Why it is necessary, what it encompasses and how it will help any organization reach predetermined objectives and goals. Strategic management is a sophisticated process blending planning, programming, business policy and budgeting. The emphasis is on the assessment of external and internal environmental factors, which may impact on the overall business plan and create a future need for transition within the company, in order to remain competitive and maintain, or increase, market share. First, a strategy has to be formulated and then it must be implemented.
Strategic planning is the term used to describe the formulation phase of strategic management.
Determining the purpose and mission of an enterprise is the first step. A company profile needs to be considered, reflecting internal conditions and capabilities. External environments are often not controllable, but they can be predicted and assessed to identify opportunities and threats. The last step should be in making the strategic choices required to meet long-term objectives. It is focused on the firm as a whole, future-oriented and should be an ongoing management process.