UNIT 1 .

INTRODUCTION TO STRATEGIC MANAGEMENT
A.Evaluation of Strategic Management and Business Policy B.Strategic Management Process Model C.Understanding Strategy D.Level at which strategy operates E.Strategic Decision Making F.Introduction to Strategic Management G.Element s in Strategic |Management Process H.Model

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A. Evaluation of Strategic Management and Business Policy 2. 1911 –Harvard Business School : An Integrative Course in Management aimed at the creation of General Management Capability. 3. 1959 – Gordon and Howell Report sponsored by the Ford Foundation, recommended a comprehensive course on Business Policy which will give students an opportunity to pull together what they have learned in the separate business fields and utilize this knowledge in the analysis of complex business problems.( Pierson Report by Carnegie Foundation also supported the view) 4. 1969 – American Assembly of Collegiate Schools of Business(Like AICTE) made the Business Policy course mandatory requirement for the purpose of recognition. 5. India : IIM’s followed American Business Schools. 1990 –AICTE prescribed the Business Policy. Association of Indian Management Schools made it as compulsory course.
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B. Strategic Management Process Model by hambrick and fredrickson Arena: Where will be we active? Vehicles: How will we get there? Differentiators: How will we win in the market? Staging: What will be our speed and sequences of moves? Logic: How will we obtain our returns?
INTERNAL & External Strategic Analysis

STRATEGY: ARENAS VEHICLES DIFFERENTIATORS STAGING LOGIC
IMPLEMENTATION LEVERS AND STRATEGIC LEADERSHIP

VISION & MISSION

GOALS & OBJECTIVES

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C. Understanding Strategy • Strategy is derived from a Greek word ”strategos” the actual direction of military force. • • A plan or course of action or creating a common thread. Strategy is the means to achieve objectives a set of decision rules making a pattern or

– means generalship –

Sun Tzu : The Art War
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4. Level at which strategy operates LEVELS OF MANAGEMENT CORPORATE CORPORATE OFFICE SBU

LEVELS OF STRATEGY CORPORATE

BUSINESS LEVEL SBU A SBU B SBU C

FUNCTIONAL

FUNCTIONAL LEVEL

FINANACE

MARKETING

OPERATIONS

HRM

INFORMATION
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4. Level at which strategy operates LEVELS OF MANAGEMENT CORPORATE TVS GROUP SBU

LEVELS OF STRATEGY CORPORATE

BUSINESS LEVEL SUNDARAM FASTNERS LUCAS TVS TVS MOTRS

FUNCTIONAL

FUNCTIONAL LEVEL

FINANACE

MARKETING

OPERATIONS

HRM

INFORMATION
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5. Strategic Decision Making Objectives to be achieved are determined Alternative ways of achieving the objectives are identified

Not Simp le in reali ty ?!

Each alternative is evaluated in terms of objective achieving ability The best alternative is chosen

ISSUES IN STRATEGIC DECISION MAKING 1. CRITERIA 2. RATIONALITY 3. CREATIVITY 4. VARIABILITY 5. PERSON RELATED FACTORS 6. INDIVIDUAL V/S GROUP DECISION
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6.Introduction to Strategic Management S.M IS “THE DYNAMIC PROCESS OF FORMULATION, IMPLEMENTATION, EVALUATION AND CONTROL OF STRATEGIES TO REALISE THE ORGANISATION’S STRATEGIC INTENT”. FOUR PHASES IN SM PROCESS 1. ESTABLISHING STRATEGIC INTENT 2. FORMULATION OF STRATEGIES 3. IMPLEMENTATION OF STRATEGIES 4. STRAYEGIC EVALUATION

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A. Establishing the hierarchy of strategic intent • Creating and communicating a vision • Designing a mission statement • Defining the business • Adopting the business model • Setting Objectives

B. Formulating Strategies • Performing environment appraisal • Formulating corporate level strategies • Formulating business level strategies • Undertaking strategic analysis • Exercising strategic choice • Preparing Strategic Plan

C. Implementation of strategies • Activating Strategies • Designing the structure, system and process • Managing functional implementation • Operationalising strategies

D. Performing strategic evaluation and control • Performing strategic evaluation • Exercising strategic control • Reformulating Strategies

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7. Comprehensive model of strategic management STRATEGIC INTENT STRATEGY FORMULATION
Environmental Appraisal Organizational Appraisal

STRATEGIC IMPLEMENTATION

•Vision •Mission •Business Definition •Business Model •Objectives

•Project •Procedure •Resource allocation •Structual, • behavioural, functional & Operational Strategic Evaluation

SWOT ANALYSIS
CORPORATE LEVEL STRATEGIES BUSINESS LEVEL STRATEGIES STRATEGIC ANALYSIS AND CHOICE STRATEGIC PLAN

Strategic Control
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