IILM Institute for Higher Education

Course Manual Strategic Management MGT 606

PGP 10-12

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PGP Batch 10-12

I.

COURSE FACILITATORS (names of faculty teaching in LR and GGN, along with contact details) Prof. K.M. Mital Prof. Rakesh Chaudhry Prof. Vijesh Jain Prof. Rahul Mishra Prof. S. Das

II.

COURSE OVERVIEW: Strategic management is set of managerial decisions and actions that determine the long term performance of a corporation. It includes environmental scanning (both external and internal), strategy implementation, and evaluation and control. It emphasizes the monitoring and evaluating of external opportunities and threats in light of a corporation’s strengths and weaknesses. Achievement of appropriate fit between an organization’s environment and its strategy, structure and processes has positive effects on its performance. Many of the concepts and techniques dealing with strategic management have been developed and used successfully by business corporations such as General Electric and Boston Consulting Group. Over the time, business practitioners and academic researchers have expanded and refined these concepts and added many more. Initially strategic management was of most use to large corporations operating in multiple industries and locations. Over the years its benefit has been realized for all types of organizations, small and large, private and public, industrial and cooperative Increasing risks of error, costly mistakes, and even economic ruin are causing today’s professional managers in all organizations to take strategic management seriously in order to keep their company competitive in an increasingly volatile environment. A survey of nearly 50 corporations in a variety of countries and industries found the three most highly rated benefits of strategic management to be, (i) clearer sense of strategic vision for the firm, (ii) sharper focus on what is strategically important, and (iii) improved understanding of a rapidly changing environment. The course is planned to familiarize students with all the important concepts, goals and objectives of strategic management.

III.

COURSE TOPICS:

a.
b. c.

Understanding concepts of strategic management Vision, Mission, Goals and Objectives Understanding external and internal environment for strategic management Formulation and execution of strategies Understanding competitive strategies Strategy monitoring and corporate governance

d.
e. f.

IV.

LEARNING OUTCOMES: Following delivery of this course, interactive discussions and project assignments, students shall develop conceptual understanding of strategy formulation, implementation and evaluation that forms the essence of ‘strategic management.’ This course would equip students to develop requisite skills for developing long term strategic plans for an organization by carrying out SWOT and TOWS analysis, environment scanning, applying analytical techniques for strategy formulation, applying balanced scorecard approach for strategy implementation, and carrying out evaluation and control of the implementation by using different analytical tools including strategic audit.

V.

PRE- REQUISITES:

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It is essential that the student has a thorough understanding of basic concepts of management practices and functional duties of a typical manager in a typical commercial organization. VI. BOOKS AND REFERENCES: Main Text Book 1. A A Thompson, A J Strickland III, J E Gamble & Arun K Jain: Crafting and Executing Strategy-The Quest for Competitive Advantage- Concept and Cases, Tata McGraw Hill Publishing Co. Ltd. 16th Edition, 2008

Additional Readings 2. 3. 4. 5. 6. G Johnson & K Scholes: Exploring Corporate Strategy, Prentice hall of India Ltd.,6th Edition, 2003 M A Hitt, R D Ireland & R E Hoskisson: Strategic Management, South Western Thomson Learning, 4th Edition, 200 I Fred R David: Strategic Management, Pearson Education 2003 G Hamel & C K Prahalad: Competing for the Future, Tata McGraw Hill Publishing Co. Ltd. J David Hunger & Thomas L Wheelen: Strategic Management, Addison Wesley, 6thEdition, 2006 Jauch, L.R. and Glueck, W.F., Business Policy and Strategic Management, Frank Brothers and Co., 4675A, Ansari Road, 21 Daryaganj, New Delhi 110002, 2005. Sanjiv Agrawal: Corporate Governance - Concepts and Dimensions J B Barney: Gaining and Sustaining Competitive Advantage Nilakant and Ramnarayan: Managing Organizational Change M Bear and N Nohria: Breaking the Code of Change A C Hax & N S Majluf: The Strategy Concept and Process H Mintzberg & J B Quinp.: The Strategy Process P Ghemawat: Strategy and Business Landscape R Das: Crafting the Strategy Azhar Kazmi: Business Policy and Strategic Management Journals: 1. CFO Asia 2. Strategic Management Journal, Strat Manag J Published by John Wiley and Sons. ISSN (printed): 0143-2095. ISSN (electronic): 1097-0266. Online Resources:

7.
8. 9. 10. 11. 12. 13. 14. 15. 16.

a. www.cfoasia.com
b. c. VII. http://strategic-management.bestmanagementarticles.com/ http://www.blogcatalog.com/topic/strategic+management/ S.No 1 2 Parameter Midterm/ Group Assignments/ Seminar/ Case Analysis End Term* Weightage 40% 60%

ASSESSMENT CRITERIA:

*There will be only one integrated end-term assessment for 3 courses viz., MOS, MPS and Strategic Management.

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SESSION PLAN

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** Three guest lecture would be scheduled, anywhere between the first class and the last class after getting confirmation from experts. Session 1&2 Learning Objective Topic

Understanding Conceptual foundations of strategic management involving strategy what is strategy and why it formulation, implementation and evaluation. The relationship between is important a company’s strategy and its business model Understanding related concepts. Understanding the managerial process of crafting and executing strategy. Vision, mission, goals and objectives

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4-6

What does the process of crafting and executing strategy entail ? Developing a strategic vision; setting objectives; crafting a strategy; implementing and executing the strategy; initiating corrective adjustments; corporate governance Analyzing a company’s External Environment; scanning the external environment by using different strategic management tools including Porter’s “FIVE FORCE MODEL” and PESTL analysis. How well is the company’s present strategy working ? What are the company’s resource strength and weaknesses and its external opportunities and threats ? Are the company’s prices and cost competitive ? Is the company competitively stronger or weaker than key rivals ? ?What strategic issues and problems merit critical managerial attention ? Low-cost Provider Strategy; Differentiation Strategy; Best-Cost Provider Strategy; Focused Low-Cost Strategy; Focused Differentiation Strategy

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Understanding external environment.

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Analyzing a company’s resources and competitive position

12-13

Understanding Five Generic Competitive Strategies.

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Strategic business units (SBUs) Different types of Understanding concepts of Business strategies for meeting the requirements SBUs, of different SBUs Merger and Acquisition Strategies; Vertical Integration Strategies; Outsourcing strategies; Strategic Alliance and Collaborative partnership; joint ventures, licensing arrangements; value chain partnerships, etc. Offensive strategies; Defensive strategies; Strategies for using internet as a distribution channel; Choosing appropriate Functional-Area Strategies; The concept of Multicountry Competition and global Competition; Cross-country differences in cultural, Demographic, and market conditions; Strategic options for entering and competing in Foreign markets. Strategy implementation: Organizational structure and resource allocation. Balanced scorecard as an implementation tool.

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Other Important Strategic Choices

19-20

Competing in Foreign Markets Understanding implementation issues. Understanding strategy monitoring process and corporate governance Guest Lecture** LOC activities

21 & 22

23 & 24

Evaluation and control, strategic audit. Corporate Governance

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25-27 28-30#

Guest Lecture LOC Activities

# Similarly, three LOC activities would be organized anywhere between the first class and the last class VIII. SESSION DETAILS Sessions 1 & 2- What is strategy and why it is important? In this introductory session we will study the basic concepts of strategic management. This will include an understanding of benefits of strategic management, basic model of strategic management, challenges of strategic management, how to initiate strategy, strategic decision making, impact of technology on strategic decision making etc. Conceptual foundations of strategic management involving strategy formulation, implementation and evaluation are given important emphasis. The relationship between a company’s strategy and its business model is explained. a. Pre-Reading Page 1 to 17 of the core text b. Question for discussion in class

c.

“What do we mean by strategy”. Discuss with examples.

Video – to be screened in the class

d. Case discussion – Comcast’s Strategy to revolutionize the Cable Industry e. Learning Outcomes: As an introductory session, the objective is help the students understand the meaning
and purpose of strategic management. Being the capstone subject of management, students will be sensitized of the concept of success, value for the society and basic approach of a typical organization. f. Chapter

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Chapter 1, of the core text.

Session 3- Understanding related concepts. Vision, Mission, Goals and Objectives These are the starting concepts of strategy formulation. These are the source of all the decision making, triggering strategies, program, budgets and procedures, a company adopt. The session will also discuss about redefining business and how does it matter to the entire organization. a. Pre-Reading Page 20 to 31 of the core text b. Question for discussion in class “Can you understand why companies require to redefine their business over time?”. Discuss with examples. c. Video – to be screened in the class

d. Case discussion – Yahoo’s mission and core values e. Learning Outcomes: Student tends to understand the importance of forming vision or redefining business
with time to align the business to changing realities. Student should also be clear of the use of vision, mission, goals in steering the company to right direction to compete effectively with the peers. f. Chapter Chapter 2 of the core text. Session 4, 5, 6- Understanding the managerial process of crafting and executing strategy

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What does the process of crafting and executing strategy entail? Developing a strategic vision; setting objectives; crafting a strategy; implementing and executing the strategy; initiating corrective adjustments; corporate governance. Five tasks of strategic management are discussed using a common model of strategic management a. Pre-Reading Page 32 to 47 of the core text b. Question for discussion in class “How does vision and mission of the company get reflected into several strategies which work as blue print for strategy execution and implementation?” Discuss with examples. c. Video – to be screened in the class

d. Case discussion – Intel’s two strategic inflection points e. Learning Outcomes: Student is supposed to be sensitized to the fact that medium to large organization
require a formal process of strategy formulation and that a professional process of strategy formulation can prove to be a major factor in successful execution and implementation of the strategies to realize the goals and objectives of the company, as reflected from the vision, mission and values of the company. f. Chapter Chapter 2 of the core text.

Session 7 & 8- Understanding external environment Environmental scanning forms the analysis part of strategic management which tries to identify the factors which have direct bearing on the success or failure of the organization. These are the strategic factors and may be the opportunities, threats, strengths and weaknesses, which companies need to consider and gauge according to the societal and task environment and its own internal capabilities. This chapter however deals with external environment. Analyzing a company’s External Environment; scanning the external environment by using different strategic management tools including Porter’s “FIVE FORCE MODEL” and PESTL analysis. a. Pre-Reading Page 51 to 90 of the core text b. Question for discussion in class “How does the company tries to understand its external environment and filter out issues strategic to the future success or failure of the company?” Discuss with examples. c. Video – to be screened in the class

d. Case discussion – Cheaper steel may be radioactive e. Learning Outcomes: Student are now expected to appreciate the importance of general awareness of the
external world and be able to identify factors which are of core importance to a specific organization. f. Chapter Chapter 3 of the core text. Session 9, 10 & 11- Analyzing a company’s resources and competitive position Environmental scanning forms the analysis part of strategic management which tries to identify the factors which have direct bearing on the success or failure of the organization. These are the strategic factors and may be the opportunities, threats, strengths and weaknesses, which companies need to consider and gauge according

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to the societal and task environment and its own internal capabilities. This chapter however deals with internal environment. Analyzing a company’s resources and competitive position. Concept of SWOT and TOWS; Company value chain; Benchmarking; Cost competitiveness. a. Pre-Reading Page 97 to 128 of the core text b. Question for discussion in class “What are the internal strategic issues faced by a company in a hyper competitive situation?” Discuss with examples. c. Video – to be screened in the class

d. Case discussion – Fall of Subhiksha (Supposed to be a role model). e. Learning Outcomes: Students are now expected to appreciate the importance of most controllable
environmental factors which relate to the internal environment of the company. f. Chapter Chapter 4 of the core text. Session 12 & 13 – The five generic competitive strategies. Understanding five generic competitive strategies - Focused Differentiation Strategy; Low-cost Provider Strategy; Differentiation Strategy; Best-Cost Provider Strategy; Focus Low-Cost Strategy. a. Pre-Reading Page 135 to 161 of the core text

b. Question for discussion in class
What are the different ways a company tries to differentiate its products? c. Video – to be screened in the class

d. Case discussion – Wal-Mart’s value chain e. Learning Outcomes: Students are now expected to be aware of basic approaches to compete in the market
place and drive the firm based on generic competitive strategies in most practical and suitable manner. f. Chapter Chapter 5 of the core text. Session 14 - Understanding concepts of SBUs What is a strategic business unit? Why do we need such units in large business organizations? How does this structure fit into the overall corporate strategy of the business house? What are the benefits and pitfalls of diving business into SBUs a. Pre-Reading a. a. c. Notes to be provided Why and when there is a need to divide large businesses into smaller SBUs. Discuss with examples. Video – to be screened in the class

b. Question for discussion in class

d. Case discussion – To be announced 10

e. Learning Outcomes: Student are now expected to understand the concept of SBUs and alternative
organizational structures, in line with relation of restructuring the organization according f. Chapter

a. To be announced.
Session 15-18 - Understanding other important strategic choices. Merger and Acquisition Strategies; Vertical Integration Strategies; Outsourcing strategies; Strategic Alliance and Collaborative partnership; joint ventures, licensing arrangements; value chain partnerships, etc. Offensive strategies; Defensive strategies; Strategies for using internet as a distribution channel; Choosing appropriate, Functional-Area Strategies; g. Pre-Reading Pages 158 – 192 of the core text book h. Question for discussion in class “Thinking beyond generic strategies”. Discuss with examples. Why do we need to do that? i. Video – to be screened in the class

j. Case discussion – Brick and Click Strategies in office supply industry k. Learning Outcomes: Student are now expected to understand the concept innovative strategies. They must
understand that generic strategies are more bookish. They need to work beyond to actually compete in the market. l. Chapter Chapter 6 of the core text. Session 19-20 - Competing in Foreign Markets The concept of Multicountry Competition and global Competition; Cross-country differences in cultural, a. PreDemographic, and market conditions; Strategic options for entering in foreign markets Reading Notes to be provided b. Question for discussion in class “Can you do the strategic management in the global setup? How? ”. Discuss with examples. c. Video – to be screened in the class

d. Case discussion – To be announced e. Learning Outcomes: Student are now expected to understand the application of innovative concepts while
doing business in global markets. f. Chapter Notes to be provided Session 21-22 - Understanding implementation issues. Strategy implementation: Organizational structure and resource allocation. Balanced scorecard. a. Pre-Reading

a. Pages 286 – 312 of the core text book
b. Question for discussion in class

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a. How do you ensure strategy is implemented to delivered what is desired?
c. Video – to be screened in the class

d. Case discussion – General Electric Develops a talented and deep management team. e. Learning Outcomes: Student are now capable of taking implementation decision and understand the
concept of building organization conducive to implementation of strategies f. Chapter

a. Chapter 9 of the core text.
Session 23-24 - Understanding strategy monitoring process and corporate governance Evaluation and control, strategic audit. Corporate Governance a. Pre-Reading Pages 359 – 3379 of the core text book b. Question for discussion in class Why do implementation and execution need to be flexible and how corrections are made?

c. Video – NA d. Case discussion – Whirlpool’s use of six sigma. e. Learning Outcomes: Student should be capable of fine tuning the strategies
f. \ LOC activities Chapter Chapter11 of the core text

1. Students will be asked to visit any mall in Gurgaon and spend at least 2 hours there. Each group is required
to study the mall and find out basic competitive strategies followed by different brands of products. For example basic strategies of Big Bazar which differentiate itself from other competitors like Spencers etc. In addition students are required to observe any other strategic cues in the mall. 2. Student group will be asked to visit a Cineplex in Gurgaon and will be asked to study the strategic management at the Cineplex which differentiate it from other brands of Cineplex in Gurgaon

IX.

ANNEXURES: All the case studies mentioned above are available in the core text book which will be provided to each student by IILM.

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