Strategic management  is the means by which a business plans for its long term future. It is a process which establishes what success will look like in three to five year's time, analyzes the current state of the business and puts in place a road map to move the company from where it is now to where it needs to be.

There are three stages in the strategic management process. Stage one involves analysis of the context in which the business operates. A future search is undertaken to understand likely and predicted changes in industry, governments and society which will impact on the company or its products. This is combined with a current state analysis of the business operations and its ability to adapt and grow to meet the future challenges.

Stakeholders are included in the contextual analysis stage to ensure a complete picture of the future is achieved. Customers' views are an essential input to understanding the environment in which the business operates. Shareholders and investor's expectations of returns over the long term must also be built into calculations and predictions. Finally management and employee involvement is required to get true commitment to the change process which will be initiated by the planning process in stage two.

Once the future business environment is understood a strategic planning process is undertaken which sets out the vision for the future, establishes goals which will achieve the vision and assesses the risks and barriers which must be overcome or mitigated to achieve the vision.

The vision is translated into action in the third stage. Producing business plans is an iterative process combining top down (management) and bottom up (employee) participation. Specific objectives and strategies are developed in reference to the long term goals. The strategic plan is then linked to annual performance planning.

If annual planning is divorced from long term strategic targets the business will drift as managers chase incremental in year targets rather than milestones on the path to the vision. Linking the strategic plan to annual planning and performance ensures the day-to-day activities of the business are aligned to the longer term direction of the business.

In a rapidly changing business environment with growing global competition strategic management allows a business to take full advantage of fleeting competitive advantage and be forewarned of competitive threats. It is a cyclical and continuous undertaking which underpins the long term viability of the business.