Strategic Management Fundamentals

UNIT-1
INTRODUCTION OF STRATEGIC
MANAGEMENT
GOURAV SISODIA PGDM(2017-
2019)

WHAT IS STRATEGY
• STRATEGY IS THE DETERMINATION OF THE LONG TERM GOALS AND OBJECTIVES OF AN ENTERPRISE AND
THE ADOPTION OF THE COURSES OF ACTION AND THE ALLOCATION OF RESOURCES NECESSARY FOR
CARRYING OUT THESE GOALS.
2019)

TYPES OF STRATEGY
• CORPORATE LEVEL
• BUSINESS UNIT LEVEL
• FUNCTIONAL LEVEL
2019)

WHAT IS STRATEGIC MANAGEMENT
• STRATEGIC MANAGEMENT IS DEFINED AS THE ART AND SCIENCE OF FORMULATION, IMPLEMENTING, AND
EVALUATING CROSS-FUNCTIONAL DECISIONS THAT ENABLE THE ORGANISATION TO ACHIEVE ITS
OBJECTIVES.
• IT DEALS WITH THE ORGANISATIONAL LEVEL AND TOP LEVEL ISSUES WHEREAS FUNCTIONAL LEVEL
MANAGEMENT DEALS WITH THE SPECIFIC AREAS OF THE BUSINESS.
2019)

PROCESS OF STRATEGIC MANAGEMENT
• GOAL SETTING
• ENVIRONMENTAL SCANNING
• STRATEGIC FORMULATION
• STRATEGIC IMPLEMENTATION
• EVALUATION AND CONTROL
2019)

IMPORTANCE OF STRATEGIC MANAGEMENT
• GOAL SETTING
• ESTABLISH POLICIES
• DEVELOPING STRATEGY
• PLAN THE ORGANISATIONAL STRUCTURE
• TO SHAPE THE FUTURE OF BUSINESS
• MANAGERS AND EMPLOYERS ARE CREATIVE AND INNOVATIVE
• MAKE DISCIPLINE
• MAKE CONTROL
2019)

TEN SCHOOL OF THOUGHT IN STRATEGIC MANAGEMENT
• THE TEN SCHOOL OF THOUGHT MODEL FROM HENRY MINTZBERG IS A FRAMEWORK THAT CAN BE USED TO
CATEGORIZE THE FIELD OF STRATEGIC MANAGEMENT.
• IT DESCRIBES EACH SCHOOL IN CONTEXT AND PROVIDES A CRITIQUE. THUS, IT ACTS AS A VERY GOOD
OVERVIEW TO THE ENTIRE FIELD OF STRATEGIC MANAGEMENT
2019)

TEN SCHOOL OF THOUGHT IN STRATEGIC
MANAGEMENT
• DESIGN
• PLANNING
• POSITIONING
• ENTREPRENEURIAL
• COGNITIVE (MENTAL PROCESS)
• LEARNING
• POWER
• CULTURAL
• ENVIRONMENTAL
• CONFIGURATION
2019)

STRATEGY CONTENT
• IT IS CONCERNED WITH THE EMERGENCE OF ORGANISATION STRATEGY THAT CONSTITUTES A BLUE PRINT
OF DESIRABLE ACTIONS THAT THE ORGANISATION SHOULD HAVE TAKE TO SECURE ITS FUTURE.
• IT IS THE OUTPUT OF THE STRATEGY FORMULATION PROCESS
• IT IS ALSO THE INPUT TO THE IMPLEMENTATION PROCESS
2019)

ROLE OF STRATEGIC MANAGEMENT
• FRAMEWORK FOR OPERATIONAL PLANNING
• CLARITY IN DIRECTION OF ACTIVITIES
• INCREASE ORGANISATIONAL EFFECTIVENESS
• PERSONNEL SATISFACTION
2019)

THE FIT CONCEPT OF STRATEGIC MANAGEMENT
OR 7’S FRAMEWORK GIVEN BY MCKINSEY
• STRATEGY
• STRUCTURE
• SYSTEM
• STYLE
• STAFF
• SHARED VALUES
• SKILLS
2019)

DIMENSIONS OF STRATEGIC MANAGEMENT
• STRATEGIC ISSUES REQUIRE TOP-MANAGEMENT DECISIONS
• STRATEGIC ISSUES INVOLVE THE ALLOCATION OF LARGE AMOUNTS OF COMPANY RESOURCES
• STRATEGIC ISSUES ARE LIKELY TO HAVE SIGNIFICANT IMPACT ON THE LONG-TERM PROSPERITY OF THE FIRM
• STRATEGIC ISSUES ARE FUTURE ORIENTED
• STRATEGIC ISSUES USUALLY HAVE MAJOR MULTIFUNCTIONAL OR MULTI-BUSINESS CONSEQUENCES
• STRATEGIC ISSUES NECESSITATE CONSIDERING FACTORS IN THE FIRM'S EXTERNAL ENVIRONMENT.
2019)

UNIT-2
STRATEGY INTENT
2019)

WHAT IS STRATEGY INTENT
• STRATEGIC INTENT CAN BE UNDERSTOOD AS THE PHILOSOPHICAL BASE OF STRATEGIC MANAGEMENT
PROCESS.
• IT IMPLIES THE PURPOSE, WHICH AN ORGANIZATION ENDEAVOUR OF ACHIEVING.
• IT IS A STATEMENT, THAT PROVIDES A PERSPECTIVE OF THE MEANS, WHICH WILL LEAD THE
ORGANIZATION, REACH THE VISION IN THE LONG RUN
2019)

HIERARCHY OF STRATEGIC INTENT
• VISION
• MISSION
• GOALS
• OBJECTIVES
• PLANS
2019)

VISION
• IT IS REALISTIC, CREDIBLE AND ATTRACTIVE FUTURE FOR AN ORGANISATION
• VISION MUST BE BASED ON REALITY TO BE MEANINGFUL FOR AN ORGANISATION
• VISION MUST BE ATTRACTIVE AS TO INSPIRE AND MOTIVATE THE ORGANISATION.
• VISION IS ALWAYS FOR FUTURE
2019)

BENEFITS OF VISION
• GOOD VISIONS ARE INSPIRING
• COMPETITIVE
• ORIGINAL
• UNIQUE
• RISK TAKING
• LONG TERM THINKING
• INTEGRITY
2019)

DEVELOPING A VISION
IT IS LIKE CONVERTING DREAM INTO REALITY
• CONDUCTING VISION AUDIT
• TARGETING THE VISION
• SETTING VISION CONTEXT
• DEVELOPING FUTURE SCENARIOS
• GENERATING THE ALTERNATIVE VISIONS
• CHOOSING THE FINAL VISION
2019)

MISSION
• IT IS DEFINED A FUNDAMENTAL UNIQUE PURPOSE THAT SETS A BUSINESS APART FROM OTHERS FORMS
OF ITS TYPE AND IDENTIFIES ITS SCOPE OF ITS OPERATIONS IN PRODUCT AND MARKET TERMS.
• IT IS A STATEMENT WHICH DEFINES THE ROLE THAT ORGANISATION PLAYS IN SOCIETY
2019)

CHARACTERISTICS OF MISSION
• IT SHOULD BE FEASIBLE
• IT SHOULD BE PRECISE
• IT SHOULD BE CLEAR
• IT SHOULD BE MOTIVATING
• IT SHOULD BE DISTINCTIVE
• IT SHOULD INDICATE THE MAJOR COMPONENT OF STRATEGY
• IT SHOULD INDICATE HOW OBJECTIVES ARE TO BE ACCOMPLISHED
2019)

DIFFERENCE BETWEEN VISION AND MISSION
• VISION IS FORWARDING LOOKING AND MISSION STATES WHAT ORGANISATION IS AND WHY IT EXISTS
• VISION EMPHASIS ON LONG TERM CONCEPT WITH VERY HIGH LEVEL OF ACHIEVEMENT AND MISSION
DEALS WITH PRODUCTS, SERVICES OFFERS, WAY THESE ARE OFFERED.
2019)

BUSINESS DEFINITION
• IT IS CLEAR CUT STATEMENT OF THE BUSINESS OR A SET OF BUSINESS THE ORGANISATION ENGAGE IN
PRESENTLY OR WISHES TO PURSUE IN FUTURE. THEN IT PRESCRIBES THE AREA IN WHICH THE
ORGANISATION WILL PLAY COMPLETE.
• IT HAS THREE DIMENSION
a) PRODUCT
b) CUSTOMER
c) TECHNOLOGY
2019)

CONCEPT OF STRETCH
STRETCH IS A MISFIT BETWEEN RESOURCES AND ASPIRATIONS.
• NEW IDEAS
• MAKE THE MOST OF LIMITED RESOURCES
• STRIVE FOR THE IMPOSSIBLE
2019)

LEVERAGE
• LEVERAGE IN STRATEGIC BUSINESS TERM MEANS ENHANCING THE FIRM RESOURCES AND CAPABILITIES
TO INCREASE ITS COMPETITIVE ADVANTAGE
2019)

GOALS AND OBJECTIVES
• GOALS DENOTE WHAT AN ORGANISATION HOPES TO ACCOMPLISH IN A FUTURE PERIOD OF TIME. THEY
REPRESENT THE FUTURE PERIOD OF TIME. THEY REPRESENT THE FUTURE STATE OF OUTCOME OF EFFORT
PUT IN NOW
• OBJECTIVES ARE THE ENDS THAT STATE SPECIFICALLY HOW THE GOALS SHALL BE ACHIEVED. THEY ARE
CONCRETE AND SPECIFIC IN CONTRAST TO GOALS THAT ARE GENERALISED.
2019)

FEATURES OF GOALS AND OBJECTIVES
• SMART
a) S-SPECIFIC
b) M-MEASURABLE
c) A-ATTAINABLE
d) R-RELEVANT
e) T-TIME BOUND
• DUMB
a) D-DOABLE (WITHIN POWERS)
b) U-UNDERSTANDABLE
c) M-MANAGEABLE
d) B-BENEFICIAL
2019)

ISSUES IN OBJECTIVE SETTING
• SPECIFICITY
• MULTIPLICITY
• PERIODICITY
• VERIFIABILITY
• REALITY
• QUALITY
2019)

BALANCED SCORECARD APPROACH
THE BALANCED SCORECARD IS A STRATEGIC PLANNING AND MANAGEMENT SYSTEM USED TO ALIGN
BUSINESS ACTIVITIES TO THE VISION AND STRATEGY OF THE ORGANISATION BY MONITORING
PERFORMANCE AGAINST STRATEGIC GOALS.
2019)

WHY USE A BALANCED SCORECARD
• IMPROVES ORGANISATIONAL PERFORMANCE
• INCREASE FOCUS ON STRATEGY AND RESULTS
• IMPROVE COMMUNICATION
• FOCUS ON FUTURE PERFORMANCE
2019)

2019)

WHAT IS ENVIRONMENT
• ENVIRONMENT MEANS THE SURROUNDINGS, EXTERNAL OBJECTS, INFLUENCES UNDER WHICH SOMEONE
EXISTS.
• THE ENVIRONMENT OF ANY ORGANISATION IS THE AGGREGATE OF ALL CONDITIONS, EVENTS AND
INFLUENCES THAT SURROUND AND AFFECT IT
2019)

CHARACTERISTICS OF ENVIRONMENT
• COMPLEX
• DYNAMIC
• MULTI-FACETED
• FAR REACHING IMPACT
2019)

INTERNAL AND EXTERNAL ENVIRONMENT
• INTERNAL ENVIRONMENT REFERS TO ALL FACTORS WITHIN AN ORGANISATION THAT IMPACT STRENGTHS
OR CAUSE WEAKNESS OF A STRATEGIC NATURE
• EXTERNAL ENVIRONMENT REFERS TO INCLUDES ALL THE FACTORS OUTSIDE HE ORGANISATION WHICH
PROVIDE OPPORTUNITIES OR POSE THREATS TO THE ORGANISATION
2019)

INTERNAL AND EXTERNAL ENVIRONMENT
• INTERNAL ENVIRONMENT
A. STRENGTH
B. WEAKNESS
• EXTERNAL ENVIRONMENT
A. OPPORTUNITIES
B. THREAT
2019)

SWOT ANALYSIS
• SWOT ANALYSIS EVOLVED DURING THE 1960’S AT STANFORD RESEARCH INSTITUTE IS A VERY POPULAR
STRATEGIC PLANNING TECHNIQUE HAVING APPLICATIONS IN MANY AREAS INCLUDING MANAGEMENT
• SWOT ANALYSIS IS A STRATEGIC PLANNING TECHNIQUE USED TO HELP A PERSON OR ORGANIZATION
IDENTIFY THE STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS RELATED TO BUSINESS
COMPETITION OR PROJECT PLANNING
2019)

BENEFITS OF SWOT ANALYSIS
• SIMPLE TO USE
• LOW COST
• FLEXIBLE
• LEADS TO CLARIFICATION OF ISSUE
• DEVELOPMENT OF GOAL ALTERNATIVE
• USEFUL AS A STARTING POINT FOR STRATEGIC ANALYSIS
2019)

MICRO AND MACRO ENVIRONMENT
MICRO ENVIRONMENT
• SUPPLIER
• CUSTOMER
• COMPETITORS
• MARKET INTERMEDIARIES
MACRO ENVIRONMENT
• ECONOMIC FACTOR
• POLITICAL FACTOR
• TECHNOLOGICAL FACTOR
• LEGAL FACTOR
• SOCIO-CULTURAL FACTOR
2019)

PESTLE ANALYSIS
• A PESTEL ANALYSIS IS A FRAMEWORK OR TOOL USED BY MARKETERS TO ANALYSE AND MONITOR THE
MACRO-ENVIRONMENTAL (EXTERNAL MARKETING ENVIRONMENT) FACTORS THAT HAVE AN IMPACT ON
AN ORGANISATION. THE RESULT OF WHICH IS USED TO IDENTIFY THREATS AND WEAKNESSES WHICH IS
USED IN A SWOT ANALYSIS.
2019)

PESTEL STANDS FOR
• P – POLITICAL
• E – ECONOMIC
• S – SOCIAL
• T – TECHNOLOGICAL
• E – ENVIRONMENTAL
• L – LEGAL
2019)

ENVIRONMENTAL SCANNING
• ENVIRONMENTAL SCANNING IS A PROCESS OF GATHERING, ANALYSING , AND DISPENSING INFORMATION
FOR TACTICAL OR STRATEGIC PURPOSES. THE ENVIRONMENTAL SCANNING PROCESS ENTAILS OBTAINING
BOTH FACTUAL AND SUBJECTIVE INFORMATION ON THE BUSINESS ENVIRONMENTS IN WHICH A
COMPANY IS OPERATING OR CONSIDERING ENTERING.
2019)

APPROACHES OF ENVIRONMENTAL SCANNING
• AD-HOC APPROACH
• REGULAR APPROACH
• PROCESSED FORM APPROACH
2019)

SOURCES OF ENVIRONMENTAL SCANNING
• DOCUMENTARY
• MASS MEDIA
• INTERNAL SOURCES
• EXTERNAL AGENCIES
• FORMAL STUDIES
• SPYING AND SURVEILLANCES
2019)

Strategic Management Fundamentals

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