Important Concepts of Strategic Management

1. SWOT Analysis

SWOT framework was initially used by Harvard and later popularized by Kenneth R. Andrews and it still remains a commonly practiced analysis tool. SWOT Analysis should be conducted, i.e., identify Strengths, Weaknesses, Opportunities, and Threats for your organization and accordingly utilize strengths in the best manner, work over the organizational weaknesses, grab the upcoming opportunities and make a backup plan for identified threats.

2. Experience Curve

Coined by the Boston Consulting Group, the experience curve is a hypothesis that per unit product costs decrease gradually in the range of 15 to 25 percent whenever the cumulative production doubles in quantity. It has been confirmed by renowned organizations at different points of time. The decline in the costs can be attributed to numerous factors, including the learning curve, automation in the processes, and economies of scale.

Author Walter Kiechel identified several insights, such as a cost structure can always be improvised, varying costs structure in the same industry is a result of varying experiences of organizations, higher market share helps in cutting costs, etc.

He wrote in 2010: “The experience curve was, simply, the most important concept in launching the strategy revolution…with the experience curve, the strategy revolution began to insinuate an acute awareness of competition into the corporate consciousness.”

Following are the other important concepts of Strategic Management:

• Environmental Scanning,
• BCG Matrix,
• Competitor Analysis,
• Porter’s Five Forces Model,
• Strategic Leadership,
• Strategy Formulation
• Implementation
• Corporate Governance
• Business Ethics
• Core Competencies, etc.