AUTHOR NAME: SHAZILA ANDLEEB

ARTICLE ON : STRATEGIC MANAGEMENT

DISCUSSION ON THE NEED FOR STRATEGIC MANAGEMENT IN A COMPETITIVE BUSINESS ENVIRONMENT?

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Presentation

Key administration is both the procedure and rationality for deciding and controlling the authoritative relationship in its the earth. As a procedure, it endeavors to characterize methodologies and procedures to aid administration adjust to the dynamic of today, through the utilization of targets and methods. Key administration attempts to accomplish compelling and effective projects to perform the association's mission. As a rationality, it changes how director takes a gander at contenders, clients, markets and even the association itself. Its target is to empower administration's attention to the key ramifications of ecological occasions and interior choice.

Lawrence and William (1988) characterized key administration as a stream of choices and movements, which prompts the improvement of a viable methodology or procedures to help attain corporate destinations. The key administration methodology is the path in which strategists focus targets and settle on vital choices.

Strategic administration's principle center is the accomplishment of hierarchical objectives looking into the inner and outside ecological components.

Watchman (1985) contends that the quintessence of forming thorough technique is relating an organization to nature's turf. Vital administration allows the deliberate administration of progress. It empowers association to intentionally assemble assets towards a sought future.

Chandler (1962) likewise placed that any successful fruitful technique is reliant on structure, along these lines to attain any compelling budgetary execution the association needs to adjust its structure.

The destination of this paper is to inspect the calculated and hypothetical methodology of key administration on the execution of business association.

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The destinations of the paper are:

i. To inspect the essentialness and importance of key administration in an association.

ii. To inspect the viability of key administration.

iii. To perceive how key administration impact execution of the business association.

Foundation to key administration improvement

Truly, vital administration is a moderately youthful subject. It has its establishes in the financial and social speculations of the 1930s and 1940s - maybe considerably prior. Yet it just truly started to rise as a different theme in the 1960s and 1970s. Indeed today, there is just incomplete agreeement on the key standards of key administration with numerous perspectives, plans and ideas. This makes the theme intriguing and testing.

Prescriptive Strategy Processes

A prescriptive procedure is one whose target is characterized ahead of time and whose fundamental

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components have been created before the method begins.' This full run of exercises is known as the prescriptive methodology process. There are various method hypotheses that demonstrate components of this methodology inside prescriptive technique and these are highlighted in the model above right.

Emergent Strategy Processes

A rising system does not have the same settled goal. The entire methodology is more trial with different conceivable conclusions relying upon how matters create.

Dissecting assets and capacities

Any association wanting to go outside its home nation needs to consider its assets. Global and worldwide movement will extend the assets of numerous associations, even those that are as of now profoundly included universally. This film sets out a structure for examining the current vital global or worldwide position of the association - critical for those arranging future universal movement.

Prescriptive reason conveyed through mission, targets and morals

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Since global extension has both profits and expenses, it is key to characterize obviously the general explanations behind universal and worldwide development - generally the expenses may be more amazing than the profits! This feature gives structures a percentage of the issues that need to be investigated when setting universal and worldwide destinations.

Reason rising up out of learning, innovation and advancement

Advancement is regularly significant to effective worldwide and worldwide development. Be that as it may there is no 'enchantment recipe' for this conclusion. This implies that basically characterizing the reason as far as some unbending global goals is exceedingly prone to come up short. There requirements to be a more open-finished and trial methodology to the entire procedure of moving comprehensively. This is well on the way to emerge from investigating information and engineering nearby the advancement process itself. The part clarifies the primary issues and sets out a percentage of the key ways that development could be administered to attain universal achievement.

Building key choices at the business level

Any association arranging worldwide and worldwide development will have countless - maybe by bringing down its expenses, maybe by a joint wander or a procurement. The part serves to structure the procedure of creating choices for an individual business range.

Picking between key alternatives

In the wake of creating technique alternatives, the following sensible step is to pick between them - whether for an association in one nation or an association arranging universal development. The part gives a legitimate and organized method for selecting the best choice (or alternatives in a few cases). This is an essential venture in creating a worldwide or worldwide system for an association from a prescriptive procedure point of view.

Discovering the Strategic Route Forward

A significant number of the late victories in global and worldwide system have not hailed from prescriptive vital arranging - simply take a gander at Google and Facebook, for instance. This part investigates a few choices, centering especially on the Learning-based key course advance. The fundamental standards are the same for one nation or for a lot of people. Anyhow the included muddling of worldwide development makes such taking in technique much more crucial.strategic Management fifth Edition (and the prior releases under the title of Corporate Strategy) is one of the few course readings - conceivably even the one and only - to investigate this course in profundity .

Actualizing the system

Worldwide and Global systems need to be actualized. Anyhow how would you go about this assignment? What are the paramount components of such a methodology? This feature outlines a percentage of the fundamental issues, including a framework of the Balanced Scorecard.

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Overseeing Strategic Change

At the point when new worldwide and worldwide systems are created and presented, there are regularly individuals issues. Some individuals will like the techniques and help them while others will oppose changes that debilitate their parts and obligations. How would we oversee such open doors and issues? There is additional multifaceted nature in managing such issues on a worldwide or worldwide premise.

The corporate reason

The corporate reason alludes to the bigger objectives of the association. Going far past piece of the pie or productivity destinations, corporate reason alludes to that bringing together vision which offers intending to the business that the organization is included in.

The Economic Goals

Understanding the company's long haul investment objectives is the beginning stage in procedure detailing. As Pearce and Robinson rightly put it, three investment objectives must drive the method of any association – survival, gainfulness and development despite the fact that the relative stress may shift at distinctive purposes of the organization's lifecycle.

Vital Planning in cutting edge business

Reason characterizes why the organization exists. In any case intention is excessively general and elevated amount for most individuals in an association to appreciate completely. Vital arranging draws from the corporate reason to think of a significant blue print regarding characterizing the client segment(s), the items and administrations to be offered and how to offer these items and administrations. The character of vital arranging is to utilize the past to get a fix on what the organization is great at and how to power these qualities. It is likewise about picturing the future to comprehend where the organization is powerless and what it must do to beat these shortcomings.

In a quick paced environment described by Moore's law, quickly changing customer tastes and quick response time, key arranging has not gotten superfluous. The main distinction is that contrasted with past times worth remembering, arranging must be more adaptable and the arranging cycle must be much shorter. As opposed to being thrown in stone, the essential arrangement must experience update at short interims.

By and large, key arrangements hold the accompanying parts:

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involves looking around and collecting a wide range of data systematically. Data can be collected by any organization. The difference between the nimble and not-so-nimble organizations lies in the way the data is interpreted. Indeed, making sense of discrete data is probably an organization’s greatest strength today.

Planning for uncertaintyStrategic planning in uncertain situations, poses special challenges. If the prevailing uncertainty is not properly considered, the firm might end up facing threats it is ill equipped to deal with. At the other extreme, the firm may show too much caution and not exploit opportunities that have the potential to yield excellent returns. Many companies take strategic decisions relying totally on their gut instincts during times of uncertainty. Intuition is useful but has to be backed with some numbers for strategic planning to be effective. Here we cover some tools available to deal with uncertain situations where hard numbers may not be available and various assumptions have to be made.

Real Options as a planning toolIn the real world, the demand for a product and the price which it can command are uncertain. So, there is considerable uncertainty about the cash flows which will be generated. How do we decide which project should be taken up? Martha Amram and Nalin Kulatilaka1 suggest the use of real options while evaluating a project. Real options look at both the upside and downside when an investment is being planned. Thus, a timing option, in the form of a delayed expansion in capacity could create value in a situation of uncertain demand. Putting up a plant in an overseas market currently fed by exports may generate new growth options. An exit option in the form of a plant closure increases the value of the investment decision. By looking at strategic

1 Harvard Business Review, January – February, 1999.

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Regular scanning

Continuous scanning

Ad hoc scanning

decisions in terms of options and then using information from financial markets to value these options, planning can be more effective.

Developing strategic decision making skills

Having scanned the environment, companies must be able to take critical strategic decisions. In fast paced, intensively competitive markets, how can companies develop superior strategic decision making skills? According to Kathleen Eisenhardt, effective strategy formulation is about2:

Building collective intuition Encouraging healthy conflict Maintaining a pace so that decisions are taken within a stipulated time Defusing political behavior.

Operationalising the strategy and modernization

Annual objectives are used to break down long-range goals into what needs to be achieved during the year. So they must be focused, specific and measurable. Examples of annual objectives include: To reduce employee attrition by 10% by the end of the year. To reduce time from order receipt to order execution by 20% To increase the number of employees, who are Six Sigma Certified Black Belts by 30%

Functional strategies represent the action plans for the subunits of the company. Functional strategies outline how key functional areas like marketing, finance, operations, R&D and human resources must be managed. Functional strategies must be framed with respect to each key activity. For example, in the case of pricing, the following issues must be addressed:

a) What segment is being targeted – mass market or premium end of the market?b) How much of price discrimination should be practiced across customer segments?c) Is the cost structure aligned with the price?d) What kind of discount can be offered, given the cost structure?e) Should the price be above or below that of competitors?

Communication is an integral part of operationalising the strategy. Meetings, informal conversations, e-mails, and other communication channels can be used to communicate the importance of the company's strategy and the role of different groups in implementing it. Communication must focus on the following.

Rationale for the company's strategy. How the initiatives that are being carried out, support the corporate strategy. The implications if the plans are implemented successfully. The implications if the company fails to implement its plans.

2

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Over optimism

Underestimating the challenges involved

Loss aversion

Few investment proposals

Over confidence

Underestimating risks

Misaligned time horizon

Focus on incremental innovation

Misalignedrisk profile

Putting career over company

r ririsksrisks

Typical distortions in strategic decision making

The attitudes and behaviors expected from each person in the team.

Source: Charles Roxburgh, “Hidden flaws in Strategy,” McKinsey Quarterly, 2003 No.2,

Behavioral issues in strategic planning in competitive business

A competitive advantage is the distinct way in which an organization is positioned in the market to obtain an edge over its competitors. This status is most commonly evidenced by the organization’s ability to generate and maintain sustained levels of profitability above the industry average. The process that is primarily associated with helping an organization attain competitive advantage is strategic planning . This can be defined as a disciplined and systematic effort to develop, plan, and specify an organization’s strategy, as well as assigning responsibilities and resources for executing it.

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 A generic strategic planning process in modern business environment

Management decisions in the strategy development process are concerned with the

following:

The scope of the organization’s activities. The most overlooked element of strategy,

this addresses questions such as Where will we operate? What customers will we

target? Which competitors will we avoid or take on? What parts of the value chain

will we do ourselves, and what should we outsource?

Aligning an organization’s activities with its environment. This is the idea of finding

a strategy that creates a desirable level of “fit.” Environments often change, and

strategies must be dynamic and flexible to effectively address these changes.

Matching an organization’s activities to its resource capability. This requires

working within our means while winning customers and generating profits.

The implications of change throughout the organization. These are likely to be

complex in nature and will require excellence in execution or strategy

implementation.

Allocating and reallocating an organization’s significant resources. This requires us

to seek resource optimization in using our assets where they can be most highly

valued.

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The values, expectations, and goals of those influencing strategy. Decision-makers

understand what is happening and have a clear sense of where the organization

needs to go both now and in the future.

The direction in which the organization will move in the long run. This can be five to

ten years or more, depending on the natures of change, dynamism, and

competition affecting an industry.

The answer to these questions is no—especially not these days. what we do and do not

mean by analysis.

Defining Analysis

  What Analysis Is What Analysis Is Not

Methods The practiced application of proven

technologies. It combines science,

art, and craft.

Constant usage of industry

conventions and one-off

solutions. Using the same

things over and over again.

Process A method and planned set of steps

designed to effectively break a

situation into its component

elements and recompose it in a

way that addresses a challenge or

question.

Ad hoc. “We just kind of know

what it is and how to do it.

Fortunately, we have gotten by

so far,” “We just know these

things,” or “We hire pricy

consultants to do it for us.”

Output Actionable insight, intelligence,

meaning, and implications derived

from data and information. Future-

oriented, accurate, resource-

efficient, objective, useful, and

timely (FAROUT).

Synthesis in the form of

repackaged, reorganized,

reclassified data and

information. Often a “cut and

pasted” summary of the

information at hand. No

meaningful conversion.

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  What Analysis Is What Analysis Is Not

Data sources Legal and ethical gathering of data

or information, driven by the

client’s needs defined in the

structuring of the analytical

question. Sources and their

content are qualified and validated.

Seeking and using data or

information from illegal sources

or by unethical means, often

incomplete. Mostly “nice to

know” data that does not inform

or that clients already knew.

Support systems Using application-relevant

communication, information, and

management systems to

supplement your thinking.

A software application or

solution you can acquire and

apply off the shelf. Magic-bullet

solutions.

Timing Provided well in advance of any

decisions to be made. Early

warning.

Rushed to provide support to

an answer that has already

been decided. Too late.

Communication

channel

Conducted in whatever way the

decision-maker can best

understand and use it. Much face-

to-face and interactive discussion.

Done via “formal” reports with a

specific format.

Always in writing. Too much e-

mail and “push.”

Questions

answered

What?

So what?

Now what?

What then?

Huh?

What is this about?

Is there anything critical or new

here?

What can I take away or do

with this?

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  What Analysis Is What Analysis Is Not

Catalyst Forthcoming decisions. Yours or

your boss’s discussed needing to

know something. The need to

better position your organization in

its marketplace.

What you think or hope is

important to the executive. The

need to demonstrate that we

are actually doing something.

Our rivals are doing it, and so

should we.

INFORMATION AS A STRATEGIC RESOURCE

IMPACT ON COMPANY’S STRATEGY

Information impacts on all aspects of the organization: marketing, distribution, production, operations management, management economics, finance, public policy, industry dynamics, office automation, human resource management as shown on the

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Figure above. The wheel is spinning round and in its center is Information Resource Management. Information and communication technologies provide continuous information flow, which the organization should use in forming its corporate strategy and accomplishing its management activities in decision making.

Strategy has become an over-used and much-abused terms, being frequently made unnecessarily complicated. At a simple level, the following Figure captures the underlying and interrelated dimensions of any organization's strategy formulation and implementation: business opportunities, organizational competencies and governance (COG).

 

 Because of the quickly changing environment, the process of strategy formulation transforms from an apparently formal and systematic set of procedures for analysis and planning to an adhoc reaction by the senior management of an organization to perceived problems and information about them. In strategy formulation, managers must consider both information about internal and external forces.

 

  The context in which competitive strategy is formulated

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The opportunities and threats in the industry must be considered within the context of the organization's strengths and weaknesses, all of which cannot be divorced from the broader social setting and the leadership and vision of the key people for implementation.

.

Strategic management & the link to marketing in modern business

Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition.

Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).

The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.

Where does marketing planning fit in with the overall strategic planning of a modern business?

Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.

Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”.Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!).

Concluding notes

The classical views of strategy have focused on understanding industry structures and developing suitable capabilities to position the firm effectively in relation to competitors. But in today’s complex and changing environment, when the very boundaries of many industries are being constantly reshaped, does it make sense to try and understand the evolving industry

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structure? Are ad hoc short-term movements the only way to cope with the uncertain environment? Is long term strategic planning no longer relevant?

To strike a balance between speed and direction, two different time horizons are needed – a long term horizon for setting the direction and a short term horizon to focus on operational initiatives. Hagel and Seely Brown have come up with a frame work called FAST – Focus, Accelerate, Strengthen, Tie all together. Focus refers to long term positioning, and specialization and capability building in the chosen area of business. Accelerate means moving fast in the short term. Strengthen means removing road blocks that prevent faster movement in the short run. This includes building shared meaning and trust and making appropriate investments in information technology. Tie it all together means integrating these three components across networks of organizations to amplify learning and accelerate capability building. As they mention3: “The sequential approach of traditional strategies simply cannot generate the rapid learning and capability building that one from moving quickly back and forth between a very short-term operational horizon and a much longer term strategic horizon”.

REFERENCES

Source: Charles Roxburgh, “Hidden flaws in Strategy,” McKinsey Quarterly, 2003 No.2, Google search engine

BIBLIOGRAPHY:

1. Corporate Information Systems Management-J. Cash, F. McFarlan, J. McKenney2. Managing with Information-Jerome Kanter3. Information Acumen-Lisa Bud-Frierman, 19944. Information Resources Management-John Beaumont, Ewan Sutherland, 19955. Information Management-Blaise Cronin, 19946. Management Information Systems-Terry Lucey, 19967. Managing Information-Periodical, Moira Duncan 8. Internet –Information Resources Management Association

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