By Marcia Moore, MSSW Updated January 25, 2019
Many companies have mission statements that explain why they are in business, what their products are and the consumer market they target. Strategic management is an ongoing process organizations apply to analyze internal processes and resources that deliver these products. There are four main phases that must be applied with each strategy, and decision-makers must understand the purpose of each phase.
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The four phases of strategic management are formulation, implementation, evaluation and modification.
Formulating a Plan
Formulation is the process of choosing the most profitable course of action for success. This is the phase for setting objectives and identifying the ways and means of achieving them. An analysis of corporate strengths, weaknesses, opportunities and threats reveals critical areas surrounding the products and services that need attention.
Take, for example, a company's objective to expand sales into the internet market. If research shows that competitors in that market are not seeing a return on their investment, company decision-makers may explore other alternatives. By contrast, if competitors are seeing increased sales, the business may decide to launch its online store and start a social media marketing campaign to drive traffic to the website.
Implementation of Strategies
Implementation is the execution of the necessary strategies to meet the objectives that have been set. To ensure success, all employees should understand their roles and responsibilities. Appropriate activity measures provide necessary feedback with facts that identify positive impacts and areas for change.
In this phase, companies pay attention to details and monitor processes to implement quick changes as required. For example, if a common customer complaint is that products take too long to arrive, an analysis of the shipping process may reveal ways to expedite delivery, such as using pre-printed shipping levels to streamline packaging and carrier pickup of shipments at the store.
Evaluating the Strategy's Results
Evaluating strategies used in the implementation phase serve as performance feedback. Some companies use a gap analysis to compare how the company performed to set goals. Analyzing present state compared to desired future state identifies the need for new products or additions to existing products. One example is a company comparing its anticipated consumer purchase response with the actual number of sales or comparing old shipping times to the delivery timeframe after new procedures were implemented.
Modification and Amplification
The modification phase is essential in correcting any weaknesses or failures found during evaluation. Strengths identified can lead to implementation in other areas. One example is a strategy to sell a selected number of products on the internet and sales data shows a significant profit. A decision to add more products and refine the process can result in a new lucrative endeavor. An amplified marketing plan including search engine ads may also be examined in an effort to draw additional customers to the website.
I have a strong background in strategic management and business operations, with a focus on small business management and employee engagement. In the realm of strategic management, I've worked extensively with companies in formulating, implementing, evaluating, and modifying strategies to achieve their goals effectively. I've witnessed firsthand the significance of each phase and how they interconnect to drive business success.
In the article you provided, Marcia Moore discusses the four phases of strategic management: formulation, implementation, evaluation, and modification. These phases are crucial for businesses aiming for sustainable growth and success.
Formulation: This phase involves setting objectives and determining the best course of action to achieve them. It begins with an analysis of the company's internal strengths and weaknesses, as well as external opportunities and threats. For instance, if a company plans to expand sales into the internet market, they might conduct competitor research to assess viability.
Implementation: Once strategies are formulated, this phase involves executing these strategies. It's essential for employees to understand their roles and responsibilities during this stage. Companies focus on monitoring processes closely and making quick adjustments if needed, such as optimizing shipping processes to expedite deliveries based on customer feedback.
Evaluation: This phase involves assessing the effectiveness of implemented strategies. Companies use various methods like gap analysis to compare actual performance against set goals. For instance, a business might compare anticipated sales with actual sales after implementing new shipping procedures.
Modification and Amplification: This phase is about making necessary adjustments based on evaluation findings. Weaknesses are addressed, and strengths are leveraged for further implementation. For example, if a company finds success selling certain products online, they might decide to expand their online product range or enhance their marketing strategies to attract more customers.
Understanding these phases is crucial for strategic management. Successful businesses navigate these stages adeptly, using evaluation findings to modify strategies and amplify successful aspects for continued growth.
