Environment Scanning Strategy Fermentation Strategy Implication Evaluation
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Importance of strategic Management
Why do we need to lay so much stress on strategic management?
Strategic management becomes important due to the following reasons:
�� Globalization: The survival for business
First, global considerations impact virtually all strategic decisions! The boundaries of countries no longer can define
the limits of our imaginations. To see and appreciate the world from the perspective of others has become a
matter of survival for businesses. The underpinnings of strategic management hinge upon managers' gaining
an understanding of competitors, markets, prices, suppliers, distributors, governments, creditors,
shareholders, and customers worldwide. The price and quality of a firm's products and services must be
competitive on a worldwide basis, not just a local basis.
The distance between the business sectors are becoming less due to the provisions of certain facilities.
Although political boundaries are there but in order to become successful in business it is essential to laid
stress on globalization.
�� E-Commerce: A business tool
A second theme is that electric commerce (e-commerce) has become a vital strategic-management tool. An increasing
number of companies are gaining competitive advantage by using the Internet for direct selling and for
communication with suppliers, customers, creditors, partners, shareholders, clients, and competitors who
may be dispersed globally. E-commerce allows firms to sell products, advertise, purchase supplies, bypass
intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is
minimizing the expense and cumbersomeness of time, distance and space in doing business, which yields
better customer service, greater efficiency, improved products and higher profitability.
The Internet and personal computers are changing the way we organize our lives; inhabit our homes; and
relate to and interact with family, friends, neighbors, and even ourselves. The Internet promotes endless
comparison shopping which enables consumers worldwide to band together to demand discounts. The
Internet has transferred power from businesses to individuals so swiftly that in another decade there may be
"regulations" imposed on groups of consumers. Politicians may one day debate the need for "regulation on
consumers" rather than "regulation on big business" because of the Internet's empowerment of individuals.
Buyers used to face big obstacles to getting the best price and service, such as limited time and data to
compare, but now consumers can quickly scan hundreds of vendors’ offerings. Or they can go to Web sites
such as CompareNet.com that offers detailed information on more than 100,000 consumer products.
The Internet has changed the very nature and core of buying and selling in nearly all industries. It has
fundamentally changed the economics of business in every single industry worldwide
�� Earth environment has become a major strategic issue
A third theme is that the natural environment has become an important strategic issue. With the demise of
communism and the end of the Cold War, perhaps there is now no greater threat to business and society
than the continuous exploitation and decimation of our natural environment.
The resources are scarce but the wants are unlimited. In order to meet the wants of the world, the resources
should be efficiently utilized. For example, the use of oil resources or energy resources will make the people
to use these resources for a long time.
Strategic management – A route to success:
The study of strategic management integrates different topics. Different courses are integrated due to the
study of this course so that businesses become successful in every sector. It integrates the following:
�� Marketing
�� Management
�� Finance
�� Research and development
The management and marketing are essential part of a business sectors. They should be integrated. Just like
other sections of the business are integrated under this study. This term is mostly used by academia but this
is also used in media.