Professional Documents
Culture Documents
Introduction
• Environment can be defined as the surroundings in which a
business is born, grows, matures and declines
• An environment exhibits the following characteristics –
o Real – it is as real and alive as the business itself,
o Complex – factors, events, conditions are related & interactive
o Uncertain – cannot be predicted, totally random,
o Dynamic – constantly changing,
o Multi-faceted – variety of views, totally subjective in nature
o Integral – inseparable part of any organization.
• Businesses have to respond to such hostile environment in
pursuit of their aims and objectives.
What is Strategy ??
• The word ‘strategy’ has evolved in the context of ‘war’ and
deception of enemy.
• Modern day business is no less than a ‘war’, with cut-throat
competition and survival of the fittest and the smartest.
• Strategy is “a unified, comprehensive and integrated plan
designed to assure that the basic objectives of the enterprise are
achieved” – William Glueck
• “Determination of basic long-term goals
and objectives of an enterprise and the
allocation of resources necessary to carry
out these goals” – Alfred Chandler
What is Strategy ?? contd..
• Strategy is consciously considered and flexibly designed
scheme of action –
– to achieve effectiveness,
– to mobilize resources,
– to direct efforts and behaviour,
– to handle events and problems,
– to perceive and utilize opportunities, and
– to meet challenges and threats to survival and success.
• Corporate strategy is a set of goals, priorities, combinations
and the sequence and timing of decision making.
Strategy – Characteristics
• Generally long-term in nature,
• Action oriented, very specific,
• Integrated,
• Flexible and dynamic,
• Formulated by the top management,
• Middle and lower management involvement in the formation,
• Purpose is to cope up with competition and complex issues,
• Basis are the main goals and objectives of the organization,
• Concerned with locating opportunities and threats and seizing
the initiative, and
• Decision making is organized, analyzed, and justified.
Levels of Corporate Strategies
Corporate Multi business
Level Corporation
Identify the
organization's Formulate Implement Evaluate
SWOT Analysis
current mission, goals, Strategies Strategies Results
and strategies
Internal Analysis
• strengths
• weaknesses
SM model – phases in SM
1) Environmental Analysis 3) Strategy Formulation
Processing scenarios Perform environment appraisal (ETOP)
Analysis of current trends Doing organizational evaluation (SWOT)
Corporate-level strategy
2) Establish Goals
Business-level strategy
Creating vision
Undertake strategic analysis
Design mission
Evaluate various alternatives
Define business
Formulate strategies
Setting objectives
Prepare strategic plan of action
4) Implementation of Strategies
Activating strategies
5) Strategic Evaluation & Control
Designing structure and systems
Perform strategic evaluation
Behavioural studies
Exercise control over operations
Functional-level strategies
Re-formulating strategies, if required.
Make the strategies operational
Benefits of Strategic Management
Financial benefits – improved financial performance in terms
of profits and growth. Specialized professional developed.
Enhanced capability of problem prevention – being proactive
and also quick to respond in cases of problems.
Improved quality of decisions – better decision making due to
extensive analysis, interaction amongst departments etc.
Greater employee motivation – participation of employees in
planning process for better understanding the company policies
Reduction in commutation gaps – auth. & responsibilities
Minimum resistance to change – participation helps to reduce
the resistance to change, better understanding.