Strategic management involves aligning business goal action plans with workplace performance objectives. In developing performance plans, a manager must clearly assess a company's mission, vision, values, goals and objectives. The business environment and competitive placement are also evaluated to identify the growth issues faced by the company, devise solutions to challenges and allocate roles and responsibilities to individuals and teams to carry out strategic goals.
Strategic planning involves developing specific business goals that are SMART: specific, measurable, achievable, relevant and timely. A business goal target might be to increase production by a specific amount annually to meet growing market demands. In 1998, for example, Harley-Davidson Inc. approached its 95th anniversary and found itself facing a growing challenge to its dominant position in the motorcycle industry because of its inability to timely fulfill lengthening customer waiting lists. Strategic business goals to meet this type of challenge might relate to increasing available production through licensing or retooling and expanding manufacturing.
The type of data collected when developing a performance plan include financial statements, sales reports, internal databases and industry reports. In the strategic planning process, this type of business data assists management in gauging a company's market position. As an example, in the late 1990s, Reebok International Ltd. was squarely faced with shifting customer preferences for its athletic footwear and apparel industry products. Reebok identified market share variances that indicated decreased market performance and implemented a multiple-brand strategy that aimed to address its losses across a variety of market segments.
When Hewlett-Packard hired Carly Fiorina as CEO in 1999, Fiorina's assessment of the then-ailing tech company led to the sale of the company's Tests and Instruments Division to focus on computer-related products and services. This is an example of the type of strategic business actions used to improve business operations. It involves re-evaluating all products and services, examining labor performance, procurement costs, delivery processes and customer satisfaction.
A performance measurement system evaluates performance standards wthin an activity or process, which gauges the degree to which specific objectives, targets and activities are being met. Performance standards are those measurable indicators within an activity or process that can be quantitatively assessed for efficiency and effectiveness. For example, benchmarks performance might include specific quality and timeliness standards. Each company's strategic planning process will have its own performance indicators.