Strategic management includes three key elements

Strategic management includes three key elements

Strategic management includes three key elements. In the workplace, there are many professional terms in companies, and strategic management is one of them, but many people do not know what strategic management is. Next, I will take you to understand that strategic management includes three key elements. Strategic management includes three key elements 1

1. Differentiation strategic management

Differentiation management strategy refers to the obvious difference between travel agency products or services and those of competitors, forming a A strategy adopted based on distinctive characteristics. The core of this strategy is that tourists can feel and accept this difference.

The purpose of differentiation strategy is to reduce the price elasticity of demand for products, and then set a higher price than competitors without reducing sales to gain a competitive advantage. Difference is for tourists, so if travel agencies want to successfully implement a differentiation strategy, they must study the needs and consumption behavior of tourists to understand what they think is important and what they think is valuable, and try to satisfy them Correspond to the individual needs and purchasing habits of the exciting market. The higher the tourists' differential preferences, the closer the relationship between them and travel agencies, and the stronger the advantages gained by travel agencies.

Successful differentiation can enable travel agencies to charge higher prices for the products or services they provide, increase sales and gain tourists' loyalty to their brands. Differentiation increases a travel agency's profitability whenever the additional price the travel agency receives from selling a product or service exceeds the cost of the call to gain the differentiation. Tourists have added value expectations for the uniqueness of travel agencies' products or services, but they still purchase products or services from competitors, or if a travel agency's differentiated approach is easily imitated or copied by competitors, then its differentiation strategy will not be effective. will succeed.

2. Contraction strategic management

Contraction strategy refers to a business strategy in which an enterprise shrinks and retreats from its current strategic business areas and basic levels, and deviates significantly from the strategic starting point. . Tightening strategy is a negative development strategy. Generally speaking, companies implement tightening strategy only in the short term. Its main purpose is to avoid environmental threats and quickly implement the optimal allocation of its own resources and transfer to other industries. It can be said that the contraction strategy is a corporate strategy that uses retreat to advance. (Selected from "Strategic Management of Tourism Enterprises" by Ma Guishun)

As a tourism enterprise, travel agencies can also appropriately absorb and adopt this business strategy based on their own actual conditions. For example, in response to the current severe tourism market environment, some travel agencies can adopt the abandonment strategy in this strategy. A travel agency can transfer one or several of its departments and cease operations. The purpose of abandoning the strategy is to find a buyer who is willing to pay more than the actual price of the fixed assets. Therefore, managers should convince the buyer that the technology or resources obtained after the purchase can increase the other party's profits, thereby maximizing the interests of the travel agency in a real sense. be maintained.

3. Alliance strategic management

A strategic alliance is a network-type alliance formed by two or more enterprises in a certain way in order to achieve a certain purpose. Generally speaking, in order to achieve one or more strategic goals, these enterprises do not form independent organizations, but adopt the method of cooperation between two or more organizations.

Strategic alliance is an innovation of modern enterprise organization system. As a leisure and fashionable tourism enterprise, travel agencies can completely copy this modern enterprise management system, develop the tourism market through multi-party cooperation, win a larger source of tourists, achieve higher benefits, and cooperate with At the same time, it also enriches the entire tourism market and promotes the development of tourism. Strategic management includes three key elements 2

Strategic management process

Three stages

A normative and comprehensive strategic management process can be roughly broken down into three stages:

(1) Strategy analysis stage;

(2) Strategy selection and evaluation stage;

(3) Strategy implementation and control stage.

Strategic analysis

Analyze and evaluate the strategic environment of the enterprise, and predict the future development trends of these environments, as well as the possible impact and direction of these trends on the enterprise.

There are two parts: analysis of the external environment of the enterprise and analysis of the internal environment or conditions of the enterprise.

The external environment of an enterprise generally includes the following factors or forces: government-legal factors, economic factors, technological factors, social factors and the competitive situation in the industry in which the enterprise operates.

Purpose: It is to timely search for and discover opportunities that are beneficial to the development of the enterprise, as well as threats to the enterprise, and to "know the enemy" so that external sources can be used in formulating and selecting strategies. opportunities provided by conditions while avoiding threats to the enterprise.

The internal environment of an enterprise is the conditions that the enterprise itself has, that is, the qualities that the enterprise possesses. It includes all aspects of production and operation activities, such as production, technology, Marketing, finance, research and development, employee situation, management capabilities, etc.

Purpose: It is to discover the strengths or weaknesses of the enterprise so that it can exploit its strengths and avoid weaknesses, give full play to its advantages when formulating and implementing strategies, and effectively utilize the various resources of the enterprise itself.

Strategic Selection

The essence of the strategic selection and evaluation process: it is the strategic decision-making process - the exploration, formulation and selection of strategies.

The strategic choice of a cross-industry enterprise should solve two basic strategic issues:

First: the business scope or strategic business field of the enterprise, that is, the enterprise is required to engage in production and operation The industry in which the company operates, clearly defines the nature of the company and the business it is engaged in, and determines what kind of products or services the company will use to meet the needs of which customers;

The second is: the company’s performance in a specific business field Competitive advantage is to determine the basis on which the products or services provided by the enterprise should gain an advantage over its competitors.

Strategy Implementation

After the enterprise's strategic plan is determined, it must take concrete practical actions to achieve the strategy and strategic goals. Generally speaking, the implementation of a strategy can be promoted in three aspects:

First: formulating functional strategies, such as production strategy, research and development strategy, marketing strategy, financial strategy, etc. These functional strategies must be able to reflect the steps to launch the strategy, the measures taken, projects and the general time schedule;

The second step is to build the organizational structure of the enterprise so that the constructed organization Be able to adapt to the adopted strategy and provide a favorable environment for the implementation of the strategy;

The third step is to match the leader’s quality and ability with the implemented strategy, that is, to select the appropriate senior management of the enterprise to implement the established strategic plan. In the process of strategy concretization and implementation, control is carried out in order to achieve implementation. This means that the actual results returned through information feedback are compared with the predetermined strategic goals. If there is a significant deviation between the two, effective measures should be taken to correct it. When deviations occur due to poor analysis, incorrect judgment, or unexpected changes in the environment, the environment may even be re-examined, new strategic plans formulated, and a new round of strategic management process carried out.

Characteristics

Characteristics of the strategic management process:

Develop strategic vision, establish goal system, formulate company strategy, implement and execute strategic plan, and evaluate performance, Basically outlines the tasks of strategic management. But in fact, the distinction is not so clear, and it does not necessarily follow this order strictly. There are many cross-influences and loops among these five tasks. For example, considering what strategic actions should be taken often involves two other questions: Will these actions have satisfactory results when implemented? How to implement these actions? The selection and formulation of the company's strategic vision and organizational mission also map to the company Goals are being established (both of which are of great significance in the company's development direction). The establishment of the goal system requires consideration of current business performance, strategic means to improve current business performance, and what the company can actually achieve when the company faces challenges. The choice and formulation of a company's strategy is intertwined with the following issues: the choice of the company's long-term development direction, and whether the company has established a goal system in all key financial and strategic areas. Obviously, the tasks of formulating the organizational mission, establishing the company's goal system and formulating the company's strategy must be combined and carried out as a whole rather than separated.

Second, the completion of these five strategic management tasks is not separated from other responsibilities and duties of managers, such as: daily business management, handling the crises faced by the company, and participating in management meetings , review information, handle personnel issues, undertake special tasks and civil obligations, etc. Therefore, from the perspective of the success or failure of the entire company, managing strategy is a crucial management function, but specifically for every manager in the company, not all managers face this problem.

Third, the formulation and implementation of strategies require an indefinite amount of time from managers. The occurrence of various changes is disorderly and unpredictable. The occurrence of various events may come suddenly like a spring breeze overnight, or they may come like a thread; they may occur independently, or they may be in a sequence like machine gun fire; their impact on strategy may be easy to estimate, or it may be easy to estimate. It can be difficult. Therefore, the evaluation and adjustment of the company's strategic plan may sometimes take a lot of time. But sometimes a moment is enough. In particular, as with finding the path to strategic change, there are many techniques to weighing the timing of implementing it.

Finally, a long-lasting and time-consuming aspect of strategic management is to enable each individual to achieve performance that supports the strategy, make the best contribution, and continuously improve the current strategy. content and execution results, so that the current strategy becomes better and better.

Managers tend to spend most of their energy improving the company's strategy bit by bit, rather than making some fundamental changes to the current strategy. Too many changes tend to upset a company's employees and create chaos among the company's customers, which is often unnecessary. In most cases, continually improving the execution of your current strategy will yield many good results. Consistently improving the implementation and execution of a good strategy is often the path to strategic management success. Strategic management includes three key elements3

Eight steps to build a strategic performance management system

The first step is to clarify the strategy, the second step is to decompose key tasks, the third step is to decompose key factors, The fourth step is to draw a strategic map, the fifth step is to convert key factors into performance indicators, the sixth step is to clarify the department mission, the seventh step is to implement the company and each department's indicators, and the eighth step is to design indicator elements.

It can be said that it is impossible to build a performance appraisal system without sorting out a company's strategy. The main work of clarifying the strategy is to identify strategic issues, clarify the corporate vision and strategic goal system, analyze the external environment and industry, and internally Resource capability analysis, overall strategy and business strategy establishment, core competitiveness or critical success factor analysis, functional strategy and strategy implementation plan design. After the first step, we have a full grasp of the company's strategic system, and performance management is a powerful tool for companies to achieve strategic goals.

The second step is to decompose the key tasks and use the balanced scorecard method to decompose the key tasks from the four dimensions of finance, customers, internal operations, learning and growth. The four dimensions of the scorecard have their own internal logical relationships. Unless it is an organization engaged in public welfare undertakings, a business organization seeks the most financial returns, and who creates financial returns, that is, customers. How to win customers must rely on good internal operations, and companies continue to Local self-learning and growth are the means to improve internal operating capabilities.

The third step is to decompose the key factors and use the organizational function decomposition method (FAST method) to decompose the key factors. The enterprise value chain usually includes six main values ??such as R&D, procurement, production, marketing, sales, and service. In addition to the main value chain, there are also auxiliary links such as human resources, IT services, and administrative support. We follow the main chain and auxiliary links of the enterprise value chain to decompose the key factors that support the realization of the company's strategic goals.

The fourth step is to draw a strategic map. The idea of ??drawing a strategic map is to use the value tree decomposition method and a layer-by-layer analysis method to divide the company's strategic goals from top to bottom in order of finance, customers, internal The logical relationships among the four dimensions of operation, learning and growth are decomposed layer by layer. The financial aspect mainly clarifies the measurable economic results produced by the company's business operations and reflects the company's increase in shareholder value. The customer level focuses on the customers and market segments the company expects to acquire, and how the department meets the needs of internal and external customers. The focus at the internal operations level is on what core business processes the company must be good at and in line with the company's value trends in order to attract and retain customers in the target market and meet shareholders' financial return expectations. The learning and growth aspect focuses on the core knowledge and innovative spirit that organizations and employees need to possess in order to achieve competitive success.

The fifth step is to convert key factors into performance indicators. For example, a company's key success factor at the financial level is to increase the return on equity, then the return on equity is its key performance indicator. Enterprises must consider measurability when designing key performance indicators, and also consider the cost of obtaining this key performance indicator. When the management improvement effect brought about by the cost is too large and the management improvement effect is not very obvious, then this performance indicator may also Not adopted.

The sixth step is to clarify the department mission. The process of decomposing assessment indicators into departments requires a clear department mission as a guide. When clarifying the department's mission, the following points should be noted. First, the mission is not a simple superposition of responsibilities. Second, the mission is the support point of each department for the company's strategy. Finally, the focus is on describing the value, significance and role of the department. This process is a process of repeated consultations and discussions with the leaders of each department. The department mission must be convincing to each department head, so as to lay a good foundation for the seventh step of implementing the company and each department's indicators.

The seventh step is to implement the company and department indicators. Departments are the main undertakings to realize the company's strategy. When designing department indicators, they should be based on the balanced scorecard idea and pay equal attention to the results and process of corporate strategy implementation. , conduct comprehensive design based on annual indicators and monthly indicators.

The eighth step is to design the indicator elements. Each position in the department is a cell unit in the organic whole of the company. Whether the company is dynamic and able to last forever and the business is booming is the key to each cell. Whether employees in unit positions are motivated and proactive. Therefore, the design of indicator elements refined to each position is the top priority in building a strategic performance management system. The design of job indicators must be fully integrated with job responsibilities and business processes, while ensuring that the assessment indicators are what the post subjects can achieve through their efforts. elevated.