Strat Management-1 Intro
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Transcript of Strat Management-1 Intro
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STRATEGIC MANAGEMENT
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Dr. T.K. Vijay Kumar
Companies are operating in age of discontinuing change - anage of creative & constructive destruction. Business, technology and product life is shrinking. Demographic shift in terms of consumer preference andrequirements. A direct promotion from Agricultural economy to service orHi-tech economy in the new growth economy. A concept from liberalization, privatization & Globalization(LPG) to regionalization. Shift from controlled economy to market driven economy. Rich countries adopt deindustrialization. Emergence of new Global Socio economic system and worldorders. Knowledge is replacing Infrastructure Self-leadership is in, command and control out Networks are replacing hierarchies Wanted - employees with Emotional Intelligence.
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Dr. T.K. Vijay Kumar
Increasing environmental awareness Growing health consciousness Expanding seniors market Impact of the Generation Y Declining mass market Changing pace and location of life Changing household composition Increasing diversity of workforce & market
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Rapid technological changes
Rapid technology diffusions
Dramatic changes in
information and
communication technologies
Increasing importance of
knowledge
Fundamental nature ofcompetition is changing The pace of change
is relentless....
and increasing
Traditional industry
boundaries are
blurring, such as... Computers
Telecommunications
21st Century Competitive Landscape
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Changing Corporations
Old Organizat ion al Format New Organizat ional FormatOne large corporation Mini-business units & cooperative relationships
Vertical communication Horizontal communication
Centralized top-down decision making Decentralized participative decision making
Vertical integration Outsourcing & Virtual Organizations
Work/quality teams Autonomous work teams
Functional work teams Cross-functional work teams
Minimal training Extensive training
Specialized job design focused on individual Value-chain team-focused job design
Stability & Structured & Gradual Change & Flexibility & Speedy, Fast
Mass Production Mass Customization
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FOUR MAJOR THRUST AREAS OF
BUSINESS
Managing Competition
- Aggressive Marketing Market Share Go Global
- Superior Quality of Products / Services
- Cost Reduction / Lowering Prices
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Faster Deliveries / Response Time- Innovations / Productivity Improvements
Developing Leadership Skills for Vision and Change.
To focus on People besides Products, Process, Profits.
Today, every person is a Profit Center. Using IT based tsunami of information, ideas and tools
for managing the business E Business
Making ours a Learning Organization
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PRODUCT
MARKET FUNCTION
What Business the Firm is in?Why the Firm is in the Business?What should be Firms Business?
WHAT IS BUSINESS?
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Strategic Management
Creating &
SustainingCompetitive
Advantages,Globally
Why?To ensure Growth
with Profits in
the long-run!
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which are required for firms to achieve:
Above-Average Returns
Strategic Competitiveness
Sustained Competitive Advantage
The Strategic Management System
Involves the full set of:
ActionsCommitments Decisions
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Sustained Competitive Advantage
Above-Average ReturnsReturns in excess of what an investor expects to
earn from other investments with similar risk
Occurs when a firm develops a strategy thatcompetitors are not simultaneously implementing
Provides benefits which current and potentialcompetitors are unable to duplicate
Strategic CompetitivenessAchieved when a firm successfully formulates
and implements a value-creating strategy
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STRATEGY: It is Unified, Comprehensive, and Integratedlong term plan that relates to the strategic advantagesof the firm to the challenges of the environment.
STRATEGIC MANAGEMENT: It is a stream of decisionsand actions which leads to the development of an
effective strategy to help achieve the corporateobjective. It is a continuous, iterative, & Cross functionalprocess of matching firm with its environment.
COMPETITIVE ADVANTAGE: is delivering superior valueadvantage to your target customers relative to your
competitors. Or delivering equivalent customer value toyour target customers relative to your competitors , butat a lower cost.
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MISSION & GOALS OF A COMPANY
VISION: It is a vividly descriptive image ofwhat you
what to be or what you want to be known for. Vision is
an art for seeing invisibles.
MISSION : It a statement of intent ofwhat a firm wants tocreate and through which line of Business. It is a process
of legitimization of corporate existence of business. Itdefines the culture, philosophy and grand design of the
firm. To pursue the Creation of Value to all Stakeholders in
the Business. It is an answer to question What business
are we in?
GOALS / OBJECTIVES : End to be achieved. It is
To make Profit for today and forever
To satisfy Customers today and forever
To satisfy Employees today and forever