Strategic market management, or,
simply, strategic management, is motivated by the assumption that the planning
cycle is inadequate to deal with the rapid rate of change that can occur in a
firm's external environment. To cope with strategic surprises and
fast-developing threats and opportunities, strategic decisions need to be
precipitated and made outside the planning cycle.
Recognition of the demands of a rapidly changing environment has
stimulated the development or increased use of methods systems, and options
that are responsive. In particular, it suggests a need for continuous,
real-time information systems rather than, or in addition to, periodic
analysis. More sensitive environmental scanning, the identification and
continuous monitoring of information-need areas, efforts to develop strategic
flexibility, and the enhancement of the entrepreneurial thrust of the organization may be helpful. An information-need area is an area of uncertainty that will
affect strategy, such as an emerging consumer-interest area. Strategic
flexibility involves strategic options that allow quick and appropriate
responses to sudden changes in the environment.
Strategic market management is proactive and future oriented.
Rather than simply accepting the environment as given, with the strategic role
confined to adaptation and reaction, strategy may be proactive, effecting
environmental change. Thus, governmental policies, customer needs, and
technological developments can be influenced—and perhaps even controlled—with
creative, active strategies.
Gary Hamel and C. K. Prahalad argue that managers should have a
clear and shared understanding of how their industry may be different in 10
years and a strategy for competing in that world. They challenge managers to
evaluate the extent to which
* Management
has a distinctive and farsighted view, rather than a conventional and
reactive view, about the future.
* Senior
management focuses on regenerating core strategies rather than on reengineering
core processes.
* Competitors
view the company as a rule maker rather than a rule follower.
* The
company's strength is in innovation and growth rather than in operational
efficiency.
* The
company is mostly out in front rather than catching up.
In that spirit, strategic market
management actually includes all four management systems: the budgeting system,
the projection-based approach of long-range planning, the elements of strategic
planning, and the refinements needed to adapt strategic decision making to real
time. In strategic market management, a periodic planning process is normally
supplemented by techniques that allow the organization to be strategically
responsive outside the planning process.
The inclusion of the term market
in the phrase "strategic management" emphasizes that strategy development
needs to be driven by the market and its environment rather than by an internal
orientation. It also points out that the process should be proactive rather
than reactive and that the task should be to try to influence the environment
as well as respond to it.
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