Sales Management is the process of current exchanges of goods - and thus sales management forms an integral part of Marketing Management. A significantly broader meaning is assigned to sales management as it also encompasses managing the sales functions and the sales force. To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html This Slideshare is the sole Property of the Welingkar School of Distance Learning – Reproduction of this material , without prior consent, either wholly or partially will be treated as a violation of copyright.

1. STRATEGIC MANAGEMENT

2. Chapter 1 Page 1
STRUGGLE FOR EXISTENCE AND GROWTH
• RULES OF COMPETITION CHANGE
• INDUSTRY BOUNDRIES ARE REDRAWN
• NEW INDUSTRIES AND PRODUCTS ARE CREATED
• ESTABLISHED INDUSTRIES ARE REINVENTED

3. Chapter 1 Page 1
• COMPANIES MAY CHANGE THEIR
VISION
OBJECTIVES
STRUCTURE
PORTFOLIO OF BUSINESS
MARKETS AND COMPETITIVE STRATEGIES

4. Chapter 1 Page 3
• STRATEGIC MANAGEMENT IS A
BROADER TERM THAN CORPORATE
STRATEGY
• STRATEGIC MANAGEMENT
CONSISTS
OF CORPORATE STRATEGY AND
BUSINESS STRATEGY

5. Chapter 1 Page 3
STRATEGIC MANAGEMENT INVOLVES
DECISION - MAKING AND THE ACTIVITIES
WHICH
• HAVE WIDER RAMIFICATIONS
• HAVE A LONG TIME PERSPECTIVE
• USE CRITICAL RESOURCES TOWARDS
PERCEIVED OPPORTUNITIES AND THREATSNAUMES
PAINE AND

6. Chapter 1 Page 4
ESSENCE OF STRATEGY
DISTINCTIVELY DIFFERENT FROM
THE
COMPETITORS
PORTER, HAMEL, PRAHLAD

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A COMPANY CAN CONTROL
ITS OWN DESTINY
IF IT UNDERSTANDS HOW TO CONTROL
THE DESTINY OF
ITS INDUSTRY
HAMEL, PRAHLAD

8. Chapter 1 Page 5
TO CREATE THE FUTURE A COMPANY MUST
– CHANGE IN SOME FUNDAMENTAL WAY THE
RULES OF ENGAGEMENT IN A LONG STANDING
INDUSTRY
– REDRAW THE BOUNDARIES BETWEEN INDUSTRIES
– CREATE ENTIRELY NEW INDUSTRIES

9. Chapter 1 Page 7
STRATEGIC PLANNING
– TOP MANAGEMENT DETERMINES ORGANISATIONAL
OBJECTIVES,STRATEGIES NEEDED TO REACH THESE
OBJECTIVES
– TOP LEVEL ACTIONS NECESSARY TO IMPLEMENT THE
STRATEGY PROPERLY
TACTICAL PLANNING
– SHORT RANGE PLANNING THAT IS ORIENTED
TOWARDS OPERATIONS AND IS CONCERNED WITH
SPECIFIC AND SHORT RANGE DETAILS

10. Chapter 1 Page 8
STRATEGIC BUSINESS UNIT ( SBU )
( OPERATING DIVISION OF A FIRM )
• SERVES A DISTINCT PRODUCT
• SERVES A DISTINCT MARKET SEGMENT
• SERVES A DISTINCT GEOGRAPHICAL AREA
AND
FORMULATES OWN STRATEGIC DECISIONS WITHIN
CORPORATE GUIDELINES

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CLASSES OF DECISIONS
1. OPERATING DECISIONS
TO MAXIMISE THE EFFICIENCY OF THE FIRM’S RESOURCES
CONVERSION PROCESS
2. STRATEGIC DECISIONS
PERTAIN TO FUNDAMENTAL QUESTIONS IN WHAT BUSINESS
THE FIRM SHOULD BE IN AND HOW IT SHOULD BE IN ?
3. ADMINISTRATIVE DECISIONS
ORGANISE AND MOBILISE FOR THE IMPLEMENTATION OF THE
CORPORATE STRATEGY

12. Chapter 1 Page 11
STRATEGIC DECISIONS
KEY CHARACTERISTICS
1. DECISIONS CENTRALISED
2. PARTIAL IGNORANCE
3. DECISIONS NON REPETITIVE
4. DECISIONS NOT SELF REGENERATIVE

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OPERATING DECISIONS
KEY CHARACTERISTICS
• DECENTRALISED DECISIONS
• RISK AND UNCERTAINTY
• REPETITIVE DECISIONS
• LARGE VOLUME DECISIONS
• DECISIONS SELF REGENERATIVE

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ADMINISTRATIVE
KEY CHARACTERISTICS
• CONFLICT BETWEEN STRATEGY AND OPERATIONS
• CONFLICT BETWEEN INDIVIDUAL AND INSTITUTIONAL
OBJECTIVES
• STRONG COUPLING BETWEEN ECONOMIC AND SOCIAL
VARIABLES
• DECISIONS TRIGGERED BY STRATEGIC AND / OR
OPERATING PROBLEMS

15. Chapter 1 Page 11
STRATEGIC DECISIONS
KEY DECISIONS
• OBJECTIVES AND GOALS
• DIVERSIFICATION STRATEGY
• EXPANSION STRATEGY
• ADMINISTRATIVE STRATEGY
• FINANCE STRATEGY
• GROWTH METHOD
• TIMING OF GROWTH

16. Chapter 1 Page 11
ADMINISTRATIVE DECISIONS
KEY DECISIONS
• ORGANISATION
• STRUCTURE OF INFORMATION AUTHORITY AND
RESPONSIBILITY FLOWS
• STRUCTURE OF RESOURCES
CONVERSION, WORK FLOWS, DISTRIBUTION SYSTEMS ,
FACILITIES, LOCATION
• RESOURCE ACQUISITION AND DEVELOPMENT
FINANCING, FACILITIES AND EQUIPMENT, PERSONNEL, RAW
MATERIALS

17. Chapter 1 Page 11
OPERATING DECISIONS
KEY DECISIONS
• OPERATING OBJECTIVES AND GOALS
• PRICING AND OUTPUT LEVELS
• OPERATING LEVELS
– PRODUCTION SCHEDULES
– INVENTORY LEVELS
– WAREHOUSING ETC.
• MARKETING POLICIES AND STRATEGIES
• R & D POLICIES AND STRATEGY CONTROL

18. Chapter 1 Page 12
LEVELS OF STRATEGY
HAVING SEVERAL SBU’s
1. CORPORATE STRATEGY
DECIDES BUSINESS PORTFOLIO
2. SBU STRATEGY / BUSINESS STRATEGY /
COMPETITIVE STRATEGY
DECISION PERTAINING TO PRODUCT MIX
3. FUNCTIONAL STRATEGY
PRODUCTION, FINANCE, PERSONNEL, MARKETING, ETC

19. Chapter 1 Page 12
LEVELS OF STRATEGY
ENTERPRISES WHICH DO NOT HAVE SBU’s
1. CORPORATE STRATEGY
2. FUNCTIONAL STRATEGY

20. Chapter 1 Page 15
TESTS APPLIED TO IDENTIFY CORE COMPETENCIES
A CORE COMPETENCE SHOULD
1. PROVIDE POTENTIAL ACCESS TO A WIDE
VARIETY OF MARKETS
2. MAKE SIGNIFICANT CONTRIBUTION TO THE
PERCEIVED CUSTOMER BENEFIT OF THE END
PRODUCT
3. BE DIFFICULT FOR COMPETITORS TO IMITATE

21. Chapter 1 Page 16
CHARACTERISTICS OF GLOBAL LEADERS IN THEIR
ENVISIONING OF THE FUTURE
o STRATEGY INTENT
o AN OBSESSION WITH WINNING
o UNFETTERED BY THEIR RESOURCE
CONSTRAINTS

22. Chapter 1 Page 17
STRATEGIC INTENT IS MORE THAN SIMPLY UNFETTERED AMBITION
ACTIVE MANAGEMENT :
FOCUSES THE ORGANISATION’S ATTENTION ON THE ESSENCE
OF WINNING
MOTIVATES PEOPLE BY COMMUNICATING THE VALUE OF THE
TARGET
LEAVES ROOM FOR INDIVIDUAL AND TEAM CONTRIBUTION
SUSTAINS ENTHUSIASM BY PROVIDING NEW OPERATIONAL
DEFINITIONS AS CIRCUMSTANCES CHANGE
USES INTENT CONSISTENTLY TO GUIDE RESOURCES
ALLOCATIONS

23. Chapter 1 Page 18
JAPENESE COMPANIES WHICH HAD FAR
LIMITED RESOURCES THAN THE
EASTERN COMPANIES HAVE BECOME GLOBAL
LEADERS BECAUSE OF THEIR
STRATEGIC INTENT THAT STRETCHED THEIR
ORGANISATION

24. Chapter 1 Page 18
APPROACHES TO STRATEGY MAKING
ON THE BASIS OF THE STRATEGIC MANAGEMENT
PROCESS AND NATURE OF RELATIONSHIP
BETWEEN THE CORE COMPONENTS OF THE
STRATEGIC MANAGEMENT
1. PRESCRIPTIVE APPROACH
2. EMERGENT APPROACH

25. Chapter 1 Page 19
PRESCRIPTIVE AND EMERGENT APPROACHES
BOTH THE APPROACHES RECOGNISE THE CORE COMPONENTS
1. STRATEGIC ANALYSIS
( CONSISTING OF SWOT ANALYSIS AND DETERMINATION OF MISSION
AND OBJECTIVES )
2. STRATEGY DEVELOPMENT
( EVALUATION OF STRATEGIC ALTERNATIVES AND CHOICE OF
STRATEGY )
3. IMPLEMENTATION

26. Chapter 1 Page 22
APPROACHES TO STRATEGY MAKING
MINTZBERG HAS IDENTIFIED 3 MODES OR APPROACHES
1. ENTREPRENEURIAL MODE
2. ADAPTIVE MODE
3. PLANNING MODE

27. Chapter 1 Page 22
IN LARGE ORGANIZATIONS
• BOARD OF DIRECTORS
• GENERAL MANAGERS
• CORPORATE PLANNING STAFF
• EXTERNAL CONSULTANTS
MAY PLAY A ROLE IN STRATEGIC PLANNNING

28. Chapter 1 Page 23
BOARD OF DIRECTORS
THE ULTIMATE LEGAL AUTHORITY IN THE BUSINESS
THEY ARE RESPONSIBLE
TO THE STOCKHOLDERS
MANAGERS TAKE PRUDENT ACTIONS REGARDING
CORPORATE OBJECTIVES
APPROVING MAJOR FINANCIAL AND OPERATIONAL
DECISIONS
REPRESENTING THE COMPANY WITH OTHER
ORGANISATIONS
MAINTAINING , REVISING AND ENFORCING THE CORPORATE
CHARTER AND BYLAWS

29. Chapter 1 Page 23
THE BOARD AS A WHOLE
RESPONSIBLE
TO
INITIATE DISCUSSION , AGREE AND UNDERWRITE THE
CORPORATION’S STRATEGIC PLANS
ENSURE ITS IMPLEMENTATION THROUGH AGREED
OPERATIONAL PLANS
INDIVIDUAL EXECUTIVE DIRECTORS ARE RESPONSIBLE
AND ACCOUNTABLE TO MEET THE TARGETS FOR SPECIFIC
BUSINESSES UNDER THEIR CONTROL
Dr. A.S GANGULY
CHAIRMAN ICI INDIA LTD.

30. Chapter 1 Page 24
ON ANY COMPANY’S BOARD THERE SHOULD BE
SOME INDEPENDENT , PROFESSIONALLY QUALIFIED
NON – EXECUTIVE DIRECTORS
REGULAR RETIREMENT POLICY FOR NON - EXECUTIVE
DIRECTORS
( THIS IS AN ESSENTIAL PART OF CORPORATE GOVERNANCE )

31. Chapter 1 Page 25
STRATEGIC MANAGEMENT IS A
GENERAL MANAGEMENT FUNCTION
GENERAL MANAGERS ARE THE TOP EXECUTIVES OF
THE ENTERPRISE & SBUS
• RESPONSIBLE FOR THE SURVIVAL AND
SUCCESS OF THE ENTERPRISE

32. Chapter 1 Page 25
GENERAL MANAGER
• ENTREPRENEUR ……………. ………. ( SETS GOALS )
• STRATEGIST ………………………….. ( PLANS )
• ORGANISATION BUILDER ………….. ( ORGANISES )
• LEADER ……………………………… ( DIRECTS )
• CHIEF IMPLEMENTER ………………. ( ONTROLS )
THE TASK IS TO LEAD THE FIRM OR SBU
JAUCH AND GULECK

33. Chapter 1 Page 25
“THERE CAN AND WILL BE NO EFFECTIVE FORMAL
STRATEGIC PLANNING IN AN ORGANISATION IN
WHICH THE CHIEF EXECUTIVE DOES NOT GIVE IT
FIRM SUPPORT AND MAKE SURE THAT OTHERS IN
THE ORGANISATION UNDERSTAND HIS DEPTH OF
COMMITMENT”
GEORGE STEINER

34. Chapter 1 Page 26
STRATEGIC MANAGEMENT PROCESS HAS THREE
PHASES INVOLVING A NUMBER OF SYSTEMATIC
STEPS
1. STRATEGY FORMULATION
2. IMPLEMENTATION
3. EVALUATION AND CONTROL

35. Chapter 1 Page 27
FORMULATION CONSIDERATION
SWOT
OF MISSION & OF STRATEGIC
ANALYSIS
OBJECTIVES ALTERNATIVES
EVALUATION CHOICE OF
IMPLEMENTATION
AND CONTROL STRATEGY
STRATEGIC MANAGEMENT PROCESS

36. Chapter 1 Page 27
“THE ART AND SCIENCE OF FORMULATING ,
IMPLEMENTING AND EVALUATING CROSS -
FUNCTIONAL DECISIONS THAT ENABLE AN
ORGANISATION TO ACHIEVE ITS OBJECTIVES”.
STRATEGIC MANAGEMENT

37. Chapter 1 Page 28
TERM “STRATEGIC” ( IN STRATEGIC MANAGEMENT )
MEANS
“PERTAINING TO THE RELATION BETWEEN THE
FIRM AND ITS ENVIRONMENT”

38. Chapter 1 Page 29
ASSESSING THE SUITABILITY OF THE STRATEGY
1. DOES IT -- CONFORM WITH CORPORATE – PHILOSOPHY ?
2. DOES IT -- ACCOMPLISH THE MISSION AND OBJECTIVES ?
3. DOES IT -- EXPLOIT ORGANIZATIONAL STRENGTHS AND
ENVIRONMENTAL OPPORTUNITIES ?
4. DOES IT -- COMBAT ENVIRONMETAL THREATS AND
OVERCOME INTERNAL WEAKNESSES ?
5. IS THE STRATEGY CONSISTENT ?

39. Chapter 1 Page 31
STRATEGIC MANAGEMENT FACILITATES
• BETTER DELEGATION
• COORDINATION
• MONITORING
• PERFORMANCE EVALUATION AND CONTROL

40. Chapter 1 Page 32
CRITICISM AGAINST STRATEGIC MANAGEMENT
1. SOMETIME MAKES THE ORGANIZATOIN OVER AMBITIOUS AND
THE RESULTANT FAILURE --- CAUSE FRUSTRATION
2. MAKES THE FUTURE VISION TUNNELED THAT SEVERAL
OPPORTUNITIES MAY BE OVERLOOKED
3. IT MAKES THE WHOLE APPROACH VERY RIGID

41. Chapter 1 Page 33
EFFECTIVE IMPLEMENTATION OF STRATEGY
DEMANDS
1. RESOURCE ALLOCATION
2. LEADERSHIP IMPLEMENTATION
3. RIGHT STRUCTURE
4. EFFECTIVE EVALUATION AND CONTROL

42. Chapter 1 Page 34
ACCORDING TO PETER DRUCKER STRATEGIC
PLANNING
• IT IS NEITHER A BOX OF TRICKS NOR A BUNDLE OF
TECHNIQUES
• IT IS NEITHER FORECASTING NOR MASTERMINDING THE
FUTURE
• IT DOES NOT DEAL WITH THE FUTURE DECISIONS
• IT NEITHER ELIMINATES RISK NOR MAKES AN ATTEMPT TO
MINIMISE RISK

43. Chapter 1 Page 34
PRINCIPLES OF GOOD STRATEGY
• A GOOD STRATEGY IS CONCERNED WITH THE STRUCTURAL
EVOLUTION OF THE INDUSTRY, AND FIRMS OWN UNIQUE
POSITION WITHIN THAT INDUSTRY.
• A GOOD STRATEGY MAKES THE COMPANY DIFFERENT
INVOLVING THE DELIVERY OF A PARTICULAR MIX
OF VALUE.
• ACOMPANY HAS GOT TO BE DIFFERENT IN WAYS THAT
INVOLVE TRADE-OFFS.AND MUST BE INCONSISTENT WITH
DELIVERING OTHER TYPES OF VALUES.

44. Chapter 1 Page 35
ENVIRONMENTAL CHANGES THAT HAVE INCREASED
THE RELEVANCE OF STRATEGIC MANAGEMENT
ABOLITION OF PUBLIC SECTOR MONOPOLY
DELICENSING HAS REMOVED BARRIER ON ENTRY AND
GROWTH.
SCRAPPING OF MOST OF THE MRTPA RESTRICTIONS ON
ENTRY, GROWTH AND M & A s
LIBERALISATION IN OTHER COUNTRIES, THE EXPANDING
FOREIGN MARKETS
GRANT OF MORE AUTONOMY TO THE PUBLIC SECTOR
ENTERPRISE

45. Chapter 1 Page 36
LIBERALIZATION ON
INDUSTRIAL POLICY
IMPORTS
MRTPA
POSING SURGING THREATS TO MANY EXISTING BUSINESSES

46. Chapter 1 Page 37
THE ESSENTIAL CHARACTERISTICS OF TQM ARE
A CUSTOMER – DRIVEN DEFINITION OF QUALITY
STRONG QUALITY LEADERSHIP
EMPHASIS ON CONTINUOUS IMPROVEMENT
RELIANCE ON FACTS, DATA , AND ANALYSIS
ENCOURAGEMENT OF EMPLOYEES PARTICIPATION

47. Chapter 1 Page 38
SUCCESSFUL IMPLEMENTATION OF TQM LEADS TO
CUSTOMERS LOYALTY
ORGANIZATION RESPONDING TO PROBLEMS , NEEDS AND
OPPORTUNITIES
ENCOURAGES TEAM WORK AND MAKES WORK MORE
SATISFYING
DEVELOPMENT OF GENERAL ETHIC OF CONTINUOUS
IMPROVEMENT

48. Chapter 1 Page 39
TQM FORCES TO INCLUDE INTO THE PROCESS OF
FORMULATING STRATEGY
CUSTOMER’S PERSPECTIVE
COMPETITOR’S PERSPECTIVE
SUPPLIER’S PERSPECTIVE

49. Chapter 1 Page 39
CARDINAL PRINCIPLE OF TQM
CUSTOMER NEEDS
CUSTOMER PREFERENCES

50. Chapter 1 Page 40
A TOTAL QUALITY MANAGEMENT INITIATIVE
AFFECTS EVERY STEP IN THE STRATEGIC
MANAGEMENT PROCESS
IT FOCUSSES
1 FIRM’S ENVIRONMENTAL ANALYSIS
2. ORGANISATION’S VISION AND MISSION
3. KEEPING OBJECTIVES TIED SECURELY TO CUSTOMER’S
NEEDS