strategic management process

What Are The Advantages And Disadvantages Of Strategic Management

What is strategic management? It’s defined as the formulation, deployment, evaluation and adjustment of a business’s strategy as an essential part of the management. The implementation of these strategies ensures that business goals are achieved.

The strategic planning process decides which way the business should go with regard to its objectives and the strategic management process actually plans this route.

What are the advantages and disadvantages of strategic management? Read on to find out…

The steps of strategic management


During the formulation of strategies to beat the competition and successfully survive environmental analysis will be carried out. This includes assessment of economic, political, social and legal aspects. Clear internal analysis should also be made on resources, processes, and employees.


Decisions now have to be taken on how resources will be used in order to achieve set goals, and checks made on how these resources have been structured. Putting strategies into practice whilst developing structures and systems will help manage the behavioural and functional implementation.

Evaluation and control

Performing evaluation and exercising control will ensure the right direction and guide the business to prepare for future challenges, making long-term survival assurance. Strategic management helps in overall business development and success.

The benefits of strategic management

Defines realistic direction

Strategic management is a statement of the business goals and mission and provides a base from which progress can be measured.

Makes for better business decisions

Investing time, money, and utilising employee skills will allow focus on financial and human resources, allowing proper allocation to any project.

Creates a sound future

When a business practices strategic management it enables measurement of progress and of success. The establishment of objectives keeps these critical measures visible to guarantee that the business will at least break even, but better still continue to be profitable.

Increases market share

With a focused plan strategic management can help to increase market share and with it the profitability of the business. Understanding industry market conditions will help with the right approach, resulting in better network distribution and higher profits.

The disadvantages of strategic management

It’s a complex and time-consuming process

The lengthy process involves continually checking many types of major critical components including short term and long term goals, business resources, and the organisational structure. It takes time to plan how the growth of the business may be affected and needs strong leadership and properly structured resources.

Difficult to implement

Compared to other management techniques the process needs perfect communication between employer and employees. Active participation is needed with employees being held accountable for their work, and employers must constantly strive to make employees aware of the process and its benefits.

Needs proper planning

Proper practical planning needs to be implemented by the entire team in order to ensure that decision-making activities that would adversely affect the business in the long term are avoided.

Can be expensive

There may be funding agencies that can be approached to help with the financial costs to help develop strategies. These costs will need to be discussed prior to the implementation of any strategic management process.


  • Strategic management sets objectives and measures success
  • It provides a framework for decision making
  • It takes an organisational perspective and looks at all components to develop a strategy
  • Many disadvantages are caused by inappropriate application rather than limitations

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