Strategic management uses a company’s mission to develop policies and procedures, which move the organization forward toward reaching goals. The strategic management techniques help the company plan and implement projects designed to align with the company mission. The techniques also allow the company to reevaluate projects to determine progress or obstacles that may prevent it from reaching its goals.
Program evaluation is one strategic management technique that allows managers to analyze a project from beginning to end. The evaluation helps management determine which activities are needed to complete a project and the time frame for completion. Using program evaluation allows management to determine how much time is necessary to complete projects and reach company goals. The projects and programs in the company help the company reach its overall goal or objective.
Break-even analysis is a strategic management tool a company can use to determine the number of products a company must sell to break even and become profitable. A break-even point is the time when the cost of business and the money generated from the sale of the product meet. New businesses use break-even analysis to plan the management and strategic planning for the company.
Strategic management uses the game theory technique to determine how competitors in the market will react and respond to price increases and new products. Game theory is applied mathematics used in economics to determine how people will react and behave in various situations. Using game theory helps businesses make strategic decisions for the company.
Financial Control Techniques
Strategic management uses financial control techniques such as budgets, accounting audits and financial analysis to keep the cost of business under control. Budgets control the money that comes into an organization, within the organization and that is paid out of the organization. The budget determines the amount of resources allocated to a specific activity or project for a set period of time in the company.