The paper "Essentials of Strategic Management" is an outstanding example of an essay on management. Strategic management is a dynamic and on-going process that keeps on repeating itself because management has to perform this act repetitively in order to adjust according to the situation. The manner in which strategy is formulated is always directional in nature because organizations have to actually take a certain strategic order in which the strategies are implemented. (Charles W. L. Hill & Jones, 2011)
Strategies are formulated through categories and there are five different categories that actually form the order through which these strategies are formulated. Directional strategies are designed in order to set the overall general direction for the firm. If there is no vision or future direction which needs to be pursued, the organization needs to decide an orientation towards growth and its other competitive objectives. Directional strategies, therefore, are always formulated first to give the organization a sense of direction as to where to go and reach.
Adaptive, market-entry, competitive, as well as implementation strategies, follow directional strategies because they are actually made to materialize and execute the directional strategies. These strategies are then made according to the external environment, competitive advantage held by the firm over its competitors as well as the general business environment.
When formulating strategies, organizations have to take into consideration their ability to deal with external threats and how they can use their existing internal strengths to deal with such threats. This, therefore, requires that the subsequent strategies formulated should corroborate with the internal strengths of the firm. Directional strategies only determine a vision for the firm whereas other strategies actually identify the resources needed, market entry strategies, implementation strategies are just focused upon utilizing such resources in the most optimal manner. (Michael A. Hitt, Ireland, & Hoskisson, 2008)
Organizations have to follow these steps because as the strategy formulation process trickles down, the overall number of people involved in the strategy formulation process increases. This is because of the fact that organizations once decide on their directional strategies allow more and more managers and employees to be part of the strategy formulation because that is how the resources are identified and deployed to achieve the overall strategic objectives of the firm.
One of the key principles of evaluating the strategy and determining whether one strategy is effective than another is based upon evaluating the strategic fit of the strategy with firm resources. Strategic fit actually determines whether a particular strategy is a better fit according to the internal resources available to the firm, its competitive advantage as well as its ability to deal with external threats. (Swayne, Duncan, & Ginter, 2006)
For a hospital, one strategy can be more effective than others if that strategy provides a better strategic fit. The effectiveness of the strategy, therefore, will be based upon whether the hospital has the required resources to implement that strategy and whether that strategy actually corroborates and further increase the competitive advantage for the hospital. For example, if a hospital has a competitive advantage over other health service providers in terms of service delivery than a differentiation strategy may more suitable to pursue as compared to other strategies that may not utilize the hospital’s resources in the most optimal manner.