Strategy Management Process Components - Essay Example

The strategic management process entails four major components. Each of these steps plays a role in business development and enterprise performance. The first component is environmental scanning. Environmental scanning entails the analysis of all factors in the business’s internal, external and general environments. This component assesses various forces within the environment that are likely to interfere or affect the strategy implemented. The environment scanning process involves the use of tools such as SWOT analysis and Porter’s five forces. These tools assist in the establishment of weaknesses, threats, opportunities, and key competency areas (Vagadia, 2014). As such, environmental scanning is very important in directing strategy formulation and implementation.

            The next component is the strategy formulation process. The strategies were developed to determine the excellence of the firm in executing them. However, some scholars argue that strategy implementation and monitoring can lead an organization to excellence even if the strategy developed was inefficient or wrong. However, strategy formulation leads to the development of objectives, performance indicators, business unit strategies, functional strategies, and the key strategy (Vagadia, 2014). Strategy implementation is equally important. The approach of strategies implementation and execution determines how successful they will become. Strategy implementation assesses aspects such as synergy, efficiency, and total reward strategies.

            Strategy evaluation is the final component of the strategic management process. Primarily, strategy evaluation and monitoring is the process of performance analysis and management.