BACHELOR IN BUSINESS ADMINISTRATION

SEMESTER

STRATEGIC MANAGEMENT

INDIVIDUAL ASSIGNMENT

Prepared for:
Lecturer’s name: Mr. Saboor

Prepared by:
Student’s Name: Ihedioha Nnamdi
ID No: ALFA2018-0179

Subject Code: BBA

Deadline date: 14th November, 2020

Table of Contents
Question 1...................................................................................................................................................3
Benefits of strategic planning..................................................................................................................3
1. Creates a sense of direction:........................................................................................................4
2. Increase operational efficiency....................................................................................................4
3. Increase market share and profitability........................................................................................4
4. Increase durability and sustainability...........................................................................................4
5. Being proactive instead of reactive..............................................................................................4
Key terms of strategic management.............................................................................................................4
Strategists................................................................................................................................................5
Vision Statement.....................................................................................................................................5
Mission Statement...................................................................................................................................5
External Opportunities & Threats............................................................................................................5
Internal Strengths & Weaknesses............................................................................................................5
Long Term Objectives.............................................................................................................................5
Strategies.................................................................................................................................................5
Annual Objectives...................................................................................................................................6
Policies....................................................................................................................................................6
Question 2...................................................................................................................................................6
Concept of SBU in a multi business organization....................................................................................6
3 Levels of strategy-corporate business and functional...............................................................................7
The Corporate Level................................................................................................................................7
The Business Unit Level..........................................................................................................................7
The Functional Level...............................................................................................................................8
Question 3...................................................................................................................................................8
The key traits of a CEO...........................................................................................................................8
Ability to learn from the past...............................................................................................................8
Strong communication skills...............................................................................................................8
Building relationships..........................................................................................................................8
Realistic optimism...............................................................................................................................9
Understanding.....................................................................................................................................9
Listening skills....................................................................................................................................9
Willingness to take calculated risks.....................................................................................................9
 Reading people and adapting to necessary management styles............................................................9
Coaching employees effectively:.........................................................................................................9
Thinking outside the box.....................................................................................................................9
The forces that design the strategic management systems...........................................................................9
Mission and Goals.................................................................................................................................10
Environmental Scanning........................................................................................................................10
Strategy Formulation.............................................................................................................................10
Strategy Evaluation...............................................................................................................................10
Question 4.................................................................................................................................................10
Grand strategies at the corporate level...................................................................................................10
The Stability Strategy........................................................................................................................11
The Expansion Strategy.....................................................................................................................11
The Retrenchment Strategy...............................................................................................................11
The Combination Strategy.................................................................................................................11
Question 5.................................................................................................................................................11
Factors affecting strategic choices.........................................................................................................11
Changes in Executive Management...................................................................................................12
Transformations in Organizational Structure.....................................................................................12
Competition from Other Businesses..................................................................................................12
Social and Cultural Factors:...............................................................................................................12
Laws and Regulations........................................................................................................................12
Technological Forces in Strategic Management................................................................................12
CITATIONS AND REFERENCES...........................................................................................................13
Question 1
Benefits of strategic planning.

Most business owners would agree that having a business strategy is important and necessary for
every business to grow and compete effectively. Overall, strategic planning helps to increase
operational efficiency, market share and profitability of your business. In the long run, the
exercise makes the business more sustainable as it has taken into account the potential
opportunities, trends and threats that might affect it. To help business owners get a better
understanding about the importance of having a business strategy, we are sharing our insights on
the 5 benefits your business could derive from strategic planning.
1. Creates a sense of direction: A strategic plan helps to creates a sense of purpose and to
define the direction in which an organization must travel, and aids in establishing realistic
objectives and goals that are in line with the vision and mission charted out for it. It also
creates the necessary foundation and boundaries to determine resource allocation and
efficient decision-making in the following areas (e.g. budget allocation, hiring decisions,
operational processes, marketing strategy etc.)

2. Increase operational efficiency: With a clear plan and direction in place, resources
could be channeled and monitored more effectively to ensure that effectiveness is
enhanced and wastage is reduced. Effective goals and KPIs could be set and measured to
determine the progress and growth of the organization.

3. Increase market share and profitability: By crafting and adopting a dedicated strategic
plan, organizations can get valuable insights on market trends, consumer segments,
buying behavior/patterns. With a well-planned and targeted approach, a clear strategic
intent could be channeled into sales and marketing efforts, leading onto a higher
possibility of increasing profitability and market share.

4. Increase durability and sustainability: Businesses are constantly adapting to change,

especially in a digitally-led economy. The purpose of strategic planning is to flag out
potential internal/external shocks and prepare the business to be more effective in
adapting. With industry trends and consumer demands constantly changing,
organizations that lack a strong foundation focus and foresight will have difficulties
riding the next wave.

5. Being proactive instead of reactive: The current dynamic business environment

requires every business to be equipped with a good strategic plan. Strategic planning
enables your business to stay ahead of the curve and be on top of the competition. It will
also enable your business to find and benefit from potential opportunities present in the
market.
Key terms of strategic management

There are some of basic strategic management key terms that need to be considered at the
beginning in order to completely understand strategic management. These strategic management
key terms are eight in numbers and are the base of strategic management.
Strategists: Strategists are individuals who are most responsible for the success or failure of an
organization. Strategists are individuals who form strategies. Strategists have various job titles,
such as chief executive officer, president, and owner, chair of the board, executive director,
chancellor, dean, or entrepreneur. Strategists help an organization gather, analyze, and organize
information.
Vision Statement: Vision statement is quite necessary for the operation of the organization as it
provides answer to the question that should be the organization wants to become? The first step
in the strategic planning is to develop the vision statement and after that mission statement is
prepared. Mostly the organizations develop single sentence vision statements.
Mission Statement: Mission statement is long lasting statement that differentiates one
organization from other similar organization. The scope of the operations of the organization in
terms of market and product is identified through mission statement.
External Opportunities & Threats: External opportunities and external threats refer to
economic, social, cultural, demographic, environmental, political, legal, governmental,
technological, and competitive trends and events that could significantly benefit or harm an
organization in the future. Opportunities and threats are largely beyond the control of a single
organization, thus the term external. The computer revolution, biotechnology, population shifts,
changing work values and attitudes, space exploration, recyclable packages, and increased
competition from foreign companies are examples of opportunities or threats for companies.
These types of changes are creating a different type of consumer and consequently a need for
different types of products, services, and strategies.
Internal Strengths & Weaknesses: Those activities of the organization that are under control of
the organization, and may show good and bad impact on the organization are known as internal
strengths and weaknesses of organization. These are present in the marketing, management,
production/operation, finance/accounting, and information technology research and development
activities of the organization. It is quite essential strategic activity for an organization to identify
and evaluate organizational strengths and weaknesses.
Long Term Objectives: Long term objectives are also from one of the important strategic
management key terms. Long term objectives are referred to as particular results that
organization wants to accomplish in targeting the mission. Expected results by targeting certain
strategies are represented by long term objectives. Strategies include those actions that are
executed for the accomplishment of the long term objectives. There should be consistent time
frame for strategies & objectives which range from two to five years.
Strategies: The means through which allow us to achieved long term objectives. Following are
included in the business strategies.
Geographic Expansion
Diversification
Product development
Acquisition
Retrenchment
Market penetration
Liquidation & Joint venture
Large amount of the resources of organization are required along with the decisions of top
management for the application of strategies in the form of actions.
Annual Objectives: Those short term targets that are helpful in achieving long term objectives
of the organization are called annual objectives. The annual objectives must be quantitative,
measurable, realistic, challenging, consistent and prioritized. These must be developed at
functional, divisional & corporate levels in large organizations. Annual objectives are significant
for strategy implementation whereas strategy formulation phase contains long term objectives.
Policies: Annual objectives are accomplished by the means of policies. Policies contain rules,
guidelines & procedures developed to assist efforts to accomplish stated objectives. Decision
making is guided through policies & recurring and repetitive situations are also addressed
through policies. Policies are usually mentioned in terms of marketing, finance/accounting,
Management and production/operation, activities related to information technology and research
and development.

Question 2
Concept of SBU in a multi business organization

Strategic Business Unit (SBU) implies an independently managed division of a large company,
having its own vision, mission and objectives, whose planning is done separately from other
businesses of the company. The vision, mission and objectives of the division are both distinct
from the parent enterprise and elemental to the long-term performance of the enterprise. Simply
put, an SBU is a cluster of associated businesses which are responsible for its combined planning
treatment, i.e. the company engaged in a diversified range of businesses, categorizes its
multitude of businesses into a few separate divisions, in a scientific way. The task may include
analysis and bifurcation of a variety of businesses.
It can be a business division, a product line of the division or even a specific product/brand,
targeting a particular group of customers or a geographical location. A strategic business unit is
specially formed to target a particular market segment, which requires expertise in production or
management, not present in the parent company. The structure of SBU consists of operating
units; wherein the units serve as an autonomous business. The top corporate officer assigns the
responsibility of the business to the managers, for the regular operations and business unit
strategy. So, the corporate officer is accountable for the formulation and implementation of the
comprehensive strategy and administers the SBU by way of strategic and financial controls.
In this way, the structure combines related divisions of business into the strategic business unit
and the senior executive is empowered for taking decisions for each unit. The senior executive
works under the supervision of a chief executive officer. There are three levels in a strategic
business unit, wherein the corporate headquarters remain at the top, SBU’s in the middle and
divisions clustered by similarity, within each SBU, remain at the bottom. Hence, the divisions
within the SBU are associated with each other, and the SBU groups are independent of each
other. From the strategic viewpoint, each SBU is an independent business. A single strategic
business unit is considered as a profit center and governed by the corporate officers. It stresses
over strategic planning instead of operational control so that the separate divisions of the SBU
can respond as fast as they can, to the changing business environment.

3 Levels of strategy-corporate business and functional

How ‘far down’ into the company does our strategy really need to go?” In other words, in what
areas of the company should the groundwork for strategy be laid? This is a question we’ve heard
repeatedly from people at companies that are either in the beginning phases of strategy creation
or are updating an outdated strategy. Regardless of which of those two camps you belong to, you
should have a clear understanding of the three levels of strategy in your business. The three
levels of strategy are:
The Corporate Level: The corporate level is the highest and therefore the most broad, level of
strategy in business. Corporate-level strategy should define your organization’s main purpose. It
should also direct all your downstream decision-making. For example, the objectives (e.g. high-
level goals) in the levels below this one should all have a direct line to the goals defined here.
Creating and understanding your corporate-level strategy is particularly important for
organizations that have multiple lines of business. For example, if one arm of your business
manufactures a product and another arm sells that product, you’ll have a separate business unit
strategy for each—but one single corporate-level strategy that describes why those two arms are
important, and how those businesses interact for the good of the organization.
The Business Unit Level: Your business unit strategy is used for different areas of your
business (like services and products, or multiple departments or divisions, for example). The
complexity of this level will depend on how many businesses you are in, and how your company
is structured. It’s important to create a strategy for each business unit so that you can see which
units are excelling and which need improvement. Having a strategy at the business unit level
allows you to weigh the costs and benefits of each business unit and to decide where you should
spend your resources. Depending on the progress towards your goals and your analysis of the
market, you may even decide it’s time to divest or sell some of your business units so you can
focus on the areas that are most important to achieving your company’s corporate strategy.
The Functional Level: The functional level of your strategy involves each department—and
what those at the department level are doing day-to-day to support corporate initiatives. Whereas
your business unit strategy would be defined and evaluated by senior leadership, your functional
strategy is typically produced by department heads (e.g. leaders in marketing, operations,
finance, IT, etc.). These individuals can help ensure that the departments execute the defined
strategic elements, and that the components laid out at the functional level help support both the
department level and corporate level strategies.

Question 3
The key traits of a CEO

Becoming a CEO takes hard work and dedication. It isn't for the faint of heart. However, it
seems once the magical title is bestowed upon someone, they can forget a lot of traits they
admired in their successor. Effective leadership is the most important aspect of a company and
its team's success. But what makes a leader effective? A CEO must possess these certain traits to
truly become a great leader:
Ability to learn from the past: A CEO must have the ability to learn from past experiences and
instill lessons for the future. CEOs are only human. Mistakes will happen, but it's important that
a CEO learn from them to prevent them from happening again. For example, if a CEO didn't
have an effective crisis management system in place when a situation arose, he or she should
learn what they need for future reference and be able to build a plan based on what went wrong
the first time.
Strong communication skills: As a leader, a CEO needs strong communication skills.
Communication is key in any setting and as someone in charge, a CEO must learn how to
communicate effectively to boost moral when necessary. From motivating his or her team to
completing projects in a timely manner, a CEO must be able to communicate what they need,
from whom, when they need it by and how things should be done. According to a Navalent study
on Developing Exceptional Executives, "Top executives are consistently transparent and
balanced in their communication. They effectively translate their view of business potential and
challenges, as well as expectations for action using succinct, direct and readily understandable
language in doses that are easily digestible. They devote time to their connections."
Building relationships: A CEO must have the ability to build relationships with clients and
coworkers to be successful. Relationships create loyalty and an image for the CEO and the
company. Positive relationships also create great word-of-mouth, and while your business may
not run solely on that type of marketing, it's always a plus.
Realistic optimism: It's important for a CEO to be confident, but not arrogant about their skills
and what they offer their employees. They should remain aware of and confront challenges while
still striving to reach audacious goals.
Understanding: A CEO must understand matters in and out of the workplace. Employees are
people with lives outside of work, and if there's an emergency, a CEO should be understanding
and let the employee handle it. The risk of making mistakes is far greater if an employee is
working and focused on other things. A CEO must also understand things happen out of anyone's
control. In sales, sometimes a customer can suddenly change their mind. A CEO must
understand and accept the situation and handle things accordingly.
Listening skills: The same Navalent study mentioned above states, "Top executives are
distinguished by the consistency with which they listen to, and actively seek out the ideas and
opinions of others. They incorporate other views into their plans to solve organizational
problems." A good CEO must have the ability to listen attentively. Not every idea a CEO has is
going to be a good one, and not every direction is the right one. When a CEO can listen and seek
the ideas of trusted individuals, the team and company is more likely to be successful.
Willingness to take calculated risks: Great, and sometimes unforeseen opportunities often
come from taking risks. Taking calculated risks shows confidence and helps you grow as a
business leader. Often times, risky decisions may take you on a new, important path. Success
won't be handed to you on a silver platter. Embracing risk also helps you overcome the fear of
failing.
Reading people and adapting to necessary management styles: One of the greatest traits a
CEO can have is the ability to read people and adapt management styles accordingly. Not
everyone has the same learning style and if you want your company and your employees to
succeed, it's important to be able to adapt to the needs of your employees.
Coaching employees effectively: As the head of a company, you are creating a healthy and
collaborative work environment. You are not only preparing the next generation of your
company but the next generation in your line of work. It's your job to give your employees the
tools they need to be successful. You must be able to teach and train in a way that inspires your
staff to succeed.
Thinking outside the box: While it may seem like an obvious fact, the market changes with the
times. It's important to think outside the box because sometimes there are better ways to achieve
business goals. Sometimes, the same tried and true methods don't always work. When a CEO
thinks outside the box, it makes them and their company stand out to customers and prospects.
The forces that design the strategic management systems
Everything you need to know about strategic management process. Strategic management is all
about identification and description of the strategies that managers can carry so as to achieve
better performance and a competitive advantage for their organization. An organization is said to
have competitive advantage if its profitability is higher than the average profitability for all
companies in its industry. The strategic management process defines the organization’s strategy.
It is also the process which helps managers make a choice of a set of strategies for the
organization that will enable it to achieve better performance. Strategic management process has
following five steps:
Mission and Goals: The first step in the strategic management begins with senior managers
evaluating their position in relation to the organization’s current mission and goals. The mission
describes the organization’s values and aspirations; and indicates the direction in which senior
management is going. Goals are the desired ends sought through the actual operating procedures
of the organization. It typically describes short-term measurable outcomes.
Environmental Scanning: Environmental scanning refers to a process of collecting, scrutinizing
and providing information for strategic purposes and helps in analyzing the internal and external
factors influencing an organization. After executing the process, management should evaluate it
on a continuous basis and strive to improve it.
Strategy Formulation: Strategy formulation is the process of deciding best course of action for
achieving organizational objectives. After conducting environment scanning process, managers
formulate corporate, business and functional strategies.
Strategy Evaluation: Strategy evaluation which is the final step of strategy management process
involves- appraising internal and external factors, measuring performance, and taking
remedial/corrective actions. Evaluation assures the management that the organizational strategy
as well as its implementation meets the organizational objectives.
These steps are carried by the businesses, in chronological order, when creating a new strategic
management plan. Present businesses that have already created a strategic management plan will
revert to these steps as per the situation’s requirement, so as to make essential changes.
Question 4
Grand strategies at the corporate level

The Grand Strategies are the corporate level strategies designed to identify the firm’s choice with
respect to the direction it follows to accomplish its set objectives. Simply, it involves the
decision of choosing the long term plans from the set of available alternatives. The Grand
Strategies are also called as Master Strategies or Corporate Strategies. There are four grand
strategic alternatives that can be followed by the organization to realize its long-term objectives:
The Stability Strategy: This is adopted when the organization attempts to maintain its current
position and focuses only on the incremental improvement by merely changing one or more of
its business operations in the perspective of customer groups, customer functions and technology
alternatives, either individually or collectively. Generally, the stability strategy is adopted by the
firms that are risk averse, usually the small scale businesses or if the market conditions are not
favorable, and the firm is satisfied with its performance, then it will not make any significant
changes in its business operations. Also, the firms, which are slow and reluctant to change finds
the stability strategy safe and do not look for any other options.
The Expansion Strategy: This is adopted by an organization when it attempts to achieve a high
growth as compared to its past achievements. In other words, when a firm aims to grow
considerably by broadening the scope of one of its business operations in the perspective of
customer groups, customer functions and technology alternatives, either individually or jointly,
then it follows the Expansion Strategy. The reasons for the expansion could be survival, higher
profits, increased prestige, economies of scale, larger market share, social benefits, etc. The
expansion strategy is adopted by those firms who have managers with a high degree of
achievement and recognition. Their aim is to grow, irrespective of the risk and the hurdles
coming in the way.
The Retrenchment Strategy: This is adopted when an organization aims at reducing its one or
more business operations with the view to cut expenses and reach to a more stable financial
position. In other words, the strategy followed, when a firm decides to eliminate its activities
through a considerable reduction in its business operations, in the perspective of customer
groups, customer functions and technology alternatives, either individually or collectively is
called as Retrenchment Strategy. The firm can either restructure its business operations or
discontinue it, so as to revitalize its financial position.
The Combination Strategy: This means making the use of other grand strategies (stability,
expansion or retrenchment) simultaneously. Simply, the combination of any grand strategy used
by an organization in different businesses at the same time or in the same business at different
times with an aim to improve its efficiency is called as a combination strategy. Such strategy is
followed when an organization is large and complex and consists of several businesses that lie in
different industries, serving different purposes.
Question 5
Factors affecting strategic choices

Strategic management is the systematic process of analyzing, coordinating and implementing

decisions and action plans to achieve sustainable competitive advantage. Factors influencing
changes in strategic management may be internal or external to the business organization. Some
of these factors include management functions, structural transformations, competition, socio-
economic factors, laws and technology.
Changes in Executive Management: Changes in the composition of the board of directors or
exit of chief executive officer’s influence changes in strategy. The incoming members of the
management team may seek to review the existing strategies with the view of injecting new ideas
to take the business to the next level.
Transformations in Organizational Structure: Structural transformations, such as mergers
acquisitions and expansion to international markets, necessitate strategic realignment. Such
transformations alter the management, capital, ownership and market structures of your
organization, making changes in strategic management inevitable. Your company must adjust
existing strategies and develop new ones to reconcile and realign the missions and objectives of
the organization.
Competition from Other Businesses: Rising competition in target markets triggers urgent
reviews of strategies in efforts to enhance competitive advantage. Businesses employ strategic
tools such as a SWOT analysis to examine strengths, weaknesses, opportunities and threats and
change the existing strategies. For example, challenges such as product imitations by competitors
pose threats to your competitive advantage. Changing strategies will enable you to change course
by addressing the inherent weaknesses and threats.
Social and Cultural Factors: The social and cultural profiles of your target markets may prompt
changes in strategic management. You want to make sure that the strategic orientation of your
business is realigned to account for demographic and cultural sensitivities, especially when
entering new markets or designing new products for specific market segments.
Laws and Regulations: Changes in laws, such as tax, environment and healthcare laws,
influence changes in strategic management. You must adjust the existing strategies of your
business to incorporate the requirements of the new laws. For example, a law requiring you to
reduce your carbon footprint may necessitate the review of your production or supply chain
management strategies in order to comply with the new requirements.
Technological Forces in Strategic Management: Your Company may change strategies due to
the availability or lack thereof of adequate technological capabilities. The acquisition of capital
resources, such as automated equipment and advanced machinery, may prompt your organization
to increase production volumes and adjust the supply chain functions. Information technology
trends also influence changes in strategic management. For example, the growing influence of e-
commerce may prompt your business to abandon brick-and-mortar distribution strategies and
embrace online distribution strategies.
 CITATIONS AND REFERENCES

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Prosci.com: Why You Need A Change Management Strategy
SHRM.org: Managing Organizational Change
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Frost, B. (2000). Measuring performance. Dallas: Measurement International.
Arrfelt, M., Wiseman, R. M., Hult, G. T. M. 2013. Looking backward instead of forward:
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