Last Updated on October 30, 2024 by Owen McGab Enaohwo
Every business organization has goals and objectives that it hopes to complete. These goals might include anything from achieving certain sales numbers to driving a certain percentage of market share. More broadly, business goals tend to revolve around growth: Companies wish to expand their footprint, enlarge their customer base, and balloon their profits.
In pursuit of these goals, strategic management is a must. In fact, strategic management provides the tools and frameworks that a business needs in order to accelerate growth in a smart, sustainable way. But when we talk about sustainable growth, exactly what do we mean?
Strategic Management, Explained
At the most basic level, strategic management is all about implementing plans, processes, and procedures to help the organization achieve its stated goals.
The strategic management process can involve a number of moving parts, including:
- Shaping or reshaping the structure of the organization, perhaps with the assistance of an LLC formation service.
- Carefully allocating resources.
- Leading change initiatives.
- Controlling internal processes.
- Implementing additional management systems.
Strategic management often takes place at the broadest level of the organization, including the C-suite. However, it can also be implemented at the level of a specific department, division, or team.
Different Approaches to Strategic Management
Strategic management tends to take one of two forms: Prescriptive or descriptive. The former deals with how a business strategy should be developed, while the latter focuses on how that strategy should be executed.
When using a prescriptive model for strategic management, tools like a SWOT analysis are used to explore the business’ opportunities and vulnerabilities, and to recommend a top-down approach to institutional change. With a descriptive approach, leaders usually experiment with different methods until they determine which strategies or solutions work best.
How Strategic Management Helps Accelerate Growth
Strategic management is designed to provide a business organization with a roadmap for meaningful, sustainable growth. There are several different ways in which strategic management can lead to business growth:
Goal Alignment
First and foremost, the strategic management process ensures that all activities within the business are aligned with its overall objectives. This alignment provides clarity for how best to distribute resources, efforts, and investments, always favoring activities that lead directly to growth or expansion.
Resource Allocation
By analyzing factors both internally and in the marketplace at large, strategic management helps businesses allocate their resources effectively. These resources include finances, technology, personnel, and more This ensures that resources are invested where they can generate the highest returns and facilitate growth.
Adaptability
When done properly, the strategic management process involves continuous monitoring of the broader marketplace, including competitor and consumer trends. This allows a business to adapt quickly to fluctuations in the business environment, the technological ecosystem, or the regulatory landscape, seizing opportunities for growth while mediating risks.
Competitive Advantage
The strategic management process devotes special attention to the competitive landscape, allowing the organization to identify areas where it can differentiate itself from other businesses in the same field. By leveraging its strengths and exploiting market opportunities, a business can gain a competitive advantage, a must-have for any company seeking growth.
Innovation and Creativity
Strategic management also fosters innovation and encourages creativity, contributing to a culture that foregrounds experimentation and continuous learning. Businesses that innovate and adapt have a much better chance not just of surviving a changing marketplace, but of thriving.
Long-Term Vision
Strategic management helps businesses develop a clear vision for the future, setting and refining long-term objectives. This creates a sense of purposefulness, guiding decision-making processes and ensuring that short-term actions are aligned with big-picture goals.
Risk Management
The strategic management process involves identifying and assessing risks that might ultimately hinder growth. Through proactive risk management, businesses can minimize their impact and create a stable environment that fosters growth.
Using an LLC to Guide the Strategic Management Process
Over the course of the strategic management process, many businesses wind up rethinking their business structure. For a majority of smaller and medium-sized companies, the structure best-suited for ongoing growth is the Limited Liability Company, or LLC.
Registering as an LLC can help with strategic growth in a number of different ways:
Legal Protection
A primary reason to register as an LLC is limited liability protection. What this means is that the personal assets of the business owners, or partners, are safeguarded from the debts and liabilities of the business. Business owners can focus more on strategic planning, without having to worry as much about their personal investments being plundered by litigators or creditors.
Flexibility in Management Structure
LLCs offer flexibility with regard to how the business’ management team is structured. LLCs can be managed by their own members, or by a third-party management team. This flexibility allows businesses to seek a management structure best-aligned with their plans for ongoing, strategic growth.
Tax Flexibility
LLCs can choose between being taxed as a pass-through entity (which basically means that profits and losses are declared on the owners’ personal tax returns) or as a corporation. This flexibility can be a boon to the strategic management process, allowing owners to optimize their tax strategy based on the business’s long-term financial goals and circumstances.
Enhanced Credibility
Registering as an LLC also enhances the credibility of a business in the eyes of customers, partners, lenders, and investors. It signals a level of professionalism and commitment to long-term operation, which may help cultivate the types of relationships that are necessary for ongoing strategic growth.
Access to Financing and Growth Opportunities
Finally, registering as an LLC expands access to financing options such as business loans, lines of credit, and investment capital. This ensures the resources needed for implementing strategic initiatives, expanding operations, and pursuing exciting growth opportunities.
Move Forward with the Strategic Management Process
Every business desires growth, and one of the best ways to achieve it is by embarking on the strategic management journey. A good place to begin is by registering as an LLC. Establish a strong foundation for lasting growth and a meaningful strategic management process.
Author Bio
Amanda E. Clark is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing.