Strategic Management: Process, Models, and Tools

This document provides an introduction to strategic management, including its definition and importance. It discusses the process used by organizations to determine their strategy, as well as the models and tools commonly used. The application of SWOT analysis to Marks and Spencer is explored, along with the importance of change management in strategic planning. The document is relevant to the subject of Strategic Management and is suitable for college or university students.

Strategic Management
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO1 & LO4......................................................................................................................................3
1. An introduction including a definition of strategic management............................................3
2. Process used by organisations to determine their strategy.......................................................4
3. Models and tools used by organisations to determine their strategy.......................................6
4. Application of SWOT analysis to M&S..................................................................................9
5. Importance of change management.......................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Strategies are the course of actions which are planned well in advance so that the long and
short term goals of organisation are achieved. For this resources are allocated according to the
need so that implementation of the strategy is done in most effective manner (Rothaermel, 2017).
Planning is done as per the capacities of the firm as it is important that there are enough
resources with the organisation to follow the strategic path. Marks and Spencer is a retail firm
having its headquarters in Westminster. It was founded in 1884. The following report will cover
the external and internal analysis of the organisation along with eth mission and purpose of the
strategic planning in context of the chosen firm. Various alternatives to follow and apply in the
business will be elaborated which will help in understanding how strategies are implemented in
work context.
LO1 & LO4
1. An introduction including a definition of strategic management
Strategic management is a continuous process through which included monitoring assessing
and evaluating the required modifications of business. it consists of various stages and each stage
focus on facilitating vision for the organisation so that the desired outcome is achieved. there are
different areas of business and depending upon complexities planning has to be done before hand
so that full capacity utilisation of resources is made (Ansoff and et.al., 2018). Environment for
business keeps on changing and hence it makes it necessary for Marks and Spencer to do regular
check on their strategies as this will help in identifying weather any modification in them are
required or not. Effectiveness of the employees in the organisation can be evaluated through
strategic management process as it helps in identifying weather the work is done in accordance
to the strategies planned or not. Strategies are planned according to the goals of the organisation
as where it sees itself in the next coming years. As per the need both long and short term tactics
are planned which has an overall impact on the final outcomes. Marks and spencer is dealing in
retail business which has close rivalry. It is important for referred to organisation that it evaluates
its strategies on regular basis so that in case of any change in the business environment if found
than accordingly alteration in the current working style can be made.
Importance of strategic management:
 Assist in planning for the future coursework.
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 Help in facing the competition present in the industry.
 As common vison is given to the work force through strategic management process,
hence this way the overall efficiency of the operations increases.
2. Process used by organisations to determine their strategy
Formulation of plan is a complex process as before deciding upon a particular action it has
to be tested that it is capable of achieving the desired goals and will give the maximum return
(Freeman, 2010). There are many options that are available with M&S and it has to follow series
of stages that will help it in identifying that which is the best suitable conduct for it from all the
alternatives. In order to explore the framework for strategies the current strategic position is
determine first than all the strategic choices are evaluated on different basis and lastly
management of action as per the set framework is done.
Strategic position – An organisation is affected by different factors like internal and
external factors, investors, shareholders, company’s resources and capacities of doing work etc.
All these elements have direct influence on the strategy that is made for the business. The macro
factors offer various favourable and favourable conditions for business like tax rates, economic
conditions, law related to trade etc. restrictions imposed by government regarding the afety of
environment etc. all these are beyond the control of the management and has to be adopted in the
same manner. while formulating the strategies all these needs to be evaluated first so that such
framework is developed which fulfils all the criteria’s and can assist business in achieving its
goals. Planning is done to manage these forces like following the guidelines given against the
industry, fulfilling the CSR etc. Apart from the external factors stakeholders also has great
influence on eth formulation of tactics (David and David, 2013). They are comprised of different
parties and each one of them has distinct purpose behind being part of business. While designing
the policies management has to make sure that the purpose of stakeholder is not affected and
they have their consent in the new strategy.
Thereafter, comes the other main factor that has its crucial role in policy creation and it is
analysing present means and capacities of the business. It is important that strategy is planned in
accordance to these as only then successful implementations of same can be done. If such plan is
made which is not possible to be executed with the current assets and resources of the company
than it is assured that the planning will fail. Also even if all the required factors are there but if
the code of conduct of the strategy is not in accordance of the regular company culture than also
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the chances of its failure increases (Wheelen and et.al., 2010). Adopting the new process
become difficult and therefore while designing the tactics it should be ensured that it well fits to
the company culture so that employees do not find it difficult to execute.
Fig.1: Exploring strategy framework
Strategic Choices – This is another step which need to be determine while selecting
strategy for business. It consists of distinct directions towards which the tactics are followed and
ways through which the movement in the direction will be done. Here it is first identified that
how different business in same industry must give rivalry to one another. Once it is recognised
than it becomes necessary to identify that what all business can be made part of the strategic
direction scope as it will help in focusing on areas which has possibilities of giving the maximum
returns (Hitt, Ireland and Hoskisson, 2012). Thereafter process of self-evaluation of capacities of
business is done that weather it is capable of establishing completion at global level or not and if
yes than choice of international market has to be made. It includes market analysis of different
places so that the most suitable place is selected. Last but not the least, depending upon the
choices made it is then find that weather operating alone is better for business or it is required to
form an alliance as this will increase the total capacities.
Strategy in action – This is the final step which can only be taken once the above two
stages are crossed. At this phase the suitability of different stages is tested on different basis.
These are the likelihood and aptness and fulfilment of both these criteria is required for
successful implementation of tactics. Once the strategy
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is decided that steps for formulating same are determined and accordingly modifications to the
present culture of business is made. As a new concept is brought when a sudden action is taken it
needs arrangements in the work accordingly and are executed by the management and other
superior authorities which are responsible for the plan implementation process (Hill, Jones and
Schilling, 2014).
3. Models and tools used by organisations to determine their strategy
There are many options of strategies that can be adopted by the organisation in order to
achieve the results. Every model has their own way of implementation and gives distinct solution
to business. It is very important that before deciding any particular option its evaluation is done
in detail so that maximum help of the tool can be made. Porters five force mode, VRIO analysis,
SWOT analysis, balance scorecard approach, theory of change, PEST(LE) analysis are some of
the most commonly used tools for enterprises to plan their strategy. Evaluation of some are done
below:
SWOT analysis – This is a critical tool that is used by the business in order to analyse its
external (threats and opportunities) and internal factors (strength and weakness). It facilitates
organisations in doing the strategic planning as with the application of same company can
identify its current position (Schilling, 2010). SWOT helps in knowing where the business is
going as a result of its daily operations which is very important or the leaders so that they can
make the future plans.
Strength of SWOT analysis:
1. Applicable to all business and state of
affairs
Application of this tool is very simple that it
can be used by any variety of business and in
any situation.
2. Different analysis with one tool SWOT analysis gives the information about the
strength, weakness, threat and opportunity. It
shows that user is assisted with distinct data
with the application of only one model which
is again a benefit of this technique.
3. Combination of qualitative and
quantitative data
Results of SWOT are presented in numerical as
well as in theoretical terms. It facilitates the
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leaders in understanding the current position in
more precise way.
4. Less expensive No special resources are required for analysing
the strength, weakness, threat and opportunities
of business. results can be brought in hand by
simply investing some time and hence it is a
low cost option for business (Wheelen and
Hunger, 2011).
Weaknesses of SWOT analysis:
1. Non-existence of ranking system Many time WOT analysis is conducted without
clearing the objective behind the same. It
results into mix data which is not set according
to the category of its importance in the
business.
2. Too many opinions to address Results of this tool depends upon the object or
nature of people involved. In case different
personnel from distinct department are part of
this process than a mix result will be achieved
which might not help in strategy formulation.
Benchmarking – This is another technique through which companies determine their strategies.
It is a process under which criteria are set against the performance of employees and on
completion of the project or task the final results are compared with the set benchmark. In case
of non-achievement of same management do take the actions accordingly against the concern
person.
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Types of Benchmarking
Internal benchmarking External benchmarking

Disadvantages of
Benchmarking
Advantages of benchmarking
 One most common negative
aspect of this model is that it
stabilises the standards which
is not correct in case where the
internal capacities of two
organisations are different and
it is not practically possible to
achieve the benchmark.
 Less or incomplete analysis of
the standards to be
benchmarked may lead to great
disturbance in own business as
inappropriate knowledge of
standards and process of
achieving same can lead to
huge cost for the business.
 When benchmarks are set by
the companies it affects the
present working processes. It is
widely observed that in many
cases it has affected the present
working style and resulted into
failure.
 Due to lack of time many times
standards are set against the
work force without providing
proper training to them. it leads
to work pressure and
 Through this concept an organisation
can get the results of own business in
comparison to other commercial unit
which is dealing in same sector or
having same resources. It facilitates in
evaluating the working standards.
 When employees are given benchmarks
to achieve they work with more
responsibility as they know that they are
accountable for the non-achievements of
targets.
 Motivation is another advantage of this
practice as when the work force know
that a particular standard can be
achieved with the provided standard and
someone else has already done it then it
influences them also. they do not easily
give up in this case (Eden and
Ackermann, , 2013).
 Once the culture of achieving the
benchmarks is establishing in business it
creates the developing working culture
in the organisation and every time a
better work is done.
 One most common negative aspect of
this model is that it stabilises the
standards which is not correct in case
where the internal capacities of two
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dissatisfaction among the
employees.
organisations are different and it is not
practically possible to achieve the
benchmark.
 Due to lack of time many times
standards are set against the work force
without providing proper training to
them. it leads to work pressure and
dissatisfaction among the employees
(Ward, 2012).
4. Application of SWOT analysis to M&S
M&S in order to determine the strategies for its business can apply SWOT analyses to
business. Strength, weakness, opportunity and threat of Marks and Spencer which are determined
on the basis of past 2 year trends are as follows:
Strength – Brand value of M&S is very high and this is one of the main strength of this
company. it offers great variety of products which provides them options to choose and hence
their satisfaction level is increased. It has many stores which are globally present which further
add value to business.
Weakness – Non trendy outlets is the major flaw with this company. It has resulted into
less attraction of new segment of customer towards the brand and hence the overall sales are
affected. Most of the procedures here are carried out manually which further reduces its
popularity and also makes a time consuming process for customers to shop.
Opportunity – M&S can increase its scale of business by raising its global presence. It has
limited connections with the global franchises which shows that it has chance to expand more.
More of digitalisation in the stores can be done as it will decrease the overall manual cost and
will also add better efficiency in the work (López-Nicolás and Meroño-Cerdán, 2011).
Threat –Thereafter as close substitutes are available in the market any small mistake can
be an opportunity for another brand to capture the market and attract the customer of M&S. Also
after numerous years of bumper growth, M&S food halls are lagging as rivals from Aldi and Lidl
to upmarket Waitrose raise their game with the kinds of new products M&S was once famous
for.
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Application of benchmarking for M&S
M&S in order to improve its total sales benchmarked the customer requirements and give
full attention to collect the data regarding same so that company can deliver the most likely
product to them. When benchmarks are set by the companies it affects the present working
processes. It is widely observed that in many cases it has affected the present working style and
resulted into failure. In case of M&S Less or incomplete analysis of the standards to be
benchmarked may lead to great disturbance in own business as inappropriate knowledge of
standards and process of achieving same can lead to huge cost for the business.
5. Importance of change management
Whenever a new practice is brought into business it comes with some risk of failure too. It is
because this is not necessary that the application of strategy is always done in the exact manner
in which it is planned. It results into loss of time, resources cost and sometimes failure of
business if the change is not properly planed. This develops the value of change management for
M&S which is discussed below:
Reduce complexities of innovation – when the alterations are made it is important that all
the arrangements for same are made well in advance so that while implementing same employees
do not find it difficult to work with same. Change management process facilitates in same and
reduce the complexities which ultimately control the cost of training and development (Lasserre,
2017).
Reduce risks – The process of change management gives a complete scaffolding to the
parties involve in innovation. Therefore, it increases the knowledge of the personals and they are
more careful while applying the modification. This way the overall cost of failure is avoided and
resources are saved.
Development of staff – By educating the employees and communicating the benefits of
change in the organisation level of business performances is maintained though change
management. Overall growth of the human resource is done which further help in eliminating the
cost of employing talented staff from outside.
CONCLUSION
The above report concludes that strategic management is an ongoing process in business and
needs proper planning before taking any decision regarding same. SWOT is an effective tool
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through which changes can be brought in the business but due to its collective data which is not
categories sometimes it is ineffective in assisting management with change.
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REFERENCES
Books and Journals
Rothaermel, F.T., 2017. Strategic management. New York, NY: McGraw-Hill Education.
Ansoff, H.I. And et.al., 2018. Implanting strategic management. Springer.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university
press.
David, F.R. and David, F.R., 2013. Strategic management: Concepts and cases: A competitive
advantage approach. Pearson.
Wheelen, T.L. and et.al., 2010. Strategic management and business policy. New Jersey: Prentice
Hall.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Schilling, M.A., 2010. Strategic management of technological innovation. Tata McGraw-Hill
Education.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Ward, K., 2012. Strategic management accounting. Routledge.
López-Nicolás, C. and Meroño-Cerdán, Á.L., 2011. Strategic knowledge management,
innovation and performance. International journal of information management.31(6).
pp.502-509.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
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