The Importance Of Strategic Management

The current business environment is very competitive. Only those companies that will employee efficient strategies will achieve success. Strategic management helps an entity to utilize its resources effectively achieve a cost advantage. A cost advantage plays a key role in ensuring that a company offers competitive product prices in the market. Basis of management comes from earlier thinking and books on strategy that date back to thousands of years ago (Ambrosini and Bowman, 2009). Strategic management refers to a continuous process of analysis, creation and monitoring strategic progress of an entity to ensure sustainability (Helmstetter, Cleveland, Evans and Galloway, 2002). Organizations formulate strategies in order to focus their energy to one direction to achieve superior performance. Ambrosini and Bowman (2009) indicate that strategic management and strategic planning mean the same thing except that the term strategic management is used in academic while strategic planning is used in the industry. According Hopkins, Mallette and Hopkins (2013, strategic management is essential in sustaining competitive advantage. Organizations need to sustain their competitive advantage in order to be ahead of their competitors. According to Ambrosini and Bowman (2009), companies which have competitive advantages, perform better financially than other companies in the industry, and they also perform better than the industry average. Strategic management is also important in viewing the organization as a whole.

Organizations do not use finances, operations or marketing to create competitive advantage. This is because managers from different departments often view the organization from different perceptive, which are narrow for the whole org...

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...ar, the shares of the company were reported to be $255million (Enz, 2010). In 1994, Callaway Golf introduced an innovative design for irons that would accompany their earlier innovation and increase the company’s profitability. Pehlchen (2003) argues that Callaway pursued its strategic mission of producing innovative products that increased profitability of the company. A case study analyzing Callaway indicate that the company believed that innovation could enable the business profitability. As the golf industry continued to grow, the company embarked on innovation strategy to its sustainability. Therefore, strategic management plays an important role in ensuring that an entity competitive to increase chances of its overall growth. Efficiency in strategic management can enable a company acquire sustainable competitive advantage over its competitors in the market.