Strategic Management Process

The strategic management process is a systematic and iterative approach that organizations use
to formulate, implement, and evaluate their strategies. It involves a series of steps and activities aimed
at aligning an organization's internal resources and capabilities with the external environment to achieve
its objectives. The process typically includes the following stages:

1. Environmental Analysis
 External Analysis: Organizations assess the external environment to identify opportunities
and threats. This involves analyzing factors such as economic trends, technological
advancements, political and legal changes, social and cultural shifts, and competitive forces.
Example: Marriott International conducts an external analysis and identifies a growing trend
in experiential travel. The company recognizes the rising demand for unique and immersive
travel experiences.

 Internal Analysis: Organizations evaluate their internal strengths and weaknesses, including
resources, capabilities, and core competencies. This analysis helps identify areas where the
organization can gain a competitive advantage.
Example: Hilton Hotels assesses its internal strengths, such as a strong loyalty program,
extensive global presence, and expertise in managing various hotel brands.

2. Strategy Formulation
 Mission, Vision, and Values: Organizations define their mission (purpose), vision (desired future
state), and core values (principles that guide behavior).
Example: Airbnb's mission is "to create a world where anyone can belong anywhere." The vision
involves offering unique and local experiences to travelers. The company values diversity,
inclusion, and community.

 Setting Objectives: Clear and measurable objectives are established to guide the organization
and provide a basis for strategic decision-making.
Example: InterContinental Hotels Group (IHG) sets an objective to expand its portfolio by adding
100 new hotel properties in key tourist destinations within the next three years.

 Strategic Options: Different strategic options are generated, considering the organization's
strengths, weaknesses, opportunities, and threats. Common strategies include differentiation,
cost leadership, focus, and innovation.
Example: Carnival Corporation explores strategic options, including fleet expansion, introducing
new cruise itineraries, and investing in onboard technology to enhance the passenger
experience.

 Strategy Selection: Organizations choose a specific strategy or combination of strategies based

on a careful evaluation of the alternatives.
Example: A pharmaceutical company, after evaluating various strategies, selects a focus strategy
by concentrating its research and development efforts on becoming a leader in a niche
therapeutic area.

3. Strategy Implementation
 Structural Implementation: Organizational structures, systems, and processes are designed or
modified to support the chosen strategy.
Example: Accor reorganizes its hotel management structure to enhance operational efficiency,
centralizing certain functions while ensuring a consistent guest experience across its diverse
portfolio.

 Resource Allocation: Resources such as finances, personnel, and technology are allocated to
support the strategy.
Example: The tourism board of a destination allocates resources to marketing campaigns and
infrastructure development to attract more visitors, focusing on sustainable tourism practices.
  Policies and Procedures: Policies and procedures are developed to guide day-to-day activities in
alignment with the chosen strategy.
Example: Hyatt Hotels implements policies to ensure a high level of guest satisfaction, including
standardized service protocols, staff training programs, and quality assurance measures.

 Strategic Leadership: Effective leadership is crucial in ensuring that the strategy is

communicated, understood, and embraced throughout the organization.
Example: The CEO of a resort chain takes a leadership role in implementing an eco-friendly
initiative, emphasizing sustainable practices throughout the organization.

4. Strategy Evaluation
 Performance Metrics: Key performance indicators (KPIs) are established to measure progress
toward strategic objectives.
Example: Expedia Group uses metrics such as booking volumes, customer reviews, and market
share to evaluate the performance of its online travel platforms.

 Monitoring and Feedback: Regular monitoring and feedback mechanisms are implemented to
assess whether the organization is on track to achieve its strategic goals.
Example: Delta Air Lines monitors customer feedback and adjusts its in-flight services and
amenities based on passenger preferences and changing travel trends.

 Adaptation: Based on performance feedback, organizations may need to adapt or revise their
strategies to respond to changes in the internal or external environment.
Example: The tourism board of a destination adapts its marketing strategy in response to
geopolitical events, shifting its focus to target markets less affected by the current geopolitical
climate.

5. Strategic Control
 Feedback Systems: Control systems are put in place to monitor and adjust strategic initiatives.
Example: Marriott uses customer feedback and reviews to continually assess and improve its
hotel services, amenities, and overall guest experience.

 Corrective Action: If the organization is not progressing as planned, corrective action may be
taken to address deviations from the strategic plan.
Example: A hotel chain adjusts its pricing strategy during economic downturns, offering special
promotions and packages to stimulate demand and maintain occupancy rates.

The strategic management process is not a linear sequence; it is an ongoing and dynamic cycle
that requires continuous adaptation to the ever-changing business environment. Successful
organizations engage in strategic management as a regular and integral part of their operations to
remain competitive and achieve their long-term goals.
Case Study: Coastal Resorts International (CRI)
Background:
Coastal Resorts International (CRI) is a well-established hospitality company specializing in
luxury beachfront resorts. With a portfolio of resorts in popular tourist destinations, CRI has been a
leading player in the industry for the past two decades. However, in recent years, the company has
faced challenges, including changing consumer preferences, increased competition from boutique
hotels, and concerns about environmental sustainability.

Scenario:
As the new Chief Executive Officer (CEO) of CRI, you are tasked with revitalizing the company's
strategic direction to address the current challenges and position it for sustained success in the evolving
hospitality landscape.

Key Information:
 Market Trends: There is a growing trend among travelers for experiential and eco-friendly
tourism.
 Competition: Boutique hotels with personalized services have gained popularity, posing a threat
to traditional luxury resorts.
 Environmental Concerns: Increasing awareness of environmental issues prompts guests to seek
environmentally responsible accommodations.

Stages of the Strategic Management Process:

Environmental Analysis:
 Identify key opportunities and threats in the external environment.
 Assess internal strengths and weaknesses.

Strategy Formulation:
 Define a mission, vision, and core values for CRI.
 Set strategic objectives for the next five years.
 Propose strategic options considering market trends and competitive challenges.

Strategy Implementation:
 Recommend structural changes, if any, to support the new strategy.
 Allocate resources for the implementation of the chosen strategy.
 Develop policies and procedures aligned with the strategic goals.

Strategy Evaluation:
 Propose key performance metrics to measure the success of the strategy.
 Discuss mechanisms for monitoring and collecting feedback.
 Suggest how CRI can adapt its strategy based on performance reviews.

Strategic Control:
 Design a feedback system for ongoing monitoring.
 Discuss potential corrective actions in response to unforeseen challenges.
 Explore the role of leadership in ensuring strategic control.

Discussion Questions:

Environmental Analysis:
1. What opportunities and threats does CRI face in the current market environment?
2. What are the internal strengths and weaknesses that need consideration?

Strategy Formulation:
1. What mission, vision, and values would align with the evolving hospitality landscape?
2. What strategic objectives should CRI set to address the challenges and capitalize on
opportunities?
Strategy Implementation:
 1. How should CRI restructure its operations to support the new strategy?
2. What resources are critical for the successful implementation of the chosen strategy?

Strategy Evaluation:
1. What performance metrics would be most relevant for CRI in measuring the success of its new
strategy?
2. How can the company adapt its strategy based on performance reviews?

Strategic Control:
1. How can CRI establish an effective feedback system for ongoing strategic control?
2. What corrective actions might be necessary in response to unforeseen challenges?

Conclusion:
Students should conclude by presenting their comprehensive strategic plan for Coastal Resorts
International, addressing each stage of the strategic management process and considering the unique
challenges and opportunities presented in the case study.