Scope of Strategic Management on Influencing the Transition of Business
For a sustainable competitive advantage businesses need to pursue growth opportunities since a static business would eventually lose out to aggressive competition. In addition to this, the dynamic business environment requires a business to be on the lookout for growth opportunities. One of these growth strategies is diversification and the question is whether strategic management is useful for accomplishing the advantages of strategies like diversification or whether it’s just mere effort that wastes a management’s time and effort.
The fact is that whether an organisation exists in the private or public sector, the process of diversification or implementation of any other growth strategy is complicated . If this transition process is not carried out effectively with proactive planning the business can face major corporate failures (Kenny, 2009). Considering the fact that diversification would not just be limited to the local market but also includes expansion in the international market, strategic management provides a more proactive approach to this growth strategy (Huiru, 2011).
Considering that strategic management includes the formulation and implementation of strategies for accomplishing long term goals and attaining a sustainable competitive advantage, a business pursuing diversification would need to have a thorough analysis of its internal and external environments. This is because an analysis of its organisational resources and capabilities in terms of strengths and weaknesses is important to develop strategies to pursue international or local opportunities and be prepared with a contingency plan for potential threats in the external environment (Farquharson, 2014). Thus, strategic management tools like the SWOT analysis come into play. The contradiction that this type of an analysis is not required can be countered with the benefits of the SWOT analysis. Threats in the form of new competitors, regulations, substitute products can be planned for in advance while a business can be better prepared for emerging technologies and entry into new markets.........................
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