Strategic Management and Competitive Advantage

Last Updated: 12 May 2020
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What is Strategic Management?

Strategic planning is a process to provide direction and meaning to day-to-day activities. It examines an organization's values, current status, and environment, and relates those factors to the organization's desired future state, usually expressed in five- to ten-year time periods.

The organization may be a program, school, school district, public or private agency, or any other institution that wishes to control its future. If the organization existed in a static environment in which no change was necessary or desired, there would be no need for strategic planning. But, our environment is changing -demographically, economically, and culturally.

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Thus, strategic planning is both a reaction to, and a tool for adapting to, those changes and creating an organization's future within the context of change. McCune describes strategic planning as a process for organizational renewal and transformation.

She identifies another difference between long-range planning and strategic planning: in long-range planning, goals and projections are based on the assumption of organizational stability, while in strategic planning; the role of the organization is examined within the context of its environment.

Strategic planning provides the means for an organization to adapt its services and activities to meet changing needs in its environment. It provides a framework not only for the improvement of programs but also for the restructuring of programs, management, and collaborations, and for evaluation of the organization's progress in these efforts. (1) What Does It Involve? As a process, strategic planning involves an orderly sequence of activities, each vital to the success of the whole.

Strategic planning activities include:

  1. Assessing the external environment.
  2. Assessing internal capacity.
  3. Developing goals and objectives.
  4. Implementing the plan.
  5. Measuring progress and revising the plan.(1)

The planning process depends on a formal information system. The external and internal assessments provide a reality base on which to build future plans. The vision or mission identifies the organization's purpose and its desired future state. The process of internal assessment and future visioning may uncover, with in an organization, differing views of its purpose, its current level of effective ness, and its potential for the future. Thus, consensus building may be an important element of these phases.

Once consensus is reached, the practical steps necessary for reaching that future state over a given period of time - the goals and objectives of the organization can be identified and actualized in the implementation phase. Evaluation and revision occur at the end of the planning cycle, but may occur at any stage with in the planning process.

Why Do It?

In the simplest terms, a strategic plan can help improve performance. School staff or members of any organization, can become so bogged down in routine functioning and daily challenges, they can lose sight of the organization's purpose. A strategic plan cannot only refocus members' sense of purpose, but can stimulate future-oriented thinking based on a shared sense of mission. Collaboration between members of an organization is more effective when everyone is working with in the same set of assumptions and toward the same goals.

Today's educational system must cope with changes in demographics, family patterns, and workplace requirements. Many of these changes provide interrelated challenges to the system. Viewing them as a web of problems may be overwhelming; putting them in the perspective of an organized strategic plan allows the organization to deal with them in a coordinated way, addressing pieces of the problems as part of a progression toward a total solution.(3)

This allows the organization to influence its environment and take control of its future, rather than reacting to it. Strategic planning is not an appropriate activity for every organization at all times. When an organization is in crisis, when its very existence is in question, the crisis must be addressed before any other activity is initiated. Strategic planning makes no sense when the organization's future is in doubt. Developing goals and objectives.

Who, what, when, where, why, and how is not only the mantra of journalists, it is also the guideline for developing goals and objectives. And, the future vision of the organization- the why- is the guiding force in their development.(1) Specific goals, what is to be achieved, are identified to help move the organization from its current state to the desired future state. Goals may be sequential over, for example, a five-year strategic plan, with a completion date specified for each goal.

The objectives may be considered action steps, the accumulation of achievements necessary for attaining each goal. Objectives answer the questions of who is responsible, what specifically will be done, how and where it will be done, and when it will be completed. The goals and objectives must at all times convey a sense of movement toward the desired end state. Pfeiffer and others refer to this stage as strategic business modeling. (3) For them, the strategic business model consists of two parts: the strategic profile, which states the business' goals in quantified terms; and clear statements saying how each goal will be achieved.(3)

As with goals and objectives, strategic business modeling must be compatible with the organization's vision for the future. This is the essence of the full strategic plan. As a document, it clearly and concisely outlines the results of the preceding steps. It builds from a statement of the current situation to a description of the desired future situation, with a blueprint of how that future is to be achieved.

Section headings may include: The strategic plan should be the organization's guiding spirit, providing a common sense of direction and purpose. It need not identify every step in the process; that can be left to the implementation plan. The guideline, however, must be commonly agreed upon and in place before day-to-day activity can have meaningful implementation. Assessing the external environment. There are many ways to assess the external environment.

Trend analysis is a method of examining changes over time in order to anticipate future conditions and events. Trends within the economic, demographic, social, and political arenas, sometimes referred to as the macro-environment, can also be examined in relation to each other to identify patterns that may have implications for the organization's future. (4) Competition is a factor to be examined in the external environment. Some members of social service and educational organizations think they are outside of the competitive market place, but that is not the case. The competition for limited funding is fairly clear.

The turf problems frequently encountered between agencies are, at heart, competition for clients. An important factor for community educators is assessing current needs and projecting future needs for the community as a whole and for the various constituencies that may be served by the community education program both now and in the future.

Typical questions posed during an external assessment include:

  • What is my community like today?
  • Are the demographics changing? How?
  • What are the implications of today's trends for the future of my community?
  • What other agencies currently serve my community?
  • What services do they provide? To whom?
  • What needs exist today?
  • What needs are anticipated for tomorrow? How Is It Done?

The most basic question to ask before starting a strategic planning process is whether to develop a strategic plan. Unless this question is answered honestly in terms of the organization's current status and the attitudes of its members and leadership, the planning process may be doomed before it begins.(2)

The question of whether or not to develop a strategic plan may be based on answers to the following questions:

  • What purpose will the strategic plan serve?
  • How will it help the organization?
  • Will it be better than the system we use now?
  • Are those in leadership positions committed to strategic planning?
  • How much will it cost in terms of time and personnel effort?
  • Who should be on the planning team?
  • Does anyone have experience with strategic planning?
  • Do we think we can do it?

If the answers to these questions support the development of a strategic plan, then the process can be initiated. Strategic planning can be accomplished in as little as four to six two-hour planning sessions. (4) It is important to stay focused on the critical issues. The planning design frequently calls for a small team to direct efforts and develop the written document, but input should come from the entire organization so that each member has a stake in the process and outcome.

Team members should work well together, be committed to the process, and be respected by their peers. Whoever leads the planning team should understand planning well enough to help others through the process. If this is a first-time experience for everyone involved, out side expertise may be useful to provide an initial orientation or a jump-start.

With this in mind, a planning team can work through the steps of the planning process, adapting and adjusting the procedure to fit the organization and its members. Implementing of Strategies. Implementation shifts the organizations focus from developing the strategic plan to acting upon it.

This occurs not only at the organizational level but within each program or unit of the school or organization. The degree to which the plan was developed through honest self-examination, environmental scanning, and stake holder involvement can determine the ease- or difficulty- the organization will experience in moving toward its envisioned future state.

Implementation is, in effect, a reality check on the assumptions and future visioning of the planning process and a test of the organization's capacity, unit by unit, to achieve its stated goals. Implementation may require greater specificity in the objectives, a detailed description of the steps that must be taken in each unit or program in order to reach the organization's long-term goals.

The focus here is on the short-term activities that lead to goal achievement. Implementation can also serve as a strategic management tool, providing both a framework for staff development and a solid basis for evaluating progress. Evaluating progress and revising plans. Although listed as a separate set of activities, evaluation and revision are implied in every step of strategic planning.

If continuous evaluation and revision have been an integral part of the strategic plan development process, formal evaluation and revision following implementation are unlikely to involve major changes. The advantages of this are obvious. Each step of the strategic planning process involves a degree of investment by the organization in terms of time, energy, and commitment. (2) The later in the planning process a major revision occurs, the greater retrenchment necessary.(1)

Strategic planning requires a broad base of in formation. It involves stakeholders in order to develop consensus around a future vision for the organization and the specific steps or activities necessary to reach that future. With faulty information or lack of consensus, there is an insufficient base to support the future vision. Thus, evaluation and revision must begin with the first steps of developing a strategic plan to ensure an adequate base for further development.

Additionally, the environment is not static during the development of a strategic plan. Revisions may be necessitated by changing events or changes in personnel, funding patterns, or needs. Summary Some groups of people, or inspired leaders, have a natural ability to respond quickly and effectively to new challenges and opportunities, making strategic planning superfluous. However, for most organizations and most organization members, strategic planning provides a powerful framework.

Developing a strategic plan can be expensive, especially in terms of personnel time and energy. This cost must be considered in relation to the expected benefits. For some organizations or units within an organization, strategic planning is a burden imposed by a higher authority - a funding source or an umbrella organization.

If there is no internal commitment to the plan, and no intent to implement it, strategic planning is a waste of time and energy. In sum, strategic planning is for those who are willing to be honest, who want to focus on revitalization, and who are committed to influencing and creating their future.

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Strategic Management and Competitive Advantage. (2017, Feb 13). Retrieved from

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