The Strategic Management and Choosing the Appropriate Business Strategy

A brief introduction about strategic management and its peculiarities. Hope you enjoy it!

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The current management teams of any company face an increasingly changing, complex and hostile environment. As a consequence, it is necessary to address the adaptability of the company to survive or to increase its efficiency in these circumstances. We  understand, therefore, that the company must respond to its permanent need to adapt to changes in its environment.

By choosing the appropriate business strategy, we will approach this issue. This strategy arises from a complex set of activities that we will call the strategic management process. The current context demands a strategic attitude towards company management teams that seeks constant adaptation to a highly unstable environment, based on the belief that the future can be improved by means of appropriate strategic actions.

The concept of strategy applied to the business world emerged in the 60’s and has evolved at the same time that the management systems and the internal and external problems that these systems have had to face.

There are many definitions of strategy that have been presented by several authors without this having reached a consensus between them. However, many elements that conform the strategy are widely accepted and fully developed.

A first and classical definition is that the strategy can be defined as the pattern of the main objectives, purposes or goals and the essential policies and plans to achieve them.

The variety of definitions that we can find within plenty of bibliography for the concept of strategy is the consequence of the multiplicity of approaches used to study the problem.

Based on this approach integrating the concept of strategy some authors consider that the strategy becomes the fundamental structure through which an organization can define its vital continuity and, at the same time, its adaptation to a changing environment.

For this reason, some consider that the concept of strategy is multidimensional, since it includes all the critical activities of the company, it provides a sense of unity, direction and purpose, and facilitates the necessary changes induced by its environment.

The strategy is the way to link the company with its environment to achieve the resilience that its shareholders satisfy.

As many authors have pointed out, the strategy is the way of linking the company with its environment. Although the environment influences the company by determining its decisions, this company is also part of the environment of other competitors and, consequently, conditions them with their own decisions.

This implies that the strategy that a company chooses to compete not only tries to respond to the environment, but also tries to model the environment in its favor. Another element that is derived from this first idea is that in order to be able to talk about strategy it is necessary that there are other players on the board such as other companies that compete with the company for resources, for clients or for its profitability and success through their own strategies.

Strategic decisions can be diverse: the definition of the activities to be undertaken by the company, a merger, entering into new businesses or going to international markets are clear examples of strategic decisions.

All these strategic decisions have in common that they try to make the company more competitive, therefore, more profitable. The way in which each company achieves to be more competitive reflects the content of the strategy that follows.

For instance, a company aiming to be more competitive improving the quality of its products, being very effective in the use of its assets or trying to innovate constantly thanks to a strong investment in research. But, in all cases, the clear indicator that a company is succeeding with its strategy is that it obtains a profitability superior to that of its competitors.