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Operations Management and Strategic Management · Introduction to Strategic Management

Strategic Management Process: Stages and Feedback Loop Explained

Updated 10 October 2026 · Fact-checked

The strategic management process is the sequence of stages an organisation follows to set direction and achieve it: define vision, mission and objectives, analyse the environment, formulate strategy, implement it, then evaluate and control results. In exams, name each stage, explain it in one or two lines, and show the feedback loop.

Understand Strategic Management Process

Strategic management is the continuing work of deciding where an organisation wants to go, choosing how to get there, and checking whether it is getting there. The strategic management process breaks this work into stages so that decisions are made in a logical order.

It starts with direction. The vision says what the organisation wants to become. The mission says what business it is in, for whom, and why it exists. Objectives turn these into specific, measurable targets, such as a market share or a profit goal. Without this stage, later analysis has nothing to aim at.

Next comes environmental analysis. You study the external environment (economy, technology, law, competitors, customers) to find opportunities and threats. You also study the internal environment (people, finance, operations, brand) to find strengths and weaknesses. Together this is the basis of a SWOT view.

Then the organisation does strategy formulation: it generates alternatives, evaluates them against objectives and resources, and chooses the strategy at corporate, business and functional levels. After that comes strategy implementation: turning the chosen strategy into action through structure, leadership, resource allocation, policies, budgets and culture. The last stage is strategic evaluation and control: compare actual results with targets, find the reasons for gaps, and take corrective action.

The process is not a one-way line. Results from evaluation feed back into objectives, analysis and strategy. Environments change, so the process is repeated. Textbooks may group or name the stages slightly differently, so learn the logic and not only a fixed list.

How to solve Strategic Management Process questions

Use this method for any question that asks you to explain, list, or apply the strategic management process.

  1. 1Read the verb. 'Explain' needs a definition plus each stage. 'Discuss' needs stages plus comments. 'Apply to a case' needs the stages linked to the facts given.
  2. 2Open with one line defining the strategic management process.
  3. 3List the stages in order: vision, mission and objectives; environmental analysis; strategy formulation; strategy implementation; evaluation and control.
  4. 4Give each stage a heading and 1-3 lines on what is done and why. Add one example if marks allow.
  5. 5Show the link between stages. State that evaluation feeds back into earlier stages.
  6. 6For case questions, name the stage the company is in and quote the facts that prove it.
  7. 7Close with a one-line conclusion: the process is continuous and adapts to change.

Quickest way: Stage-keyword method

When to use it: Use when you have about 5-6 minutes for a short note or an MCQ on stages.

  1. Recall the chain: Direction, Analysis, Formulation, Implementation, Control.
  2. Write one keyword output for each: objectives, opportunities and threats with strengths and weaknesses, strategic choice, action plans, corrective action.
  3. For MCQs, match the activity to the stage. Setting targets is direction. Scanning the market is analysis. Choosing between alternatives is formulation. Allocating budgets is implementation. Comparing actual with target is control.
  4. Add the feedback loop in the last line.

Common mistakes in Strategic Management Process

  • Mixing up strategy formulation and strategy implementation.

    Both deal with strategy, so students treat them as one stage.

    Fix: Formulation is deciding what to do. Implementation is doing it through structure, resources and leadership.

  • Skipping vision, mission and objectives and starting with SWOT.

    SWOT feels more practical, so students jump to it.

    Fix: Always begin with direction. Analysis is done against stated objectives.

  • Writing the stages as a bare list with no explanation.

    Students memorise the sequence but not its meaning.

    Fix: Add at least one line per stage on what is done and what it produces.

  • Treating the process as one-time and linear.

    Diagrams show arrows moving forward only.

    Fix: State that evaluation and control give feedback that can change objectives, analysis or strategy.

  • Confusing evaluation and control with implementation.

    Both happen after the strategy is chosen.

    Fix: Implementation puts the plan into action. Evaluation and control measure results and correct deviations.

  • Placing internal and external analysis under the wrong labels.

    Strengths, weaknesses, opportunities and threats get mixed.

    Fix: Internal factors give strengths and weaknesses. External factors give opportunities and threats.

Worked examples

Example 1

Explain the strategic management process. (14 marks)

Show the solution
  1. Define: the strategic management process is the set of stages by which an organisation sets direction, chooses strategy, puts it into action and checks results.
  2. Stage 1, vision, mission and objectives: the vision states the desired future, the mission states purpose and business scope, and objectives set measurable targets.
  3. Stage 2, environmental analysis: scan the external environment for opportunities and threats, and appraise internal resources for strengths and weaknesses.
  4. Stage 3, strategy formulation: develop alternatives, evaluate them against objectives and resources, and choose strategies at corporate, business and functional levels.
  5. Stage 4, strategy implementation: put the strategy into action through organisation structure, leadership, resource allocation, policies, budgets and culture.
  6. Stage 5, evaluation and control: compare actual performance with targets, analyse deviations, and take corrective action.
  7. Link: findings from evaluation feed back into objectives, analysis and strategy, so the process repeats as conditions change.

Answer: The process runs from direction setting through analysis, formulation and implementation to evaluation and control, with continuous feedback.

Example 2

A Pune-based packaged snacks company notes that its market share is 8% against a target of 12%. The management finds that a rival's price cuts and weak distribution in small towns caused the gap. It then revises its distribution plan. Identify the stages of the strategic management process shown and explain.

Show the solution
  1. Market share of 8% against a target of 12%: the company is comparing actual results with an objective. This is evaluation and control.
  2. Finding that a rival's price cuts and weak distribution caused the gap: this is analysis of deviations. The rival's pricing is an external threat. Weak small-town distribution is an internal weakness.
  3. Revising the distribution plan: this is corrective action. It may change implementation, such as resources and channels, or the strategy itself if the old choice no longer fits.
  4. Overall: the feedback loop is at work. Results flow back into earlier stages, which shows that the process is continuous.

Answer: The case shows evaluation and control, with analysis of external threats and internal weaknesses, followed by corrective action through the feedback loop.

Exam tips

  • Write stages in the correct order and use headings. Examiners award marks per stage.
  • Use a simple flow diagram of the stages with a feedback arrow if you have time. It adds clarity.
  • In case questions, quote the facts from the case next to the stage name.
  • For MCQs, identify the activity described and match it to a single stage before reading the options.
  • If the question says 'discuss', add a line on why the process matters, such as consistent direction and better use of resources.

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 steps of the strategic management process?

The usual stages are vision, mission and objectives; environmental analysis; strategy formulation; strategy implementation; and evaluation and control. Some books split or merge these. Learn the logic so you can adapt to the wording asked.

How do I explain the strategic management process in the exam?

Define it in one line, then explain each stage with a short heading and one to three lines. End by noting that feedback makes the process continuous. Add an example if the question asks for application.

What is the difference between strategy formulation and implementation?

Formulation is deciding what strategy to follow after analysing the environment and alternatives. Implementation is putting that strategy into action through structure, resources, leadership and systems.

Why is evaluation and control needed?

It shows whether actual results match objectives. It identifies deviations and their causes, so management can take corrective action or revise the strategy.