An introduction

Strategy and Strategic Management

Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:

"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

STRATEGY…….

Direction: Where is the business trying to get Scope: Which markets should a business

compete in/ what kind of activitiesResources: What resources (skills, assets,

finance, relationships, technical competence, facilities) are required

Market : Local or internationalEnvironment: What external, environmental

factors affect Stakeholders: What are the values and

expectations

STARTEGY….

A plan is an arrangement, a pattern, a program, or a scheme for a

definite purpose. A plan is very concrete in nature and doesn’t

allow for deviationA strategy, on the other hand, is a blueprint,

layout, design, idea used to accomplish a specific goal. A strategy is very flexible and open for

adaptation and change when needed.

Plan Versus Strategy

Plan – of actionPattern – emerges out of actionPosition – defines firm’s place in marketPloy – a tactic or a maneuverPerspective – a vision or a direction

Mintezberg’s Five Ps of Strategy

Globalization – technology drivenBoundryless OrganisationsChanging socio cultural dynamicsRising consumerismEscalating competitionNeed for multipronged planningRise of Strategic management

Strategic management – the need

Three Perspectives on SM

TraditionalPerspective

Resource-BasedView(RBV)

StakeholderView

Origin Economics, otherbusiness disciplines,

Economics,distinctivecompetencies,

Business ethics and social responsibility

View of Firm

An economic entity

A collection ofresources, skills, andabilities

A network ofrelationships amongthe firm and itsstakeholders

Competitive advantage

Situation analysisof internal and externalenvironmentsleading to formulation of mission andstrategies

Possession ofresources, skills, andabilities that arevaluable, rare, inimitable

Superior linkageswith stakeholdersleading to trust,goodwill, reduceduncertainty,

Process of strategic managment The Strategic Planning Process Vision and Mission |

V Objectives |

V Situation Analysis |

V Strategy Formulation |

V Implementation |

V Control

Identification, prioritization and exploitation of resources

Forward thinkingChange orientationResource utilizationCoordination communication and controlFacilitates Decision makingCulminates in organisational integrationEstablishes positive culture

Benefits of Strategic Managment

Hasty implementationOverenthusiastic implementerLack of clarityRisk or rigidityoverriding Regulatory mechanismLack of top management commitmentEmployee involvementSystem and process reorientationLack of supportive organizational climate

Limitations of Strategic Managment