Strategic management involves an organization’s analysis of their objectives, formulating strategies that involve both internal and external situations, implementing and evaluating the strategies, and finally making adjustments as necessary to stay on track.
Strategic planning is a key discipline that organizations should not overlook especially in the present highly competitive business environment, budget-oriented or forecast-based planning methods are insufficient if a large firm has to prosper. Strategic management involves a number of steps which include: mission and objectives, environmental scanning, strategy formulation, strategy implementation, evaluation, and control. (Schonberg, R. 122)
Since an organization’s success can be described better by analyzing closely its internal and external strengths and weaknesses we shall take an example of the Airbus Company that began as a consortium of aerospace manufactures and with the purpose of strengthening European cooperation in the field of aviation technology and thereby promoting economic and technological progress in Europe, to take appropriate measures for the joint development and production of an airbus. Airbus Company has its objectives based on financial aspects which include: measuring sales and earnings growth. These objectives are related to the firm’s business position and reputation. (Hollinger, Peggy; Done, Kevin, page 1, 14)
To understand and analyze the strategic management we shall consider the internal analysis of the Airbus company to help in identifying a firm’s strengths and weaknesses and the external analysis reveals opportunities and threats. This analysis is referred to as the SWOT analysis. The strengths and weaknesses of Airbus Company can be analyzed with the help of the Internal and External Analysis Strategy tables (IFAS, EFAS, and SFAS) as shown in the tables below. (Bradford, Robert W., Duncan, Peter J p12-23)
Strategy formulation of Airbus Company is carried out by matching its strengths to the opportunities that it has identified while addressing its weaknesses and external threats, to attain superior profitability the firm seeks to develop a competitive advantage over its rivals (Michael Porter).
Airbus Company implements its strategy by means of programs, budget and procedures. Implementation considers the organizational goals, this involves management of the firm’s resources and motivating employees. Since Airbus is a large Company, those who formulate a strategy are different from those who implement it hence communication is an essential factor in this company.
Evaluation of the strategy must be carried out and it involves monitoring and making adjustments that may be needed. The company’s evaluation and control involve a number of steps: defining the parameters they are to measure, defining target values for those parameters perform measurements, comparing measured results to the pre-determined standards, and making necessary changes.
Table 1 Internal Factor Analyzing Summary.
Priority 1- Very important.
2- Fairly important
3 – Important
Table 2 External Factor Analysis Summary.
Priority 1. – Very important
2. – fairly important
3. – Important
Table 3 Strategic Factor Analysis Summary.
Priority 1. –Very important
2. – Fairly important
3. – Important.
References
Bradford, Robert W., Duncan, Peter J., Tarcy, Brian, Simplified Strategic Planning: A No-Nonsense Guide for Busy People Who Want Results Fast!
Drucker, Peter The Practice of Management, Harper and Row, New York, 1954.
Peters, T. and Waterman, R. In Search of Excellence, Harper Colllins, New york, 1982.
Schonberger, R. Japanese Manufacturing Techniques, The Free Press, 1982, New York.
Hollinger, Peggy; Done, Kevin, Sharp drop in orders at Airbus Financial Times Daily. 2006.