Strategic Mangement For Under Grad Animated

04/11/2304/11/23 Ulhas D WadivkarUlhas D Wadivkar 11

Strategic Management - SyllabusStrategic Management - Syllabus Definition.Definition. Classes of Decisions.Classes of Decisions. Levels of Decisions.Levels of Decisions. Strategy.Strategy. Role of different Strategists.Role of different Strategists. Relevance of Strategic Management.Relevance of Strategic Management. Benefits.Benefits. Strategic Management in India.Strategic Management in India.


Business Policy - DefinitionBusiness Policy - Definition As defined by Christensen: “Business Policy is As defined by Christensen: “Business Policy is

the study of the function and responsibilities of the study of the function and responsibilities of Senior Management, the crucial problems that Senior Management, the crucial problems that affect success in the total enterprise, and the affect success in the total enterprise, and the decisions that determine the directions of the decisions that determine the directions of the organisation and shape of its future. organisation and shape of its future.

The problems of policy in the business, like The problems of policy in the business, like those of policy in public affairs, have to do with those of policy in public affairs, have to do with choice of purposes, the moulding of choice of purposes, the moulding of organisational identity and character, the organisational identity and character, the continuous definition of what needs to be done, continuous definition of what needs to be done, and the mobilisation of resources for the and the mobilisation of resources for the attainment of organisational Goals in the face of attainment of organisational Goals in the face of competition or adverse circumstancecompetition or adverse circumstance


Concept of Strategy – new ParadigmConcept of Strategy – new Paradigm

1940- 1960: Planned policy became 1940- 1960: Planned policy became irrelevant due to increasingly irrelevant due to increasingly complex and accelerating changes. complex and accelerating changes. Firms had to anticipate Firms had to anticipate environmental changes. A strategy environmental changes. A strategy needed to be formed with critical needed to be formed with critical look at basic concept of Business and look at basic concept of Business and its relationship to the existing its relationship to the existing environment then. environment then.


Strategic Management – new FocusStrategic Management – new Focus 1980 & onwards: The focus of Strategic Management 1980 & onwards: The focus of Strategic Management

is on the strategic process of business firms and is on the strategic process of business firms and responsibilities of general management. Everything responsibilities of general management. Everything outside the four walls is changing rapidly.outside the four walls is changing rapidly.

This phenomenon is called as “Discontinuity” by Mr. This phenomenon is called as “Discontinuity” by Mr. Peter Drucker. Past experiences are no guarantee as Peter Drucker. Past experiences are no guarantee as science and technology is moving faster. The future is science and technology is moving faster. The future is no more extension of the past or the present. The no more extension of the past or the present. The world is substantially compressed and managing the world is substantially compressed and managing the environment becomes crucial function. environment becomes crucial function.

What to produce, where to market, which new What to produce, where to market, which new business to enter, which one to quit and how to get business to enter, which one to quit and how to get internally stronger and resourceful are the new stakes. internally stronger and resourceful are the new stakes.

Strategic Planning is required to be done to endow the Strategic Planning is required to be done to endow the enterprise with certain fundamental competencies / enterprise with certain fundamental competencies / distinctive strengths which could take care of distinctive strengths which could take care of eventualities resulting from unexpected environmental eventualities resulting from unexpected environmental changes.changes.


Strategic Management – new FocusStrategic Management – new Focus

However, the evolution of this phase However, the evolution of this phase is still continuing and is yet not is still continuing and is yet not formed into a theory of how to formed into a theory of how to manage an enterprise. But Strategic manage an enterprise. But Strategic Management is a very important tool Management is a very important tool for and way of thinking to resolve for and way of thinking to resolve strategic issues.strategic issues.


Strategy – Definitions -1Strategy – Definitions -1 Defining Strategy and Concept of Strategic Defining Strategy and Concept of Strategic

ManagementManagement Alfred D Chandler(1962)Alfred D Chandler(1962) : “The determination of : “The determination of

basic basic long-term goalslong-term goals and the and the adoption of coursesadoption of courses of the courses of action and the of the courses of action and the allocation of allocation of resourcesresources necessary for carrying out these goals” necessary for carrying out these goals”

Alfred D Chandler(1984)Alfred D Chandler(1984) : “Basically, a strategy is : “Basically, a strategy is a set of decisions-making rules for the guidance a set of decisions-making rules for the guidance of organisational behaviour”of organisational behaviour”

Kenneth Andrews(1965)Kenneth Andrews(1965) : “The pattern of : “The pattern of objectives, purpose, goals, and the major policies objectives, purpose, goals, and the major policies and plans for achieving these goals stated in such and plans for achieving these goals stated in such a way so as to a way so as to define what business the company define what business the company isis in or is to be and the kind of company it is or to in or is to be and the kind of company it is or to bebe


Strategy – Definitions -2Strategy – Definitions -2 ””Kenneth Andrews (1965)Kenneth Andrews (1965) : “Business Strategy is a : “Business Strategy is a

method of describing the future position of the company, method of describing the future position of the company, its objectives, purposes, goals, policies, and plans that its objectives, purposes, goals, policies, and plans that may be required for guiding the company from its may be required for guiding the company from its existing position to where it desires to be”.existing position to where it desires to be”.

Igor Ansoff(1965)Igor Ansoff(1965) : “The : “The common threadcommon thread among the among the organisation’s activities and product-markets…that organisation’s activities and product-markets…that defines the essential nature of business that the defines the essential nature of business that the organisation was or planned to be in future”organisation was or planned to be in future”

William F Gleueck(1972)William F Gleueck(1972) : “A : “A unifiedunified, , comprehensivecomprehensive and and integratedintegrated plan designed to assure that the basic plan designed to assure that the basic objectives of the enterprise are achieved”objectives of the enterprise are achieved”

Henry Mintzberg(1987)Henry Mintzberg(1987) : “A pattern in a stream of : “A pattern in a stream of decisions and actions”decisions and actions”

Michael E Porter(1996)Michael E Porter(1996) : “…developing and : “…developing and communicating the company’s unique position, making communicating the company’s unique position, making trade-offs, and forging fit among activities”trade-offs, and forging fit among activities”


Strategy – Summing up all Definitions Strategy – Summing up all Definitions A plan or course of action or a set of decisions rules A plan or course of action or a set of decisions rules

forming pattern or creating a common thread.forming pattern or creating a common thread. The pattern or common thread related to the The pattern or common thread related to the

organisation’s activities which move an organisation organisation’s activities which move an organisation from its current position to a desired to a desired from its current position to a desired to a desired future stagefuture stage

Related to pursuing those activities which move an Related to pursuing those activities which move an organisation from its current position to a desired organisation from its current position to a desired future state,future state,

Concerned with the resources necessary for Concerned with the resources necessary for implementing a plan or following a course of action implementing a plan or following a course of action and,and,

Connected to the strategic positioning of a firm, Connected to the strategic positioning of a firm, making trade-offs between its different activities, making trade-offs between its different activities, and creating a fit among these activities.and creating a fit among these activities.


The Strategy HierarchyThe Strategy Hierarchy In most (large) corporations there are In most (large) corporations there are

several levels of strategy. Strategic several levels of strategy. Strategic management is the highest in the management is the highest in the sense that it is the broadest, sense that it is the broadest, applying to all parts of the firm. It applying to all parts of the firm. It gives direction to corporate values, gives direction to corporate values, corporate culture, corporate goals, corporate culture, corporate goals, and corporate missions. Under this and corporate missions. Under this broad corporate strategy there are broad corporate strategy there are often functional or business unit often functional or business unit strategiesstrategies


Different Levels of StrategyDifferent Levels of Strategy

Levels Structure Strategy

Corporate Corporate Level

SBU - A SBU - B SBU - CSBU Business level

FunctionalFinance Marketing Operations

Personnel Information

Functional Level

Corporate Office


Functional StrategiesFunctional Strategies Functional strategiesFunctional strategies include include

marketing strategiesmarketing strategies, new product development , new product development strategies, human resource strategies, financial strategies, human resource strategies, financial strategies, legal strategies, supply-chain strategies, legal strategies, supply-chain strategies, and information technology strategies, and information technology management strategies. The emphasis is on management strategies. The emphasis is on short and medium term plans and is limited to short and medium term plans and is limited to the domain of each department’s functional the domain of each department’s functional responsibility. Each functional department responsibility. Each functional department attempts to do its part in meeting overall attempts to do its part in meeting overall corporate objectives, and hence to some extent corporate objectives, and hence to some extent their strategies are derived from broader their strategies are derived from broader corporate strategies.corporate strategies.


Strategic Business UnitsStrategic Business Units Many companies feel that a functional Many companies feel that a functional

organizational structure is not an efficient way to organizational structure is not an efficient way to organize activities so they have organize activities so they have reengineeredreengineered according to processes or strategic business according to processes or strategic business units (called SBUs). A units (called SBUs). A strategic business unitstrategic business unit is a semi-autonomous unit within an is a semi-autonomous unit within an organization. It is usually responsible for its own organization. It is usually responsible for its own budgeting, new product decisions, hiring budgeting, new product decisions, hiring decisions, and price setting. An SBU is treated decisions, and price setting. An SBU is treated as an internal profit centre by corporate as an internal profit centre by corporate headquarters. Each SBU is responsible for headquarters. Each SBU is responsible for developing its business strategies, strategies developing its business strategies, strategies that must be in tune with broader corporate that must be in tune with broader corporate strategiesstrategies


Operational StrategyOperational Strategy

The “lowest” level of strategy is The “lowest” level of strategy is operational operational strategystrategy. It is very narrow in focus and deals . It is very narrow in focus and deals with day-to-day operational activities such as with day-to-day operational activities such as scheduling criteria. It must operate within a scheduling criteria. It must operate within a budget but is not at liberty to adjust or create budget but is not at liberty to adjust or create that budget. Operational level strategy was that budget. Operational level strategy was encouraged by encouraged by Peter DruckerPeter Drucker in his theory of in his theory of management by objectivesmanagement by objectives (MBO). Operational (MBO). Operational level strategies are informed by business level level strategies are informed by business level strategies which, intional turn, are informed by strategies which, intional turn, are informed by corporate level strategies. corporate level strategies.


Business & Corporate StrategyBusiness & Corporate Strategy Business strategyBusiness strategy, which refers to the , which refers to the

aggregated operational strategies of single aggregated operational strategies of single business firm or that of an SBU in a diversified business firm or that of an SBU in a diversified corporation refers to the way in which a firm corporation refers to the way in which a firm competes in its chosen arenas.competes in its chosen arenas.

Corporate strategyCorporate strategy, then, refers to the , then, refers to the overarching strategy of the diversified firm. Such overarching strategy of the diversified firm. Such corporate strategy answers the questions of "in corporate strategy answers the questions of "in which businesses should we compete?" and which businesses should we compete?" and "how does being in one business add to the "how does being in one business add to the competitive advantage of another portfolio firm, competitive advantage of another portfolio firm, as well as the competitive advantage of the as well as the competitive advantage of the corporation as a wholecorporation as a whole


Dynamic StrategyDynamic Strategy Since the turn of the millennium, there has been Since the turn of the millennium, there has been

a tendency in some firms to revert to a simpler a tendency in some firms to revert to a simpler strategic structure. This is being driven by strategic structure. This is being driven by information technology. It is felt that information technology. It is felt that knowledge managementknowledge management systems should be used systems should be used to share information and create common goals. to share information and create common goals. Strategic divisions are thought to hamper this Strategic divisions are thought to hamper this process. Most recently, this notion of strategy has process. Most recently, this notion of strategy has been captured under the rubric of been captured under the rubric of dynamic dynamic strategystrategy, popularized by the strategic , popularized by the strategic management textbook authored by Carpenter management textbook authored by Carpenter and Sanders. This work builds on that of Brown and Sanders. This work builds on that of Brown and Eisenhart as well as Christensen and portrays and Eisenhart as well as Christensen and portrays firm strategy, both business and corporate, as firm strategy, both business and corporate, as necessarily embracing ongoing strategic change, necessarily embracing ongoing strategic change, and the seamless integration of strategy and the seamless integration of strategy formulation and implementation. Such change formulation and implementation. Such change and implementation are usually built into the and implementation are usually built into the strategy through the staging and pacing facets.strategy through the staging and pacing facets.


Strategists - Their Roles & Levels - 1Strategists - Their Roles & Levels - 1 Strategists are individuals or groups who are primarily Strategists are individuals or groups who are primarily

involved in the formulation, implementation, and involved in the formulation, implementation, and evaluation of Strategy.evaluation of Strategy.

In a limited sense, all managers are Strategists. But we In a limited sense, all managers are Strategists. But we may have outside agencies involved in various aspects may have outside agencies involved in various aspects of Strategic Management, who are also Strategists.of Strategic Management, who are also Strategists.

1.1. Board of DirectorsBoard of Directors:- Board is an ultimate legal authority :- Board is an ultimate legal authority of an organisation. Board is responsible to owners, share of an organisation. Board is responsible to owners, share holders, government, controlling agencies, financial holders, government, controlling agencies, financial institutes. They get elected and appointed by holding or institutes. They get elected and appointed by holding or parent company. Board is requires to direct and is parent company. Board is requires to direct and is involved in reviewing and screening executive decisions involved in reviewing and screening executive decisions in light of their environmental, business and in light of their environmental, business and organisational implications.organisational implications.


Strategists - Their Roles & Levels - 2Strategists - Their Roles & Levels - 2 Role of Board of Directors is to guide the senior management in Role of Board of Directors is to guide the senior management in

setting and accomplishing objectives, reviewing and evaluating setting and accomplishing objectives, reviewing and evaluating organisational performance, and appointing senior executives. organisational performance, and appointing senior executives. Board is involved in setting strategic direction, establishing Board is involved in setting strategic direction, establishing objectives & strategy, monitoring and reviewing achievement.objectives & strategy, monitoring and reviewing achievement.

2.2. Chief Executive OfficerChief Executive Officer:- is responsible for all aspects of strategic :- is responsible for all aspects of strategic management from the formulation to evaluation of strategy. CEO management from the formulation to evaluation of strategy. CEO plays a pivotal role in setting mission, objectives and goals. He plays a pivotal role in setting mission, objectives and goals. He formulates and implements strategy and ensures that organisation formulates and implements strategy and ensures that organisation does not deviate from a predetermined path. CEO is primarily does not deviate from a predetermined path. CEO is primarily responsible for strategic management of the organisation.responsible for strategic management of the organisation.

3.3. EntrepreneurEntrepreneur:- is the person who starts a new business, is a venture :- is the person who starts a new business, is a venture capitalist. He has to play a proactive role to provide sense of capitalist. He has to play a proactive role to provide sense of direction, set objectives and formulate strategies. He is different direction, set objectives and formulate strategies. He is different from formal system and plays all strategic roles simultaneously.from formal system and plays all strategic roles simultaneously.

4.4. Senior managementSenior management:- consists of higher management level starting :- consists of higher management level starting from CEO to functional managers and profit centre or SBU heads. from CEO to functional managers and profit centre or SBU heads. They are responsible for implementing the strategies and plans and They are responsible for implementing the strategies and plans and for a periodic evaluation of their performance. Organisationally they for a periodic evaluation of their performance. Organisationally they come together in the form of committees, task forces, work groups, come together in the form of committees, task forces, work groups, think tanks and play a very important role in Strategic management. think tanks and play a very important role in Strategic management.


Strategists - Their Roles & Levels - 3Strategists - Their Roles & Levels - 35.5. SBU level ExecutivesSBU level Executives:- SBUs are formed with each :- SBUs are formed with each

business having a clearly defined product – market business having a clearly defined product – market segment and a unique strategy. They are CEOs for their segment and a unique strategy. They are CEOs for their SBUs and hence SBU level strategy formulation and SBUs and hence SBU level strategy formulation and implementation is their main role.implementation is their main role.

6.6. Corporate PlanningCorporate Planning:- It assists management in all aspects :- It assists management in all aspects of strategy formulation, implementation and evaluation. of strategy formulation, implementation and evaluation. They are responsible for preparation and communication They are responsible for preparation and communication of strategic plans, provides administrative support and of strategic plans, provides administrative support and plays a measurement and controlling role. They do not plays a measurement and controlling role. They do not from strategy and do not initiate a process on their own.from strategy and do not initiate a process on their own.

7.7. ConsultantsConsultants:- in absence of a Corporate planning many :- in absence of a Corporate planning many organisation take an outside help in the form of a organisation take an outside help in the form of a consultants or consulting companies. Besides providing consultants or consulting companies. Besides providing corporate strategy and strategic planning, they are corporate strategy and strategic planning, they are specialist, knowledgeable, outsider, unbiased and provide specialist, knowledgeable, outsider, unbiased and provide objective evaluation. E.g. AF Ferguson, PWC, KPMG, objective evaluation. E.g. AF Ferguson, PWC, KPMG, Billimoria, Mckinsey etc.Billimoria, Mckinsey etc.


Strategists - Their Roles & Levels - 4Strategists - Their Roles & Levels - 4Middle Level ManagersMiddle Level Managers:- They relate to operational matters :- They relate to operational matters

and are seldom play active role in Strategic Management. and are seldom play active role in Strategic Management. They form departmental / functional plan in light of broad They form departmental / functional plan in light of broad objectives and goals of organisation provided in vision, objectives and goals of organisation provided in vision, mission, goals and objective statements of the organisation. mission, goals and objective statements of the organisation. They are implementers, followers of guide lines, receivers They are implementers, followers of guide lines, receivers of communication about strategic plans. They are basically of communication about strategic plans. They are basically involved in in the implementation of functional strategies.involved in in the implementation of functional strategies.

9. 9. Executive AssistantExecutive Assistant:- An executive assistant is a person who :- An executive assistant is a person who assists the chief executive in the performance of his duties assists the chief executive in the performance of his duties like data collection and analysis, suggesting alternatives. like data collection and analysis, suggesting alternatives. He prepares brief for various plans, proposals, projects. He He prepares brief for various plans, proposals, projects. He helps in public relations and liaison functions. He helps in public relations and liaison functions. He coordinates activities with the internal staff and outsiders. coordinates activities with the internal staff and outsiders. He is a corporate planner for CEO. Generally, he orients He is a corporate planner for CEO. Generally, he orients from finance background ensuring and opining on ROI and from finance background ensuring and opining on ROI and strategic positioning of the organisation.strategic positioning of the organisation.


Strategic Management – Definitions Strategic Management – Definitions

Definition – “Strategic management is the Definition – “Strategic management is the process of systematically analysing process of systematically analysing various opportunities and threats ‘vis-a various opportunities and threats ‘vis-a vis’ organisational strengths and vis’ organisational strengths and weaknesses, formulating, and arriving at weaknesses, formulating, and arriving at strategic choices through critical strategic choices through critical evaluation of alternatives and evaluation of alternatives and implementing them to meet the set implementing them to meet the set objectives of the organisation”. objectives of the organisation”.

Definition – “Strategic Management is Definition – “Strategic Management is concerned with making decisions about an concerned with making decisions about an organisation’s future direction and organisation’s future direction and implementing those decisions”.- By Lloyd implementing those decisions”.- By Lloyd L Byras.L Byras.


Strategic ManagementStrategic Management Strategic managementStrategic management is the art, science and is the art, science and

craft of formulating, implementing and evaluating craft of formulating, implementing and evaluating cross-functional decisions that will enable an cross-functional decisions that will enable an organization to achieve its objectives. It is the organization to achieve its objectives. It is the process of specifying the process of specifying the organizationorganization's 's missionmission, , visionvision and objectives, developing policies and and objectives, developing policies and plans, often in terms of projects and programs, plans, often in terms of projects and programs, which are designed to achieve these objectives, which are designed to achieve these objectives, and then allocating resources to implement the and then allocating resources to implement the policies and plans, projects and programs. policies and plans, projects and programs. Strategic management seeks to coordinate and Strategic management seeks to coordinate and integrate the activities of the various functional integrate the activities of the various functional areas of a business in order to achieve areas of a business in order to achieve organizational objectives. A organizational objectives. A balanced scorecardbalanced scorecard is is often used to evaluate the overall performance of often used to evaluate the overall performance of the business and its progress towards objectives.the business and its progress towards objectives.


Evaluation of Strategic Management in IndiaEvaluation of Strategic Management in India Evolution of Strategic Management in Evolution of Strategic Management in

India is divided in three periods.India is divided in three periods. Till 1980Till 1980 : Pre-liberalisation Stage: Pre-liberalisation Stage: : Strategic management on Government Strategic management on Government

fringes.fringes. Entwining enterprise objectives into the Entwining enterprise objectives into the

national Planning framework.national Planning framework. Grabbing opportunities, high Grabbing opportunities, high

diversification, non- competitive scales, diversification, non- competitive scales, and weak technology.and weak technology.

Secretive & one man Strategic Secretive & one man Strategic Management Process.Management Process.


Evaluation of Strategic Management in IndiaEvaluation of Strategic Management in India Till 2000: Liberalisation Stage:Till 2000: Liberalisation Stage: ‘‘Foreign Complex’ governed strategy.Foreign Complex’ governed strategy. Strategy of focus on rationalisation and operations Strategy of focus on rationalisation and operations

improvement.improvement. Strategy of growth through acquisitions, Strategy of growth through acquisitions,

internationalisation and product market expansion.internationalisation and product market expansion. Employing international consulting firms in Strategic Employing international consulting firms in Strategic

Management.Management. Post Liberalisation Stage: 2000-2010Post Liberalisation Stage: 2000-2010 ‘‘Global maverick’ mindset.Global maverick’ mindset. Acquire professional skills in Strategic Management Acquire professional skills in Strategic Management

and synergise entrepreneurial flair.and synergise entrepreneurial flair. Portfolio rationalisation, entry into emerging sectors.Portfolio rationalisation, entry into emerging sectors. Mobilise resources and ensure adequate growth Mobilise resources and ensure adequate growth

through existing business.through existing business. De-merge businesses as independent companies and De-merge businesses as independent companies and

improve market capabilities.improve market capabilities. Development of Technology capabilitiesDevelopment of Technology capabilities Decentralise organisations, develop institutionalised Decentralise organisations, develop institutionalised

control mechanismcontrol mechanism


Elements of Strategic ManagementElements of Strategic Management Strategic management involves adapting the Strategic management involves adapting the

organization to its business environment. organization to its business environment. Strategic management is fluid and complex. Change Strategic management is fluid and complex. Change

creates novel combinations of circumstances requiring creates novel combinations of circumstances requiring unstructured non-repetitive responses. unstructured non-repetitive responses.

Strategic management affects the entire organization by Strategic management affects the entire organization by providing direction. providing direction.

Strategic management involves both strategy formation Strategic management involves both strategy formation (it is called, content) and also strategy implementation (it (it is called, content) and also strategy implementation (it is called, process). is called, process).

Strategic management is partially planned and partially Strategic management is partially planned and partially unplanned. unplanned.

Strategic management is done at several levels: overall Strategic management is done at several levels: overall corporate strategy, and individual business strategies. corporate strategy, and individual business strategies.

Strategic management involves both conceptual and Strategic management involves both conceptual and analytical thought processesanalytical thought processes


Aspects of Strategic ManagementAspects of Strategic Management Vision StatementVision Statement Mission Statement indicating methodology for Mission Statement indicating methodology for

achieving the objectives, purposes and Philosophy of achieving the objectives, purposes and Philosophy of organisation as reflected in vision statement.organisation as reflected in vision statement.

Company Profile, its internal culture, strengths and Company Profile, its internal culture, strengths and capabilities.capabilities.

Critical study of external environmental factors, Critical study of external environmental factors, threats and opportunities.threats and opportunities.

Finding out way and deciding the desirable course of Finding out way and deciding the desirable course of actions for accomplishing the Mission statement. actions for accomplishing the Mission statement.

Selecting long term objectives and deciding Selecting long term objectives and deciding corresponding strategies.corresponding strategies.

Evolving short term objectives, defining Evolving short term objectives, defining corresponding strategies in tune with Mission and corresponding strategies in tune with Mission and Vision Statements.Vision Statements.

Implementing chosen strategies in planned way, Implementing chosen strategies in planned way, based on budgets, allocating resources, outlining based on budgets, allocating resources, outlining action plan and tasks.action plan and tasks.

Installation of a continuous review system, creating Installation of a continuous review system, creating a control mechanism and Data generation for a control mechanism and Data generation for selecting future course of action.selecting future course of action.


Characteristics & Benefits of Strategic Management -1 Strategic Planning provides the route map for the Strategic Planning provides the route map for the

enterprise. It lends a framework which can ensure enterprise. It lends a framework which can ensure that decisions concerning future are taken in a that decisions concerning future are taken in a systematic and purposeful way.systematic and purposeful way.

Strategic Planning provides a hedge against Strategic Planning provides a hedge against uncertainty, against totally unexpected uncertainty, against totally unexpected developments.developments.

Strategic Planning helps in understanding trends Strategic Planning helps in understanding trends in a better way and generates a reference frame in a better way and generates a reference frame for investment decisions.for investment decisions.

Strategic Planning provides the frame work for all Strategic Planning provides the frame work for all major business decisions, decisions on business, major business decisions, decisions on business, products, markets, manufacturing facilities, products, markets, manufacturing facilities, investments, and organisational structure. It is a investments, and organisational structure. It is a path finder for business opportunities and it is path finder for business opportunities and it is also a defence mechanism to avoid costly also a defence mechanism to avoid costly mistakes in choice of product market or mistakes in choice of product market or investments.investments.


Characteristics & Benefits of Strategic Management - 2 The more intense the environmental uncertainty, more The more intense the environmental uncertainty, more

critical is the need for strategic planning. The success of critical is the need for strategic planning. The success of the efforts and activities of the enterprise depends the efforts and activities of the enterprise depends heavily on the quality of strategic planning. Considerable heavily on the quality of strategic planning. Considerable thought and effort must go in vision, insight, experience, thought and effort must go in vision, insight, experience, quality of judgement and the perfection of methods and quality of judgement and the perfection of methods and measures.measures.

Strategic Planning is a management task concerned with Strategic Planning is a management task concerned with growth and future of the business enterprise.growth and future of the business enterprise.

As a management tool, Strategic Planning utilises both As a management tool, Strategic Planning utilises both intuition and logic. Logic is through Planning and intuition and logic. Logic is through Planning and information process and intuition is through experience, information process and intuition is through experience, knowledge and vision of top people in Management.knowledge and vision of top people in Management.


Characteristics & Benefits of Strategic Management - 3 All vital aspects of corporate governance are perfected All vital aspects of corporate governance are perfected

through strategic planning, starting from corporate through strategic planning, starting from corporate mission, philosophy and core values, down to choice of mission, philosophy and core values, down to choice of businesses and strategies.businesses and strategies.

Through analytical process aspect, involved in Strategic Through analytical process aspect, involved in Strategic Planning, corporation understands where its core Planning, corporation understands where its core competencies are, identifies the competitive advantages, competencies are, identifies the competitive advantages, pinpoints the gaps, formulate steps to bridge them.pinpoints the gaps, formulate steps to bridge them.

Main aspects of Strategic Planning are Future, Growth, Main aspects of Strategic Planning are Future, Growth, Environment, basket of businesses of the firm for Environment, basket of businesses of the firm for additions and deletions, Strategy and not day to day additions and deletions, Strategy and not day to day routine matters, creation of core competency and routine matters, creation of core competency and competitiveness and finally integration. It views the competitiveness and finally integration. It views the organisation / business in its totality and not a particular organisation / business in its totality and not a particular function. Thus Strategic Planning is Corporate Strategy. function. Thus Strategic Planning is Corporate Strategy.


Characteristics & Benefits of Strategic Management - 4 Strategic Planning differs from other Strategic Planning differs from other

operative and administrative functions of operative and administrative functions of management.management.

Strategic Planning provides objective – Strategic Planning provides objective – strategy design:strategy design:

A) Growth Objective –Performance levels, A) Growth Objective –Performance levels, Profitability target,Profitability target,

B) Product Market scope, its penetration,B) Product Market scope, its penetration, C) Growth Vector – Product Market C) Growth Vector – Product Market

posture, development or diversification,posture, development or diversification, D) Competitive Advantages,D) Competitive Advantages, E) Synergy, strength obtained from new E) Synergy, strength obtained from new

product-market selections.product-market selections.


Strategic Management Process - an OverviewStrategic Management Process - an Overview Defining the Vision. Defining the Vision. Defining the Mission.Defining the Mission. Clarifying the business mission, purpose & Clarifying the business mission, purpose &

broad Objectives and Goals.broad Objectives and Goals. Defining the business.Defining the business. Environment Survey. SWOT AnalysisEnvironment Survey. SWOT Analysis Internal Appraisal of the firm Internal Appraisal of the firm Setting Corporate objectives.Setting Corporate objectives. Formulating the Corporate objectivesFormulating the Corporate objectives Formulating the Corporate strategies.Formulating the Corporate strategies. Preparing a Plan.Preparing a Plan. Implementing the Corporate strategies.Implementing the Corporate strategies. Evaluating & Monitoring the strategiesEvaluating & Monitoring the strategies


Environment & OrganisationEnvironment & Organisation

Environment: Political, legal, Socio, Technological, Economic, Cultural

VisionsMissions,

Objectives,Goals,

SystemsStructures

Targets

Feedback

CorrectiveAction

Input5 Ms

ProcessesPlanning

ManufacturingInspectionPacking

OutputsSales,

Service,Transport of goods

Strategic Mangement For Under Grad Animated

Education

Transcript of Strategic Mangement For Under Grad Animated