University of Karachi

Karachi University Business School

Assignment Subject: Strategic Management

Name: Tasbeeha Salehjee

Submitted to: Ms Tooba

Submission Date: 10th January, 2021

Seat Number: EP-19541903

Topic Title: Strategic Management Importance, Process and Formulation of

Growth Strategies
Why the look for Strategic Management:
In today’s competitive business environments companies look for strategic management so do they works
on their plans that shows how to sustain their business operations, their competitive advantage and increase
their profitability by using the concept of strategic management.

Also they look for strategic management because it has many benefits some of them have already been
pointed out in the 1960’s when Alfred Chandler mapped out that “structure follows strategy”, meaning that
a long-term perspective and formulated strategy provides a company structure, focus, alignment and
direction.

A comprehensive summary of why to look strategic management is formulated by Lamb (1984): “Strategic
management is an ongoing process that helps managers to evaluates and controls their business and the
industries in which the company is involved; assesses its competitors and sets goals and strategies to meet
all existing and potential competitors; also help in reassesses each strategy annually or quarterly to
determine how it has been implemented and whether it has succeeded or needs replacement by a new
strategy to meet changed circumstances, new technology, new competitors, a new economic environment,
a new social, financial or political environment”.

How important is strategic management:

Everything we need to know about the importance of strategic management is, it is about success and
failure, about the ability to plan wars and win them. Effective strategic management can transform the
performance of an organization, make fortunes for shareholders or change the structure of an industry.
Ineffective strategic management can bankrupt companies and ruin the careers of executives.

Strategic management helps a decision-maker to get equipped with management tools or

anticipating changes and directing the organizational activities along the right path. Practice of
strategic management reduces the risk of operation by helping the enterprise to innovate in time
and take an early action.

The importance of strategic management can be understood under the following points:-

1. Foundation of Ultimate Success or Failure

2. Sign of Brilliant Management
3. Deals with Real-Life Business Situations
4. Enriches the Practice of Management
5. Forward Thinking
6. Route Map
7. Provides Real-World View of Business Management
8. Raises the Level of Success
9. Whole Approach to Managing
10. Solution of Multiple Problems
11. Comprehensive Approach to Managing Discontinuous and Complex Changes
12. Renews Confidence in Current Strategies
13. Long-Term Organizational Success
14. Important Way to Keep Track of International Developments
15. Operating Successfully in Dynamic Environment
16. Shaping Organization’s Destiny and
17. Lighthouse Effect.

There's an old Japanese saying that I like, which to me sums up pretty succinctly why strategic
management is important:

When you’re dying of thirst, it's too late to start thinking about digging a well.

There are tons of other benefits to strategic management, but above mention are for me the biggest that go
beyond the basic 'it makes us better at what we do' benefit that we all know about.

What is the process of strategic management in our organization?

The strategic management process in my organization (Gloria Jeans) is more like others just a set of rules
to follow. Employees has a documented set of steps that they will go through to turn the 'concept' of
strategic management into reality for our organization.

In my organization upper management think strategically first, then apply that thought to a process. The
main elements of a typical strategic management process that my organization include strategic
planning followed by implementation, and finally strategic tracking and iteration.

This process typically involves 3 stages Plan >> Manage >> Track.
1: The Plan Phase of the Strategic Management Process
This first part of the strategic management process involves figuring out what we want to accomplish,
and how we are going to get there. The Plan phase include many points which we put into consideration.
Some of these are

 High-Level Goal Setting

 Set Corporate Level Strategic Objectives
 Strategic analysis & understanding your environment
 Internal Strategic Analysis
 External Strategic Analysis
 SWOT Analysis

After considering all above mentioned point we make In-Depth Strategy Formulation to achieve our
long or short term objectives.

2: The Manage Phase of the Strategic Management Process

Now in this phase we have a plan, and this is the time to start the hard work of strategy implementation
At this phase everyone within the organization has been made clear of their responsibilities and duties, and
how that fits in with the overall goal. Additionally, if any resources or funding for the venture that need to
be secure, get done at this point. Once the funding is in place and the employees are ready, team execute
the plan.

Strategic Implementation phase is highly based on Strategic Communication

Strictly speaking, our company consider the communication of our strategy as part of strategy formulation
as it is just as important to strategy implementation as it is to formulation.

At a minimum, our strategic communication include:

 An initial deep-dive into the new strategy for our entire organization.
 Quarterly all-hands updates on the progress of our corporate level strategy.
 An annual review with all employees to talk about any changes to the strategy as we perform our
strategy iteration.

3: The Track Phase of the Strategic Management Process

With implementation underway, we turn to the final phase of the strategic management process, which
is strategy execution track we do this to see either we are on right path or not. This phase
include performance measurements, consistent review of internal and external issues and making of
corrective actions where necessary.

Monitoring internal and external issues will also enable us to react to any substantial change in our business
environment. If we determine that the strategy is not moving us toward our goal, we take corrective actions.
Again if those actions are not successful, we repeat the strategic management process. Because internal and
external issues are constantly evolving, any data gained in this stage should be retained to help with any
future strategies.

This was the strategic management process in my organization which I think is relevant for capacity
building and setting the organization to be on the right track.

Growth Strategies
When a firm seeks to grow, it is also a strategic question whether to diversify or internationalize
to sustain its business operations. A firm may diversify if current product lines do not match
growth potential, or if current operations are not profitable. There are two basic diversification
strategies, concentric/ related and conglomerate/ unrelated (Hunger and Wheelen, 2009, 2003,
2001). Related diversification occurs when a firm enters into strategic business area (SBAs) by
adding products or services, which are related to the existing core SBA. Related diversification can
be classified by the direction of diversification, vertical integration (backward and forward) and
horizontal integration.

Firms that operate in global industries must complete on worldwide basis if they are to succeed.
This is because their strategic positions in specific markets are affected strongly by their overall
global positions (Kotler et al., 2005). The fundamental reason for firms to go international can be seen in
proactive motives. Proactive motive represents stimuli to attempt strategy changes, which based on the
firm’s interesting in exploiting unique competences and/or market possibilities.

Formulation of Growth Strategies

Growth strategies are business plans designed
to improve the business performance of a
company. Ansoff’s grid is very useful to detect
new intensive growth. The grid is mainly
considers product and market. The product can
be current product or new product. And the
market can be current market or new market.
On the basis of product and market there are
four strategy named: market penetration,
product development, market development and
diversification.

To prepare my report I have chosen Gloria

Jeans Coffees Shop who also offer different
types of products like Coffee, tea, cakes,
sandwiches etc.
Market Penetration :( existing market, existing products): The main goal in this
strategy is to expand sales of existing product in existing market. I think this can be the safest
strategy for Gloria Jeans because they have deep knowledge of their product and current market.
The main goal of Gloria Jeans should be to extend its market share by selling more products to
established customers and try to achieve new kind of customers inside the existing market. To
achieve this goal Gloria Jeans Coffees can try to do some promotional activities. They can
introduce more outlets inside the existing market area so that the customers can easily get their
products.

Product Development: (existing market, new product): Gloria Jeans Coffee can
introduce new products into existing market. This strategy is related to the possibility to meet
customers need more closely and outperform competitors, through the introduction of a new
product. They can introduced so many products like different type of tea, seared steak, egg and
tomatillo warp, Chicken and protein bowl and lunch meal for their existing market.

Market Development: (new market, existing product): In this strategy the main goal
is to enter an existing product into a new market or segment. The Gloria Jeans Company is now
operating in posh areas of Pakistan. They can developed their market to some others areas too.
Gloria Jeans also must plans to enter more countries of Asia, Africa. In future Gloria Jeans can
grows by expanding its local reach in order to capture new market.

Diversification: (new market, new product): In this intensive strategy, Gloria Jeans can
grows by developing new business of Equipment. They can selling Coffee makers, Espresso
Makers, Teapots and Tea kettles and different type of related accessories. These products will be
new product for the company. They can targeting those people who like to make coffee or tea at
home or those people who don’t have time to go to shop. So they have selected new market.

Conclusion
Gloria Jeans Coffee can have different range of products targeting both existing/new customers and
existing/new markets. The company should follows different strategies according to the local tastes, place,
and consumer behavior. I think development of new products is good move for the company, because
customers demand is now changing day by day.

Also I would conclude that it is an insightful reminder to all business operator that, diligent strategic
management is essential for success. It never ceases to amaze me how many hopeful potential small or big
business operators put their savings into their ventures without doing the proper strategic planning and then
once involved fail to pay attention to the key performance indicators that project the health of their
operation. So for the better part of a decade, strategy has been a business buzzword. Top executives ponder
strategic objectives and missions and in regard to this managers should do planning that has its glamor that
work efficiently well for the organization.