural folks, who comprise our primary user
group

3. Set up a communications network by creating a newsletter which is easily

available, for viewing reports, summary of meetings, ideas. Either makes it
publicly available from the bookshops and grocery shops.

4. Issue reports and discussions on the topic of strategic planning including the
"information common" debate plus anything else that, will, or could impact on
the working environments of staff and clients.

5. We have to have a structure for addressing these issues together. Many of us

have been here a long time, learned from past experience, and can contribute
positively.

6. Morale issues: From the broad perspective of this document, people feel they
cannot make any difference, very discouraging not to have an
opinion/experience taken seriously.

7. discussion whether any of this input gets used, when implementation will
occur

8. Implementation: bring in representation across the bargaining units

REFERENCES
1. http://www.quickmba.com/strategy/strategic planning

2. http://www.articlesbase.com/strategic-planning-articles/strategic-management-a-
case-study-of-walmart-inc-945260.htm

3. S Gumbe. Strategic Management

4. Johnson, Gerry & Scholes, Kevan (2002). Exploring Corporate Strategy, Prentice

Hall, London

5. Ackerman, Peter and Christopher Kruegler. Strategic Nonviolent Conflict. Praeger

Publishers, 1994

6. John M. Bryson, Strategic Planning for Public and Non-profit Organizations.

Oxford: Jossey-Bass Publishers, 1988.