What are the various factors that affect the choice of a change strategy?
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Factors Influencing Changes in Strategic Management
by Paul Cole-Ingait
Frequent reviews of strategies will enable your business to maintain a competitive advantage.
Strategic management is the systematic process of analyzing, coordinating and implementing decisions and action plans to achieve sustainable competitive advantage. Factors influencing changes in strategic management may be internal or external to the business organization. Some of these factors include management functions, structural transformations, competition, socio-economic factors, laws and technology.
Management Functions
Changes in the composition of the board of directors or exit of chief executive officers influence changes in strategy. The incoming members of the management team may seek to review the existing strategies with the view of injecting new ideas to take the business to the next level.
Structural Transformations
Structural transformations, such as mergers acquisitions and expansion to international markets, necessitate strategic realignment. Such transformations alter the management, capital, ownership and market structures of your organization, making changes in strategic management inevitable. Your company must adjust existing strategies and develop new ones to reconcile and realign the missions and objectives of the organization.
Competition
Rising competition in target markets triggers urgent reviews of strategies in efforts to enhance competitive advantage. Businesses employ strategic tools such as a SWOT analysis to examine strengths, weaknesses, opportunities and threats and change the existing strategies. For example, challenges such as product imitations by competitors pose threats to your competitive advantage. Changing strategies will enable you to change course by addressing the inherent weaknesses and threats.
Socio-Cultural Factors
The social and cultural profiles of your the target markets may prompt changes in strategic management. You want to make sure that the strategic orientation of your business is realigned to account for demographic and cultural sensitivities, especially when entering new markets or designing new products for specific market segments.
Laws
Changes in laws, such as tax, environment and healthcare laws, influence changes in strategic management. You must adjust the existing strategies of your business to incorporate the requirements of the new laws. For example, a law requiring you to reduce your carbon footprint may necessitate the review of your production or supply chain management strategies in order to comply with the new requirements.
Technology
Your company may change strategies due to the availability or lack thereof of adequate technological capabilities. The acquisition of capital resources, such as automated equipment and advanced machinery, may prompt your organization to increase production volumes and adjust the supply chain functions. Information technology trends also influence changes in strategic management. For example, the growing influence of e-commerce may prompt your business to abandon brick-and-mortar distribution strategies and embrace online distribution strategies.
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References (2)
Small Business Advancement National Center: Defining Strategic Management
Comunity Toolbox: SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats
About the Author
Paul Cole-Ingait is a professional accountant and financial advisor. He has been working as a senior accountant for leading multinational firms in Europe and Asia since 2007. Cole-Ingait holds a Bachelor of Science Degree in accounting and finance and Master of Business Administration degree from the University of Birmingham.
Photo Credits
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