Summary
Strategic management is the ongoing process used by companies to form a vision, analyse
their external and their internal environment, and select one or more strategies to use to
create value for customers and other stake holders.
Three main parts of strategic management are VISION, ANALYSIS and STRATEGY. The
vision inspires people, while the mission provides the direction to the firm. Firms need to
analyse their external and internal environments before a strategy can be chosen and
implemented. This has been demonstrated by Best Buy, analysing their external
environment best buy was able to group their customers based on their different needs.
After identifying their strength as supply chain management and customer relationship
management systems, best buy decided to use them to serve the needs of each customer
group. Strategy is an action plan designed to move an organisation towards achievement of
its vision. While finding the best strategy, the firm should not use the same strategies
adopted by their competitors. The firms strategy should facilitate it to provide a unique
mix of value to its customers.
Firms use the industrial organisation (I/O) model to analyse their external environment and
the resource based view (RBV) for internal environmental analysis. Using the two models
analysis is done by studying, identifying, selecting and implementing The I/O model
assists the firm to identify the firms strengths, core competencies, competitive advantage,