Strategic managementIntroductionStrategic management is defined as an ongoing process that evaluates and controls the business and the industry that the business is operating (Sandler and Craig 7). It entails an assessment of a company’s competitors, setting goals and setting up strategies so as to win a competitive edge. Competitors are other companies offering the same services to satisfy same customer needs. On the other hand, a competitive advantage is defined as the relative advantage that one business has over another and it translates into a benefit that is vital to target customers.
The assessment can be done in intervals such as quarterly or yearly in order to ascertain how the strategic management process is to be implemented and incorporate any changes in the industry which result to a new strategy. Some of the changes may include new technology, new competitors, new management, and new economic or political environment. Strategic management is the top level in the management hierarchy and it is an obligation to the board of directors and other stakeholders in the organization, depending on the organizational structure. There are several steps taken in the strategic management process (Michael 1).
To begin with the strategy is first formed. To form a strategy, first the assessment of the company itself and its environment should be carried out. Also, the company’s objectives should be set by crafting the vision, mission and the overall corporate goals. A mission statement shows the organizational role to the society while the vision statement shows the view of the company’s future. Other corporate objectives may be financial, strategic business unit objectives and the tactical objectives. The said objectives should suggest a strategic plan that shows how these objectives are to be achieved.
The other step to strategic management is strategy evaluation by ascertaining its suitability, feasibility and acceptability. The strategy can also be measured for effectiveness using the SWOT analysis which ascertains the strengths, weaknesses, opportunities and threats regarding the company. Suitability here means the rationale for implementation of the strategy (Michael 1). That is if it makes any economic sense and whether the strategy will be suitable to the environment. On the other hand, feasibility is mainly concerned the question whether the resources available to the company are available.
Finally, acceptability tests the expectations of the identified stakeholders such as the customers, shareholders and employees. It tests on risk, returns and stakeholders reactions. After the above step a have been taken, then the strategy can successfully be implemented. Reasons why Jetstar Company was created by Qantas. We can make a presumption that, Qantas group did an analysis of its internal and external environment using the SWOT analysis as part of the strategic management process. The SWOT analysis as noted earlier analyzes the strengths, weaknesses, opportunities and threats of a company (Michael 1).
Some of the opportunities might be that specific needs a certain market segment or niche had not been met. A threat would have been competition from other airlines businesses as a result of offering affordable air tickets. An example of a new entrant offering low priced tickets was the Virgin Blue Australian airline in the year 2000.