STRATEGIC LEVEL: CHARACTERISTICS AND EXAMPLES - DUDAS - 2025

The strategic level is the organizational level where the important management of a company's resources is carried out so that it can achieve its goals and objectives. It involves setting objectives, analyzing the competitive environment, internal company analysis, evaluating strategies, and ensuring that strategies are implemented throughout the organization.

The prescriptive approach at the strategic level indicates how strategies should be developed, while the descriptive approach focuses on how strategies should be put into practice.

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Company culture, organizational structure, and employee skills are important factors that influence how an organization can achieve its set goals.

Inflexible companies can struggle in a changing business environment. Creating barriers between the development of strategies and their implementation makes it difficult to determine if the objectives have been met efficiently.

The strategic level extends to internal and external communication practices, as well as monitoring, ensuring that the company meets the objectives defined in its strategic management plan.

characteristics

At the strategic level, the following strategic management activities are carried out, which generally involves:

- Analysis of internal and external strengths and weaknesses.

- Formulation of action plans.

- Execution of action plans.

- Evaluate to what extent the action plans have been successful and make changes when the desired results are not produced.

- Develop for the long term, instead of executing routine operations. It deals with the probability of innovations or new products, new production methods or new markets that will develop in the future.

Strategies are created to take into account the likely behavior of customers and competitors.

It is a well-defined roadmap of a company. Defines the mission, vision and general direction of an organization. It seeks to maximize the strengths of an organization and minimize the strengths of competitors.

Strategic planning

The strategic level requires a commitment to strategic planning, which represents an organization's ability to set short-term and long-term goals, and then determine the actions and decisions that need to be taken to achieve those goals.

Making companies able to compete is the goal of the strategic level. To that end, the most important aspect of planning is implementing strategic management plans.

In practice, the plans include identifying benchmarks, realigning financial and human resources, and implementing leadership to oversee the manufacture, sale, and distribution of products and services.

Importance

The management process performed at the strategic level is used to plan for the future, creating a vision by developing long-term strategies.

This helps identify the processes and allocate the resources necessary to achieve those objectives. It also helps companies strengthen and support their core capabilities.

By determining a strategy, organizations can make logical decisions and quickly develop new goals to keep pace with a changing business environment.

SWOT analysis

SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is a crucial element of strategic management by helping companies identify their strengths, opportunities, weaknesses and threats.

It helps to analyze internal and external scenarios that can affect the business, helping companies prepare for the future.

It also helps to analyze key aspects of the organizational environment in order to formulate competitive strategies.

The process is useful in determining whether the company's resources and skills will be effective in the competitive environment where it has to operate, and in developing its objectives and strategies to continue to be successful in this environment.

Value of organizational culture

Organizational culture can determine the success or failure of a business. It is a key component that is considered when developing a dynamic organization.

Culture is an important factor in the way people in an organization outline goals, execute tasks, and manage resources.

A strong company culture will make it easier for leaders to motivate their staff to execute their tasks aligned with the strategies.

Therefore, if a particular strategy does not match the culture of the organization, it would hinder the ability to achieve the expected results in the implementation of that strategy.

Examples

University enrollment

A for-profit technical college wants to increase the enrollment of new students and the graduation of enrolled students in the next three years.

The purpose is to make the university recognized as the best investment for a student's money among five other private technical universities in the region, with the goal of increasing revenue.

In this case, strategic management means ensuring that the school has funds to create high-tech classrooms and hire the most qualified instructors.

The university also invests in marketing and recruiting, implementing strategies to retain students. The leadership of the strategic level of the university periodically evaluates whether its objectives have been achieved.

Globalization and the virtual enterprise

One definition of globalization refers to the integration of economies due to technology and innovation in supply chain processes. Companies are no longer required to integrate vertically (i.e. design, produce, assemble and sell their products).

In other words, the value chain for a company's product no longer has to be entirely within a company. There may be several entities, which make up a virtual company, to meet customer requirements.

For example, some companies have chosen to outsource production to third parties, retaining only the design and sales functions within their organization.

Self service

A theme in strategic competition has been the trend toward self-service, enabled by technology, where the customer assumes a role previously performed by a worker to reduce company costs and perhaps prices. Examples include:

- ATM to get cash, instead of a bank teller.

- Self-service at the fuel pump, instead of doing it with the help of an assistant.

- Online retail orders are entered by the customer, rather than an employee, such as online book sales.

- Furniture produced in mass and ready to assemble transported by the client.

- Self-pay at the grocery store.

- Online banking and bill payment.

Information and technology driven strategy

Many industries with a high information component are transforming. For example, Microsoft Encarta demolished the Encyclopedia Britannica, before it was overshadowed by collaborative encyclopedias like Wikipedia.

References

1. Will Kenton (2019). Strategic Management. Investopedia. Taken from: investopedia.com.
2. Margaret Rouse (2019). Strategic management. Taken from: searchcio.techtarget.com.
3. Wikipedia, the free encyclopedia (2019). Strategic management. Taken from: en.wikipedia.org.
4. Management Study Guide (2019). Strategic Management - Meaning and Important Concepts. Taken from: managementstudyguide.com.
5. Business Jargons (2019). Strategic management. Taken from: businessjargons.com.