Strategic management is the concept of identification, implementation, and management of the strategies

that managers carry out to achieve the goals and objectives of their organization. It can also be defined as
a bundle of decisions that a manager has to undertake which directly contributes to the firm’s
performance. The manager responsible for Strategic management must have a thorough knowledge of the
internal and external organizational environment to make the right decisions.

According to Kenneth Hatten, strategic management is the process by which an organisation formulates
objectives and manages to achieve them. Strategy is the means to an organisational end; it is the way to
achieve organisational objectives.

The strategic management process includes 7 steps:

 Setting the Goal – The first and foremost stage in the process of strategic management requires the
organization to set the short term and long term goals it wants to achieve.
 Initial Assesment – The second stages says to gathers as much data and information as possible to
help state the mission and vision of the organization.
 Situation Analysis – It refers to the process of collecting, scrutinizing and providing information for
strategic purposes. It helps in analyzing the internal and external environment that is influencing an
organization.
 Strategy Formulation – Strategy formulation is the process of deciding the best course of action to
be taken in order to achieve the goals and objectives of the organization.
 Strategy Implementation – Executing the formulated strategy in such a way that it successfully
creates a competitive advantage for the company. In simple words, putting the chosen plan into
action.
 Strategy Monitoring – Strategy Monitoring involves the key evaluation strategies like taking into
account the internal and external factors that are the root of the present strategies and measuring
the team performance.
 SWOT Analysis – It helps in determining the Strengths, Weaknesses, Opportunities and Threats
(SWOT) of an organization and taking remedial/corrective courses of actions to fight these
weaknesses and threats.

Components of Strategic Management

1) Formulation :- Formulation includes an assessment of the environment in which the organization
operates and then creating a strategy on how the organization will operate and compete. This is similar to
the first step of the budgeting process.

2) Implementation :- Implementation includes the deployment of an organization’s resources to meet the

desired objectives.

Characteristics of strategic management

1) Long-term Issues :- The issues which strategic management handles are usually of long-term nature.
These issues not necessarily affect the organisation immediately but will benefit the organisation in the
future. For example, if a company spends on the education of its employees, it may not witness increases
in productivity in the short-run, but in due course, highly educated employees will deliver better results
and will also help in increasing the returns.

2) Competitive Advantage :- Strategic management assists the managers in looking for fresh avenues
for achieving sustainable competitive advantage. When strategic management principles are applied
regularly in the proceedings of the organisation, managers can increase the number of satisfied customers,
provide goods and services at economical prices, and can develop a highly satisfied workforce.

3) Impact on Operations :- An effective strategic management process affects operational issues

positively. For example, if increases in salary and performance are correlated then this would increase the
operational productivity, as the employees will be motivated to put more effort in their work. Operating
decisions are the ones that involve topics like deciding the best way to handle sales with a particular
segment of customers or making decisions regarding selling products on credit. Decisions concerned with
operational issues are made by lower level managers.

4) Future-Oriented :- Strategic management makes decisions regarding situations that would occur in
the future and are not a part of the day-to-day activities. Managers are ignorant about the after effects of
their decisions because of the dynamic and uncertain business environment.

5) Complex :- Since strategic management is uncertain, it becomes complex as well. Managers come
across situations related to the business environment that are not easy to understand. There is a need for
analysing internal and external environments.

6) Organisation-Wide :- The implementation of strategic management affects the entire organisation

and not merely the operation on which strategic management principles are applied. It entails strategic
choices and is a systematic approach.

7) Long-Term Implications :- The implications of strategic management are long-term and do not
affect the routine operations of the organisations. The concepts of strategic management are concerned
with the mission, vision and objectives of the organisation.

8) Facilitates Strategic Implementation :- Strategic management makes sure that strategies are
effectively executed and implemented with the help of action-oriented plans.

School of thought on stretagy formation

The schools of thought on strategy formulation, were created by the academic Henry Mintzberg, in his
book Strategy Safari; A Guided Tour through the Wilds of Strategic Management. Mintzberg proposes a
Strategy Formulation process with ten school of thoughts.[1] he believed that any type of business needs
to be driven by a strategy[2].

Strategy Formulation Process

Strategy formulation is part of a strategic management process[3]. Strategic management focuses in

creating future-oriented strategies that allow an organization to achieve its objectives, considering its
capabilities, constraints, and the environment in which it operates[4]. A strategy has to be S.M.A.R.T.
(Specific, Measurable, Attainable, Realistic and Time based) is a way to make sure the organization's vision
is made concrete[5] If an organization wants to succeed, it has to accomplish the following phases.

1. Definition of the organization,

2. Definition of the strategic mission,

3. Definition of the strategic objectives,

4. Definition of the competitive strategy,

5. Implementation of the strategies

6. Evaluation progress[4]

The levels of strategy

Mintzberg divided strategy into two groups which are prescriptive schools and the descriptive schools.
[6]The former contains the design, the planning and the positioning schools. The latter, the
entreprenurial, cognitive, learning, power, cultural, environmental, and the configuration school[1].

The prescriptive school

 The design school

Is emphacized on the appraisals of the external and internal situation the former uncovering threats and
opportunities in the environment the latter revealing strengths and weaknesses of the organization[7]. This
means developing a SWOT analysis, where the results can be used to analyse strategic options which both
exploit the internal opportunities[6]

 The planning school

Recomends the analysis of the situation of the business, taking into account external and internal
factors[8]. Here the innovation and the colaborative learning are encouraged.

 The positioning school[1]

Is based on the Porter's five forces analysis. This approach sees strategy formation as an analytical process.
Supporters of this school analyse the business context of the industry they are in and look for ways that
their organisation can improve their competitive position within it[1]. Is driven like both the programmatic
and consultancy driven. [2]

The descriptive school

 The entrepreneurial school

Suggests that organizations that follow this path, have a visionary leader [8]that adapts previous atrategies
of the company to the contemporary times. Here the environment is not a stable factor it can be
influenced and manipulated[9]

 The cognitive school

This approach sees strategy formation as a mental process, using cognitive psychology to get into the
strategist’s mind. According to Mintzberg, the Cognitive School’s approach is less than perfect. “This school
is characterised more by its potential than by its contribution…The central idea is valid – that the strategy
formation process is also fundamentally one of cognition…but strategic management, in practice, if not in
theory, has yet to gain sufficiently from cognitive psychology. Cognitive psychology has yet to address
adequately the questions of prime interest to strategic management, especially how concepts form in the
mind of the strategist.”[1]

 The learning school

Strategy is percived as an emergent process [10] with the organisation coming to realise over time what
does and doesn’t work for them. What they learn is then fed back into their overall strategy[1].
  The power school

Is focused on self-interest, here the strategy formation is shaped by power and politics, whether as a
process inside the organization or as the behavior of the organization itself in its external environment. The
strategies are emergent and partial [7]. Enterprises achieve their goals by persuation, lobbying and
bargaining.

 The cultural school

this approach sees strategy formation as a collective process, involving co-operation between various
groups and departments within an organisation. The resulting strategy can be seen as a reflection of the
organisation’s corporate culture[1]

 The environmental school

This believes that the strategies and the companies have a life cycle and it rotates continually. So it seems
important to understand the demand and supply of the products that are being used under the policies of
the organization or a company and there is a viable strategy to exist is needed. The individuals acquire the
organizations beliefs by a process of socialization reinforce by the formal training session [2]

 The configuration school[1]

The transformation process viewed as the strategy for the company in order to undertake such
revolutionary alteration. The strategy is one of the most important aspects of the enterprise. Most of the
enterprises state it as stable like adopting a particular structure for a number of strategies. The stability
time durations are like a life cycle in the organization or company [2]

Vision

A vision or motto is very important for the growth of any company. If you see the vision statement, then it
will tell you clearly where a company is and where it wants to reach in the future distant. A vision
statement can also tell you what it should do to meet the best requirements of the stakeholders, in case
the company is public. It tells you about the dreams and aspirations of the company. For example, a
software company intends to provide every person on this planet through great software, and in this way,
it also intends to empower the people through its software.

A vision can be treated as a resource or a potential to view things of the future abiding by the present
trends and answering the question, “Where the company wants to be?” Sometimes it may happen that a
company might lose its path of the development and the course of the progress it was making. In this case,
a vision can guide you again and bring your progress back on the track. The vision and mission differ, and a
vision of the company by no means can be advertised to the consumers of the company, it is solely for the
employees of that particular organization. To fulfill a vision incorporating a shared understanding of the
aim and nature of the vision can help immensely.

Some of the key features of vision or a vision statement must be like the following:

 It must not have several aspects or interpretations.

 The vision statement must not create any confusions, it must be clear and direct.
 It must abide by the values, ethics and the culture of the organization.
 A vision must not have irrational thoughts or unrealistic goals; it must be rational.
 More than often a vision statement, which is very long can be hard to understand. So, it must be
short and easier for people to understand.
Mission

It is never same as vision, it intends to tell the consumers and stakeholders both that in what way you want
to serve them. It may be simplified as a statement, which tells why an organization exists and describes
certain other things like the motive behind the operations of the company, what makes this organization
unique, why it intends to serve the people, the framework of a company’s strategy, etc.

A company can surely differentiate itself from the other companies if it uses the mission statement very
clearly and objectively. A mission statement can be used to explain the broad categories, what is the scope
of your activities and how its product can change the entire course of its usability, how its product can sync
you with the technology and also the technology it uses to fulfill its goals and achieve its objectives. It will
tell you about the organization’s present i.e. where they currently stand. Take the example of a big
software company, what it intends to sell? What is its mission? Its mission is to help people in their
business and individuals across the globe by building user-friendly software that can help them in working
effectively and running their businesses very easily.

Going by the trends, this very important aspect of strategic management definition stands at the top of the
organizations motive. It is this statement through which an organization can reach its audiences. Today,
the world has changed, and everything needs to be redefined. Today, the business environment is more
competitive, dynamic and rigid.

Following are some of the key features of the mission statement:

 Feasibility of a mission is a must.

 It should be attainable and positive.
 It should be clear like the vision.
 It must be different from the competitors.
 An analytical mission always helps the company’s causes. So a mission must be analytical, and it
must be short and simple.
 It must be able to inspire your consumers, audiences, and stakeholders.

Purpose

Both vision and mission are important to a company that is looking to create movement and tangible
results in the definition of its goals and itself as a company. The piece that will tie this all together is getting
really clear on the idea of creating and leading with purpose and defining how it shows up every day.

The word "purpose" in this context is defined as “a person’s sense and feeling of resolve or determination.”
In my experience, an organization’s purpose is best found by asking, as a company, why you are doing the
work you are doing. What great problem are you solving, or what movement are you championing? If you
don’t do it, what are the consequences? Who loses? Or who will do it instead? Why do you all show up for
this company and not the one across the street?

Digging into the morals, ethics and beliefs of an organization can help deliver a purpose worth going to
work for. If you can’t define it down to its core, then you have work to do. Most morale problems fester
here — with an ill-defined or, worse yet, nonexistent purpose.

When a solid human brand leads people to a conversation that says, without hesitation, “I love my job. I
love what I do. I love my company, and I love the people I work for/with," purpose is usually at the center.
It is the "have" at the end of the day.
Vision is the picture. Mission is the road map to get there. Purpose is the feeling that everyone, from the
CEO to the janitor, has when you accomplish what you set out to do. Purpose is when the values are driven
by certain behaviors that create the kind of culture that is human-centric. And those behaviors create the
feeling we want, not only when we have accomplished the big goals and achieved the outcomes we
wanted, but in the process of doing so.

Goals and Objectives of Business Organization

What are business goals?
Business goals are goals that a business anticipates accomplishing in a set period of time. You can set
business goals for your company in general as well as for particular departments, employees, managers
and/or customers. Goals typically represent a company's larger purpose and work to establish an end-goal
for employees to work toward. Business goals do not have to be specific or have clearly defined actions.
Instead, business goals are broad outcomes that the company wishes to achieve.

Setting business goals are important for several reasons, including that they:

Provide a way to measure success

Keep all employees on the same page as to what the goals of the company are

Give employees a clear understanding of how decision-making reaches company's goals

Ensure the company is headed in the right direction

TYPES OF GOALS
1)Short term goal
2)Medium term goal
3)Long term goal

What are business objectives?

Business objectives are clearly defined and measurable steps that are taken to meet a company's broader
goals. Objectives are specific in nature and can be easily defined and kept track of. Companies must
establish objectives to achieve their business goals.

Basic objectives of organization

1) Profit
2) Increase in sales volume
3) Improving customer service
4) Cost control
5) Growth employees
6) Social responsibility
Environmental appraisal :- It is method or technique to draw a clear picture of what opportunities and
threat are feed by the organization at the given time.
An environmental analysis in plays an essential role in business management by providing possible
opportunities or threats outside the company in its external environment. The purpose of an
environmental analysis is to help to develop a plan by keeping decision-makers within an organization.
It is done while scanning the Eight sector of the environment which are follows:
1) Economic environment
2) International environment
3) Regulatory environment
4) Market environment
5) Political environment
6) Sociocultural environment
7) Supplier environment
8) Technological environment
Factors affecting Environmental scanning / Environmental Appraisal

Strategist related factors – It includes age education experience motivation and ability to with
stand time pressure and strain of responsibility.

Organization related factors – It is affected by nature of business age and size of business
complexity of business nature of its market and products and services.

Environment related factors – The nature of environment faced by the organization determines
how its appraisal could be done.The nature of environment depend upon its
complexity,volatility,hostility and diversity.

Types of business - the type of business the organization is in or intends to be in determines the
nature of information sought. Moreover, how an organizational defines its business also becomes
an important factor determining the information requirements. If the organization has defined its
business narrowly, it will focus on the narrow aspect on the environment, thus a highly diversified
company may require diverse types of the information. Similarly if an organization is its area of
information search may be much broader.

Volatility of the environment - emphasis on environmental study and type of information needed
an organizational are also dependent upon the nature of the environment. If the business
environment is highly voltaic and turbulent, the management must be greatly concerned with the
external environment and they would attempt to gather as much information as possible. This will
be further reinforced id the environmental shows less functional, central managers show less
concern towards the economic and the technological components of the environment and focus
their environmental analysis on competitions. This is more so when environmental analysis on
competitions. This is more so when environmental forces are relatively more homogeneous and
clustered.
IMPORTANCE OF ENVIRONMENTAL APPRAISAL
1. Identification of strength:
Strength of the business firm means capacity of the firm to gain advantage over its competitors. Analysis of
internal business environment helps to identify strength of the firm. After identifying the strength, the firm
must try to consolidate or maximise its strength by further improvement in its existing plans, policies and
resources.2. Identification of weakness:
Weakness of the firm means limitations of the firm. Monitoring internal environment helps to identify not
only the strength but also the weakness of the firm. A firm may be strong in certain areas but may be weak
in some other areas. For further growth and expansion, the weakness should be identified so as to correct
them as soon as possible.
3. Identification of opportunities:
Environmental analyses helps to identify the opportunities in the market. The firm should make every
possible effort to grab the opportunities as and when they come.
4. Identification of threat:
Business is subject to threat from competitors and various factors. Environmental analyses help them to
identify threat from the external environment. Early identification of threat is always beneficial as it helps
to diffuse off some threat.
5. Optimum use of resources:
Proper environmental assessment helps to make optimum utilisation of scare human, natural and capital
resources. Systematic analyses of business environment helps the firm to reduce wastage and make
optimum use of available resources, without understanding the internal and external environment
resources cannot be used in an effective manner.
6. Survival and growth:
Systematic analyses of business environment help the firm to maximise their strength, minimise the
weakness, grab the opportunities and diffuse threats. This enables the firm to survive and grow in the
competitive business world.
7. To plan long-term business strategy:
A business organisation has short term and long-term objectives. Proper analyses of environmental factors
help the business firm to frame plans and policies that could help in easy accomplishment of those
organisational objectives. Without undertaking environmental scanning, the firm cannot develop a strategy
for business success.
8. Environmental scanning aids decision-making:
Decision-making is a process of selecting the best alternative from among various available alternatives. An
environmental analysis is an extremely important tool in understanding and decision making in all situation
of the business. Success of the firm depends upon the precise decision making ability. Study of
environmental analyses enables the firm to select the best option for the success and growth of the firm.

SWOT Analysis:
SWOT stands for Strengths and Weaknesses of a business and environmental Opportunities and Threats a
business faces. SWOT analysis identifies systematically these factors and the strategy that reflects the best
match between them. It is based on the assumption that an effective strategy maximizes a business’s
strengths and opportunities and minimizes its weakness and threats.
An opportunity is a major favorable situation in the firm’s environment. Key trends, such as identification
of a previously overlooked market segment, changes in competitive or regulatory circumstances,
technological changes, and improved buyer or supplier relations, are the sources of opportunities for a firm.
A threat stands for a major unfavorable situation in the firm’s environment or an impediment to the firm’s
current and/or desired future position. The major threats to a firm’s future success might include the
factors such as the entry of new competitor, increased bargaining power of buyer or supplier, major
technological change, slow market growth and changing regulations.
For instance increasing use of personal computers was a major opportunity for IBM. An opportunity for
one firm can be a strategic threat to another. If the managers of a firm clearly understand the
opportunities and threats their firm is likely to face, it assists them to identify realistic strategic alternatives
and clarifies the most effective niche for the firm.
Strength is a resource, skill, a distinctive competence or other advantage and the needs of markets a firm
serves or anticipates serving that gives the firm a comparative advantage relative to competitors in the
marketplace. Financial resources, image, market leadership, and buyer/supplier relations are examples of
strength.
A weakness is a limitation or deficiency in resources, skills and capabilities that seriously impedes effective
performances. Facilities, financial resources, management capabilities, marketing skills, and brand image
could be sources of weaknesses.
Identification of key strengths and weaknesses of the firm helps in narrowing down the choice of
alternatives and choosing a strategy. While identification of distinctive competence and critical weaknesses
in relation to key determinants of success for different market segments provides a useful framework for
choosing the best strategy.
SWOT analysis helps in two ways in strategic choice decision-making:1. It provides a logical framework
for guiding systematic discussions of the business’s situation, alternative
strategies, and, the choice of strategy.
2. It provides a structured approach for the systematic comparison of key external opportunities and
threats with internal strengths and weaknesses.
For strategy formulation, the firm attempts to build upon its strengths and eliminate its weaknesses. When
the firm does not possess the skills required to take advantage of opportunities or avoid threats, the
necessary resources may be identified from the SWOT analysis and steps taken to procure the strengths or
to reduce any weaknesses.
GE NINE CELL MODEL :-
General Electric (USA), along with McKinsey, developed a matrix as a technique for portfolio
analysis. The GE-Mckinsey matrix has two main variables which are plotted on the X and Y-axis of the
matrix. The variables are “Market Attractiveness” & “Business Unit Strength”.
Once each product is given a value for its market attractiveness and business unit strength, it is plotted in
the position on the graph. Once the product is in its place, the management can decide the strategy for the
product. The GE-Mckinsey matrix is also known as the nine-box matrix because there are nine boxes on
the graph

If a business unit is strong with strong market attractiveness, the company should grow the business. If the
business unit strength or market attractiveness is average, the company should hold the business as it is.
In this case, it is possible that the market is dropping in value, or that there is very high competition making
it hard for the business unit to catch up. If the business unit or market has become unattractive, the
company should either sell or liquidate the business or hold it for any residual value it has.
The best step, in this case, would be to dispose of the weak businesses and reinvest the money earned
from the divestiture into business units that are growing. Thus, based on the GE-McKinsey matrix, a
company can manage its product portfolio efficiently and can take the right decisions of growing, hold or
harvest for its products.

What Are Porter's Five Forces?

Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every
industry and helps determine an industry's weaknesses and strengths. Five Forces analysis is frequently
used to identify an industry's structure to determine corporate strategy. Porter's model can be applied to
any segment of the economy to understand the level of competition within the industry and enhance a
company's long-term profitability. The Five Forces model is named after Harvard Business School professor,
Michael E. Porter.

Porter's Five Forces is a framework for analyzing a company's competitive environment.

The number and power of a company's competitive rivals, potential new market entrants, suppliers,
customers, and substitute products influence a company's profitability.

Five Forces analysis can be used to guide business strategy to increase competitive advantage.

Porter’s Five Forces Model of Competition

Porter’s five forces model of competition, five forces that always impact the whole market, especially the
competition level.
1.Threats of New Entrants:
The first force of Porter’s five forces model of competition is the entrance of new competitors in the
market. The new entrants entering into a certain industry increases the level of competition among the
Business Organizations of that industry.2.Bargaining Power of Customers:
The buying power of customers is influenced by the level of competition. When there are relatively large
numbers of producers than the customers have more options to make the selection of the products. So,
this increases the second force of the porter model which is the bargaining power of the customers.
3.Threats of Substitutes:
The third force of Porter’s five forces model of competition is the threats of substitutes. When there is a
higher degree of threat of new entrants in a certain industry, then this would result in an increase in the
competition which would further cause the increasing number of substitute products.
4.Bargaining Power of Suppliers:
When there are more suppliers in a specific industry, then this would result in an increase in the bargaining
power of producers/customers and vice versa.
5.Rivalry among Competing Organizations:
The last and fifth force of Porter five forces model of competition is rivaled exist int the market. When
there are large numbers of manufacturers and variety of different products, then the rivalry among the
organizations of same industry increases, which concentrates more on manufacturing & provision of higher
quality products that can satisfy all the demands of the customers in an effective way so that the
competition can be properly managed. So the rivalry among competing organizations is said to be the fifth
force of Porter five force model of competition.

Corporate-Level Strategy
A corporate-level strategy specifies actions a firm takes to gain a competitive advantage by selecting and
managing a group of different businesses competing in different product markets. Corporate-level
strategies help companies to select new strategic positions — positions that are expected to increase the
firm’s value. Firms use corporate-level strategies as a means to grow revenues and profits, but there can
be additional strategic intents to growth. Moreover, effective firms carefully evaluate their growth options
(including the different corporate-level strategies) before committing firm resources to any of them.
Furthermore, corporate-level strategy is concerned with two key issues: in what product markets and
businesses the firm should compete and how corporate headquarters should manage those businesses.
Because of these reasons, it is important.

Characteristics of a corporate-level strategy:-

Diversification

Diversification is when you notice that you need to change the market you're operating in. Moving into
new markets allows you to create new business opportunities with clients. It can give you the chance to
build a long-lasting relationship linked to the execution and satisfaction of the products and services you
render. If you have enough capital, you can try re-branding on shifting your services to a new target
audience eager to try a new product.

Forward or backward integration

Forward integration is when you take the position of a company that served a previous role in your supply
chain. Your business becoming a distributor changes the scope of your operations and you'll need to move
resources to help move and store products for companies in your area. Backward integration means that
you start in the supply chain business and you move to be a supplier of goods and services. You may have
to produce more products to adapt to the change in your business.

Horizontal integration

Horizontal integration happens when a business merges with another in the same vertical. If you merge
with another company, you'll need to make sure you have the operational capacity to handle the merger
and work with new employees eager to learn your process and how they differ from the company you
acquired.

Profit

This strategy is only dedicated to having more capital to spend once you take out your expenses. You may
need to reduce costs or expenses, selling investments like stocks and bonds, increase the price of services
you sell to your customer based and cutting back on non-essential services.

Turnaround

Turnaround refers to increasing the effectiveness of existing products, so you can sell more of them. This
may require you to boost your testing processes and raise your quality assurance standards to generate
more profit.

Divestment
Divestment is a retrenchment strategy that is aimed to resolve problems and enhance your business
results. You start by selling high-performing stock and paying off debts to raise money and report favorable
financial information to internal and external stakeholders.

Liquidation

Liquidation is the final option you can take if you own a company. You'll make this move after you
exhausted all options to increase the profits of your business. This results in the selling of your company to
another entity and the conclusion of production for all product lines.

Concentration

Concentration is an expansion strategy approach that adds more market shares to the industry you're
operating in. It's viewed as a high-reward strategy because of the market demand for the industry you're
getting involved in.

Investigation

The investigation is the process of testing expansion and retrenchment strategies. You'll know which
strategy to move forward with after you decide to prioritize your performance or readjusting the scope of
your business.

No change

Lastly, no change is often correlated with your stability strategy. It's important to highlight where you need
to upgrade your product to ensure usage and brand loyalty from consumers.

Grand Strategies:-
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:

1. Stability Strategy
 2. Expansion Strategy
3. Retrenchment Strategy
4. Combination Strategy

The grand strategies are concerned with the decisions about the allocation and transfer of resources from
one business to the other and managing the business portfolio efficiently, such that the overall objective of
the organization is achieved. In doing so, a set of alternatives are available to the firm and to decide which
one to choose, the grand strategies help to find an answer to it.

Stability strategy

The stability strategy is when you proceed in working with clients in your industry. This strategy also
assumes that your company is doing well under this current business model. Since the pathway to growth
is uncertain, you should employ a stability strategy to ensure incremental progress that still brings in
revenue, which includes practices such as research and development and product innovation. An example
can be offering free trials of your existing products to your target audience to increase its engagement.

Reasons for Adopting Stability Strategy:

1. The company is doing fairly well or perceives itself as successful and expects the same in the future.

2. The stability strategy is less risky. Frequent changes involving new products or new ways of doing things
may lead to failure of the firm. The larger the firm and the more successful it has been, the greater is the
resistance to the risk.

3. The stability strategy can evolve because the managers prefer action to thought and do not tend to
consider any other alternatives. Many of the firms that follow stability strategy do this unconsciously. Such
companies react to the changes in the forces in the environment.

4. To follow a stability strategy, it is easier and more comfortable for all concerned as activities take place
in routines.

5. The management pursuing stability strategy does not have the mind-set of a strategist to appraise the
environmental opportunities and threats and take advantage of the opportunities.

6. The company that has core competence in the existing business does not want to take the risk of
diverting attention from the current business by opting for diversification.

7. It is a frequently employed strategy.

Hunger and Wheelen visualize three types of stability strategies:

1. Pause/Proceed with caution strategy

2. No change strategy

3. Profit strategy

Expansion strategy

The expansion strategy is great for you if your company is planning on creating new products and reaching
new audiences. It can also be used if you're upgrading the level of activity within your business like taking
on new clients and hiring more employees. You can apply this strategy if the region you're operating in has
a strong economy or if your focus is to enhance your performance. Overall, this strategy has large earnings
potential for executives, which can lead to raises and expansion to employee benefits packages as well.

Reasons for Adopting Expansion Strategy:

1. If business environments are volatile, expansion may be a necessary strategy for survival.

2. Many executives may feel more satisfied with the prospects of growth expansion.

3. Chief Executive Officer may feel pride in presiding over organizations perceived to be growth-oriented.

4. Some executives believe that expansion is in the benefit of the society.

5. Expansion provides more financial and other rewards.

6. Expansion enables to reap advantages from the experience curve and scale of operations.

A company can adopt expansion strategy in the following five ways:

1. Concentration

2. Integration

3. Diversification

4. Cooperation

5. Internationalization

Retrenchment strategy

A retrenchment strategy requires you to strongly consider switching your business model. This may involve
stopping the manufacturing of a product or reducing its functionality. You may need to allocate more
energy to accounts receivable to ensure you're still getting payments of services you provided to maintain
your organization's cash flow.

This strategy is only used when the company is looking to take protective measures in keeping the solvency
of the business. You should compile a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis
to see which marketing you can successfully operate in.

Reasons for following retrenchment strategy:

1. The firm is doing poorly.

2. If there is pressure from various groups of stakeholders to improve performance.

3. If better opportunities of doing business are available elsewhere a firm can better utilize its strengths.

A retrenchment strategy can take any of the following forms:

1. Turnaround strategy-A turnaround strategy involves management measures designed to reverse certain
negative trends and to bring the firm back to normal health and profitability.
2. Divestment or divestiture strategy-A divestiture strategy is pursued when a company sells or divests
itself of a business or part of a business. It may be because of loss, less than target rate of return, urgency
to mobilise funds, managerial problems, or redefinition of the business of the company.

3. Liquidation strategy-Liquidation occurs when an entire company is sold or dissolved. The reasons for
divestiture mentioned above could also be reasons for liquidation.

When there are no buyers for a company that wants to be sold, its assets may be sold and company may
be wound up.

4.Becoming a Captive-A firm becomes a captive of another firm when it subjects itself to the decision of
the other firm in return for a guarantee that a certain amount of the captive’s product will be purchased by
the other firm.

Combination strategy

A combination strategy is a hybrid of the previous three strategies to create your business model. Its main
purpose is to increase the company's performance and find out which areas of your company can grow and
retract based on market conditions. This approach makes it easier for you to make adjustments to your
strategy because you can be more flexible with your time and how much should be allocated to each
function of your strategy.

Reasons for following Combination strategies:

1. When the organization is large and faces a fast changing complex environment.

2. The company’s products are in different stages of the life-cycle.

3. A combination strategy is suitable for a multiple-industry firm at the time of recession.

4. The combination strategy is best for firms, divisions of which perform unevenly or do not have the same
future potential.

Its consist for:

1) simultaneous adaption of strategies

2) Sequential adaption of strategies

1)Project implementation-Project Implementation is the last stage before the analysis of the outcome
where all such actions take place.This stage is the most challenging one in terms of implementation, details,
and high team coordination requirements.The Project Implementation phase has two essential functions:
execution of the work and proper delivery. The resources used in the implementation have to be
accurate.Based on the implementation, the project’s fate is decided. The success and effectiveness can
only be known after proper monitoring and feedback. This phase of delivering provides the client with an
outlook of the project.

The key to a successful implementation is proper structuring and coordination at the managerial level. The
primary ingredients that form the base of project implementation are:

Key Ingredients of Successful Project Implementation

For the successful implementation of a project, you need to

 1. Execute the planned details into a full-proof action plan
2. Document every little detail in this stage, from decisions to results at every step
3. Have an efficient line of communication in place across the hierarchy
4. Take quick decisions if the need for a change of plan felt instantly.
5. Form a consensus about the changes and implement immediately

A project is managed by following 5 phases :

1) Initiating
2) Planning
3) Executing
4) Controlling
5) Closing

2)Procedural implementation-Procedural Implementation deals with the different aspects of the

regulatory framework that Indian companies have to consider. Any organisation which is planning to
implement strategies must be aware of the regulatory framework within which the plans, programmes ,
and projects have to be approved by the government (central and state).
3)Resource allocation :-Resource allocation is a process which supports the company goals by managing
authorities and assets in a result-driven manner to achieve strategic goals.Optimization of resources is the
latest trend in the world of business today.But, we never really understood what resources they are
optimizing and how they are locating those resources. The allocation of resources is a process of managing
as well as assigning the assets, which supports the organizations’ strategy and goals.

Resource allocation includes various things such as controlling the tangible assets, for example, hardware
which can be used for the human capital.

The process of resource allocation wants a balance between the needs and wants of an organization.
Resource allocation determines the practical course of action so that it can maximize the use of limited
resources. It helps to gain a generous return on the sum of investment.

How does the Resource Allocation work?

Resource allocation is an enormous task, and it needs precise administrative skills for planning and
speculating the best possible way in which the resources could be optimized. People involved in the
project will have to give due importance to the process of allocation.

People and workers are the most crucial resources, which, if managed well, will ensure the success of any
project. They include –writers, editors, user experience designers, traffic managers, directors, accountants,
contract resources, developers, freelancers, testers. These people are crucial in developing and offering
direction to your project in the best possible way. And they are one of the vital areas for resource
investment.

Another essential factor for resource allocation in the context of any project is time. As the project often
requires weeks or months for completion, one needs to make sure the work concludes by the deadlines.

Accomplishing this could be difficult without the adequate allocation of resources. An organization may
require increments to make sure their projects stay on track and to ensure that it completes on time.

Tools, capitals, and equipment are an essential part of any project. Their availability can be planned
skillfully with strategies of resource allocations for project management.

Factors that affect Resource Allocation

1. The changes in the timeline

2. Availability of resources
3. Dependencies of projects
4. Objective of organization
5. Preference of dominent strategy
6. Internal politics
7. External influence

6 Steps of Resource Allocation

1. Divide the Project into Tasks

2. Assign the Resources

3. Determine resource attributes

4. Resource Leveling

5. Re-allocate as necessary

6. Track resource utilization

Resource allocation deals with:-

1) Procurement
2) Commitment and distribution of finance
3) Human resource
4) Information and physical resource to strategic task for the achievement of organizational objective

Difficulties in resource allocation:-

1) Scarcity of resources
2) Restriction on generating resources
3) Over Statement of needs
4) Tendency to imitate competitors

Leadership Style and Strategy

Implementation

Growth Strategy with Concentration

Dynamic industry expert

Growth Strategy with Diversification

Analytical portfolio manager

Stability:

Cautious profit planner

Retrenchment to save company

Turnaround specialist

Retrenchment to close company

Professional liquidator

Values

Values represent basic convictions that ‘a

specific mode of conduct or end-state of
existence is personally or socially preferable to
an opposite mode of conduct or end-state of
existence.

We have a hierarchy of values that forms our

value system. This system is identified by the
relative importance we assign to values such
as freedom, pleasure, self-respect, honesty,
obedience, and equality.

Ethics
Study of moral issues and choices

Concerned with right vs. wrong, good vs. bad

Ethics try to set the standard for the ultimate

end or the highest good to be pursued

Normative; judgmental

Unstructured; abstract

corporate culture

Corporate culture is the collection of values, beliefs, ethics and attitudes that characterize an organization
and guide its practices.A corporate culture that reflects the broader culture is usually more successful than
one that is at odds with it. For example, in the current global culture, which values transparency, equality
and communication, a secretive company with a strictly hierarchical structure is likely to have trouble
recruiting and retaining workers and appealing to customers and partners.

Corporate culture is also sometimes considered to be synonymous with workplace culture. However, some
experts classify workplace culture as a separate idea that specifically and narrowly describes the conditions
under which employees conduct their work -- what has come to be referred to, in part, as the employee
experience. According to this view, workplace conditions are shaped by and ultimately reinforce the overall
corporate culture.

Measure Performance

The standards of performance set will serve as the benchmark against which the actual performance will
be evaluated. Based on these standards, managers should decide how to measure the performance and
how often to do so.

The methods used to measure performance may vary on the standard set; usually, data such as the
number of materials used, units produced, the monetary amount of services utilized, the number of
defects found, processes followed, quality of output, and return on investment, are used.

Once the methods of measuring performance are identified, how often it should be done for control
purposes needs to be then decided. Whether it should be on a daily, weekly, monthly, or annual basis is
decided on factors such as how important the objective is to the organization, how quickly the situation
might change, and how difficult or costly it would be to fix a problem once it has actually occurred.

Strategic Control and Operational Control

Strategic Control

Strategic control focuses on the dual questions of whether: (1) the strategy is being implemented as
planned; and (2) the results produced by the strategy are those intended.” Strategic control is “the critical
evaluation of plans, activities, and results, thereby providing information for the future action”. There are
four types of strategic control: premise control, implementation control, strategic surveillance, and special
alert control

Premise Control: Planning premises/assumptions are established early on in the strategic planning process
and act as a basis for formulating strategies. Premise control has been designed to check systematically
and continuously whether or not the premises set during the planning and implementation processes are
still valid. It involves the checking of environmental conditions. Premises are primarily concerned with two
types of factors:

 Environmental factors (for example, inflation, technology, interest rates, regulation, and
demographic/social changes).
 Industry factors (for example, competitors, suppliers, substitutes, and barriers to entry).

All premises may not require the same amount of control. Therefore, managers must select those premises
and variables that (a) are likely to change and (b) would a major impact on the company and its strategy if
they did.

Implementation Control: Strategic implantation control provides an additional source of feedforward

information. “Implementation control is designed to assess whether the overall strategy should be
changed in light of unfolding events and results associated with incremental steps and actions that
implement the overall strategy.” The two basic types of implementation control are:

1. Monitoring strategic thrusts (new or key strategic programs). Two approaches are useful in
enacting implementation controls focused on monitoring strategic thrusts: (1) one way is to agree
early in the planning process on which thrusts are critical factors in the success of the strategy or of
that thrust; (2) the second approach is to use stop/go assessments linked to a series of meaningful
thresholds (time, costs, research and development, success, etc.) associated with particular thrusts.
2. Milestone Reviews. Milestones are significant points in the development of a program, such as
points where large commitments of resources must be made. A milestone review usually involves a
full-scale reassessment of the strategy and the advisability of continuing or refocusing the direction
of the company. In order to control the current strategy, must be provided in strategic plans.

Strategic Surveillance: is designed to monitor a broad range of events inside and outside the company that
is likely to threaten the course of the firm’s strategy. The basic idea behind strategic surveillance is that
some form of general monitoring of multiple information sources should be encouraged, with the specific
intent being the opportunity to uncover important yet unanticipated information. Strategic surveillance
appears to be similar in some way to “environmental scanning.” The rationale, however, is different.
Environmental, scanning usually is seen as part of the chronological planning cycle devoted to generating
information for the new plan. By way of contrast, strategic surveillance is designed to safeguard the
established strategy on a continuous basis.

Special Alert Control: Special alert controls are the need to thoroughly, and often rapidly, reconsider the
firm’s basic strategy based on a sudden, unexpected event. (i.e., natural disasters, chemical spills, plane
crashes, product defects, hostile takeovers, etc.). Special alert controls should be conducted throughout
the entire strategic management process.

Operational Control

Operational control systems are designed to ensure that day-to-day actions are consistent with established
plans and objectives. It focuses on events in a recent period. Operational control systems are derived from
the requirements of the management control system. Corrective action is taken where performance does
not meet standards. This action may involve training, motivation, leadership, discipline, or termination.
Evaluation Techniques for Operational Control:

 Value chain analysis: Firms employ value chain analysis to identify and evaluate the competitive
potential of resources and capabilities. By studying their skills relative to those associated with
primary and support activities, firms are able to understand their cost structure and identify their
activities through which they can create value.
 Quantitative performance measurements: Most firms prepare formal reports of quantitative
performance measurements (such as sales growth, profit growth, economic value-added, rational
analysis, etc.) that managers review at regular intervals. These measurements are generally linked
to the standards set in the first step of the control process. For example, if sales growth is a target,
the firm should have a means of gathering and exporting sales data. If the firm has identified
appropriate measurements, regular review of these reports helps managers stay aware of whether
the firm is doing what it should do. In addition to there, certain qualitative bases based on
intuition, judgment, opinions, or surveys could be used to judge whether the firm’s performance is
on the right track or not.
 Benchmarking: It is a process of learning how other firms do exceptionally high-quality things. Some
approaches to benchmarking are simple and straightforward. For example, Xerox Corporation
routinely buys copiers made by other firms and takes them apart to see how they work. This helps
the firms to stay abreast of their competitors’ improvements and changes.
 Key Factor Rating: It is based on a close examination of key factors affecting performance
(financial, marketing, operations, and human resource capabilities) and assessing overall
organizational capability based on the collected information.

Corporate level Strategy: we can simply say that corporate level strategies are concerned with questions
about what business to compete in. Corporate Strategy involves the careful analysis of the selection of
businesses the company can successful compete in. Corporate level strategies affect the entire
organization and are considered delicate in the strategic planning process.

Characteristics of Corporate Strategy

 Corporate level strategies are formulated by the top management with inputs from middle level
management and lower level management in the formulation process and designing of sub
strategies
 Decisions are complex and affects the entire organization
 It is concerned with the efficient allocation and utilization of scarce resources for the benefit of the
organization
 Corporate level strategies are mapped out around the goal and objectives of an organization. They
seek to translate these goals and objectives to reality
 Typical examples of decisions made are decisions on products and markets

Types of corporate Strategy:

The three main types of corporate strategies are Growth strategies, stability strategies and retrenchment.

Growth Strategy

Like the name implies, corporate strategies are those corporate level strategies designed to achieve growth
in key metrics such as sales / revenue, total assets, profits etc. A growth strategy could be implemented by
expanding operations both globally and locally; this is a growth strategy based on internal factors which
can be achieved through internal economies of scale. Aside from the illustration of internal growth
strategies above, an organization can also grow externally through mergers, acquisitions and strategic
alliances.
The two basic growth strategies are concentration strategies and diversification strategies.

Concentration strategy: This is mostly utilized for company’s producing product lines with real growth
potentials. The company concentrates more resources on the product line to increase its participation in
the value chain of the product. The two main types of concentration strategies are vertical growth strategy
and horizontal growth strategy.

Vertical growth strategy: As mentioned above, by utilizing this strategy, the company participates in the
value chain of the product by either taking up the job of the supplier or distributor. If the company
assumes the function or the role previously taken up by a supplier, we call it backward integration, while it
is called forward integration if a company assumes the function previously provided by a distributor.

Horizontal growth strategy: Horizontal growth is achieved by expanding operations into other geographical
locations or by expanding the range of products or services offered in the existing market. Horizontal
growth results into horizontal integration which can be defined as the degree in which a company
increases production of goods or services at the same point on an industry’s value chain.

Business-Level Strategies

Business-Level Strategies are a mechanism for a business to achieve a competitive advantage.

According to the Business-Level Strategies theory, there are two types of competitive advantage that an
organization must choose between:

1. Cost Leadership: ensuring you cost less than your competitors.

2. Differentiation: ensuring you are different from your competitors.

There are also two types of competitive scope than an organization must choose between:

1. Broad market: serving a diverse market.

2. Narrow market: focusing on a niche market.

Plotting all of the above factors on to a matrix gives us five generic business-level strategies.
five generic business-level strategies:-

Cost Leadership Strategy

This strategy is for organizations that want to compete for a broad customer base based on price.

A misconception about this strategy is that returns are lower. That is not the case. To maintain above-
average returns and provide the lowest price, the organization must focus on internal efficiencies
continually.

Common mechanisms to drive down costs include:

 Establishing rigid cost controls.

 Building state-of-the-art facilities to produce at scale at a low cost.

To be effective, this strategy requires your product or service to be standardized.

Differentiation Strategy

This strategy is for firms that want a broad customer base based on their uniqueness. Typically, firms with
this strategy will focus on building unique features to win in the marketplace. They also usually charge a
higher price to their customers, to offset the cost of being unique.

Common mechanisms to differentiate include:

 Superior quality.
 Customer service.
 Design.
 Uniqueness.

Focused Cost Leadership Strategy

These organizations compete on price but also stand out because they focus on serving a niche market.

Common mechanisms to adopt a focused cost leadership strategy include:

 Focusing on serving a small group of customers.

 By understanding the needs of your smaller target market, you can uniquely cut costs to serve the
needs of that market.

Focused Differentiation Strategy

This strategy is very similar to that of a differentiation strategy except that it is focused on a very narrow
segment of the market. These firms compete by offering unique features to a small market segment.

Common mechanisms to focus include:

 Select a profitable narrow subset of the market.

 Focus on areas where competition is weakest.
 Focus on a segment where product substitution is difficult.
Integrated Cost Leadership/Differentiation Strategy

This strategy involves producing low-cost products with differentiated features. This strategy is about
simultaneously focusing on two drivers of competitive advantage: cost and differentiation. This type of
strategy is often called a hybrid strategy.

To understand the appeal of a hybrid strategy, realize that a mid-priced product that distinguishes itself in
some way can be more appealing to customers than a cheap generic product.

This can be a high-risk strategy because you must invest in both reducing costs (through automation, etc.)
and also invest in differentiating your product.

Factors Affecting Strategic Choice

 Environmental constraints.
 Attitude of management towards risk.
 Restrictions related to time such as time pressure and decision timing.
 Reaction of competitors.
 Restrictions related to information.
 Values and preferences.
 Past strategies impact.
 Relationship between management power and internal organization.

What is Strategic Planning?

Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the
results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept
that focuses on integrating various departments (such as accounting and finance, marketing, and human
resources) within a company to accomplish its strategic goals. The term strategic planning is essentially
synonymous with strategic management.

Analysis performance

Track progress strategic planing identify focus areas

Develop marketing create new value curve

strategic planning is important to an organization because its provide a sense of direction and outlines
measurable goals. Strategic planning is a tool that is useful for guiding day to day decision and and also for
evaluating progress and changing approaches when moving forward.

Element of strategy planing :

Define your vision

Create your mission

Set your objectives

Develop your strategy

Outline your approaches

Get down to tactics

* A successful strategic management involves three steps:-

I) Planing
II) Execution and monitoring
III) Development and progress

There are struggle running on E-commerce business these competition is feasible

The following successful E-commerce strategy :

Brand name

Design of store

Search engine optimization

Multichannel marketing

Personalized buying experiences

Multiple payment method

Easy checkout process

Customer service
Leadership style:- A leadership style refer to a characteristics behaviour when directing ,motivating,guiding
and managing groups of people.They can also motivate other to perform create and innovate.

*The 5 leadership style:-

1) Authorization leadership
2) Participative leadership
3) Delegative leadership
4) Transactional leadership
5) Transformational leadership

* The importance of leadership style:-

Its play a significant role in the job they have and the way they communicate.Having an awareness of your
personality style can allow you to communicate better ,access other needs and force productive
relationship.

1) Initiating action
2) Providing motivation
3) Providing guidance
4) Creating confidence
5) Building work environment
6) Coordination
7) Creating successor
8) Induces changes

* Feature of Leadership style:-

1) Influence the behaviour the others

2) Inter personal process
3) Attainment of common organizational goals
4) Continuous process
5) Group process
6) Dependent on the situation