Strategic management consist of three stages are formulation, implementation and evaluation of strategies. Each stage based upon set of activities performed by the individual working in the organization.
Strategy formulation is the first stage of strategic management, this stage includes developing vision and mission statement, identifying external opportunities and threats, evaluating company internal strengths and weaknesses, developing alternative strategies, selection strategies which benefits the business. Strategy formulation issues include deciding what new business to enter, what business to abandon, how to allocate resources, whether to expand operation or diversify, whether to enter international market. whether to merge or form a joint venture.
No organization have unlimited resources, strategists must go with the strategies which are most feasible and beneficial for the business.Strategy formulation commit an organization to specific products,services, markets, resources and technologies over an extended period of time. Strategies are developed for long term competitive advantage over its competitors.
Strategy implementation is the second stage of strategic management. Strategy implementation can be only proceed after completion of strategy formulation stage, when strategists are done with strategies selection. This stage includes number of activities such as defining policies, building organizational structure, allocating resource to implementing strategy, assigning tasks to each functional area employees and tracking the progress of strategy implementation.
This stage is often referred as action stage because each individuals is looking to get the thing implemented according to the strategy. To execute the strategy in a right way each individual must ask himself or herself the following questions.
What are the objectives?
What must we do to implement out part of the organization’s strategy?
How best can we get the job done?
The challenge for the managers to create gel effect among the employees and guide them throughout the strategy implementation.
Strategy evaluation is the last stage of strategic management, the purpose of this stage to monitor the implemented strategies and find out whether they are working or not to achieve organization objectives.Strategy evaluation consist of three fundamental activities reviewing external and internal factors that are bases for current strategies, measuring performance and taking corrective action. Each implemented strategy is evaluated to determine the outcomes, if the outcomes are meeting the expectation it means strategy is successfully otherwise corrective action is required.