involves the formulation and implementation of the major goals and initiatives taken by a company's top management
on behalf of owners, based on consideration of resources and an assessment
of the internal and external environments in which the organization competes.
Strategic management provides overall direction to the enterprise and involves specifying the organization's objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision
making in the context of complex environments and competitive dynamics. Strategic management is not static in nature; the models often include a feedback loop
to monitor execution and inform the next round of planning.
Michael Porter identifies three principles underlying strategy: creating a "unique and valuable [market] position", making trade-offs by choosing "what not to do", and creating "fit" by aligning company activities with one another to support the chosen strategy. Dr
. Vladimir Kvint defines strategy as "a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully
Corporate strategy involves answering a key question from a portfolio perspective
: "What business should we be in?" Business strategy involves answering the question: "How shall we compete in this business?" In management theory and practice, a further distinction is often made between strategic management and operational management. Operational management is concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization's strategy.