PES6250 Chap.4 The Strategic Management Process and Its Tools
The Strategic Management Process and Its Tools
Five stages, and the return path
Strategic management is taught as a cycle. Strategy analysis evaluates internal capabilities and external conditions. Strategy direction crafts mission and vision statements and sets clear, measurable objectives. Strategy development formulates the methods and plans that would achieve them.
Implementation and evaluation translate plans into action and review outcomes so that strategies adapt iteratively.
That last clause is what separates strategic management from strategic planning, and it is the clause most often dropped in practice, which is how a strategy becomes a document nobody consults again.
SWOT, and the clause that makes it analytical
The classification rule is two dimensions crossed: whether a factor originates inside the organisation or outside it, and whether it is helpful or harmful to achieving the objective.
The sport examples given include skilled coaching and strong youth programmes as internal strengths, poor facilities and lack of sponsorship as weaknesses, new market trends and government grants as opportunities, and increased competition and evolving consumer behaviour as threats. The objective clause is not decoration.
A large volunteer base is a strength against a participation objective and a constraint against a professionalisation one.
PESTEL as a prompt rather than a survey
Six headings are defined: political factors covering government actions and policies, economic factors covering the health of the wider economy, social factors covering culture and demographics, technological factors covering innovation affecting market position or operations, legal factors covering the regulatory environment at every level, and environmental factors covering ecological and sustainability questions.
Where SWOT sorts what you already noticed, PESTEL is a defence against the blind spot, and a usable one names the two headings that would change the decision and records the other four as scanned and immaterial.
Five forces, with one adjustment for this sector
The model asks how much of the value created in an industry each party can capture, through the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitutes and rivalry among existing competitors.
Applying it to sport requires splitting rivalry, because competition between clubs inside one league is constrained and partly cooperative while competition between leagues, codes and leisure options is not.
Substitutes reward the most care, since the definition covers alternative leisure activities generally and the real substitute for attending a fixture is often staying home.
A live illustration of strategy done deliberately
The course works through an international federation's strategic plan as a case: a ten-point plan emphasising global development, financial restructuring, governance reform and digital engagement, supported by a landmark sponsorship, an ethics code that improved transparency and governance, and a digital portal that improved engagement with stakeholders worldwide.
It is a useful case because every element maps onto a stage of the cycle rather than onto a single clever decision.
What this chapter covers
- 01
Five stages from analysis through direction and development to implementation and evaluation
- 02
The return path, and what distinguishes strategic management from planning
- 03
SWOT as origin crossed with effect, judged against a stated objective
- 04
Two entries that cancel out are one factor with a time dimension
- 05
Six PESTEL headings, ranked rather than surveyed
- 06
Five forces as a model of value capture
- 07
Splitting rivalry inside a competition from rivalry between competitions
- 08
Substitutes defined widely, and why restricting them understates the force
- 09
Choosing a tool by naming the decision first
Rewrite a general environmental scan so it answers the board's question
- 2State the decision the analysis has to serve.
- 4Rank the six headings and justify the two that carry the answer.
- 3Draw the recommendation from the ranked headings.
Key terms
- Strategy Analysis
- The first stage of the cycle, in which managers evaluate internal capabilities and external conditions before any direction is set.
- Strategy Development
- The stage at which creative methods and plans are formulated to achieve objectives that have already been set, rather than alongside them.
- Strategic Evaluation
- The stage at which outcomes are reviewed and fed back into analysis. An evaluation that changes nothing upstream is a report rather than a stage.
- Internal Factor
- In a SWOT, an attribute of the organisation itself, distinguished by whether the organisation could change it acting alone.
- Threat of Substitutes
- The force exerted by alternative activities competing for the same attention and spending, which in sport extends well beyond other sports.
- Industry Rivalry
- The intensity of competition among existing organisations, which in sport has to be split between constrained rivalry inside a competition and ordinary rivalry outside it.
- Bargaining Power
- The ability of a buyer or supplier to influence terms, determined largely by the alternatives each side holds rather than by negotiating skill.
The Strategic Management Process and Its Tools FAQ
Should a case study report run all three analytical tools?
Only if you can say what question each one was answering. The three are not a sequence and they are not interchangeable: SWOT asks what can be acted on and whether it helps or harms a stated objective, PESTEL asks what is arriving from outside that was not planned for, and the five forces model asks who captures the value and why a margin is what it is.
Running all three without stating the question each serves usually means none of them is run well, and it consumes the words the recommendation needs.
What is the commonest way a SWOT goes wrong?
No objective is stated, so the helpful and harmful axis has nothing to measure against and the classification becomes a list. The second commonest is a strength and a threat that describe the same underlying fact from opposite sides, for example a loyal ageing membership and demographic change.
That is one factor with a time dimension, and writing it twice inflates the analysis while hiding the actual finding, which is that a current strength is scheduled to become a weakness.
Why does the five forces model need adjusting for sport?
Because the earlier chapters established that competitors are required for viability. Rivalry between clubs inside one competition is partly cooperative, since each needs the others to produce an uncertain contest, while rivalry between competitions, codes and leisure alternatives behaves normally.
An analysis that does not split the force will conclude that a league with many strong clubs faces intense rivalry and is therefore unattractive, which reverses the actual position.
How long should a PESTEL be in a written report?
Shorter than most students make it. Two headings analysed in depth, with a stated reason why they carry the decision, and four recorded in one sentence each as scanned and immaterial. That format demonstrates the scan was complete, which is the reason for using the tool at all, and leaves the reader with a ranked judgement instead of six paragraphs of equal weight.
Assessment move
Practise the selection rather than the execution. Write down five different questions a sport organisation might face, one about capability, one about an external change, one about margin, one about direction and one about people, then name the tool each calls for and the reason the other two do not fit.
Choosing correctly is most of the marks in a strategic section, and it is the part that is never practised because performing a SWOT feels more like work.
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