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Financial Management and Strategic Management · Introduction to Strategic Management

Strategic Management Process

Updated 4 October 2026 · Fact-checked

The strategic management process is the series of stages a firm follows to set direction and achieve it: strategic intent (vision, mission, objectives), environmental analysis, strategy formulation, implementation, and evaluation and control. In exams, name each stage in order, explain it in one or two lines, and link it to a short example.

Understand Strategic Management Process

Strategic management is not one decision. It is a continuing process. The firm decides where it wants to go, studies its surroundings, chooses a path, acts on it and then checks whether it is working. If it is not, it corrects course.

The process starts with strategic intent. This covers the vision (what the firm wants to become in the long run), the mission (why the firm exists, whom it serves and how) and the objectives (specific results the firm aims for, usually with a target and a time frame). Vision looks ahead. Mission describes the present purpose. Objectives turn both into measurable targets.

Next comes environmental analysis. The firm scans the external environment for opportunities and threats, and appraises its internal environment for strengths and weaknesses. Tools such as PESTLE, Porter's Five Forces and SWOT are used here.

Then comes strategy formulation: the firm generates options, evaluates them and chooses the strategy at corporate, business and functional levels. After that, strategy implementation puts the choice into action through structure, resources, leadership, culture and policies. Finally, strategy evaluation and control compares actual results with targets, finds deviations and takes corrective action.

The stages are linked by feedback. Results from evaluation can change objectives, analysis or the strategy itself. Remember it as a cycle, not a straight line.

Key rules to remember

Stages of the process
Strategic intent → Environmental analysis → Strategy formulation → Strategy implementation → Evaluation and control
Write the stages in this order. Add that feedback from the last stage loops back to earlier stages.
Vision vs mission vs objectives
Vision = what we want to become; Mission = why we exist and for whom; Objectives = measurable targets with time frame
Use this one-line contrast whenever the question asks you to differentiate them.
Environmental analysis outcome
External scan → Opportunities and Threats; Internal appraisal → Strengths and Weaknesses
This is the base of SWOT. Do not mix up the internal and external sides.

How to solve Strategic Management Process questions

Use this method for any question on the process, whether it asks you to explain, list, differentiate or apply it to a case.

  1. 1Read the verb. 'Explain' needs each stage with a short description. 'Differentiate' needs a point-wise contrast. 'Discuss' needs stages plus the linkage between them.
  2. 2Start with a one-line definition of the strategic management process.
  3. 3List the stages in order: strategic intent, environmental analysis, formulation, implementation, evaluation and control.
  4. 4Give each stage its own bold heading or numbered point, with one or two lines on what happens in it.
  5. 5Where the question gives a case or company, add a short example for each stage using the facts given.
  6. 6Mention feedback: evaluation results can change objectives, analysis or strategy.
  7. 7Close with one line on why the process matters, such as giving direction, helping adapt to change and improving performance.

Quickest way: Stage-wise skeleton for written answers and MCQs

When to use it: Use this when time is short, for a 5 to 8 mark written answer or when a MCQ asks you to identify a stage.

  1. Write the skeleton first: Intent, Analysis, Formulation, Implementation, Evaluation and Control. Each gets a numbered point.
  2. Under each, write the key action in one line: set direction; scan environment; choose strategy; execute; measure and correct.
  3. For MCQs, match the activity to the stage. Setting targets is intent. Scanning opportunities and threats is analysis. Choosing among options is formulation. Allocating resources and building structure is implementation. Comparing actual with planned is evaluation.
  4. For vision vs mission MCQs, look for the time orientation. Future aspiration points to vision. Present business purpose and customers point to mission.
  5. Attempt all MCQs. There is no negative marking.

Common mistakes in Strategic Management Process

  • Treating vision and mission as the same thing.

    Both are broad statements and look alike in wording.

    Fix: Remember vision is the future picture and mission is the purpose, customers and way of working today. State the difference explicitly in the answer.

  • Writing stages in the wrong order or skipping environmental analysis.

    Students jump from objectives straight to strategy choice.

    Fix: Memorise the five-stage sequence and write it as a skeleton before elaborating.

  • Calling objectives vague aims instead of measurable targets.

    Students confuse objectives with vision.

    Fix: Say objectives are specific, measurable and time-bound, such as raising market share by a stated figure within a stated period.

  • Presenting the process as a one-way line with no feedback.

    Notes show a simple flow of boxes.

    Fix: Add a line that evaluation and control results feed back and may change objectives, analysis or strategy.

  • Confusing formulation with implementation.

    Both involve strategy and decisions.

    Fix: Formulation decides what to do. Implementation decides how to do it through structure, resources and leadership.

  • Giving generic answers in case-based questions.

    Students recite theory without using the facts given.

    Fix: Pick the facts from the case and attach each to a stage by name.

Worked examples

Example 1

Explain the stages of the strategic management process. (Answer in about 6 to 8 points.)

Show the solution
  1. Define: the strategic management process is a continuing set of steps by which a firm sets direction, chooses and carries out strategy, and reviews results.
  2. Stage 1, Strategic intent: the firm sets its vision, mission and objectives, which give direction and targets.
  3. Stage 2, Environmental analysis: it scans the external environment for opportunities and threats and appraises internal strengths and weaknesses.
  4. Stage 3, Strategy formulation: it generates alternatives, evaluates them and chooses strategies at corporate, business and functional levels.
  5. Stage 4, Strategy implementation: it puts the strategy into action through structure, resource allocation, leadership, culture and policies.
  6. Stage 5, Evaluation and control: it compares actual performance with targets, finds deviations and takes corrective action.
  7. Link: findings from the last stage feed back to earlier stages, so the process is a cycle.

Answer: The process has five stages in order: strategic intent, environmental analysis, strategy formulation, strategy implementation, and evaluation and control, with feedback from the last stage to the earlier ones.

Example 2

A mid-sized firm says: 'We aim to be the most trusted name in affordable home appliances in India.' It also says: 'We make durable appliances for middle-income families, backed by service in every district.' It further sets: 'Raise market share in the segment by a stated percentage within three years.' Identify each statement and state its stage in the process.

Show the solution
  1. First statement: it describes the future position the firm wants to reach. This is a vision.
  2. Second statement: it states what the firm does, for whom and how. This is a mission.
  3. Third statement: it is specific, measurable and has a time frame. This is an objective.
  4. All three belong to the first stage, strategic intent, because they set direction and targets before analysis and strategy choice.
  5. Next step for the firm: analyse the environment, such as demand trends and competitors, before formulating strategy.

Answer: The statements are a vision, a mission and an objective respectively. All three form the strategic intent stage, which is followed by environmental analysis.

Exam tips

  • Always write the stages in order and give each a separate numbered point. It makes step marks easy to award.
  • For differentiate questions on vision, mission and objectives, use a two-column style in bullet form: time orientation, nature, measurability.
  • In case studies, quote the facts from the passage and label them with the stage name.
  • Mention feedback and the cyclic nature of the process in the closing line. Many students miss it.
  • Do not leave any MCQ blank. There is no negative marking, so eliminate and guess.

Practice questions from Introduction to Strategic Management

Strategic Management Process in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Strategic Management Process: frequently asked questions

What are the stages of the strategic management process?

The stages are strategic intent (vision, mission, objectives), environmental analysis, strategy formulation, strategy implementation, and evaluation and control. Write them in this order. Add that results feed back into earlier stages.

What is the difference between vision and mission?

Vision is the future position the firm aspires to reach. Mission states the firm's present purpose, its customers and how it serves them. Objectives then convert these into measurable targets.

How do I write this topic in the exam?

Start with a one-line definition, then list each stage as a numbered point with one or two lines. Use examples from the case if one is given. End with a line on feedback and the importance of the process.

Is strategy formulation the same as implementation?

No. Formulation is deciding which strategy to follow. Implementation is turning that choice into action using structure, resources, leadership and culture.