Introduction

Strategy
Strategos

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 Contents

ü Strategy concept and formulation

ü Types of strategies
ü Strategic planning process
ü Strategy Analysis Tools
ü Generic Corporate Strategies by Porter
ü Effective Implementation of Strategies

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 What is strategy??

“The determination of the basic long term goals

and objectives of an enterprise and the adoption
of the courses of action and the allocation of
resources necessary for carrying out these goals".

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 What is Strategy?

• Strategic Management is a process for

analyzing a company's competitive
situation, developing the company's
strategic goals, and devising a plan of
action and allocation of resources that
will help a company achieve its goals.

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 Strategy is the answer to?

• What do we want to do?

• What do we bring to the
table?
• Where should we put our
efforts, and why?
• What do we need to do to
compete, survive, and meet
our goals?
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 “Hows” of strategy

• How to please customers

• How to respond to changing market conditions
• How to outcompete rivals
• How to grow the business
• How to manage each functional piece of the business
and develop
needed organizational capabilities
• How to achieve strategic and financial objectives
• How to balance short term and long term Strategies

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 Types of Strategies

• Corporate strategy
CCorporate
Strategy
Business
strategy
• Business strategy Functional
strategy

• Functional strategy

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 Corporate Strategy

v Corporate strategy is one, which decides

what business the organization should be in,
and how the overall group of activities
should be structured and managed.

v Porter has described it as the overall plan

for a diversified business.

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 Corporate Strategy (..contd)

It deals with three key issues facing the

corporation as a whole:
Ø Directional strategy – The firm’s overall orientation
towards growth, stability and retrenchment.
Ø Portfolio analysis – The industries or markets in
which the firm competes through its products
and business units.
Ø Parenting strategy – The manner in which the
management coordinates activities and transfers
resources and cultivate capabilities among product
lines and business units.

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 Strategy Formulation

• Formulation of strategies is a creative and

analytical process.

• The process involves a number of activities

and their analysis to arrive at a decision.

• It suggests the various elements of strategy

formulation and process and the way they
interact among themselves

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 Strategy Formulation(..contd)

Accordingly the various elements are:

• Corporate mission and objectives

• Environmental analysis
• Corporate analysis
• Identification  of alternatives
• Choice  of alternatives

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 Strategic Planning Process

• It is the formal consideration of an

organization's future course. All strategic
planning deals with at least one of three key
questions:

Ø "What do we do?"

Ø "For whom do we do it?"

Ø "How do we excel?"
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 Vision, Mission and Values

v Vision: Defines the desired or intended future state

of an organization or enterprise in terms of its
fundamental objective and/or strategic direction.
v Mission: Defines the fundamental purpose of an
organization or an enterprise, basically describing
why it exists and what it does to achieve its Vision.
v Values: Beliefs that are shared among the
stakeholders of an organization. Values drive an
organization's culture and priorities

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 Portfolio Analysis

The Portfolio Analysis module provides project

analysis across the enterprise. In particular, it helps
project-control coordinators, project managers, and
program managers analyze schedule,resources,and
cost data across projects.

Types of Portfolio Analysis

• Growth Share Matrix (Boston Consulting Group)
• Industry Attractiveness/Business Position Matrix
(General Electric)

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 The Boston Consulting Group’s
Growth-Share Matrix

20%- Stars Question marks

Market Growth Rate

16%-
4
3 ?
?? 1
12%- 5 2
Cash cows Dogs
8%- 8
4%- 7
6
0
10x 8x 2x 1x .5x .3x .1x
Relative Market Share 2-15
 Problem Child or ?

Low market share in

expanding industry
Needs substantial
cash to improve its
position.
Can become a star in
future.
Leave market.

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 Star Strategies
Leader expanding
industry
Generates large profits
Requires substantial
investments to sustain
growth
Increase sales – e.g. new
markets, new channels
of distribution
Increase market share

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 Cash Cow
Leader in mature or declining
industry
Can generate funds for other
SBUs
Maintain market share e.g.
ensure quality, build customer
loyalty, develop substitute
brands
Maximize Cash Flow e.g.
increase usage rate, rate of
replacement, modify expense
structure, raise prices

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 Dogs

Low market share in a

mature or declining
industry.
Cost disadvantages and
few growth
opportunities.
Harvest or Divest.
Concentrate on niches
requiring limited effort.

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 The TOWS Matrix

v The TOWS matrix, serves as a conceptual

framework for future research about the
combination of external factors and those
internal to the enterprise, and the strategies
based on these variables.

v TOWS Analysis is a variant of the classic

business tool, SWOT Analysis. TOWS and
SWOT are acronyms for different
arrangements of the words Strengths,
Weaknesses, Opportunities and
Threats.

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 The TOWS Matrix(..Contd)

v SWOT or TOWS analysis helps you get a better

understanding of the strategic choices that you face.At a
practical level, the only difference between TOWS and
SWOT is that TOWS emphasizes the external environment
whilst SWOT emphasizes the internal environment.
v SWOT or TOWS analysis helps you get a better
understanding of the strategic choices that you face.
Like How do you:
• Make the most of your strengths?
• Circumvent your weaknesses?
• Capitalize on your opportunities?
• Manage your threats?

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 Porter Generic Strategies

• Michael Porter has described a category

scheme consisting of three general types of
strategies that are commonly used by businesses
to achieve and maintain competitive advantage.
• These three generic strategies are defined along
two dimensions: strategic scope and strategic
strength.

• Strategic scope is a demand-side dimension and

Strategic strength is a side dimension

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 Porter Generic Strategies(..contd)

ØCost Leadership Strategy

ØDifferentiation Strategy

ØSegmentation or Focus Strategy 2-23

 Strategy Implementation

“Strategy implementation is the process by which

strategies and policies are put in to action through
the development of programs.”

Designing the organizational structure

Aligning functional strategies
Obtaining & directing resources
Adapting to changes

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 Implementation activities

Develop a capable organization

Allocate resources
Establish policies & procedures
Motivate & reward people
Create culture and work climate
Install internal support systems
Institute continuous improvement
Exert internal leadership, keep the vision
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How strategy be implemented

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 Conclusion

Strategic management is a continuous

process.
It is not a one time event.
After the first strategic plan is developed,
management still needs to continuously:
ü Scan the external environment
ü Evaluate new conditions and events
ü Take corrective actions as needed

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That’s our Strategy!!

Any
Queries???

Thanks!!!
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