Business Strategy and Its Importance for a Company

Thesis Statement

To start with, it is necessary to mention, that every company aims to create their own strategy for the successful activity on a market, and steady development in the future. Originally, the strategy is the most significant plan of any company’s activity. The aim of this paper is to define the importance of the strategy for any company.

Introduction

The fact is that, any company should have the strategy, and strictly follow it in order to succeed. This piece of formality is required that every employee and every team member had something to orientate, and lead thee company in the required direction. As for the external activity, the competitors and partners should be aware of the strategy of the company they deal with on order to what, what should be expected.

In order to get profits, any company need to have the system of responses for the increases or falls, successes and failures, appearing or merger of the competitors or partners and for appearing or conquering new markets. Probably, the strategy is the most essential improvement in management process. The special emphasis should be made for it, as it is the tool for forecasting thee future internal and external considerations, and for implementing all the action plans. This all-encompassing approach is known as strategic management.

Strategic Management

The strategic management is defined as the tool for setting decisions, that are claimed to formulate the further plans and implementations, that are associated with the company’s activity on the external market. SM also helps to achieve the company’s objectives. There are the following tasks, that Strategic Management entails: define the company’s mission, purposes and aims; conduct the analysis of company’s activity conditions and capabilities; analyze the competitive and contextual factors; indentify the options for implementing the company’s mission; select the long term objectives, that company should be directed for.

Strategic management aims and objectives are aimed to shape the future of the company, and define its position on the current market. That is why, the strategy should be thoroughly developed, and amended in time, if necessary. Consequently, the strategy should be easily amended and the amendments easily implemented.

Strategic Issues

The strategy in any company always requires strong top-managerial decision, thus, it defines the role of the top-manager in the company hierarchy. Moreover, the strategy often involves several spheres of company’s activity, that is why, someone who has thee control over these spheres should take the decisions on the strategic issues.

Strategy of any company allocate the company’s resources, capabilities and efforts. Consequently, the strategy is the tool for accommodation and adaptation to the changing circumstances of the market. This strategic issue is essentially important, if the market is unstable.

It has been already emphasized, that strategy shapes the current and future activity of the company, depending on the probability of market changes. The fact is that, all the strategic issues are mainly future oriented, and it is claimed, that strategy is always based on what managers forecast, but not what they know. emphasis is placed on the development of projections that will enable the firm to select the most promising strategic options.

According to Drejer (2002, p. 136) Using the strategic management approach, managers at all levels of the firm interact in planning and implementing. As a result, the behavioral consequences of strategic management are similar to those of participative decision making. Therefore, an accurate assessment of the impact of strategy formulation on organizational performance requires not only financial evaluation criteria but also nonfinancial evaluation criteria—measures of behavior-based effects. In fact, promoting positive behavioral consequences also enables the firm to achieve its financial goals.

Restrictions

In spite of the significance of the strategy, managers should spend as few time as possible, as the long-term elaboration of the strategy may have crucial consequences on the company’s activity. The implementation of the strategy needs o be as close as possible, in order to interweave with the activity process, both internal and external. Strategic managers must be trained to limit their promises to performance that the decision makers and their subordinates can deliver.

The strategic issues may disappoint some employees, that is why, manger should be trained to respond this disappointment, and go on implementing the strategy, as it is the prime interest for the company

Conclusion

The first and foremost significance of the strategy is that the entire way of managing is based on it (Strategic Management), that is regarded to be one of the most successful ways. Moreover, strategy defines the current and future company’s activity, and formulates the company’s highest interest on a market.

References

  1. Drejer, A. (2002). Strategic Management and Core Competencies: Theory and Application. Westport, CT: Quorum Books.
  2. The McGraw−Hill Companies (2009) “Strategic Management”
  3. Walker, G. (2002). Economics Meets Sociology in Strategic Management. Administrative Science Quarterly, 47(2), 364