Strategic Management: Why and How?

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In this article we will talk about:

The structure of a complete strategic management

One of the major problems that I see many managers and entrepreneurs committing is strategies of their respective companies in a very punctual way. Often the biggest concern is with just one step in the whole process of strategic management.

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I believe that to be successful it is important to think about the strategic management in a complete way and this is the structure that I consider ideal:

  • 4 Stage - Results Tracking

I like it because it goes from the analysis of the reality of the company and its surroundings, through the creation of strategies until arriving at the execution and monitoring of them. Now, let's look at how to put this strategic management framework in practice by looking at the case of a company that produces entertainment events.

1 Stage - Business Analysis

To begin with, there is no strategy without knowing exactly what the current business state and the sector where your company is located. To get these answers there are 4 tools that I consider fundamental:

1.1. Business Diagnostics

O diagnosis it is extremely useful to get to know more about the company's reality and which areas need more attention. In our integrated strategy sheet it is done with a series of questions and answers on the 5 main areas of the company:

1 complete strategic management - business diagnosis

Depending on the answers, your company will be ranked at a maturity level and you will be able to see a score of 0 to 100% for each of these sectors.

How to take advantage of this analysis when making your strategies:

1.2. Matrix BCG

To understand a little more about the company, it is also possible to make an analysis (with the BCG matrix) more focused on the portfolio of products or services within the integrated strategy sheet. Basically a classification should be made according to the estimated sales growth of the market and the level of participation of that product:

3 complete strategic management - bcg matrix

Again, these answers will generate a ranking of your products or services in 4 types: pineapple, questioning, dairy cow or star. The worksheet generates their distribution automatically for you:

7 complete strategic management - bcg matrix report

How to take advantage of this analysis when making your strategies:

  • Think of strategies to expand portfolio or sales of star products
  • Think about strategies for taking the pineapple products from the market
  • Think of strategies to maintain good profitability of dairy cow products

1.3. Value Curve

With much of the analysis of the company already done, it pays to start looking outside and one of the easiest things to do is analyze your mainly competitors. We usually use the value curve to arrive at this result since it provides an excellent graphical analysis:

2 complete strategic management - value curve

The process is very simple, just separate what are the main features valued in your market (in our example were quality, capacity, attractions, price, term, service and communication) and evaluate each company with notes from 0 to 10 for each item. This will generate a graph that shows the value curve of each company:

1 complete strategic management - value curve graph

How to take advantage of this analysis when making your strategies:

  • Make benchmarking with the best competitors and see what can be leveraged in your business.
  • Analyze points where all competitors have bad grades and differ in them
  • See where your company can differentiate itself in the market where it operates

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1.4. SWOT Analysis

Finally, the fourth tool of business analysis is the SWOT analysis, which shows the internal and external reality of the business in question. At integrated strategy sheet you will fill in what items are strengths, weaknesses, opportunities or threats and the importance of them to your company.

4 complete strategic management - swot analysis

After that, you will be able to observe the main SWOT array already ranked according to their importance and an index of favorability of their business:

7 complete strategic management - swot analysis report

How to take advantage of this analysis when making your strategies:

  • Develop action plans to take advantage of your strengths and opportunities
  • Develop contingency plans to prevent weaknesses and threats from impacting their strategies

2 - Strategy

If you have performed all the steps in the 1 step, you are likely to already have a thorough knowledge of your company and the market in which you operate. This is the time to start planning your goals and objectives. It is important that you do not get lost during the planning, so try not to set too long deadlines. For our example I've used the 1 year period, which I believe is a good level for larger strategies and that allows revisions over those 12 months.

2.1. Objectives

Delimitation of objectives is one of the most important activities of your strategic management. This is where you will define the strategies that will guide all the actions of your company. To do this, look very carefully at all the items that were raised in the business review stage. Here's the result you'll get:

5 complete strategic management - specific goals

With the list of goals made, it is now important that you prioritize the 3 most important goals by area of ​​your business.

2.2. Goals for the most important goals

As you can see, for each area it is possible to list up to 8 goals. This does not mean that you will follow them all closely, so when goals, choose only 3 essential goals (by area) for your business.

I know there are a lot of people who are going to talk about having more than 3 important goals for each area of ​​your business, but the focus here is precisely restrict you to give attention and prioritize what is most important really. In this part of the planning, you can delimit planned values ​​(goals) and to mark what is accomplished during the planning for monitoring purposes.

6 complete strategic management - strategic planning

If you've got here, you're halfway there, but you're still on the theoretical side of ideas. This is the time to move on to a more practical step.

3 Step - Execution

Obviously, understanding everything about your company, setting goals and goals it is not enough for you to have good results. To do this, it is necessary that all of your planning and we believe that the best way to do this is by action plans.

6 complete strategic management - action plan 5w2h

As you can see up here, each action plan is connected to a goal / goal and should have the team responsible for putting it into practice, as well as the deadline and status of achievement. This will greatly facilitate the notion of what needs to be done and in what order.

Here you do not have much or little, create the number of actions you need to achieve your goals for each goal.

4 Stage - Results Tracking

Finally, the last step to make a strategic management of your business is the follow-up of the main indicators your company. It's pretty simple even, if you've separated one goal is to increase revenue and established a goal for this, it is enough to analyze the graphics and see if you are winning or not goals desired.

8 complete strategic management - planning graph

In our case, in 2 only months of the year (April and December) we were able to beat the goals established. In the others, we had results well below what had been stipulated. In those moments, it is worth analyzing whether it was a planning or if the result really is bad.

In addition, to facilitate your life in meetings or even to show results and follow-up, it is possible print a report which contains all the information and is ready. Look:

9 complete strategic management - planning printing report

Integrated Worksheet of Strategy

If you followed the 4 steps listed in this article you are surely closer to having a complete strategic management running on your company. All this work can be facilitated if you have a tool that summarizes the 4 steps and automatically generates information exactly as shown in integrated strategy sheet.

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2 COMMENTS

  1. I loved your site I would like to receive material related to the management whenever possible I am a student of management

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