An organization, in order to meet its goals and objectives, needs a thorough planning, analysis, assessment and monitoring of all the aspects which can make a business run successfully. Strategic Management involves all these aspects which are required by a business enterprise to function properly.  

When you utter the word business, there are some fragmented ideas which come to your mind. Like accounting, marketing, information system, operations or audit. Strategic Management takes all the key features together and studies them with a holistic approach. This in turn pops up three questions which are important for a complete understanding of the terminology: 

a) What are the factors which establish the total corporate performance of a large enterprise? 

b) What are the reasons for which some companies succeeds while others fail? 

c) What is the role of the manager in making a business successful? 

Before answering the above questions, let us see what the word strategy stands for in a business? 

A strategy is a demarcation which draws a line between what a company should do and what it should not do. It not only enables the enterprise to excel in what it is best doing at, but also restricts it from doing certain activities which other businesses generally do. A thorough discussion about this line of demarcation forms the main theme of the strategic management- “ What a company should do” and “ What is should not do”.  

In this context, three fundamental questions needs to be answered for a better grip on the subject.  

1) Where do we stand in competition? 

In order to be successful and beat the rival companies in competition, you need to have a bold marketing strategy. Search for an attractive marketing opportunity which will promote your business, but remember, every marketing effort will be futile if you don’t possess a better resource than your competitors.  

This leads us to our second question: 

2) How do we compete? 

While answering this question, we can add one important pointer which can make a particular company serve better than the others. This pointer is capability. The resources which we are talking about and which will help in marketing may be a tangible asset like land or property or intangible like skills and expertise. These resources along with capabilities can place a particular company in an advantageous position.  

The above-stated questions will help us to answer a key aspect of strategic management, that is, strategy formulation.  

This gives us our third and a functional question: 

3) How do we execute? 

In order to execute what a business enterprise needs to do, it has to undertake an implementation plan which makes an ally between the people and the organization and brings them together with the particular strategy. In order to align the people with the strategy of the enterprise, factors like motivation, incentives, leadership, control system etc play a key role.  

Remember: 

A bad strategy will make you a wrong thing unnecessarily without perfection 

A bad execution will make the right thing go horribly wrong 

Many companies mistakenly follow either of the two points and turn up without any profit. 

So, the wise idea is to have a: 

A good strategy and a good execution will only lead you to do the right thing correctly and flawlessly. 

A strategy can generally be defined as a three-legged tool which will be firm enough to make the strategy a success. The three legs are  

1. Marketing Opportunity: An effective and attractive market opportunity will help you to plan your strategy. 

2. Resources and Capabilities: These two helps an enterprise to serve better than it’s competitors. 

3. Execution Plan: A well- synchronized execution and implementation plan will align the people and the enterprise with the strategy. 

A strategy will never work if either of these three factors is missing. 

As discussed above, marketing opportunity and resources fall under the category of Strategy Formulation. It can be classified as External Analysis and Internal Analysis which again come with a host of other factors. 

1) External Analysis includes Competitor Dynamics, Industry Analysis and Industry Evolution 

2) Internal Analysis can be further classified as Business Level and Corporate Level 

1. Business Level includes Competitive Positioning, Generic Strategies, Building Competitive Advantage and Sustaining Competitive Advantage. 
2. Corporate Level includes Vertical Integration and Diversification 

Execution plan falls under Strategy Implementation which consists of two factors- Incentive and Control System and Organization Structure.  

Educational Objectives: 

Strategic Management has three basic educational objectives. 

1) Acquiring Diagnostic Skills: By this you learn to fill in the gap in the information by making an appropriate conclusion. There is no room for analysis here and you have to come to a suitable conclusion sans the basic facts which are required to do analytical reasoning. This is more about acquiring knowledge of how to act fast in an emergent situation. The more ably you can apply diagnostic reasoning, the more successful you can be.  

2) Improve communication skills: This helps you to communicate and convince your diagnostic skills and the conclusion in a believable way so that the person whom you are trying to persuade readily accept your conclusion. Communication is a two-way skill which comes with listening. If you are making a quick diagnostic conclusion, you need to be patient and listen to what others say. This will help you elicit information required for making the conclusion.  

3) Application: The third and the final objective is to learn, understand what you are learning, apply them practically to strategic situations and analyze them. This will come to your respite when there is a scarcity of resources and a better performance is accepted.  

Strategic Management studies help you to deal with the complex and ambiguous world which exists behind the four walls of the classroom. In a classroom, we know that a solution to every problem defined here shall be provided, but that is not the case with the real world which is faced by the managers in an enterprise almost every day.