STRATEGIC MANAGEMENT

LEVELS

The levels of strategic management are: enterprise level;level of SBU (strategic business units) and level ofmarketing. Enterprise level is the highest level at which theplanning process is carried out. At this level for theplanning process is the responsibil ity of the management ofthe company. Company-level planning is the foundation ofbusiness profitabil ity in the planning period. Planning atenterprise level defines business areas and business(existing and new) which the enterprise should perform inthe planning period. In addition to determining businessareas, the administration should also specify the amount ofresources and resource allocation by business areas andbusiness units to cover them. Business planning takes placeat the level of Strategic Business Unit (SBU). Each SBUdelivers its business plan for the foreseen planning period.Planning at the level of the SBU will include plans for theproducts they are dealing with and for the markets theyoperate within the enterprise. The allocation of funds to beallocated to each SBU in the foreseeable planning period isdone by the enterprise management (company-levelplanning). As the management of companies needs toprovide synergy between business areas, each SBU shouldprovide synergy between business functions. Planning atthe level of the SBU will include plans for the products theyare dealing with and for the markets they operate withinthe enterprise. Product planning is done at the product l inelevel or brand of product within each SBU and results in aplan for each product and market in order to reach thestated goals. At the level of marketing as a businessfunction, planning is made to tailor marketing mixes totarget market segments where product positioning isperformed. Step 1 : Establishing Vision, Mission and Goals -The first step in strategic management is defining themission, vision and goals of the organization. The Missionrepresents the basic purpose and values of the organizationas well as the scope of its operations. This is a statementabout the reason for the organization's existence. Strategicvision moves beyond the mission statement to provideinsight into where the company is going and whatorganization can become. Although the terms vision andmission often use as synonyms, the vision statement ideally

clarif ies the company's long-term direction and its strategicintentions. Strategic goals come from vision and mission.The CEO of the organization, with the inputs and approvalof the board of directors, determines the vision, missionand basic strategic goals. Concepts and directions withinmission statement and vision and statement of strategicgoals cannot often be identified as such but shouldcommunicate with everyone who has contact with theorganization. Big companies often publish their publicstatements of mission, vision and strategic goals. Step 2:Analysis of External Opportunities and Threats - Themission and vision introduce the second component of thestrategic management process: the analysis of the externalenvironment. Successful strategic management depends onthe precise and fundamental evaluation of the environment.Some of the important activities are the analysis of theenvironment: Industry and market analysis - industryprofile, growth opportunities and strength within theindustry; Competition analysis - competitor profile,competition analysis according to their strategies, goals,advantages and weaknesses, as well as the advantages ofcompetition; Analysis of the political and legal environment- the influence of regulatory and legal regulations onindustry, and the level of polit ical activity that the stateundertakes within the industry; Society analysis - socialissues that can, at present and in the future, trigger theindustry, social interest groups; Human resource analysis -or analysis of human resources refers to labor andemployment issues; Macroeconomic analysis -macroeconomic conditions affecting the supply, demand,development, and profitabil ity of the industry;Technological analysis - scientific or technological methodsthat represent technological factors, whose influence onindustry is not negligible. As we can see, the analysis beginswith the examination of the industry branch to which thecompany belongs. The following are the trainees of theorganization. Coaches represent groups or individuals whoinfluence or are affected by organizational mission, visionand strategy. This includes buyers, suppliers, competitors,government and government agencies, trade unions andemployees, the finance community, owners and

shareholders, and chambers of commerce and associations.An analysis of environments enables the mapping of thesestakeholders and the way they affect the organization. Theenvironment analysis should also examine other elementsin the environment such as macroeconomic conditions andtechnological factors. The key task in environmentalanalysis is to forecast future trends. Progressive techniquesrange from simple estimation to complex mathematicalmodels that examine systematic relationships between alarge number of variables. Assessment is susceptible toprejudice, and managers have l imited abil ity to processinformation. Managers should use subjective estimates asinputs for quantitative models or when faced with a newsituation. Step 3: Internal Force Analysis and Weakness -While external analysis is being conducted, the strengthsand weaknesses of key business areas within anorganization need to go through estimation. Internalanalysis provides strategic decision makers with a completereview of organizational resources and capabil it ies, as wellas the overall levels of functional outcomes. Some of themain components of the internal analysis are: FinancialAnalysis - Investigates financial strength and weaknessesthrough financial statements such as balance sheet andperformance, and compares trends with historical andindustrial f igures; Human Resource Assessment -Investigates the strengths and weaknesses of all levels ofmanagement and employees and focuses on key humanresource activities, including recruitment, selection, jobplacement, training, relationship with trade unions,compensation, promotion, recognition, quality of work l ife,and human resource planning resources; Human ResourceAssessment - Investigates the strengths and weaknesses ofall levels of management and employees and focuses onkey human resource activities, including recruitment,selection, job placement, training, relationship with tradeunions, compensation, promotion, recognition, quality ofwork l ife, and human resource planning resources;Marketing Analysis - examines the strengths andweaknesses of major marketing activities and identifiesmarkets, key market segments, and market-drivenorganizations in key markets; 

Analysis of production (goods or services) - examines thestrengths and weaknesses of production, productdevelopment, and delivery activities of the organization;Analysis of other internal resources - explores, if necessaryand desirable, the strengths and weaknesses of ongoingorganizational activities such as research and product andprocess development, information systems management,engineering and procurement. Strategic management hasbeen under the strong influence of internal resources inrecent years. Resources are inputs to a production systemthat can accumulate over time and thus use to improveperformance. Resources may have different forms, butmainly deal with: tangible assets (such as real estate,manufacturing facil it ies, raw materials, etc.) , and intangibleassets ( including rating companies, management, culture,technological know-how, patents, as well as accumulationknowledge and experience). Effective internal analysisprovides a clear understanding of how a company cancompete with its resources. Internal resources are a sourceof comparative advantage only under certaincircumstances. First, if the resource increases the benefitsfor customers deriving from a product or service comparedto the expense they expose, then the resource leads to acomparative advantage Second, resources are a source ofadvantage when they are racing and unequal to allcompetitors. Even when it comes to a very valuableresource, if all competitors have the same approach, thenthe resource cannot be a source of competitive advantage.Third, when some resources are difficult to copy (patents . . . )by competitors, then they are a source of comparativeadvantage. And finally, resources can increase thecompany's comparative advantage only if they are well-organized. REFERENCES Boeker, W. (1989), Strategic change: the effects of foundingand history, Academy of Management Journal, Vol. 32, 489-515. Frishammar, J . (2003), Information use in strategic decisionmaking, Management Decision, Vol. 41, 318-26. Hendry, J . (2000), Strategic decision making, discourse, andstrategy as social practice, Journal of Management Studies,Vol. 37, 955-77.