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2.1. What Makes Strategically Managed Businesses Better?

Strategic management is crucial for small and medium-sized businesses with respect to their competitive advantage. It serves as a testament not only to the entrepreneurs’ experience, who run their companies on the basis of a concise strategy, but also research studies, which have proven that strategically managed companies generally have:

Better financial results (Schwenk a Schrader, 1993),
Overall better performance (Perry, 2001; Rue a Ibrahim 1995; Smith at al, 1988),
Higher growth rates (Uton at al, 2001).

Why are strategically managed companies better? They:

Have a clear idea of what they want in the long term, their goals are often more thought out, more realistic, and built on a clearly defined competitive advantage.
Are less likely to exhibit a dilution of resources, as they are capable of FOCUSING their efforts in selected strategic areas, which are in turn better equipped to attain higher customer value.
Have a better overview of what is going on outside of the company, taking note of developments and trends in their field and on the market, they are more familiar with their customers and competition, honing in on changes in their needs and behaviour.
Are better at adapting their strategy to the changing environment, allowing them to better seek out or create new opportunities for development and innovation.
Are inherently more efficient, not wasteful. Their strategy allows them to maintain functional (not rigid or bureaucratic) internal order.
Have and regularly work with their company's performance data. Should there be any gaps or hiccups along the way, they are able to act quickly and more proactively.

ATTENTION: What specific issues can be resolved by implementing strategic management in your company?

Entrepreneurs, owners and managers of small and medium-sized businesses, or businessmen who need to:

Give their company a clearer or more concise sense of direction for future development
Take a step back and assess their company’s activities, and assess/modify their current activities to give them more of a competitive edge
Implement a system for day-to-day operations - typical for growing companies that, until now, had a relaxed and informal system which no longer works and causes confusion, errors, inefficiency and negatively impacts the company’s competitive edge.

Budding entrepreneurs who need to:

Formulate their vague business idea into a detailed process including how to implement it; clearly define what it is they are going to offer and to whom, what will set them apart from their competition; identify what supplies they need and how to acquire them; define their sales strategy and economic structure of the company; delegate responsibilities etc.

Owners and managers of family businesses as well as family members who need to:

Initiate a discussion regarding the necessary course of action regarding the present generation’s departure from actively managing the company.

Owners and managers of other types of organizations, e.g. non-profit or social enterprises, as well as associations etc., which, like other companies, have to know WHAT they are going to do and HOW, in order for their projects and goals to be successful.