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RITU RANJANBBA Final year

StrategyManagement

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What is Strategy?

A strategy is a comprehensive action plan

that identifies long-term direction andguides resource utilization to accomplish

organizational goals

with sustainable competitive advantage.

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Strategic Management

Process of formulating, implementing, and evaluating,strategies to accomplish long-term goals and sustain

competitive advantage.

The set of managerial decisions and actions that determinesthe long-run performance of a corporation. It includes:

environmental scanning (internal & external)

strategy formulation

strategy implementation

evaluation and control

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Benefits of Strategic

Managemento Improved understanding of rapidly changing

environment

oNonfinancial Benefits

o Enhanced awareness of threats

o Improved understanding of competitors

strategies

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Benefits of Strategic

Management Cntd..o Clearer understanding of performance-reward

relationship

o Enhanced problem-prevention capabilities

o Reduced resistance to change

o Increased employee productivity

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Key Strategic Questions

Where is the organization now?

If no changes are made, where will theorganization be in one, two, five or tenyears? Are the answers acceptable?

If the answers are not acceptable, whatspecific actions should management

undertake? What are the risks and payoffsinvolved?

What are risks and payoffs

involved?

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EnvironmentalScanning

StrategyFormulation

StrategyImplementation

Evaluationand

Control

Basic Model of Strategic

Management

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Environmental Scanning

Monitoring, evaluating and disseminatinginformation from the environment to key

people within the corporation.

Scan via SWOT analysis:

Look for opportunities/threats in the

external environment

Look for strengths/weaknesses in the

internal environment

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Strategy Formulation

The process of developing long-range plans to dealeffectively with environmental opportunities andthreats in light of corporate strengths andweaknesses.

Composed of:

Mission Objectives

Strategies

Policies

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Mission

The purpose or reason for the corporationsexistence. It tells who the company is, what

they do as well as what theyd like to

become.

ObjectivesThe end results of planned activity. They state

WHAT is to be accomplished by WHEN.They should be quantified, if possible.

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Strategies

A method or plan chosen to bring about adesired future, such as achievement of a goalor solution to a problem.

Policies

The set of basic principlesand associated guidelines, formulated and

enforced by the governing body ofan organization, to direct and limit its actions in

pursuit of long-term goals.

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Strategy Implementation

The process of putting strategies and policies intoaction through the development of:

Programs - statements of activities or stepsneeded to accomplish a single-use plan.

Budgets - statements of a corporationsprograms in monetary term.

Procedures - systems of sequential steps ortechniques that describe in detail how toperform particular tasks or jobs.

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Evaluation and Control

The process of monitoring corporate

activities and performance results so that

actual performance can be compared withdesired performance.

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Hierarchy of Strategy

FunctionalStrategy

Business(DivisionLevel)

Strategy

CorporateStrategy

Manufacturing Finance MarketingResearch

andDevelopment

HumanResources

StrategicBusiness

Unit

StrategicBusiness

Unit

StrategicBusiness

Unit

CorporateHeadquarters

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Why Some Firms Do No

Strategic Planning Lack of knowledge of strategic

planning

Waste of time

Too expensive

Laziness

Content with success

Fear of failure

Overconfidence

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Why Some Firms Do No Strategic

Planning Cntd..

Prior bad experience

Self-interest

Fear of the unknown

Honest difference of opinion

Suspicion

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Effective Strategic Planning

is:

A people process more than a paper

process

A learning process

Words supported by numbers

Simple and non-routine

Varying assignments, team

membership, meeting formats, and

planning calendars

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