Strategic management model refers to the pattern or mode of strategic management. According to the strategic management model, a number of steps are taken to achieve the objectives of a company. Different strategic management models are chosen by various companies according to their conveniences.
About Strategic Management Model
Strategic management model is also known as strategic planning model. A strategic planning model is selected for the purpose of formulating and implementing the strategic management plan of a particular organization. Nevertheless, it has been proved that no strategic planning model is perfect. Every company designs its own strategic planning model frequently by choosing a model and transforming it as the company advances into formulating its strategic management plan procedures. A number of strategic planning model options are available for the companies from which they can choose.
The Components of a Strategic Management Model
In the decade of 1970s, a large number of corporations followed a recognized strategic planning model, which is top down in nature. According to this model, strategic planning was a calculated procedure where the top management would design the strategy of the company and after that it was passed on downward in the company for application. The steps involved in this strategic planning model were the following:
- Mission
- Objectives
- Situation Analysis
- Formulation of Strategies
- Application
- Control
The situation analysis is basically a blend of PEST Analysis (Political, Economic, Social and Technological Analysis) and SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats Analysis). Internal analysis is an important component of situation analysis, which studies the condition within the company taking into account the following factors:
- Image of the company
- Culture of the company
- Key personnel
- Structure of the company
- Location on the experience curve
- Availability of natural resources
- Operational capability
- Operational effectiveness
- Market share
- Brand consciousness
- Exclusive agreements
- Financial resources
- Trade secrets and patents
A strategic planning model is applied in functional domains like the following:
- Research and development
- Marketing
- Production
- Procurement
- Information systems
- Human resources
Forms of Strategic Management Models
The different types of strategic management models can be categorized into the following types:
- Basic strategic planning model
- Alignment strategic planning model
- Goal-based or issue-based strategic planning model
- Self-organizing or organic strategic planning model
- Scenario strategic planning model
