Strategic Management: What it is and how to apply it

Strategic management is the beating heart of any organization that wants to thrive in a dynamic market.

But what exactly does it mean to manage strategically?

Continue reading and find out:

Strategic Management

In essence, this is the art and science of aligning resources, vision and actions to achieve long-term goals, anticipating change and overcoming challenges.

Unlike operational management, which focuses on day-to-day activities, strategic management looks to the horizon, asking: Where do we want to be in five years?

Thus, it combines analysis, planning and execution with a pinch of boldness to transform vision into reality.

On the other hand, applying strategic management requires more than good intentions.

It is an ongoing process that demands clarity in defining goals, a deep understanding of the competitive environment, and the flexibility to adjust course when necessary.

In this sense, companies that master this practice not only survive, but dictate the rules of the game.

For example, think of an organization as a ship sailing in turbulent seas: without a strategic compass, it may move, but it will hardly reach its desired destination.

Furthermore, the relevance of strategic management grows in a world where change is the only constant.

With disruptive technologies, new business models and increasingly demanding consumers, organizations need a clear map to navigate.

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Therefore, this text explores what strategic management is, how to apply it intelligently and why it is indispensable for sustainable success.

Shall we dive in?

What is Strategic Management?

First, strategic management can be defined as the process of formulating, implementing and evaluating decisions that enable the organization to achieve its long-term objectives.

In other words, it is a cycle of planning and action that aligns the company's mission with market opportunities.

Unlike tactical management, which focuses on short- and medium-term goals, strategic management thinks about the “big picture.”

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In this sense, considering internal factors, such as organizational culture, and external factors, such as economic trends.

For example, imagine a technology company that decides to invest in artificial intelligence before the technology becomes mainstream.

This decision, based on a strategic market analysis, positions the organization as a leader in an emerging sector.

Thus, strategic management is not just about reacting to the present, but about anticipating the future.

A McKinsey study found that 701% of companies that adopt a consistent strategic approach outperform their competitors in revenue growth over five years.

Furthermore, strategic management involves several steps, from SWOT analysis (strengths, weaknesses, opportunities and threats) to defining key performance indicators (KPIs).

In this context, the chess analogy is perfect: each move must be calculated, considering not only the current move, but also the next five.

Therefore, managing strategically means playing with vision, patience and precision, always one step ahead of your opponents.

Why is Strategic Management Essential?

First of all, strategic management is essential because it provides direction in a world of uncertainty.

Without it, companies run the risk of getting lost in reactive decisions, wasting resources on initiatives that do not add value.

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For example, a retail chain that ignores the rise of e-commerce may see its relevance diminish as strategically oriented competitors such as Amazon dominate the market.

Furthermore, strategic management fosters organizational resilience.

In times of crisis, such as the 2020 pandemic, companies with robust strategic plans were able to pivot quickly.

An original case would be that of “Café Aroma”, a small fictitious chain of coffee shops that, upon noticing the drop in in-person business, invested in a delivery app and partnerships with local influencers.

As a result, the company not only survived but expanded its customer base by 25% during the crisis.

Finally, strategic management promotes continuous innovation.

By encouraging trend analysis and experimentation, it allows companies to reinvent themselves before obsolescence sets in.

Therefore, organizations that prioritize this practice not only follow changes, but lead them, transforming challenges into opportunities.

How to Apply Strategic Management?

1. Environmental Analysis

First, the application of strategic management begins with a thorough analysis of the internal and external environment.

Tools like SWOT analysis and Porter's Five Forces model help map strengths, weaknesses, opportunities and threats.

For example, a sustainable fashion company might identify the growing demand for ethical products as an opportunity.

In turn, while dependence on specific suppliers can be a weakness.

Furthermore, it is crucial to monitor macroeconomic, technological and cultural trends.

For example, a food company that sees the rise of veganism can adjust its product line to include plant-based options, capturing a new market segment.

In this sense, environmental analysis is like a submarine's radar: without it, the organization sails blindly, vulnerable to invisible obstacles.

Finally, the analysis must be continuous, not punctual.

The market is dynamic, and what was an opportunity yesterday may be a threat tomorrow.

Therefore, strategic companies invest in market intelligence and revisit their analyses regularly.

Thus, ensuring that your decisions are always aligned with reality.

2. Setting Clear Goals

Subsequently, strategic management requires the definition of clear and measurable objectives.

These objectives must be SMART (Specific, Measurable, Attainable, Relevant and Timely) to ensure focus and accountability.

For example, a tech startup might set a goal to “grow user base by 50% in 18 months through digital marketing campaigns.”

Furthermore, objectives must be aligned with the company's mission and vision.

An organization that aims to be a leader in sustainability, for example, might prioritize goals related to reducing carbon emissions.

In this context, clarity in defining objectives works like the rudder of a ship, keeping the team focused even in the midst of storms.

On the other hand, it is important to communicate these objectives transparently at all levels of the organization.

When everyone understands the destination, collaboration and engagement increase, creating a ripple effect that amplifies results.

3. Execution and Monitoring

Finally, strategic management does not end with planning; it requires disciplined execution and constant monitoring.

Tools like the Balanced Scorecard help translate strategies into concrete actions, while KPIs provide a clear view of progress.

For example, “Green Industry,” a fictional biodegradable packaging company, implemented a monitoring system that tracked customer satisfaction and supply chain efficiency, allowing for real-time adjustments.

Furthermore, strategic execution requires flexibility.

Changes in the market, such as new regulations or technological advances, may require adjustments to the plan.

In this sense, strategic management is like a dance: it requires rhythm, but also the ability to improvise when the music changes.

Finally, continuous monitoring ensures that the organization learns from its mistakes and successes.

Companies that regularly review their results, like Apple with its innovation cycles, manage to remain relevant even in highly competitive markets.

Practical Examples of Strategic Management

Example 1: The Reinvention of the Estante Bookstore

First, consider “Livraria Estante,” a fictional chain that faced competition from e-commerce giants.

Instead of competing on price, the company used strategic management to redefine its positioning.

After a SWOT analysis, it identified that its strengths were expert curation and customer experience.

Thus, it transformed its stores into cultural spaces, offering literary events, book clubs and themed cafes.

Furthermore, Estante invested in its own e-commerce with personalized recommendations based on artificial intelligence.

As a result, its online sales grew 40% in two years, while physical stores became cultural destinations, attracting a loyal audience.

This case illustrates how strategic management can transform threats into opportunities.

Finally, Estante continually monitors customer feedback and literary market trends, adjusting its strategy to maintain relevance.

This cycle of analysis, action and review is the essence of strategic management.

Example 2: The Expansion of TechNova

In contrast, “TechNova,” a fictional software startup, applied strategic management to enter international markets.

Initially, the company conducted a detailed analysis of the regulations and cultural preferences of each target market.

Based on this, it adapted its product to meet the specific needs of each region, such as support for multiple languages and integration with local systems.

Additionally, TechNova set clear goals, such as reaching 10,000 users in each market within 12 months, and implemented localized marketing campaigns.

The result was a 60% growth in international revenue in two years, proving that strategic management is crucial to global expansion.

Finally, the company maintains a KPI dashboard that tracks performance in each market, allowing for quick adjustments in case of deviations.

This data-driven approach is a pillar of modern strategic management.

Benefits and Challenges of Strategic Management

Frequently Asked Questions about Strategic Management

Conclusion

In short, strategic management is much more than a set of tools or processes; it is a mindset that transforms vision into impact.

By aligning analysis, planning and execution, it empowers organizations to navigate a complex and competitive world.

However, its application requires discipline, creativity and a willingness to learn along the way.

So, if your company has not yet embraced strategic management, ask yourself: Are you ready to lead the future or just react to the present?

With examples like Livraria Estante and TechNova, it is clear that managing strategically is not a luxury, but a necessity.

So, start today, analyze your environment, set clear goals, and monitor your progress.

The future of your organization depends on it.

Andre Neri May 7, 2025