The relationship among Strategy, Strategic Plan, and Strategic management
Strategy is a method or plan chosen to bring about the desired future, such as the achievement of a goal, objective, or solution to a problem. The strategy is the determination of the basic long-term goals and objectives of an enterprise and the adoption of a course of objectives and the allocation of resources necessary to carry out these goals and objectives.
Objectives are the ultimate target of the company and strategies are the way or path to reach the objectives. At first, the management of the company set the goal or objective which it wants to achieve oiler a logical time period. Then they determine the strategies, the way or methods or process to achieve that goal.
Example: If the X Company Ltd, wants to increase its sales by 10% within the next 5 years then that will be the objective, and the company can –
- Increase the quality at the same price,
- Develop better distribution channel,
- Differentiate its product,
- Increasing marketing and promotional activities.
Reduce the price, etc. as strategies to achieve predetermined the objective.
Strategic plan: the Strategic Plan is a systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them.
In contrast to long-term planning (which begins with the current status and lays down a path to meet estimated future needs), strategic planning begins with the desired end and works backward to the current status.
- At every stage of long-range planning, the planner asks, “What must-be-done here to reach the next (higher) stage?”
- At every stage of strategic planning, the planner asks, “What must be done at the previous (lower) stage to reach here?”
Also, in contrast to tactical planning (which focuses on achieving narrowly defined interim objectives with predetermined means), strategic planning looks at the wider picture and is flexible in choice of its means.
Strategic management: Strategic management refers to the managerial process of forming a strategic vision, setting objectives, crafting a strategy and then over time initiating whatever corrective adjustments required for achieving the long-term objectives and goals of an organization.
It is the systematic analysis of the factors associated with customers and competitors and the organization itself to provide the basis for maintaining optimum management practices. It is the management of an organization’s resources in order to achieve its goals and objectives. Strategic management involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies, and making sure that the strategies are rolled out across an organization.