1.1 Strategy Concept:
It is an exciting process that allows an organization to be proactive rather than reactive in formulating its future. It is the formulation, implementation and evaluation of actions that allow an organization to achieve its objectives. The formulation of strategies includes identifying the strengths and weaknesses withinan organization, the identification of external threats and opportunities of a firm, the establishment of missions in the industry, setting goals, developing strategies, alternative the analysis of these alternatives and the decision to choose from. The implementation of strategies requires the firm to set goals, devise policies, motivate employees and allocate resources so that formulatedstrategies can be implemented successfully. Strategy evaluation checks the results of the implementation and formulation.
It can be defined as an objective and systematic approach that allows the company to take a proactive rather than reactive position in the market competing for not just settle for responding to the facts, if not to influence and to anticipate them (Fred Davis 1997).
1.2Importance of Strategic Management
Strategic management is vital in large enterprises; strategic management process is applied equally to both large and small companies. From the moment of conception, every organization has a strategy, although she has only source of daily operations.
Its importance lies in the need to define the concept of the company and its nature, and also, because they are there,and who they serve, the principles and values under which they must operate and what the future of the company should be. And also need to assess the direction in which progress to determine whether this will be the most effective route to fulfill the vision and business mission, allowing answer questions like: What change of direction can be taken now? When and how future decisions will be madewith respect to the direction of the company?.
It is important for companies to alter their strategic levels to adapt to possible changes in external factors, such as when management strategies are old development will be more difficult due to the impact of technology and its rapid changes. For every business is very important to decide and make their strategies since it is allowed to:
*Provide a basis for making decisions that will keep the organization focused in the right direction
• Helps to avoid trends that could tempt him to go astray
• Reinforces the mission and vision
• Leads to common understanding on the management of all divisions contributing
in the company
• Saves time and effort
• Increases on investment income
• Increases the interest of depositors
•Provides a clear sense of direction to all major shareholders
2. Benefits of strategic management:
Allows an organization to able to influence their environment, rather than reacting to it, thereby exerting some control over their destiny. The concepts of strategic management provide an objective basis for allocating resources and reducing internal conflicts that arise when subjectivity isonly the basis for important decisions. Allows an organization to take advantage of key opportunities in the environment, minimize the impact of external threats, internal strengths and use to overcome internal threats.
Organizations conducting strategic management are more profitable and successful than those who do not use them. They avoid decreases in revenue and profits and evenbankruptcies. Prevent the demise of a company, includes an increased awareness of environmental threats, greater understanding of the strategies of competitors, increased staff productivity, reduced resistance to change and a clearer view of the relationship performance / reward.
The strategic management includes a greater awareness of environmental threats, greater understanding of the capabilities of a...