Can you please provide a response to both questions separately with reference please.
- Why has strategic management become so important to today's corporations?
- Strategic management is defined as "a set of managerial decisions and actions that help determine the long term perfomance of an organization. It includes environmental (both external and internal), strategy formulation (strategic or long planning), strategy implementation, and evaluation and control" (Wheelen, 2015). Strategic management refers to the long term trend within a business which places a great deal of emphasis on the long term and globalization has changed everything in today's business world. The globalization of markets have blossomed into the nature of understanding international developments which in turn helps a company create a long term competitive advantage (Wheelen, 2015). As a result of globalization into today's market place innovation is no longer the domain of the new entrant, ergo making strategic management more important than ever in order to have long term achievements.
What information is needed for the proper formulation of strategy? Why?
Strategy formulation defined "is the process of investigation, analysis, and decision making that provides the company with the criteria for attaining a competitive advantage" (Wheelen, 2015). Within the strategy formulation the process includes a stage known as strategy which deals with defining the competitive advantages (Wheelen, 2015). "A strategy of a corporation forms a comprehensive master approach that states how the corporation will achieve its mission and objectives" (Wheelen, 2015). It's important information because we are able to achieve our mission and objectives through maximizing a competitive advantage while minimizing the effectiveness of our competitors (Wheelen, 2015). A business will traditionally use three types of strategy which are corporate, business, and functional which will be used all at the same time in a hierarchy of strategy with each strategy complementing the other. Within each of the strategies there are different types of information derived in each case. Information within the corporate strategy includes that of various businesses and product lines within the company while information like that of competitive and cooperative strategies include researching business locations and adding services in order to have service features that aren't available through competitors within the business strategy. Lastly within the functional strategy we use research and development methods to achieve our corporate and business strategies through compiling and implementing research and the hierarchy of strategy has emerged.
Wheelen, Thomas L. Strategic Management and Business Policy: Globalisation, Innovation and Sustainability. N.p.: n.p., n.d. Print