But what exactly is strategic management?
Does management have to be strategic? And what exactly is strategy? Why not focus directly on the work and forget about the rest?
All these questions are legitimate, so let’s start at the very beginning…
what is a strategy?
The direction that the company will take in the coming years. Often associated with the long term. In contrast to Operational Management, which focuses on the short term and applies the decisions taken by strategic management in the field.
Is it the mandatory strategy for the business?
Can we run a company or build a professional project without having developed a Strategic Management? The answer is “niet”. Any great idea, if it is not analyzed from a Strategic Management point of view, is useless.
What exactly is strategic management :THEORY
There are several theories on strategic management that are well known in the sector:
- Porter’s 5 Forces Theory, which provides insight into the forces of competition in the industry. https://hbr.org/video/3590615226001/the-explainer-porters-five-forces
- Analysis of the PESTEL Strategy takes into account the factors that can affect the good development o not of a company (political, economic, sociological, technological, environmental and legal): https://fr.wikipedia.org/wiki/Analyse_PESTEL
- The SWOT Analysis is used to determine what are the advantages and also the weaknesses of our business: https://hbr.org/2019/08/are-your-companys-strengths-really-weaknesses
- or else:
- BCG matrix to decide on which product to invest in: https://www.hbrfrance.fr/magazine/2018/05/19962-graphiques-ont-change-monde/
- Blue Ocean Theory which aims to develop new markets to be the first to penetrate the market): https://www.lesechos.fr/2014/04/etes-vous-un-patron-ocean-bleu-281347
I’m not going to go any further with the theories in this post but I’ll leave you the best links I found!
However, theories are enough for our strategic management?
None of these theories is ‘solo’ enough to elaborate a Strategic Management and a vision of the company. My objective with this article is to explain in a few lines the best method to succeed in your Business Strategy, your Business Plan, your new product or service launch in the medium and long term.
So, how to succeed in your strategy?
First of all, regardless of whether we are talking about a large or small company, a huge transformation project or the beginning of a strategic plan, we will need to know why we are looking for a change in strategy. In 99% of the cases when we are looking to change our strategy, we want to improve our turnover!
And I will show you how in a few steps!
We will use as an example the creation of a company, but be aware that this model can be applied in all kinds of private companies or institutions.
1- I have a great idea, but what exactly am I selling?
First of all, we must ask ourselves the following question: what is our product or service? The answer can neither be 10 products/services nor become too specific. Ideally, no more than 3-4 products or services at the beginning because we won’t be credible with more. We have to be able to offer a much better service or product than the competition, so unfortunately and especially at the very beginning, forget about the wide range of products.
If you have any doubts, questions, do not hesitate to discuss it with me (click here).
2- My Passion Is Profitable?
Second vital question: does this product/service correspond to a CURRENT NEED or a need of yesterday or tomorrow? Regardless of the quality of the product, its design, its price, the most important thing is to understand if our product/service is really useful in the society/region we live in. As an example, developing an app to control flying cabs is TOP but for tomorrow! Today we don’t have this need yet…Or, developing a very design, high performance but diesel-powered car, it’s a need of yesterday, but no longer relevant today. Creating a Zoom in augmented reality is AN IDEA OF THE PRESENT, and if this is an environment that fascinates you, Go for it! You’ll be a hit!
3- Who Is Interested In My Know-How?
Third strategy, what kind of customers have exactly these needs? The best way to do this is to create a hypothesis and verify it thanks to the free “market studies” of social networks. The goal with these market studies is to have as much information as possible about your client: age, gender, education, profession, hobbies, purchasing power… We do not use the Persona because it has been shown on several occasions that this technique is not effective.
4- We will pay you for your know-how and never for what you don’t know how to do!!
When all the main elements are in place, you have to go for it, first with few products/services but you absolutely have to go for it, have fun with communication and never forget this fundamental sentence: people will pay you for what you know how to do and never for what you don’t know how to do ; )
I wanted to show you an exercise of Strategic Management for a business creation because the examples are easy to understand. However, this same scheme can be adapted to large public or private structures. Strategic Management is a particular way to internally manage the company, the employees and the medium and long term vision of the right of way. The manager must become LEADER if he/she wants to reach ElDorado .