5. The components of strategic management:
Broadly the components are subparts in the process
of strategic management.
Strategic position
1. Assessing the company’s external environment,
including both the competitive and general
contextual factors.( scanning the environment)
2. Formulating the company’s mission, vision,
philosophy and goals.( meeting cultural and stake
holder expectations)
3. Developing a company profile that reflects its
internal conditions and capabilities.( aligning
resources and strategic capability)
6. Strategic Choice
4. Identifying the most desirable options by evaluating
each option in light of the company’s mission.
( identifying the options)
5. Analyzing the company’s options by matching its
resources with the external environment. (evaluating
the options)
6.Selecting a set of long-term objectives and grand
strategies that will achieve the most desirable
options. (selecting the options)
7. Strategy implementation
7.Implementing the strategic choices by means of
budgeted resource allocations in which the matching
of tasks, people, structures, technologies and reward
systems is emphasized.
(organization structure and design)
(planning and allocating resources)
8.Developing annual objectives and short-term
strategies that are compatible with the selected set
of long-term objectives and grand strategies.
9.Evaluating the success of the strategic process as an
input for future decision- making.
(managing strategic change)
8. e.g. General Electric
Vision: to be no 1 or no 2 in any market that
they operate.
Strategic position:
to scout the landscape for any acquisition,
merger, divesture to improve its competitive
positioning in line with its resources and
strategic capability.
9. Strategic Choice :
Having identified the possible acquisition , move
at break neck speed to pre-empt competition
and acquire the same.
This will give a better competitive advantage.
Strategy Implementation :
1. Complete the acquisition.
2. Work for the successful integration of the
merged company and manage the strategic
change
10. Levels of strategy planning
In the hierarchy the three levels areCorporate level, the business level and
functional level.
Corporate
level : Strategies are
devised in an attempt to exploit the firm’s
distinctive competencies, by developing
long-term plans for business operations.
11. Corporate level strategy deals
basically with- the selection of the areas of business in which
the company is going to operate,
- the ways in which business will be integrated
and managed,
- the development of synergies by coordinating
and sharing different resources,
- and investment of financial resources across
units.
12. Business Level:
Business level strategy involves decisions
about the competitive position of a single
business unit. The managers at this level
translate the general statements of
corporate strategic planners into exact,
concrete functional objectives and
strategies for individual business divisions,
13. The goal of business level managers is to select,
enter and grow in the most profitable market
segment with the highest potential for growth.
This strategy is concerned with using generic
strategies such as cost leadership, differentiation
and focus to create competitive advantage.
14. Functional level :
This level consists of managers from geographic,
product and functional areas. They design short-term
strategies and fix annual objectives in different areas.
Functional level strategies address problems related
to the efficiency and effectiveness of production,
success of particular products and services in
increasing their market share, quality of customer
service.
They are quantifiable and operational in nature.
