As part of this analysis is the “benchmarking”. It consists in evaluating the performance of one company adapting the best practices of other companies within the company itself. The fourth step in the analysis is the formulation of the strategy based on the environment external and internal company develops the SWOT. This matrix incorporates the various aspects of the analysis to identify strengths and take advantage of opportunities, take action against threats and mitigate weaknesses.
(Bateman-Snell, 2003) Corporate strategy identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses. (Bateman-Snell, 2003). Corporate strategy has several options to set the path to take. This can be specialization when concentrating on a single business. Vertical when dominates its suppliers or their channels of distribution integration. Concentrated diversification and finally conglomerate diversification.
(Appendix 1) All strategies must be focused on aspects such as reduce uncertainties with which operate the company. Achieve a better orientation of investments towards activities in the channel that have higher profitability. Economy of scale. And the creation of barriers to entry to competitors. (Cuesta, P. 2006). The fifth Step is the strategy implementation. As with any plan, formulating the appropriate strategy is not enough.
Also must ensure that the new strategies are implemented effectively and efficiently. The strategy must be supported by decisions regarding the appropriate organization structure, technology, human resources, reward systems, information systems, organization culture, and leadership style. Just as the strategy of the organization must be matched to the external environment, it must fit the multiple factors responsible for its implementation. (Bateman-Snell, 2003)
The implementation of the strategy is developed in four steps beginning to define tasks strategic each of those involved; the second step is to evaluate the capabilities of the Organization to implement strategic functions, this step takes place with the help of all employees by identifying specific impeding efficiency issues; the third step is the implementation to decide to change the management model and the fourth step is implementing the where administrators are responsible for controlling the new corporate philosophy and employees develop feedback on their performance.
The final component of the strategic management process is strategic control. This is designed to support managers in evaluating the organization’s progress with its strategy and, when discrepancies exist, taking corrective action. The system must encourage efficient operations that are consistent with the plan while allowing the flexibility to adapt to changing conditions. The organization must develop performance indicators, an information system, and specific mechanisms to monitor progress. Most strategic control systems include some type of budget to monitor and control major financial expenditures.
The dual responsibilities of a control system efficiency and flexibility-often seem contradictory with respect to budgets. The budget usually establishes limits on spending, but changing conditions or innovation may require. In relation to the control of the budget, should be a dual control responsibility both to determine the efficiency of the strategy as set flexibility. The budget usually establishes limits on spending, but changing conditions or innovation may require different financial commitments during the budgetary period. To solve this dilemma, some companies have responded with two separate budgets: strategic and operational.
As conclusions we can highlight the SWOT method may be a vulnerability analysis if becomes only until the formation of actions with the analysis of risk matrix, but when it is seen as a whole is visible as a model complete for the structuring of projects. The SWOT model can be as a method of structuring and evaluation of investment projects. The use of the SWOT as vulnerability scanning tool and as a strategic planning method is quite important. However, knowing the entire model brings know the potential real method and until that point fix problems.