Problem: Strategic management (SM) is the art and science of implementing a course of action used to achieve goals and to monitor the progress of the chosen strategy. According to Richard D. Irwin (1995), there are five tasks associated with strategic management such as;
1. "Defining the business; stating a mission; and forming a strategic vision.
2. Setting measurable objectives.
3. Crafting a strategy to achieve goals.
4. Implementing and executing strategy
5. Evaluating performance, reviewing new developments, and initiating corrective adjustments." (Irwin, 1996).
The role of strategic management in the hospitality industry is to maintain a competitive advantage over competitors by remaining up-to-date with the current trends. Today's marketplace is rapidly changing; it is up to the hospitality organization to identify the needs of the consumer and to determine their needs based on the economic climate. For example, many organizations are currently out of business due to the current state of the economy (i.e. the recession); unfortunately they were unable to anticipate such a drastic downturn, resulting in a decrease in profitability and possible business closure. Organizations must pay close attention to the changing climate and develop a back-up plan for consumers who are not spending as much as they were before the recession.
A hospitality organization can work towards increasing revenue by formulating a pricing strategy that will attract more consumers. Most organizations perpetuate competitiveness by reducing their prices to become the retailer with the "lowest price in town," for example, Wal-Mart's Rollback advertisement; their organization prides themselves on having the lowest prices for household items and electronics.