Strategic Management

Strategic management is a comparatively young discipline and, in consequence, there is considerable debate over which approach managers should adopt in devising their strategies. Strategic management provides a valuable and clear vision for an organization to follow in order to be more competitive and effective. Strategic management acts as an important guideline to lead an organization to the road of success. Without a well-organized and clear selection strategy, the organization will be lost and unable to make progress.

The key process involves in an organization global/transnational strategy include analysis, choice and implementation. These three key processes contribute much to an organization as it analysis the business environment and helps organization to develop alternative choices and strategy, as well as providing a clear and useful guideline on how to implement those strategy. First, the process of analysis helps organizations analyze their strengths and weakness. It's also an opportunity and threat by S.W.O.T analysis. As for S.W.O.T analysis, Porter's (1985) approach to strategic management begins with analysis of the external environment using the five forces framework or STEP analysis to identify the potential opportunities and threats. Then, internal analysis includes value chain analysis which examines the value-adding activities of the organization and the linkages between them. The final stage is selection of a generic strategy, supported by the appropriate configuration of value-adding activities. This, Porter (1985) argued, will position the business in its competitive environment in such a way that it achieves competitive advantages.

Value chain analysis involves analysis of all the company's activities, and its internal and external linkages, in order to determine how the company's activities are currently organized and how they can be better organized so that competitive advantages can be achieved. Higher link between the value chains will create value adding in the mind of the customer. Businesses make themselves distinctive by the way in which they configure and coordinate their competences and value adding activities Competitive advantages is also enhanced by the distinctive network of relationship that a business has with its suppliers, distribution channel and customers. Inter-company relationship must be coordinated and integrated with those competences and activities which are core to the business itself.

By effective strategic management, organization can manage to sustain competitive advantages in the global market by managing internal and external linkages between competences and activities in the value chain.