Unit 1 SM Bba 6TH Sem 2022-23

UNIT 1 STRATEGIC MANAGEMENT BBA 6TH SEM
UNIT 1
“STRATEGY” ;( P.R)
Strategy is partly proactive (Anticipated events) and partly reactive (unanticipated events)The
term Strategy is derived from a Greek word Strategos, which means generalship- the actual
direction of military force, as distinct from the policy governing its development. As said above,
the word “Strategy” has emerged from military as: means or methods adopted to defeat
enemy.A company's strategy is usually a mix of (1) proactive actions on the a part of managers to
enhance the company's market position and financial performance and (2) as required reactions to
unanticipated developments and fresh market conditions.
Strategy is the means to achieve objectives. Strategy is the game plan management is using to
(M.O.C.C.A.)
 take market position,

 conduct its operations,
 attract and satisfy customers,
 compete successfully, and
 Achieve organizational objectives.
A typical dictionary will define the word strategy as something that has to do with war and ways to
win over enemy. In business organizational context the term is not much different.
Define the term ‘strategy as a long range blueprint of an organization's desired image, direction
and destination what it wants to be, what it wants to do and where it wants to go
Concept of Strategic Intent:
By strategic intent refers to the purposes that organization strives for. These may expressed in terms
of a hierarchy of strategic intent. Broadly stated, these could be in the form of vision & Mission
statement for the organization as a whole.
A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective and
concentrates its full resources and competitive actions on achieving that objective. A company’s
objectives sometimes play another role that of signaling unmistakable strategic intent to form
quantum gains in competing against key rivals and establish itself as a clear-cut winner in the
marketplace, often against long odds.
Strategic Management
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.
Strategic management can also be defined as a bundle of decisions and acts which a manager
undertakes and which decides the result of the firm's performance. The manager must have a thorough
knowledge and analysis of the general and competitive organizational environment so as to take right
decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and
Threats), i.e., they should make best possible utilization of strengths, minimize the organizational
weaknesses, make use of arising opportunities from the business environment and shouldn't ignore the
threats.
Strategic management is nothing but planning for both predictable as well as unfeasible contingencies.
It is applicable to both small as well as large organizations as even the smallest organization face
competition and, by formulating and implementing appropriate strategies, they can attain sustainable
competitive advantage.
It is a way in which strategists set the objectives and proceed about attaining them. It deals with making
and implementing decisions about future direction of an organization. It helps us to identify the
direction in which an organization is moving.
Strategic management is a continuous process that evaluates and controls the business and the
industries in which an Strategic management is nothing but planning for both predictable as well as
unfeasible contingencies. It is applicable to both small as well as large organizations as even the
smallest organization face competition and, by formulating and implementing appropriate strategies,
they can attain sustainable competitive advantage.
It is a way in which strategists set the objectives and proceed about attaining them. It deals with making
and implementing decisions about future direction of an organization. It helps us to identify the
direction in which an organization is moving.
Strategic management is a continuous process that evaluates and controls the business and the
industries in which an organization is involved; evaluates its competitors and sets goals and strategies
to meet all existing and potential competitors; and then reevaluates strategies on a regular basis to
determine how it has been implemented and whether it was successful or does it needs replacement.
Nature and Scope of Strategic Management

Strategic management is both an Art and science of formulating, implementing, and evaluating, cross-
functional decisions that facilitate an organization to accomplish its objectives. The purpose of strategic
management is to use and create new and different opportunities for future. The nature of Strategic
Management is dissimilar form other facets of management as it demands awareness to the "big
picture" and a rational assessment of the future options. It offers a strategic direction endorsed by the
team and stakeholders, a clear business strategy and vision for the future, a method for accountability,
and a structure for governance at the different levels, a logical framework to handle risk in order to
guarantee business continuity, the capability to exploit opportunities and react to external change by
taking ongoing strategic decisions.
Strategic management process encompasses of three phases.

1. Establishing the hierarchy of strategic intent
2. Strategic formulation.
3 Implementation
4. Evaluation and control.
Strategy formulation comprises of developing a vision and mission, identifying an organization's
external opportunities and threats, determining internal strengths and weaknesses, establishing long-
term objectives, creating alternative strategies, and choosing particular strategies to follow.
Strategy implementation needs a company to ascertain annual objectives, formulate policies, stimulate
employees, and assign resources so that formulated strategies can be implemented. Strategy
implementation includes developing a strategy-supportive culture, creating an effective organizational
structure, redirecting marketing efforts, preparing budgets, developing and utilizing information
systems, and relating employee reward to organizational performance.
Importance of Strategic Management

Planning or designing a strategy involves a great deal of risk and resource assessment, ways to counter
the risks, and effective utilization of resources all while trying to achieve a significant purpose.
• An organization is generally established with a goal in mind, and this goal defines the purpose for its
existence. All of the work carried out by the organization revolves around this particular goal, and it
has to align its internal resources and external environment in a way that the goal is achieved in rational
expected time.
Undoubtedly, since an organization is a big entity with probably a huge underlying investment,
strategizing becomes a necessary factor for successful working internally, as well as to get feasible
returns on the expended money.
Strategic Management on a corporate level normally incorporates preparation for future opportunities,
risks and market trends. This makes way for the firms to analyze, examine and execute administration
in a manner that is most likely to achieve the set aims. As such, strategizing or planning must be
covered as the deciding administration factor.
• Strategic Management and the role it plays in the accomplishments of firms has been a subject of
thorough research and study for an extensive period of time now. Strategic Management in an
organization ensures that goals are set, primary issues are outlined, time and resources are pivoted,
functioning is consolidated, internal environment is set towards achieving the objectives, consequences
and results are concurred upon, and the organization remains flexible towards any external changes.
. As more and more organizations have started to realize that strategic planning is the fundamental
aspect in successfully assisting them through any sudden contingencies, either internally or externally,
they have started to absorb strategy management starting from the most basic administration levels. In
actuality, strategy management is the essence of an absolute administration plan. For large
organizations, with a started to absorb strategy management starting from the most basic administration
levels. In actuality, strategy management is the essence of an absolute administration plan. For large
organizations, with a complex organizational structure and extreme regimentation, strategizing is
embedded at every tier.
Apart from faster and effective decision making, pursuing opportunities and directing work, strategic
management assists with cutting back costs, employee motivation and gratification, counteracting
threats or better, converting these threats into opportunities, predicting probable market trends, and
improving overall performance.
Keeping in mind the long-term benefits to organizations, strategic planning drives them to focus on
the internal environment, through encouraging and setting challenges for employees, helping them
achieve personal as well as organizational objectives. At the same time, it is also ensured that external
challenges are taken care of, adverse situations are tackled and threats are analyzed to turn them into
probable opportunities.
Vision and Mission

VISION
A Strategic vision is a road map of a company's future - providing specifics about
 technology and
 customer focus, the
 geographic and
 product markets to be pursued,
 the capabilities it plans to develop,
 And the kind of company that management is trying to create.
Elements
The three elements of a strategic vision:
1. Coming up with a mission statement that defines what business the company is
presently in and conveys the essence of "Who we are and where we are now?"
2. Using the mission statement as basis for deciding on a long-term course making
choices about "Where we are going?"
3. Communicating the strategic vision in clear, exciting terms that arouse organization wide
commitment
How to develop a Strategic Vision?
 Think creatively about how to prepare company for future

 Explore the core idea of organization existence in future. For example, an airline
company may have a vision to become low cost airline or best customer satisfaction
airline or both.
Clearly define the direction in vision statement which company wants to follow. Forexample, a
charity working with poor might have a vision statement which reads- A world without Poverty
MISSION
 It reflects what business we are in and what we do? Mission reflects current aims but
vision reflects more of long term aims. .
 For example, a charity working with poor might have a vision statement which reads-
A world without Poverty but this charity might have a mission statement as providing
jobs for the homeless and unemployed.
Difference between Mission & Vision
Basis of Difference Mission Vision
1. ANSWER A Mission statement talks Vision statement outlines

about HOW you will get WHERE you want to be.
there where you want to be.
2. TIME A mission statement talks about A vision statement talks

the present leading (short about your future (Long
term) to its future. term).
3. Purpose
Mission is the path which tells Vision is like destination.
you the fundamental What the organization wants
purpose of the organization. to be.
4 step Mission is formed after Vision is first step of
vision is formed strategic Management
LEVELS OF STRATEGY- CORPORATE, BUSINESS & FUNCTIONAL
There are primarily three levels of strategies in the organization.
There are primarily three levels of strategies in the organization. OR Strategies are formulated at
three levels
1. Corporate Level
2. Business Level
3. Functional Level
An organization is divided into several functions and departments that work together to bring a
particular product or service to the market.
1. There are three main levels of management: corporate, business, and functional.
2. The corporate level of management consists of the chief executive officer (CEO), other senior
executives, the board of directors, and corporate staff.
3. The role of corporate-level managers is to oversee the development of strategies for the whole
organization.
4. This role includes
a. defining the mission and goals of the organization,
b. determining what businesses, it should be in
c. allocating resources among the different businesses,

d. Formulating and implementing strategies that span individual businesses, and providing
leadership for the organization.
5. Business-level general managers are concerned with strategies that are specific to a particular
business.
6. The strategic role of these managers is to translate the general statements of direction and intent
that come from the corporate level into concrete strategies for individual businesses.
7. Functional-level managers are responsible for the specific business functions or operations (human
resources, purchasing, product development, customer service, and so on) that constitute a company
or one of its divisions.
8. Thus, a functional manager's sphere of responsibility is generally confined to one
Functional Strategies like Marketing, Human Resources or Finance.
Functional Strategy
Meaning
1. Strategies for different functions of management are known as functional level strategy.
2. Management has many functional areas. Some of the common functional areas are
 Marketing
 Human Resource
 Finance
 Production
 Logistics
 Research & Development
3. They provide details to business strategy & govern how key activities will be managed.
4. For each functional area: Major sub areas are identified.

5. Then for each sub area, contents of functional strategies, important factors & their importance
in strategy implementation process are identified.
6. These strategies provide support to functional level managers
Marketing Strategy Techniques
Social Marketing
Design, implementation, and control of programs seeking to increase the acceptability of a social
ideas, cause, or practice among a target group For instance, the publicity campaign for prohibition
of smoking in Delhi explained the place where one can and can't smoke in Delhi.
Augmented Marketing
It is provision of additional customer services and benefits built around the core and actual products
that relate to introduction of hi-tech services like movies on demand, on-line computer repair
services, secretarial services, etc. Such innovative offerings provide a set of benefits that promise to
elevate customer service to unprecedented levels.
Direct Marketing
Marketing through various advertising media that interact directly with consumers, generally calling
for the consumer to make a direct response Direct marketing includes catalogue selling, mail, tele-
computing, electronic marketing, shopping, and TV shopping.
Relationship Marketing
The process of creating, maintaining, and enhancing strong, value-laden relationships with
customers and other stakeholder For example, Airlines offer special lounges at major airports for
frequent flyers. Thus, providing special benefits to select customers to strength bonds It will go a
long way in building relationships.
Services Marketing
It is applying the concepts, tools, and techniques, of marketing to services.
Person Marketing
People are also marketed. Person marketing consists of activities undertaken to create, maintain or
change attitudes or behavior towards particular people. For example, politicians, sports stars, film
stars, professional i.e., market themselves to get votes, or to promote their careers and income.
Organization Marketing
It consists of activities undertaken to create, maintain, or change attitudes and behavior of target
audiences towards an organization. Both profit and non-profit organizations practice organization
marketing.
Place Marketing
Place marketing involves activities undertaken to create, maintain, or change attitudes and behavior
towards particular places say, business sites marketing, tourism marketing.
Enlightened Marketing
A marketing philosophy holding that a company's marketing should support the best long-run
performance of the marketing system; its five principles include customer-oriented marketing,
innovative marketing, value marketing, sense-of- mission marketing, and societal marketing
Differential Marketing
A market-coverage strategy in which a firm decides to target several market segments and designs
separate offer for each. Differentiation can be achieved through variation in name, color, size, brand
names etc. For example, Hindustan Unilever Limited has Lifebuoy, Lux and Rexona in popular
segment and Dove and Pears in premium segment.
Synchro-marketing
When the demand for the product is irregular due to season, some parts of the day, or on hour basis,
causing idle capacity or overworked capacities, synchro- marketing can be used to find ways to alter
the same pattern of demand through flexible pricing, promotion, and other incentives.
Concentrated Marketing:
A market-coverage strategy in which a firm goes after a large share of one or few sub-markets
Demarketing:
Marketing strategies to reduce demand temporarily or permanently-the aim is not to destroy demand,
but only to reduce or shift it. This happens when there is overfull demand. For example, buses are
overloaded in the morning and evening, roads are busy for most of times, zoological parks are over-
crowded on Saturdays, Sundays and holidays. Here de-marketing can be applied to regulate demand.
Human Resource Strategy Formulation
Points which can have strong influence on employee’s competence
An organization's recruitment, selection, training, performance appraisal, and compensation

practices can have a strong influence on employee competence the following points should be kept
in mind:
1. Recruitment and selection: successfully identify, attracts, and select the most competent
applicants.
2. Training: employees are well trained to perform their jobs property.
3. Appraisal of performance: The performance appraisal is to identify any performance

deficiencies experienced by employees due to lack of competence. Such deficiencies, once
identified, can often be solved through counseling, coaching or training.
4. Compensation: A firm can usually increase the competency of its workforce by offering pay
and benefit packages that are more attractive than those of their competitors. This practice enables
organizations to attract and retain the most capable people
Strategic Role of Human Resource Management
1. Providing purposeful direction:
2. Creating competitive Advantage:
3. Facilitation of change
4. Diversified workforce:
5. Empowerment of human resources:
6. Building core competency (Managing Linkage)
7. Development of works ethics and culture
Financial Strategy Formulation
Meaning
1. Acquiring capital/sources of fund,
2. Developing projected financial statements/budgets,
3. Management/ usage of funds,
4. Evaluating the worth of a business.
Examples
1. To raise capital with short-term debt, long-term debt, preferred stock, or common stock.
2. To lease or buy fixed assets.
3. To determine an appropriate dividend payout ratio.

4. To extend the time of accounts receivable.
5. To establish a certain percentage discount on accounts within a specified period of time.
6. To determine the amount of cash that should be kept in hand.
Acquiring capital to implement strategies / sources of funds
1. Additional capital. (may be internal or external) (required for successful implementation)
2. Net profit from operations
3. Sale of assets,
4. Debt and equity.
5. Appropriate mix of debt and equity in a firm's capital structure can be vital to successful
strategy implementation.
6. Enough debt in its capital structure to boost its return on investment by applying debt to
products and projects earning more than the cost of the debt.
7.Factors to be kept in mind
a.Cash flow
b. Dilution of ownership
c. Market situation
Evaluating the worth of a business
It is necessary to establish the financial worth or cash value of a business to successfully implement
strategies.
Three main approaches:
1. Net worth of stockholders
2. Future benefit
3. Let the market determine. Three methods.
a. First, base the firm's worth on the selling price of a similar company.
b. Second, the price-earnings ratio method.
c. The third approach can be called the outstanding shares method

STRATEGIC MANAGEMENT MODEL
Different Stages of Corporate Strategy Formulation Implementation Process
STRATEGIC PROCESS
“Crafting and executing a company's strategy is a five-stage managerial process?” by considering

this statement in mind and Explain Stages of Corporate strategy formulation implementation
Process
Strategic Management Process
The term strategic management refers to the managerial process of forming a strategic vision, setting
objectives, creating a strategy implementing and executing the strategy and the subsequently
initiating whatever corrective adjustments in the vision, objectives strategy and execution are
deemed appropriate.
The strategy implementing process consists of five interrelated managerial tasks there are-
 Setting vision and mission
 Setting objectives
 Crafting a strategy
 Implementing and executing
 Evaluating performance and initiating corrective adjustment
Stage 1: Developing a strategic vision (Developing a strategic vision of where the company
needs to head and what its future product-customer-market-technology focus should be.)
A vision statement identifies where the organization wants or intends to be in future or where it
should be to best meet the needs of the stakeholders. It describes dreams and aspirations for future.
What is strategic vision?
A strategic vision delineates organization’s aspirations for the business, providing a panoramic view
of the position where the organization is going.
A strategic vision points an organization in a particular direction, charts a strategic path for it to
follow in preparing for the future, and moulds organizational identity.
A Strategic vision is a road map of a company’s future – providing specifics about technology and
customer focus, the geographic and product markets to be pursued,the capabilities it plans to develop,
and the kind of company that management is trying to create.
For instance, Microsoft’s vision is ―to empower people through great software, any time, any
place, or any device.
Wal-Mart’s vision is to become worldwide leader in retailing.
An effective vision statement must have following features-
a) It must be unambiguous.
b) It must be clear.
c) It must harmonize with organization’s culture and values.
d) The dreams and aspirations must be rational/realistic.
e) Vision statements should be shorter so that they are easier to memorize.

Difference between Mission & Vision
Basis of Difference Mission Vision
1. ANSWER A Mission statement talks Vision statement outlines

about HOW you will get WHERE you want to be.
there where you want to
be.
2. TIME A mission statement talks A vision statement talks

about the present leading about your future (Long
(short term) to its future. term).
3. Purpose
Mission is the path which Vision is like destination.
tells you the fundamental What the organization wants
purpose of the organization. to be.
4 step Mission is formed after Vision is first step of
vision is formed strategic Management
Stage 2 : Setting objectives (Setting objectives and using them as yardsticks for measuring the
company’s performance and progress).
Objectives
Objectives are defined as goals that organization wants to achieve over a period of time. These are
the foundation of planning. Policies are developed in an organization so as to achieve these
objectives. Formulation of objectives is the task of top level management. Effective objectives have
following features-
What Does SMART Mean?
SMART is an acronym that you can use to guide your goal setting.
 Specific
 Measurable
 Achievable
 Relevant
 Time bound
Stage 3: Crafting a strategy to achieve the objectives and vision

A Company’s Strategy-Making Hierarchy shows who is generally responsible for devising what
pieces of a company’s overall strategy. In diversified, multi business companies where the strategies
of several different businesses have to be managed, the strategy-making task involves four distinct
types or levels of strategy, each of which involves different facets of the company’s overall strategy:
a. Corporate strategy –
b. Business strategy –
c. Functional-area strategies –
d. Operating strategies
Note- In single-business enterprises, the corporate and business levels of strategy making merge
into one level – business strategy. Thus, a single business enterprise has only three levels of strategy:
(1) business strategy for the company as a whole, (2) functional-area strategies for each main area
within the business, and (3) operating strategies
4. Implementing and executing the chosen strategy efficiently and effectively .
Strategy formulation Strategy implementation
1. Strategy formulation is positioning forces Strategy implementation is managing forces

before the action. (A) during the action.
2. Strategy formulation focuses on Strategy implementation focuses on
effectiveness. (E) efficiency.
3. Strategy formulation is primarily an Strategy implementation is primarily an
intellectual process. (I) operational process.
4. Strategy formulation requires good Strategy implementation requires special
intuitive and analytical skills. (U) motivation and leadership skills
5. Strategy formulation requires Strategy implementation requires

coordination among a few individuals (O) combination among many individuals.
Stage 5 : Monitoring developments, evaluating performance and making

corrective Adjustments
A company's vision, objectives, strategy, and approach to strategy execution are never final;
managing strategy is an ongoing process, not an every now and then task. The fifth stage of the
strategy management process – evaluating the company's progress, assessing the impact of new
external developments, and making corrective adjustments – is the trigger point for deciding
whether to continue or change the company's vision, objectives, strategy, and/or strategy execution
methods. So long as the company's direction and strategy seem well matched to industry and
competitive conditions and performance targets are being met, company executives may decide to
stay the course. Simply fine-tuning the strategic plan and continuing with ongoing efforts to
improve strategy execution are sufficient.
Strategic Management Process Strategic Management Process :
The term strategic management refers to the managerial process of forming a strategic vision,
setting objectives, creating a strategy implementing and executing the strategy and the
subsequently initiating whatever corrective adjustments in the vision, objectives strategy and
execution are deemed appropriate. The strategy implementing process consists of five
interrelated managerial tasks there are-
 Setting vision and mission
 Setting objectives
 Crafting a strategy
 Implementing and executing
 Evaluating performance and initiating corrective adjustment
Stages/ Phases of Strategic Management Framework
Stage – I Where we are now (Beginning) –Here firm should continuously perform the
situational analysis. This is also known as SWOT (Strength, Weakness, Opportunity, Threat)
analysis..
Stage – II Where are we went to be (Ends) – Firm sets goals and objectives after setting of
vision and mission. {(Set goals, mission & vision),( define the end position business wants to
achieve)
Stage – III How might we get there (Means) – Firms deals with various strategic alternatives
for achieving the goals. The short and long term effects of each alternative are evaluated.(
Analysis of alternative strategies to achieve the set goals, mission & vision).
Stage – IV Which way is the best (Evaluating) – Out of alternatives firms chooses best suitable
alternative in line with its SWOT analysis. {(Evaluation stage),( selection of best alternative),(
Alternative must be in line with SWOT)}
Stage - V How can we ensure arrival (Control) – Firm implements and control the above
suitable strategy. The firm should continuously perform the situational analysis (stage – I) and
repeat the stages again so strategic management is a continuous ongoing process.
{(Implimentation stage),( execution of selected alternative),(Also ensures controlling and
taking corrective actions for deviations.
RESPONSIBILITIES OF TOP MANAGEMENT

A top-level manager is responsible for creating and implementing organizational plans and
policies and is a professional who is at the executive level. They work as a negotiator between
the top-level and lower-level managers. These professionals can work to guide the overall
direction of an organization. Additionally, they can manage several departments of a company,
including marketing, operations, finance and human resources. They work to ensure each
department is achieving its goals so the company can remain on track in achieving its overall
goals.
Top management responsibilities
A professional working in a top management role has several responsibilities that can vary
depending on where you work. Here's a list of a few general types of responsibilities:
Planning
A professional in an executive role plans the goals, strategies and policies for an organization.
They work to define goals and objectives for the company to work toward and how they're going
to achieve them. Planning is a responsibility for top-level management to do consistently to help
a company advance, and it helps an organization perform more efficiently. Here are some aspects
to consider when planning:
Apply: It's important for a professional to create a plan realistic to apply to the organization.
Consider creating SMART goals, an acronym for specific, measurable, achievable, relevant and
time-bound, when crafting plans for departments to follow.
Transparency: Transparency, when planning, means the professionals working at the

organization are aware of the plans you've created at the top level. This allows the employees,
management teams and stakeholders to work together to achieve the goals.
Sustainability: When planning, it's important to consider if you're creating short- or long-term
goals and that they're sustainable for the organization to achieve. Sustainable goals help advance
the company in its plans.
Organizing
As an executive-level manager, it's important for you to organize your plans into manageable
areas. This includes organizing the plans into the departments they belong to so the teams can
help achieve the goals. Here are a few objectives to consider when organizing your plans:
Coordination: Coordinate your plans with the departments and encourage the departments to
coordinate with each other to work on a shared goal. The more a company has its departments
coordinated, the more success it may experience.
Balance: It's important for departments to have a fair share of work among them to achieve the
company's goals. This way, certain professionals aren't over or under working in their roles.
Consistency: Consistency among the work by each department is essential for an efficient
company. It can also help the likelihood of the organization completing its goals when
professionals are consistent in completing their tasks.
Efficiency: It's important for top-level managers to ensure their departments are achieving their
goals in the most efficient manner. When a company's workflow is efficient, it can increase
productivity among the team members.
Directing
Directing is an important responsibility for top-level manages because it can help a company's
employees navigate their work and complete their tasks. Here are a few principles you can
consider when you're directing your departments:
Individual contribution: It's important for managers to encourage their team members to
complete their tasks. You can do this by meeting with individual professionals in the company to
help them resolve any challenges they might encounter or hear what they require to feel supported
in their role.
Direction technique: When you're managing an organization, it's helpful to assess how your
direction technique, which includes your individual awareness, leadership, encouragement and
motivation. The type of technique you use can vary depending on the situation.
Leadership: It's important to understand your leadership style and when to use the different styles
based on the situation. Your leadership can help provide guidance to the departments when
they're working on completing their goals.
Follow-through: When implementing plans and leadership among departments, it's important
for you to provide them with directions and ensure they're adhering to them. This can look like
creating progress checkpoints for their tasks and asking for their feedback on your leadership
style so you can ensure you're supporting them helpfully.
Coordinating
Coordination is like planning because top-level executives work continuously on their

coordination throughout the company. Here are the principles you can consider when creating
coordination among an organization:
Continuity: It's important to maintain continuity when you're coordinating plans and tasks
among departments because ensures the ease of an organization's operations.
Early stages: When you coordinate your plans during the early stages, it may make it easier to
execute during the later stages of planning.
Direct contact: Conducting and maintaining interpersonal relationships between the executives,
departments, team members and stakeholders because they can help improve communication.
Improved communication helps team members understand their tasks and goals, including the
methods of completing the tasks.
Controlling
When you maintain control of an organization, you're helping to ensure it remains on schedule
with achieving its goals. Here are a few principles of control to consider:
Flexibility: It's important to remain flexible when controlling an organization because it can
constantly change. Factors may change in a company and require you to react and act differently.
Exceptions: Allowing exceptions for an organization and the employees can help solve
challenges quickly.
Actions: If the business were to encounter any challenges, it's important for you to understand
the actions you can take to resolve them.
LONG TERM PLANNING

A long-term strategy is a comprehensive plan for a business that defines goals for the future.
During this process, you're setting and completing goals to achieve an overarching goal for the
company. To create a long-term strategy, you may set multiple smaller goals that help you meet
your ultimate objective. The purpose of a long-term strategy is to see gradual improvement within
your company over a long time period. Long-term strategies typically take at least one year to
achieve, though you can also set plans for several years ahead.
A long-term strategy could encompass one goal or multiple goals and can be as broad or specific
as you want. For example, you could make a long-term strategy to increase overall customer
service, which is a relatively broad goal. A more specific goal would be to increase five-star
customer reviews by 25% over the course of a year and a half. Some more examples of long-term
strategies may include:
 Increase brand awareness

 Lower the cost of production by 5%
 Host four promotional events a year
 Open two more locations within three years
 Increase the total income of the company by 15%
 long-term strategy important?
Having a long-term strategy helps improve businesses in several aspects:
Business growth
Long-term strategies are typically larger goals that take a longer time to complete. When creating
these plans, the purpose is to set goals that improve your company. As you complete the plan,
you can see growth within your business, such as increased sales or more employees. These
results depend on what your goals are, but you usually set long-term goals so your business can
improve and expand.
Risk management
Long-term strategies can also be important for risk management. Since long-term strategies occur
over an extended period, you have the time and ability to make plans that help reduce risks. You
can do this by revising your long-term strategy if you think your team can improve it. Because
of the time frame, you can also track your results more actively, which can help mitigate risks as
they occur. You can make riskier or more adventurous decisions within long-term strategies
because you can apply fixes or strategy changes.
Budgeting
Budgeting is important for any company and having long-term strategies can help you create a
financially stable budget. This is because you can divide the cost of the budget over the course
of your strategy. Having a stable budget might help you afford more projects, such as developing
a new product. Then you can afford new initiatives while maintaining your finances.
Testing
Test marketing is when you test the popularity of a new product by exposing it to consumers for
a small amount of time. Long-term strategies allow you to implement test marketing because you
can make manageable changes to your company with little risk. This means that you can create
a new product to see how customers react to it more slowly to help reduce risk. Long-term
strategies are important if you want to test out new products reasonably.
HOW TO CREATE A LONG-TERM STRATEGY
Here are eight steps to creating a long-term strategy for your business:
1. Identify goals
The first step of creating a long-term strategy is to identify your goals. These can be short-term
and long-term goals because you can implement both into your strategy. Try to analyze your
business and think of areas you could improve. You could also think of new initiatives for your
business that you would like to try. Identify as many goals as you can or as many you would like
to include in your strategy. Try to make your goals realistic and measurable. Realistic goals make
your long-term strategy more manageable and measurable goals make your progress easier to
track.
2. Create strategies
Strategies are how you plan to achieve your goals. You may have multiple strategies depending
on how many goals you identified. To create your strategies, think of the steps you need to take
to meet your goals. For example, if a goal of yours is to gain a larger social media following for
your company, some potential actions to take are posting more often or hiring a social media
manager. Once you have a list of strategies, you can develop them into an action plan.
3. Develop a timeline
After you've outlined your goals and strategies, you can develop a schedule or timeline. A
timeline determines when you want to start different tasks and when you want to complete certain
goals. Be realistic with your timeline so you have plenty of time to achieve your goals. While it's
important to meet your deadlines, the timeline can also be flexible. You can adapt or revise it to
suit your business's needs. Collaborate with your team to create a timeline that everyone thinks
is doable and agreeable.
4. Adjust sales and marketing plans
A long-term strategy should account for your sales and marketing plans, which means you should
adjust them as necessary. This is because your company's priorities can change so your sales and
marketing plan should reflect that. Work with these teams to see how they predict what changes
you may need to make. Consider aspects like your target audience, competition and any other
components of sales and marketing. Develop new plans or adjust your old plans to best fit the
goals of your long-term strategy. If you want to sell products for a different target group, try to
account for that change.
5. Communicate with your team
If you want to integrate your long-term strategy into your company, try to openly communicate
with your team. Communication can help align your team so that everyone is aware of the strategy
and the changes that may arise. This can also help them feel comfortable expressing themselves
if they have a suggestion or question. To foster communication, you can start by having open
meetings with them to ask for their thoughts and opinions. Try to have a goal for each meeting.
You could also offer one-on-one meetings to have a more personal conversation with particular
team members to receive their direct opinion.
6. Revise your plan
After you've created your long-term strategy, you can review and revise it. Try to look for any
errors, inconsistencies or anything irrelevant to the strategy. To change it, look at each goal or
step and ask yourself if it's necessary and achievable. You could also ask other team members to
look at it and offer feedback. Revise your long-term strategy as necessary. Your plan can always
change, which means you can update it as each step progresses.
7. Implement your strategy
You can now implement your long-term strategy. If your strategy is comprehensive, easy to
understand and realistic, then it may be easier to follow and accomplish. To ensure that you're
following the strategy, hold recurring meetings to check on the team's progress. These checks
can help hold you and your team accountable when implementing the strategy. You could also
assign each team different tasks so everyone participates.
8. Assess the results
As you're completing the plan, remember to occasionally assess the results. Doing this can help
you determine if your plan is working or if it needs some improvement. It's often valuable to
track and assess your results to motivate your team, especially when you're seeing positive results.
You can use that information to revise the plan and make it even better.
Strategy Formulation: Concept, Process & Affecting Factors
Strategy formulation is the process of offering proper direction to a firm. It seeks to set the long-
term goals that help a firm exploit its strengths fully and en cash the opportunities that are present
in the environment. There is a conscious and deliberate attempt to focus attention on what the
firm can do better than its rivals. To achieve this, a firm seeks to find out what it can do best.
Once the strengths are known, opportunities to be exploited are identified; a long-term plan is
chalked out for concentrating resources and effort.
Since strategies consume time, energy and resources, they must be formulated carefully.
Strategies, once formulated, must ensure a best fit between goals, resources and effort put in by
people. The ultimate goal of every strategy that is being formulated should be to deliver
outstanding value to customers at all times.
Henry Mintzberg, after much research found that strategy formulation is typically not a regular,
continuous process. "It is small often an irregular, discontinuous process, proceeding in fits and
starts. There are periods of stability in strategy development, but also there are periods of flux,
of grouping of piecemeal changes and of global change."
Performance results are generally periodic measurements of developments that occur during a
given time period like return on investment, profits after taxes, earnings per share and market
share. Current performance results are compared with the current objectives and with that of the
previous year's performance results. If the results are equal to or greater than the current
objectives and past year's results, the company will mostly continue with the current strategy
otherwise, the strategy formulation process begins in earnest.
The strategy formulation involves the following steps:
Step# 1. Developing Strategic Vision:
1. Vision specifies what direction or path to follow.
2. Specify what products, markets, technologies and customer policies to follows
3. Vision communicate management aspirations to stack holders of company.
4. Helps to boost morale of organization and engages them for a common direction.
5. Clear vision helps to provide a motivated and stimulated environment in the organization.
6. Vision specify management aspiration for the business in long-term.
Step # 2. Setting Objectives:
Corporate objectives are outcome of "Mission and Vision" of organization. Objectives define
specific performance targets, results and growth that organization wants to achieve.
To determine the objectives an approach known as Balance Score Card is used.
Balance Score Card Approach:

Overall a company should set both strategic and financial objectives. However, organization can
use Balance Score Card approach for setting objectives. This approach states that "Organization
should focus more on achieving strategic objectives - like "performance", "customer
satisfaction", "innovation" and "profitability" - than financial objectives (i.e., profit and profit
growth) only.
STRATEGIC EVALUATION – CONCEPT
Strategy evaluation is that phase of the strategic management process in which manager tries to
assure that the strategic choice is properly implemented and is meeting the objectives of the
enterprise. When one talks of evaluation one cannot forget control aspect.
Process of Strategy Evaluation (With Steps)
1. Fixing Benchmark of Performance:
While fixing the benchmark, strategists encounter questions such as – what benchmarks to set,
how to set them and how to express them. In order to determine the benchmark performance to
be set, it is essential to discover the special requirements for performing the main task.
2. Measurement of Performance
The standard performance is a bench mark with which the actual performance is to be compared.
The reporting and communication system help in measuring the performance. If appropriate
means are available for measuring the performance and if the standards are set in the right
manner, strategy evaluation becomes easier.
3. Analysing Variance:
While measuring the actual performance and comparing it with standard performance there may
be variances which must be analysed. The strategists must mention the degree of tolerance limits
between which the variance between actual and standard performance may be accepted.
4. Taking Corrective Action:
Once the deviation in performance is identified, it is essential to plan for a corrective action. If
the performance is consistently less than the desired performance, the strategists must carry a
detailed analysis of the factors responsible for such performance. If the strategists discover that
the organizational potential does not match with the performance requirements, then the
standards must be lowered.
Criteria for Strategy Evaluation
i. Consistency:
Strategic consistency lacks in different ways. The strategy present must not be inconsistent with
the broad plans and policies of corporate strategy. For instance, the strategic, which are not
formulated to its excel, may compromise between opposing power groups or, it may be
manifested in the form of interdepartmental conflicts with the organisational conflict.
2. Consonance:
The key to evaluate consonance is to understand the existence of business, how it is valued
currently assumed to be and current pattern differs with earlier patterns. The business must match
and be adapted to its environment to the critical changes occurring within it.
3. Advantage:
There are two aspect of business mission in relation to the environment. One aspect is that the
business must fit with the environment. Second aspect is that business must compete with other
firms that are trying to adapt to the environment. Second aspects of business mission provide a
competitive advantage among other firms than their common aspect.
4. Feasibility:
Feasibility is the test of strategy, assessing the firm’s ability to sustain the strategy or not. Whether
a firm is capable to compete with other firm’s strategy, with the environment, or the organisation
possess the high degree of coordinate and integrative skill to carry out the strategy. If the
feasibility is found then that these are qualitative criteria, which can be profitably deployed after
the implementation is complete.
Environment Analysis and its process
An environmental analysis, or environmental scanning, is a strategic tool you can use to find all
internal and external elements that may affect an organization's performance. Internal
components indicate the business's strengths and weaknesses, while the external components
indicate the opportunities and threats outside the organization.
An environment analysis considers trends and high-level factors, such as interest rates, and how
they might change a company's business. These reviews can help companies assess market
attractiveness and create better strategies for the future.
The environmental analysis process consists of the following steps:
1. Identify environmental factors
To conduct an environmental analysis, start by selecting environmental factors to evaluate. This

depends on your type of industry. For instance, if you work for a healthcare facility, you may
want to consider legal factors, such as health and safety regulations. When selecting factors,
choose ones that have the potential to impact how you do business.
2. Gather information
Once you decide which factors to evaluate, collect information related to your selected
environmental factors. Here you may observe your factors and do some research. There are two
main types of information to collect: verbal and written information.
3. Evaluate your competitors
To determine if there are any threats from your competitors, you may want to collect information
about them. You can do this using a technique called spying, where you collect information in a
non traditional way. Using the same scenario, you may spy on a nearby health facility to learn
about their recent activities, such as a new branch opening.
4. Forecast the impact
Forecasting allows you to predict how certain environmental factors may impact your business.
This allows you to anticipate potential threats or opportunities. When forecasting, there are a
variety of methods to use, such as brainstorming and surveying. Continuing with the same
example, the health facility may forecast that the new branch opening at their competitor's facility
may take away some of their patients.
5. Assess your strategies
Finally, assess your current and potential strategies to determine how the projected environmental
changes may affect your organization. This helps you resolve potential challenges that may have
resulted from the factors. For instance, the health facility may want to create a new strategy for
how they plan to address the decrease in clients due to their competitor's new branch.
Resource Analysis –
An organization is called bundle of resources. Resources are substance on which various

activities are based. Resources are inputs into a company production and progress. There are
number of internal resources that influence the organizational performance and progress.  These
internal resources of a company determine the degree of strength or weaknesses which a company
has. Every company is supposed to make an efficient use of these resources to adopt its strategies
to the external environment within which it operates. These resources may be categorized under
tangible and intangible resources
A resource analysis is to identify company different resources like tangible and intangible
resources.
1. Tangible Resources Or Assets that can be seen, touched and quantified
2. Intangible Resources Or Assets that rooted deeply in the company’s history, accumulated over
time usually can’t be seen or touched
TYPE OF RESOURCES
1. Tangible • Physical Resource • Financial Resource • Organizational Resource • Technological
Resource
2. Intangible • Human Resource • Reputational Resource • Cultural Resource (Shared Value) •

Innovational Resource  Visible and real  Physically present  Touched
Characteristics of Tangible Resources:  Visible and real  Easily identified  Limited

Capacity  Value is easy to measure  More open to duplication by competitors  Shown by an
organization in its records and balance sheet
Examples of Tangible Resources:  Land  Plant  Building, storage and other and other
infrastructure.  Financial capacity  Borrowing Capacity  Suppliers etc.
Intangible Resources  Largely invisible and unreal  Physically not present  Not touched
Characteristics of intangible Resources:  Complex in nature.  Enormous capacity.  More

important than tangible resources.  Based on accumulated organizations specific activities. 
Main source for a competitive advantage and progress.  Value is more difficult to measure. 
Less open to duplication by competitors.  Not usually on balance sheet.
Examples of Intangible Resources

Skilled, hard working, loyal and morally high workforce.  Employee turnover.  Brand image
company reputation.  Production efficiency.  Accident records.  Company culture and trust.
 R & D facilities.  Experts of innovation.  Knowledge, New product development capacity. 
Good will & External relationship.  Intellectual property. Or Patents. Or Copyright or
Trademarks or Trade Secrets.

Unit 1 SM Bba 6TH Sem 2022-23

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Unit 1 SM Bba 6TH Sem 2022-23

Uploaded by

Copyright:

Available Formats

UNIT 1 STRATEGIC MANAGEMENT BBA 6TH SEM

 take market position,

Concept of Strategic Intent:

Nature and Scope of Strategic Management

Strategic management process encompasses of three phases.

Importance of Strategic Management

Vision and Mission

A Strategic vision is a road map of a company's future - providing specifics about

The three elements of a strategic vision:

How to develop a Strategic Vision?

 Think creatively about how to prepare company for future

Difference between Mission & Vision

Basis of Difference Mission Vision

1. ANSWER A Mission statement talks Vision statement outlines

2. TIME A mission statement talks about A vision statement talks

LEVELS OF STRATEGY- CORPORATE, BUSINESS & FUNCTIONAL

There are primarily three levels of strategies in the organization.

4. This role includes

a. defining the mission and goals of the organization,

b. determining what businesses, it should be in

c. allocating resources among the different businesses,

8. Thus, a functional manager's sphere of responsibility is generally confined to one

Functional Strategies like Marketing, Human Resources or Finance.

4. For each functional area: Major sub areas are identified.

6. These strategies provide support to functional level managers

Marketing Strategy Techniques

It is applying the concepts, tools, and techniques, of marketing to services.

Human Resource Strategy Formulation

Points which can have strong influence on employee’s competence

An organization's recruitment, selection, training, performance appraisal, and compensation

2. Training: employees are well trained to perform their jobs property.

3. Appraisal of performance: The performance appraisal is to identify any performance

Strategic Role of Human Resource Management

1. Providing purposeful direction:

2. Creating competitive Advantage:

5. Empowerment of human resources:

6. Building core competency (Managing Linkage)

7. Development of works ethics and culture

Financial Strategy Formulation

1. Acquiring capital/sources of fund,

2. Developing projected financial statements/budgets,

3. Management/ usage of funds,

4. Evaluating the worth of a business.

2. To lease or buy fixed assets.

3. To determine an appropriate dividend payout ratio.

4. To extend the time of accounts receivable.

5. To establish a certain percentage discount on accounts within a specified period of time.

6. To determine the amount of cash that should be kept in hand.

Acquiring capital to implement strategies / sources of funds

1. Additional capital. (may be internal or external) (required for successful implementation)

2. Net profit from operations

4. Debt and equity.

7.Factors to be kept in mind

Evaluating the worth of a business

Three main approaches:

1. Net worth of stockholders

3. Let the market determine. Three methods.

b. Second, the price-earnings ratio method.

c. The third approach can be called the outstanding shares method

“Crafting and executing a company's strategy is a five-stage managerial process?” by considering

Strategic Management Process

 Setting vision and mission

 Implementing and executing