1.0 What is Strategic Management?
Strategic management is a process for developing and enacting plans to reach a long-term goal that takes into account external environment (customer, competitors, and PESTLE) and internal environment (organization and Michael Porter’s 5 forces), ascertain organization achieve the highest possible level. (Susan Scribner) Usually, it is taken by strategic manager on behalf of business owner. It is a practice to rethinking company management, contribution of stakeholder, and exiting resources (time, money and people).
Strategic management related to answer three key questions, 1. What is business’s objective? 2. What is the best ways to achieve organizations’ objectives? 3. What are required resources to make that happen?
Therefore, strategic management process is a formal method to accomplish above objectives. (Refer to Figure 1)
Figure 1: Strategic Management Process (Source:http://www.mba-tutorials.com/wpcontent/uploads/2009/08/strategic_management_process.JPG)
1.1Benefits of Strategic Management
Strategic management is an implementation to increase profits or return on investment, and it creates financial benefits and non-financial benefits.
Financial benefits happens when organization invest resources in the right pace therefore productivity increased and improvement in sales and profitability. For example, the sales of Mc Donald’s in U.S. by 2003 dropped dramatically, as many consumers preferred to healthier options and restaurant with more upscale menu item and physical environment. With high pressure to regain customers, Mc Donald’s had to rethink the business by implementing “Plan and Win”. Through creating new menu items, redesigned restaurant, and deeper understanding of consumer satisfaction, company’s revenues and sales shoot up again after several years. (Citation)
Non-financial benefits have divided into four categories: (Mathijs Van de Graaff, 2011) 1. Providing a Guide
Strategic management helps large organization to create blueprint for their future plan because they have more difficult to identify organization’s goals.
2. Improve Understanding of Competitors’ strategies
Strategic management helps organization to gather the analysis of competitors’ current situation and strategies which enable organization to create its competitive advantages to capture market share among rivals.
3. Unifying Strategic Decisions
Through strategic management, organization has reduced decision making independently and all line managers will follow top management’s strategic decision.
4. Making Performance Measureable:Organization will compare between existing strategies and final result, and develop point-of-improvement such as reputation, knowledge acquisition and process efficiency. 5.
1.1.1 Dell Incorporated – Company Profile
Figure 2: Turbo PC
Dell was founded as PC’s Limited in 1984 by University of Texas’s student, Michael Saul Dell, with capital of $1, 000 on a simple concept. Initially, Michael Dell was selling and assembling computer at his hostel. Next year, he was abandoned University during the planning stage in order to focus full-time in his first in-house computer design and rawness business after gained $ 300, 000 expansion capital which fully supported from families. Dell started trading in belief by selling computer system to customer directly; they could best understanding customers’ needs efficiency and provide best computing solution effectively. At the same year, the first PC of its own design was born, and called as ‘Turbo PC’. With the price at US$795 that lower than retailers and greater convenience than assembling the component themselves. PC Limited was succeed surprisingly and gained more than US$73 million in its first product.
In 1987, Michael Dell started to expand his