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CHAPTER -1 : INTRODUCTION TO STRATEGIC MANAGEMENT

MEANING & CONCEPT OF STRATEGIC MANAGEMENT IMPORTANCE & LIMITATIONS STRATEGIC INTENT STRATEGIC LEVELS IN ORGANISATIONS NETWORK OF RELATIONSHIP BETWEEN THE THREE LEVELS
NATURE OF STRATEGY Strategic Management is defined as a dynamic process of formulation, implementation, evaluation, & control of strategies to realise organization’s strategic intent.
STRATEGIC MANAGEMENT OBJECTIVES OF STRATEGIC MANGEMENT BENEFITS OF STRATEGIC MANAGEMENT LIMITATIONS OF STRATEGIC Strategic intent refers to purposes of what the organisation strives for senior managers must define “what they want to do” and “why they want to do”.
(a) (b) (c) (a) (b) (c)
a) Igor H. ansoff : MANAGEMENT Corporate Level Business Level Functional Level Functional & Divisional Horizontal Relationship Matrix Relationship
Common thread among organization’s activities & a) To create competitive advantage a) Helps management to define realistic Relationship
Term ‘management’ is used in 2 i) It consists of CEO, other i) It consists divisional i) It consists Functional Managers; i) All positions, from top i) It features a grid-like
senses, such as - product-markets that defines essential nature of b) To guide company successfully through all objectives & goals which are in line with vision a) Environment is highly complex & VISION MISSION GOALS & OBJECTIVES VALUES senior executives, BOD, & managers & staff; i) It is an independent management to staff- structure of levels in an
business that organization has or planned to be in changes in environment of company; turbulent. It is difficult to ii) Responsible for specific
a) It is used with reference to a key corporate staff; iii) Business-level manager, business functions or relationship, where level employees, are in organisation, with teams
future b) Helps organisations to be proactive instead of understand complex environment each function or a the same hierarchical formed with people from
group in an organisation in- reactive in shaping its future; & exactly pinpoint how it will (a) (b) (a) (b) (c) (a) (b) (c) (a) (b) ii) These individuals participate is head of division; operations;
b) William F. Glueck : Meaning Essentials of a Meaning Why an organization should have a A good mission statement should be precise, clear, Meaning Characteristics of Objectives Long-term objectives Meaning why are values so important? in strategic decision making division is run position. It is a flat various departments that
charge of its affairs ‘strategic management’ refers to managerial c) Provides framework for all major decisions shape-up in future; iii) Strategic role of these iii) Whereas general managers independently headed structure where are built for temporary
A unified, comprehensive and integrated plan designed i) Top management’s views about co’s strategic vision A mission is an answer mission? feasible, distinctive & motivating. i) Business organization translates their i) Should define organization’s relationship with its To achieve long-term prosperity, A few common examples A company’s value sets the within org.;
b) also used with reference to a set to assure that basic objectives of enterprise are process of developing a strategic vision, d) It provides better guidance to entire org. on b) SM is a time-consuming process; managers is to translate oversee operation of a whole by function/division everyone is considered task-based projects.
of interrelated functions & direction & product- customer- i) Entrepreneurial challenge in to basic question vision & mission into goals & objectives; environment; strategic planners commonly of values are – Integrity, tone for how the people of iii) This role includes defining general statements of co. or division; head, who is a business at same level.
achieved setting objectives, crafting a strategy, crucial point; c) It is a costly process; market-technology focus constitute developing a strategic vision is ‘what business are we i) To ensure unanimity of purpose ; Following points are useful while writing a mission of a establish long-term objectives in 7 Trust, Accountability, think and behave, especially in ii) This relationship helps
processes carried out by co. : ii) Goals are open-ended attributes that ii) Facilitative towards achievement of mission & purpose; mission & goals, determining direction; iv) It provide most of info that level manager, reporting
c) In large organisations, strategies are formulated at : the implementing & evaluating strategy, & e) SM seeks to prepare organisation to face the d) In a competitive scenario, where strategic vision for co. to think creatively about how to in & what we do’ ii) To develop a basis, or standard, areas Humility, Innovation, & situations of dilemma. It what businesses it should be ii) This type of manage huge
management of an org. These denote future states or outcomes; iii) basis for strategic decision-making; iv) Business-level makes it possible for business directly to business relationship between conglomerates with ease
corporate, divisional, & functional levels finally initiating corrective adjustments future & act as pathfinder to various business all organisations are trying to move prepare a company for the for allocating resources; i) One of the roles of a mission statement is to give i) Profitability; Diversity creates a sense of shared in, allocating resources head, who is a
functions include Planning, opportunities; strategically, it is difficult to clearly ii) Strategic vision thus points out a future. org. its own special identity, business emphasis & iii) Objectives are close- ended attributes iv) Standards for performance appraisal; managers are concerned & corporate level general levels is more suitable where it is nearly
d) Strategy is partly proactive & partly reactive- particular direction, charts a iii) To provide a basis for motivating ii) Productivity; purpose to build a strong among different businesses, corporate level
Organising, Directing, Staffing & were deemed appropriate. estimate competitive responses to path for development – one that typically sets it which are precise & expressed in foundation and focus on with strategies that are managers to, formulate for startups where the impossible to track and
f) Serves as a corporate defence mechanism strategic path to be followed in ii) Forming a strategic vision is an use of resources; v) Concrete & specific; formulating & implementing specific to a particular realistic & attainable manager;
Control i) Proactive actions on part of managers to improve a firm’s strategies . exercise in intelligent apart from other similarly positioned co's; specific terms; iii) Competitive Position; longevity of the company’s strategies that span need to share ideas manage every single team
co’s market position & financial performance & against mistakes & pitfalls; future, & moulding organisational iv) To establish a general tone; vi) Related to a time frame; business. strategies; ii) Functions maybe like with speed is more independently.
identity. entrepreneurship. ii) co's business is defined by what needs it is trying to iv) Objectives are more specific & translate iv) Employee Development; success. Employees prefer to individual businesses, &
ii) Reactions to unanticipated developments & fresh g) helps to enhance longevity of the business; v) Serve as a focal point vii) Measurable & controllable; work with employers whose Finance, Human desirable.
iii) well-articulated strategic vision satisfy, which customer groups it is targeting & goals to both long term & short term v) Employee Relations; providing leadership for org. v) It may generate important
market conditions in dynamic business environment. h) helps org. to take a clear stand in related iii) A clearly articulated strategic vi) Facilitate translation of objective technologies & competencies it uses & activities it viii) Challenging; values resonate with them - as a whole ideas that subsequently may Resources, Marketing,
industry & makes sure that it is not just creates enthusiasm among perspective; vi) Technological Leadership; etc.
vision communicates management’s & goals into a work structure ; performs; the ones they can relate to in become major strategies for Co.
a company uses both proactive & reactive strategies to surviving on lucK; aspirations to stakeholders & helps members of organisation ix) Different objectives should correlate with each other;
vii) Specify organizational purposes iii) Good mission statements are – unique to org. for vii) Public Responsibility. their daily work & personal life
cope up uncertain business environment. Proactive steer energies of company iv) best-worded vision statement x) Set within constraints;
strategy is planned strategy whereas reactive strategy is i) Helps org. to develop certain core & translation of these purposes which they are developed.
competencies & competitive advantages. personnel in a common direction clearly illuminates the direction
adaptive reaction to changing circumstances in which organisation is headed into goals

CHAPTER -2 : STRATEGIC ANALYSIS: EXTERNAL ENVIRONMENT

STRATEGIC ANALYSIS STRATEGY AND BUSINESS ENVIRONMENT UNDERSTANDING PRODUCT & INDUSTRY INDUSTRY ENVIRONMENT ANALYSIS MARKET & CUSTOMER COMPETITIVE STRATEGY

Issues to consider External Analysis Internal Analysis Business Environment MICRO AND MACRO ENVIRONMENT MARKET CUSTOMER COMPETITIVE LANDSCAPE
Identify CHARACTERISTICS OF PRODUCT LIFE CYCLE VALUE CHAIN ANALYSIS PORTER'S FIVE FORCES MODEL EXPERIENCE CURVE VALUE CREATION
External for Strategic BUSINESS PRODUCT Market is a place, business A customer is a person or It is about identifying &
Opportunity, a) Customer Analysis: a) Performance Analysis: The term "business Experience curve is based It is an activity or
Analysis Analysis Segments, motivations, Profitability, sales, environment" refers to all Micro Environment MACRO ENVIRONMENT PLC is S-shaped curve which exhibits Value chain analysis is a (I) THREAT OF NEW ENTRANTS (V) THREAT OF SUBSTITUTES strategist work on business that buys understanding the competitors & at
threats on commonly observed performance by the firm to marketing to improve the products or services from the same time, it permits the
a) Strategy evolves unmet needs. customer satisfaction, external factors, a) Products are either relationship of sales with respect of time for method of examining each
Evaluation The term "business environment" tangible or a) A firm’s profitability tends to be Substitute products are a latent source of phenomenon that unit create value that increases chances of success. The another organisation. comprehension of their vision,
over a period b) Competitor Analysis: product qualify, influences, or situations refers to all external factors, influences, INTERNATIONALIZATION OF BUSINESS product that passes through four successive activity in value chain of a higher when other firms are costs decline as a firm the worth of goods,
current ELEMENTS OF MACRO ENVIRONMENT intangible; competition in an industry. In many cases they term "marketing" mission, core values, niche market,
of time Strategic groups, relative cost, new that in some way affect or situations that in some way affect stages business in order to identify blocked from entering industry become a major constituent of competition. accumulates experience in services, business Customers are important
Vision products, human business decisions, plans, The environment includes factors outside encompasses a wide range because they provide strengths and weaknesses.
b) Balance of performance, objectives, business decisions, plans, & the firm which can lead to opportunities for, b) Product has a price; areas for improvements. When Substitute products offering a price advantage terms of a cumulative processes or even the of operations, including
Mission Analysis resources. & operations. operations. Organisational success is CHARACTERISTICS OF A GLOBAL BUSINESS DEVELOPING INTERNATIONALLY WHY DO COMPANIES GO GLOBAL? you do a value chain analysis, b) Common barriers to entry include:- PORTER'S revenue & organisations Steps to understand the Competitive
external and strategies, culture, cost or threats to the firm. Although, there are c) Products have FIVE FORCES and/or performance improvement to consumer volume of production. It is whole business system. research, designing,
Goals internal factors structure. Organisational success is determined by its business INTRODUCTION you must analyse how each i) Capital requirements cannot exist without them Landscape-
b) Determinants Analysis: many factors, the most important of the a) It is a conglomerate of multiple units but all a) Evaluate global opportunities & threats and rate a) Often finding c) It is being realised that domestic certain features MODEL can drastically alter competitive character of an based on the concept, Competitive advantage pricing, promotion,
Strategies Past and current determined by its environment, & even more from its linked by common ownership. them with the internal capabilities. opportunities in other markets are no longer adequate & rich; Competition is almost negligible, stage in the process adds or ii) Economies of scale industry & they can bring it about all of a “we learn as we grow”.
c) Risk c) Market Analysis: Size, factors are socio-economic, technological, that deliver leads to superior transportation, and a) Identify the competitor
Internal Identify growth, profitability, entry strategies, strategic business environment, &
even more from its
relationship with it. supplier, competitors, & government b) Multiple units draw on a common pool of b) Describe the scope of the firm's global commercial parts of globe d) Need for reliable or cheaper source of satisfaction; 01 prices are relatively high & markets subtracts value from the end iii) Product differentiation sudden. profitability. distribution. b) Understand the competitors
Strength,We barriers. problems, organisation extend their are limited product or service. iv) Switching costs Experience curve has
Analysis relationship with it. a) Demographic Environment resources, such as money, credit, information, operations. raw-materials, cheap labour, etc.; d) Product is pivotal At the most basic level, Often market activities are
akness organizational patents, trade names & control systems. businesses & globalise; v) Brand identity following features: c) Determine the strengths of the
d) Environmental Analysis: Within the micro or the immediate b) Socio-Cultural Environment c) Create firm's global business objectives. e) Companies often set up overseas plants for business; how profitable a categorised and explained
Technological, Capabilities and b) There is rapid shrinking of vi) Access to distribution channels a) As business competitors
constraints, financial environment in which a firm operates we c) Economic Environment c) The units respond to some common strategy. to reduce high transportation costs; e) A product has a (IV) THE NATURE OF RIVALRY IN INDUSTRY company becomes in terms of four Ps of
government, economic, Strategic management is need to address the following issues - d) Develop distinct corporate strategies for the time & distance across GROWTH vii) Possibility of aggressive organisation grow, they marketing – product, place, d) Determine the weaknesses of the
TIME cultural, demographic. resources, strengths,
and weaknesses.
involved with choosing a
long-term direction in a) The employees of the firm, their
d) Political-Legal Environment global business & whole organisation. globe thanks to faster f) When exporting organisations find useful life;
Demand expands rapidly, prices fall, PRIMARY ACTIVITIES retaliation by existing players a) Rivalry among competitors gain experience.
depends on three factors:
a) the value customers
pricing, & promotion competitors
e) Technological Environment
Short Time Long Time relation to these characteristics and how they are
PESTLE– A TOOL TO ANALYSE MACRO ENVIRONMENT communication; foreign markets to open up or grow big; 02 competition increases & market
a) Inbound logistic
tends to be cutthroat & b) Experience may place on the company’s e) Put all of the information together
organised. g) Rise of services to constitute largest expands (II) BARGAINING POWER OF BUYERS industry profitability low provide an advantage
resources and b) Operation under various conditions products;
External Errors in interpreting Changes in the Strategic strengths, opportunities. It helps single sector in world economy; & a) Buyers of an industry’s products or over the competition. KEY FACTORS FOR COMPETITIVE SUCCESS
Opportunities, threats, b) The existing customer base on which (III) BARGAINING POWER OF SUPPLIERS explained as follows - b) the price that a
STRATEGIC RISKS

the environment environment lead to weaknesses, problems, the business in the (A) (B) (C) (D) (E) (F) regional economic integration; c) Outbound logistics services can sometimes exert Experience is a key CUSTOMER ANALYSIS CUSTOMER BEHAVIOUR a) On what basis do customers choose
trends, & Strategic the firm relies for business. barrier to entry. company charges for
cause strategic obsolescence of uncertainties constraints, & following ways: POLITICAL FACTORS ECONOMIC FACTORS SOCIAL FACTORS TECHNOLOGICAL FACTORS LEGAL FACTORS ENVIRONMENTAL FACTORS h) Trend is towards increased privatization MATURITY considerable pressure on existing firms a) Suppliers can command i) Industry Leader • It identifies target clients, Consumer behaviour may between the competing brands of
uncertainties c) The ways in which the firm can raise its d) Marketing & sales its products; &
failure strategy a) Determine • Political stability • Economy situation and • Lifestyle trends • Replacement • Business and Corporate • Ecological/ of manufacturing & services sectors; to secure lower prices or better services bargaining power over a firm ii) Number of Competitors c) Large and successful determines their wants, & then be influenced by a sellers? What product attributes are
finance. Competition gets tough & market e) Service when:- organisation possess c) the costs of creating defines how product meets those number of things. These crucial to sales?
opportunities &
threats d) Who are the firm suppliers and how • Political principles and trends • Demographics technology/solutions Laws environmentaf issues i) made co's in different countries to form 03 gets stablised, Profit comes down
b) This leverage is particularly evident
when:
iii) Fixed Costs stronger “experience those products needs. Thus, it involves the elements can be b) What resources and competitive
ideologies • Market and trade cycles • Maturity of technology • Employment Law • Environmental hazards strategic alliances to ward off economic SUPPORTIVE ACTIVITIES i) Their products are crucial
Internal Organizational Inconsistencies with Strategy Identification & Selection are the links between the two being • Consumer attitudes and & technological threats & leverage their to buyer & substitutes are iv) Exit Barriers effect”. examination & evaluation of categorised into the capabilities does a seller need to have to
capacity is unable to the strategy are b) Give direction for developed? • Current and future taxation • Specific industry factors opinions • Manufacturing maturity • Competition Law • Environmental i) Buyers have full knowledge of consumer needs, desires, & wants. following conceptual
a) Identify strategic alternatives growth respective comparative & competitive a) Procurement sources of products & their not available v) Product Differentiation be competitively successful, better
cope up with developed on policy & capacity legislation advantages. • It includes the administration of domains- human capital, quality of product or
b) Select strategy e) The local community within which the • Customer/end-user drivers • Brand, company, technology • Health & Safety Law b) Technology substitutes; ii) They can erect high vi) Slow Growth
strategic demand account of changes c) Continuous Learning firm operates. • Regulatory bodies and Interest and exchange rates image • Innovation potential • Energy consumption DECLINE customer surveys, the study of a) External Influences quantity of product, cost of service, etc.?
c) Implement the operating plan • International Treaty development ii) They spend a lot of money on switching costs
in internal capacities d) Image Building processes Government policies consumer data, the evaluation of b) Internal Influences c) What does it take for sellers to achieve a
& preferences d) Review strategies f) The direct competition and their • Inflation and unemployment • Consumer buying patterns • Technology access, and Law • Waste disposal Sales & profits fall down sharply due c) HR management industry’s products; iii) They are more market positioning strategies, sustainable competitive advantage,
e) Meeting Competition comparative performance. • Government term and change Strength of consumer • Ethnic/religious factors licensing, patents, • Regional Legislation 04 to some new product replaces
d) Infrastructure iii) Industry’s product is not perceived concentrated than their development of customer profiles,
c) Decision Making
something that can be sustained for long
Thrust areas of political leaders spending property rights and existing product buyers & the selection of the best market d) Post-decision
• Media views and perception copyrights as critical to buyer’s needs. term?
segmentation techniques Processes

CHAPTER -3 : STRATEGIC ANALYSIS: INTERNAL ENVIRONMENT

UNDERSTANDING KEY STAKEHOLDERS STRATEGIC DRIVERS ROLE OF RESOURCES & CAPABILITIES : COMBINING EXTERNAL & COMPETITIVE ADVANTAGE : USING MICHAEL PORTER'S GENERIC STRATEGIES
BUILDING CORE COMPETENCY INTERNAL ANALYSIS (SWOT ANALYSIS)
Competency is defined as a combination of SWOT analysis is the analysis of a business’s SUSTAINABILITY OF MICHAEL PORTER'S GENERIC STRATEGIES
WHO ARE STAKEHOLDERS? MENDELOW'S MATRIX INDUSTRY & MARKETS INDUSTRY & MARKETS CHANNELS skills & techniques rather than individual strengths, weaknesses, opportunities & threats COMPETITIVE ADVANTAGE
All those individuals & entities that have Mendelow’s Matrix is based on A simple bifurcation yet Product stands for the combination of “goods-and- Channels are the skill or separate technique
HIGH

a stake in its success & can impact it as Power & Interest. It suggests to Is market the same for
Analysing Industry Procedure for constructing a strategic extremely important for services” that the company offers to the target market Helpful to achieving Harmful to achieving COST LEADERSHIP STRATEGY DIFFERENTIATION STRATEGY DIFFERENTIATION STRATEGY BEST-COST PROVIDER
distribution system by a) Durability STRATEGY
well. They may be the employees, identify which stakeholders are all businesses?
and Markets group map & deciding which firms strategy build up. the objective the objective
belong in which strategic group which an organisation b) Transferability
shareholders, investors, suppliers, incredibly important. Metrics to Market refers to all buyers & Industry & market Consumers are the ones distributes its product Major core competencies Internal Origin Strengths Weaknesses i) It is a low cost competitive strategy Achieving Cost Advantages Disadvantages i) Aimed at broad mass Advantages Disadvantages (a) (b) Achieving Focused Strategy Advantages Disadvantages Best-cost provider
customers, regulators and so on. This is straightforward - who finally use a For a new product, pricing strategies Marketing Strategies are identified in (Attributes to the c) Imitability Leadership Strategy Focused cost strategy involves
define the importance being sellers of a particular product/ analysis is extremely or provides its service. that aims at broad mass market i) Rivalry a) Cost advantage may not market & involves creation i) Rivalry a) In long term, uniqueness is Focused a) Selecting specific a) Premium prices a) The firms lacking in
view of the firm is in contrast to the High Power & High Interest important to identify • Identify the competitive characteristics product/service, while for entering a market need to be three areas - organisation) d) Appropriability leadership differentiation providing customers
service & so it would be designed and for that matter • Social Marketing ii) It is effective when market is a) Prompt forecasting of demand of a last long as competitors of a product or service that difficult to sustain. niches which are not can be charged by distinctive
earlier view of the firm that was ii) Buyers ii) Buyers more value for the
POWER/ INFLUENCE

which management would need
considered to be an extension of the
to manage closely, while
owners & shareholders alone
investing a lot of time &
resources.
LOW
EX. OF KEY STAKEHOLDERS & THEIR REQUIREMENTS FOR AN OTT PLATFORM
Stakeholders Shareholders CEO and Board of
INTEREST IN THE ORGAINIZATION
Major Vendors
incorrect to say that market is one’s position as that differentiate firms in industry customers are the There are typically three composed of many price-sensitive product or service. may imitate cost reduction is perceived by customers i) It requires i) It requires covered by cost leaders the organisations competencies may
at least three objectives must • Augmented Marketing channels that should • competitor differentiation, External Origin Opportunities Threats b) Charging too high a price money by emphasizing
same for all businesses. Each compared to the typical variables are price/quality buyers of that product. A be kept in mind - buyers, when there are few ways to iii) Suppliers techniques. as unique iii) Suppliers competing offering unique and differentiators. for their focused not be able to
• Direct Marketing be considered - • customer value, and (Attributes to the b) Optimum utilization of resources for differentiated features on lower cost and better-
business has its own set of competitors, who can be range, geographic coverage, degree of customer can be a Environment) achieve product differentiation iv) Entrants b) Cost leadership can iv) Entrants based on price features that product/services. pursue focus
to achieve cost advantages. ii) Basis of Differentiation- may cause the customer to b) Creating superior skills quality differences. It can
customers i.e. market & more so, of equal size & value, or vertical integration, product-line consumer and vice a) Have customer-centric • Relationship Marketing • The sales channel • application to other markets to target a fulfill demands strategy.
c) Achieving economies of scale; thus, v) Substitutes succeed only if the firm can • Product v) Substitutes switch-off to another for catering such niche b) Due to the be done through -
each product within a business bigger in size & value or breadth,use of distribution channels, & versa. But for strategy approach while making a • Services Marketing Michael Porter's Generic Strategies narrow market of a narrow
• The product channel SWOT Analysis for Internal or External Environment? lower per unit cost of product/ achieve higher sales • Pricing alternative. markets. tremendous b) Due to the limited
HIGH has its own market even smaller & newer. A degree of service offered teams especially product. market a) offering products at
tool used for this is marketing teams it is • Person Marketing • The service channel Criteria for bilding a Broad Target Cost Leadership Differentiation service. volume.
• Organization c) Differentiation fails to work ii) It charges low c) Generating high expertise in the demand of product/ lower price than what
• Plot the firms on a two-variable map b) Produce sufficient returns core competencies (CC) SWOT stands for Strengths, Weaknesses, Opportunities &Threats. c) Cost leaders tend to keep if its basis is something prices relative ii) It concentrate goods and services, costs are
called - Strategic Group important to understand • Organization Marketing d) Standardisation of products for efficiencies for serving is being offered by
Consumers (Viewers) Employees using pairs of these differentiating through a reasonable Internal analysis is more focused on understanding the existing their costs low by Achieving Differentiation Strategy that is not valued by the to other firms their efforts on services that the high, which can
the customer and such niche markets.

Competitive Scope
Directors (Production Houses) Mapping characteristics • Place Marketing • Valuable mass production to yield lower a) Offer utility to the customers d) Rapid product innovation to that compete a particular rivals for products with
consumer separately. margin over cost. structure & competencies of the business, thus highlighting the minimizing cost of customers. organisations cause problems.
• Innovation & continuous • Prestige • Growth • New content - • Wages & benefits • Enlightened Marketing Narrow Target Focused Cost Focused cost per unit. & match products with their keep up with dynamic within target sales channel d) Developing innovative comparable quality
• Assign firms that fall in about the same c) Increasing market share. • Rare Strengths and Weaknesses, while External Analysis is about advertising, market following focus c) In the long run, the
creative content • Market share • Stability of ordering Innovation • Stability of employment Leadership Differentiation e) Invest in cost saving technologies tastes & preferences. environment. market ways in managing the and features
strategy space to the same strategic • Differential Marketing • Costly to imitate identifying and preparing for uncontrollable which can either be research, and research & strategy offer, niche could
• Total shareholder return • Revenue and profit • Stable margins • Better deals - Pricing • Pride of working for a Opportunities or threats. & using advance technology for b) Elevate/Improve e) Taking steps for enhancing value chain. rivals and new Or
(RoI) Benefits reputed org. group. • Synchro-marketing • Non-substitutable development, but this disappear or be
growth Therefore, SWOT Analysis is a tool which is used for both Internal Low Cost Product/ Differntiated Cost smart efficient working. approach can prove to be performance of the product. brand image & brand value. entrants may find b) charging similar price
Requirements • Corporate social • Value for money • Draw circles around each strategic • Concentrated Marketing taken over by larger
• Market rankings & External Analysis. Services Product/Services f) Resistance to differentiation till it expensive in the long run. c) Offer the high-quality f) Fixing product prices based it difficult to as by the rivals for
responsibility • Continuous supply group making the circles proportional competitors by
• Top rankings of the org. • Demarketing becomes essential d) Technological advancement product/ service for buyer on unique features of compete. acquiring the same products with much
to the size of the group’s respective higher quality and
• Highest market share areas a great threat to cost satisfaction. product & buying capacity of distinctive
share of total industry sales revenues Competitive Advantage better features.
leaders. customer. competencies.

CHAPTER -4 : STRATEGIC CHOICES

TYPOLOGIES OF STRATEGIES CORPORATE STRATEGY STRATEGIC OPTIONS
GENERAL ELECTRIC MATRIX ANSOFF’S PRODUCT MARKET GROWTH MATRIX
LEVEL COMPETITION ORIENTED A B C D
Business Stength in Industy
Market Penetration Product Development
Strong Average Weak Selling existing New products into
a) Corporate Level a) Competitive Strategies - Cost Leadership, STABILITY STRATEGY GROWTH/ EXPANSION STRATEGY RETRENCHMENT STRATEGIES COMBINATION STRATEGY products into existing markets
Differentiation, Focus

Market Attractiveness
INVEST INVEST HOLD

Low Medium High

b) Business Level The firm stays with its current businesses and product markets; maintains the existing level of effort; Here, the firm seeks significant growth-maybe within the current businesses; maybe by entering new business that are Strategic Exits:- Strategic Exits are followed when an organization substantially Retrenchment :-The firm retrenches some of the activities in some business (es), The firm combines the above
existing markets
b) Collaboration Strategies - Joint Venture, Market Development Diversification
c) Functional Level and is satisfied with incremental growth. related to existing businesses; or by entering new businesses that are unrelated to existing businesses. reduces the scope of its activity. This is done through an attempt to find or) or drops the business as such through sell-out or liquidation. strategic alternatives in some INVEST HOLD DIVEST Existing products New products in new
Merger & Acquisition, Strategic Alliance out the problem areas and diagnose the causes of the problems. permutation/combination so into new markets markets
HOLD DIVEST DIVEST
as to suit the specific
WHEN TO USE IT? CHARACTERISTICS MAJOR REASONS FOR STABILITY STRATEGY WHY DON’T STARTUPS AIM FOR STABILITY? MEANING CHARACTERISTICS MAJOR REASONS FOR GROWTH TYPES OF GROWTH/ EXPANSION STRATEGY requirements of the firm.
STAGES OF BUSINESS LIFE CYCLE / EXPANSION STRATEGY BCG GROWTH-SHARE MATRIX
A stability strategy is i) Firm stays with same business, same i) A product has reached the • A startup is an entrepreneurial Redefining i) Redefinition of business Turnaround Strategy Divestment Strategy
pursued by a firm when:- product- market posture & functions maturity stage of the product venture in the early stages of business by ii) It is opposite of stability i) It may become imperative when Internal retrenchment by emphasis on improving internal efficiency, known as turnaround strategy. Involves sale or liquidation of a portion of business
Relative Market Share
a) Entry/Introduction Stage - Market Penetration Strategy Internal Growth Strategies External Growth Strategies BCG Matrix: Post
ii) Endeavour is to enhance functional life cycle. ideation & development, generally enlarging scope strategy environment demands increase in High Low
Identification Strategies
i) It continues to serve in pace of activity.
b) Growth Stage - Growth/ Expansion Strategy efficiencies in an incremental way, created for solving real-life of business & iii) It leads to business growth Stare
same or similar ii) The staff feels comfortable with i) Build (Question Mark)

Market Growth Rate

through better deployment & utilization problems through technology. substantially ii) Strategists may feel more satisfied Expansion through Expansion through Expansion through Mergers & Acquisitions Conditions or indicators which point
Expansion through Action Plan for Turnaround Important elements Is Turnaround strategy Major Reasons for Retrenchment/ Turnaround Strategy A divestment strategy may be adopted due to various reasons Characteristics of Products that are Question Marks
c) Maturity Stage - Stability Strategy markets & deals in the status quo as it involves less

same or similar
d) Decline Stage - Retrenchment/ Turnaround Strategy
products & services
ii) This strategy is typical
High
iv) process of renewal of firm with the prospects of growth from out that a turnaround is needed
Strategic Alliance only relevant to Divestment Strategy growing rapidly, need Require lot of cash to
ii) Hold (Star)
of resources changes and less risks. • For it, the most important factors increasing Intensification Diversification i) Assessment of i) Changes in top i) The management no longer wishes iv) Persistent negative cash flows i) A business that had been cope with it may cause it heavy investment to hold their share
through fresh investments expansion; chief executives may loss making businesses? maintain position
iii) It does not involve a redefinition of are speed and agility, because of it investment in & new businesses/ Vertical Merger Horizontal Merger Co-generic Merger Conglomerate Merger i) Persistent negative
A strategic alliance is a current problems management to remain in business either partly from a particular business create acquired proves to be a to divest • This strategy involves iii) Harvest (Cash Cow)
iii) It is opted when the business take pride in presiding over cash flow from turnaround strategy is or wholly due to continuous financial problems for the whole mismatch & cannot be
Dogs
business of corporation being in a nascent stage of Products/ Markets Concentric Diversification Conglomerate relationship between two or ii) Analyze situation & ii) Initial credibilit iv) It is not possible for the divestment of some Cash Cows Generate enough cash
environment in which an organizations perceived to be It is a merger of Horizontal In Co-generic merger Conglomerate relevant when a iv) Divest (Dog)

for those firms whose
product have reached
the maturity stage of
product life cycle or
those who have a
sufficient market
share but need to
retain that
Low
iv) It is basically a safety-oriented, status operations. (i) (iii) Diversification business
more businesses that enables develop a strategic building actions losses and unviability. company, creating the need for integrated within the business to do of the activities in a Generate cash & have to maintain
organisation is operating is v) It is a highly versatile growth-oriented. two merger is a two or more merging mergers are the company is divestment of that business. company. low costs themselves, but do not
quo. strategy; it offers several Market Product (a) (b) each to achieve certain strategic
ii) Uncompetitive plan iii) Neutralising external ii) The management feels that Technological upgradation given business of
relatively stable. • Stability on the other hand is more iii) Expansion may lead to greater Innovation organizations combination of organizations are combination of experiencing a period have much future
permutations & Development Vertically Horizontal objectives which neither would
products or services iii) Implementing an pressures business could be made viable by v) Severity of competition & the ii) Persistent negative cash that is required for the firm or sell-out of
vi) It does not warrant much of fresh iv) Where it is not advisable to meaningful strategy when the size control over the market vis-a-vis Penetration that are firms engaged associated in some organizations of poor performance.
combinations Integrated Integrated • Helps to solve be able to achieve on its own.
iii) Declining market share emergency action iv) Identifying quick divesting some of the activities or inability of a firm to cope with it flows from a particular business to survive, a some of the ADL MATRIX
investments expand as it may be perceived of operations is expanded to full competitors. (ii) operating in in the same way or the other that are Poor performance
capacity and business is at a Diversification Diversification complex problems iv) Deterioration in plan payoff activities liquidation of unprofitable may cause it to divest. business create financial preferable option would be businesses as such. i) Dominant - Monopoly or strong & protected technological leadership
vii) Risk is less as threatening. vi) Expansion strategy holds iv) Advantages from the experience Market the same industry. related to the unrelated. does not always mean activities. problems for the whole to divest
mature stage. Thereby, we rarely within its fold two major • Increases industry but at It is a merger production No linkages w.r.t. Advantages Disadvantages physical facilities iv) Restructuring v) Quick cost reductions vi) Technological upgradation is • Divestment is to be ii) Strong - Freedom over its choice of strategies & is often able to act without its
viii) concentrating its resources & attention v) After rapid expansion, a firm curve and scale of operations Development losses, it may also company, creating the
see startups aiming for stability. strategy routes: Forward & Backward Productivity different stages with a direct processes, business customer • Organizational • sharing of resources v) Over-staffing, high business vi) Revenue generation iii) A business that had been acquired required if the business is to v) A better alternative may be viewed as an market position being unduly threatened by its competitions
on existing businesses/ products & might want to stabilize & may accrue. mean lower than need for divestment of iii) Favourable - Reasonable degree of freedom
Intensification & Integration • Gives Competitive of production competitor markets, or basic groups, customer • Economic and profits; turnover of employees, v) Returning to normal proves to be a mismatch and survive but where it is not available for investment, integral part of
markets consolidate itself vii) Asset liquidation expected growth, no that business
Diversification v) Expansion also includes Advantage or distribution required functions & • sharing knowledge & low morale cannot be integrated within the possible for the firm to invest in causing a firm to divest a corporate strategy iv) Tenable - Perform satisfactorily, vulnerable to increased competition from
ix) firms with modest growth objective • Strategic viii) Better internal future clarity, or even stronger co. in market
intensifying, diversifying, system technologies technologies. and skills vi) Mismanagement company. it, a preferable option would be to iii) Severity of competition & part of its unprofitable without any stigma
choose this strategy. • Political coordination lesser than target v) Weak - Performance of firms unsatisfactory, opportunities for improvement exist
acquiring & merging businesses divest. the inability of a firm to business attached.
profits.

CHAPTER -5 : STRATEGY IMPLEMENTATION & EVALUATION

STRATEGIC MANAGEMENT PROCESS STRATEGIC CHANGE THROUGH DIGITAL TRANSFORMATION ORGANISATIONAL FRAMEWORK ORGANISATION STRUCTURE ORGANIZATION CULTURE STRATEGIC LEADERSHIP STRATEGIC STRATEGIC CONTROL
Corporate culture refers to a company’s
values, beliefs, business principles, Managers have five leadership
PERFORMANCE It is function intended to ensure & make possible
performance of planned activities & to achieve pre-
LEADERSHIP ROLE IN
STAGES IN STRATEGY FORMULATION STRATEGY IMPLEMENTATION DIFFERENCE BETWEEN STRATEGY FORMULATION STRATEGIC CHANGE DIGITAL TRANSFORMATION
MCKINSEY 7S MODEL 1 SIMPLE STRUCTURE 3 DIVISIONAL STRUCTURE 4 MULTI DIVISIONAL STRUCTURE 5 STRATEGIC BUSINESS UNIT (SBU) STRUCTURE 6 MATRIX STRUCTURE 8 HOURGLASS STRUCTURE traditions, ways of operating, and roles to play in pushing for good IMPLEMENTATION MEASURES determined goals & results
i) It refers to a tool that analyzes a company’s “organizational design" 1) It is most appropriate for 1) It can be organized in 4 It is composed of operating An SBU is a grouping of related businesses, which is amenable to a) In matrix structures, 1) This structure consists internal work environment. strategy execution Types of Strategic
STRATEGIC MANAGEMENT Strategy implementation concerns the & STRATEGY IMPLEMENTATION ELEMENTS
ii) McKinsey 7s Model focuses on how the "Soft Ss" & "Hard Ss" elements are companies that follow a ways - divisions where each composite planning treatment. functional & product forms of 3 layers with Where Does Corporate Culture Come a) Staying on top of what is Performance Measures
a) Developing a CORPORATE STRATEGY STRATEGIC UNCERTAINTY managerial exercise of putting a freshly STEPS TO INITIATE STRATEGIC CHANGE KURT LEWIN’S MODEL OF CHANGE HOW DOES DIGITAL TRANSFORMATION WORK? happening, closely monitoring INFORMATION a) Objectives & characteristics of system which could be
interrelated, suggesting that modifying one aspect might have a ripple effect single- business strategy a) Geographic division represents a are combined constricted middle From? ORGANIZATION
SYSTEM
operationalized into measurable & controllable standards
strategic vision & AND HOW TO DEAL WITH IT? chosen strategy into action. It deals with Strategy Formulation Strategy Implementation i) Recognize the need for change i) Unfreezing the situation Use of digital technologies to A multi-business enterprise groups its multitude of businesses into progress, solving out issues, and a) Financial Measures
formulation of the managerial exercise of supervising the on the other elements in order to maintain an effective balance. & offer a line of products b) Product or service separate business to which a few distinct business units in a scientific way. simultaneously at same level layer A company’s culture is manifested in ENVIRONMENTAL
b) Mechanism for monitoring & measuring characteristics of
develop fresh, improved, or learning what obstacles lie in the SCANNING MANAGEMENT
b) Customer Satisfaction
statement of STRATEGIC PLANNING OPERATIONAL PLANNING a) Flexibility ongoing pursuit of strategy, making it work, ii) Create a shared vision to ii) Changing to the new situation in a single geographic c) Customer top corporate officer b) It is complex of all designs 2) Structure has short & the values & business principles that path of good execution.
DESIGN CONTROL

Measures system
It includes planning & entirely new company procedures, market d) Functional delegates responsibility for management preaches & practices, in
STRATEGIC LEADERSHIP
mission, goals & Characteristics of Characteristics of b) Diversification improving the competence with which it is It involves all those means manage change since it depends upon both narrow middle- PLANNING
c) Mechanism for comparing actual results with reference to
decision-making involved in related to executing the ● Compliance goods, or services is known as HARD ELEMENTS IN AN ORG. SOFT ELEMENTS IN AN ORG. LIMITATIONS OF THIS MODEL day-to-day operations & ATTRIBUTES OF AN SBU & THE BENEFITS its ethical standards & official policies, b) Promoting a culture of esprit de
IMPLEMENTATION REWARD c) Market Measures
objectives Strategic planning : Operational planning : c) Building Resilience executed and showing measurable progress iii) Institutionalise the change 2) Communication is frequent 2) Clear Accountability IMPORTANT CHARACTERISTICS vertical & horizontal flows management level
SYSTEM
standards, detecting deviations from standards & learning
developing organization’s strategic plans. "digital transformation" a) Strategy a) Shared Values a) It ignores the importance business unit strategy to OF A SBU in its stakeholder relationships, in the corps that mobilizes and POLICY
d) Employee Measures
in achieving the targeted results. strategic goals & plans. ● Identification & direct, & new products
FORMULATION
new insights on standards themselves
b) Environmental & a) Shapes the a) Deals with current of the external 3) It is based on extensive division managers a) A scientific method of grouping planning by removing the c) It result in higher overhead 3) It links top & bottom traditions the organization maintains, energizes organizational FEEDBACK
MANAGEMENT
e) Innovation Measures
d) Monitoring & ● Internalization b) Structure b) Style tend to be introduced to a) It is a single business or a the businesses of a multi- vagueness and confusion members to execute strategy in a
DEVELOPMENT
d) Mechanism feeding back corrective & adaptive information
organizational organisation & its deployment of environment and depicts delegation of authority, levels in org taking in its supervisory practices, in f) Environmental & instruction to system, for effecting desired changes
Scenario Planning It is placing the Forces before It is managing forces during market quickly, which can Multidivisional structure collection of related business corporation which d) Project objectives are clear competent fashion and perform
analysis resources. Resources iii) Refreezing CHANGE MANAGEMENT c) Systems c) Staff only the most crucial managers & employees g) Each SBU is a separate business away many tasks that employees’ attitudes and behaviour, in
action. action. result in a competitive calls for - businesses which offer at a high level. Measures TYPES OF ORGANIZATIONAL CONTROL
e) Collaboration and FORWARD & BACKWARD ISSUES IN STRATEGY Organizations can plan, prepare for, and carry out changes to their elements within the can easily see results of helps the firm in strategic from strategic planning Phases for development of are performed by the legends people repeat about
c) Formulation of b) Assesses the impact b) Develops tactics Partnerships d) Skills advantage scope for independent planning happenings in the organization, in the c) Keeping the organization EFFECTIVE STRATEGIC LEADERSHIP
LINKAGES IMPLEMENTATION An Entrepreneurial Activity An Administrative Task based operations, including digital transformations, with the aid of the organization. their good or bad a) Creating separate standpoint matrix structure Davis & middle level managers. The Importance of
strategy of environmental rather than strategy. planning & which might peer pressures that exist, in the responsive to changing
based on strategic decision- on strategic & operational discipline of change management performances divisions, each b) An improvement over the Lawrence: 4) Managers are Strategic Performance
variables. a) Project making. decisions. b) The model does not 2 FUNCTIONAL STRUCTURE feasibly standalone from h) Each SBU will have its own organization’s politics that permeate conditions, alert for new OPERATIONAL STRATEGIC CONTROL
d) Implementation of c) Projects current representing a distinct territorial grouping of businesses distinct set of competitors & its a) Cross-functional task forces generalists & they EFFECTIVE STRATEGIC LEADERSHIP
Measures
implementation clearly explain the concept 1) It groups tasks & activities 4) It is similar to functional the rest of the the work environment opportunities, bubbling with CONTROL 1) It focuses on dual questions of
strategy c) Takes a holistic view operations into the FORWARD LINKAGES BACKWARD business & strategic planning based on handle cross-
of organizational by business function structure, because organization. own distinct strategy. b) Product/brand management innovative ideas, and ahead of SHAPE OF FORMULATION OF
a) Goal Alignment It is on individual whether:
e) Strategic of the organisation. future. LINKAGES b) Procedural Emphasizes on effectiveness. Emphasizes on efficiency. CHANGE HOW DOES CHANGE A PROPERLY IMPLEMENTED CHANGE CHANGE MANAGEMENT STRATEGIES HOW TO MANAGE territorial units functional issues Culture: ally or obstacle to strategy
Different elements in effectivness or activities are organized b) Each division would rivals in developing b) Resource Allocation tasks or transactions
implementation MANAGEMENT MANAGEMENT WORK? MANAGEMENT STRATEGY CAN FOR DIGITAL TRANSFORMATION CHANGE DURING 2) It is simple & inexpensive b) It has its own set of i) Each SBU will have a CEO. c) Mature matrix emanating such as execution? a) Strategy is being implemented
evaluation & d) Develops overall d) Makes modifications strategy formulation Organizations performance. according to the way work house its functional c) It is a grouping of related competitively valuable STRATEGIC INTENT STRATEGIC MISSION as against total or
IN THE DIGITAL TRANSITION HELP AN ORGANIZATION TO - DIGITAL TRANSFORMATION competitors. those from marketing, organization’s culture is either an c) Continuous as planned
control objectives & to the business starting with objective tend to adopt c) Resource allocation Primarily an intellectual & Primarily an operational
CONSISTS OF FOUR ESSENTIAL ELEMENTS Change management is a The five best practices for managing 3) It promotes specialization is actually performed hierarchy; businesses that can be taken up j) SBUs might build on similar
competencies and capabilities. more aggregative
strategies. rational process. process. process or set of tools a) Specify the parameters and goals a) Specify the digital c) The model is considered to c) It has a manager who has 7 NETWORK STRUCTURE finance or production important contributor or an obstacle to
INFLUENCE
Improvement management b) Results produced by strategy
e) functions but not setting through those d) Structural change in small and medium-sized of labour, encourages for strategic planning distinct technologies, or all provide d) Exercising ethical leadership and
a) Defining the goals and objectives of the and best practices used of the digital transformation transformation’s aims & be more static and less c) Division managers would responsibility for strategic successful strategy execution. The d) External Accountability functions are those intended
e) Is concerned with fundamental environmental & strategies implementation Requires co-ordination Requires co-ordination businesses are - efficiency, minimizes need from the rest of the businesses similar sorts of products or a) It is termed "non-structure" by its insisting that the company
transformation to manage changes in an b) Determine which procedures and a) Begin at the top; objectives flexible for deicion be given responsibility planning & profit beliefs, vision, objectives, and conduct its affairs like a model
SUCCESSFUL STRATEGIC ACTION
2) It is process of evaluating strategy
the long-term changes. organizational appraisal, which can be among few individuals at the among many individuals at for an elaborate control services virtual elimination business approaches and practices MANAGEMENT CONTROL
e) Functional organization. It assists in tools need to be modified. b) Always, always, always making. for managing day-to-day performance, & who has d) Products/businesses that are corporate citizen Choosing the Right as it is formulated & implemented
success of the strategic alternatives & implemented top level. the middle & lower levels. b) Assessing the current state of the b) Ensure that the change is both system, & allows rapid operations; b) It becomes useful when environment underpinning a company’s strategy Strategic Performance
f) Is the responsibility implementation making changes in a safe c) Make a plan for implementing the communicate d) It is generally criticized for control of profit- related from the standpoint of k) SBUs might be serving similar or It is more inclusive & 3) Types of Strategic Control :
organisation. choice to strategic plan with help of organization and identifying gaps necessary and desired; decision making of firm is unstable & is expected to may or may not be compatible with its e) Pushing corrective actions to Measures
of functional Requires a great deal of and regulated manner, missing out the reals gaps d) A small corporate office influencing factors. “function” are assembled different markets. improve strategy execution and
FORMULATION OF IMPLEMENTATION OF
more aggregative in
determine course that an present f) Behavioural Requires specific improvements. c) Reduce disruption; c) Be ready for resistance remain so culture STRATEGIES STRATEGIES a) Premise control
f) Is a senior managers. organization adopts for structure of initiative, logical skills, motivational & leadership c) Creating a roadmap for change that reducing the possibility in conceptualization and 4) It consists of CEO or MD & that would determine the together as a distinct SBU. l) Or it may be that other overall strategic performance. a) Relevance sense of embracing
implementation conceptual intuitive & d) Involve staff members and d) Encourage communication; d) Implement changes limited corporate staff Role of culture in strategy execution integrated activities of b) Strategic surveillance
management itself. resources traits. outlines the steps needed to reach the of detrimental effects on parties involved in the gradually execution of strategy. long-term strategic e) Unrelated products/businesses competences on which the c) It provides org with increased
responsibility. analytical skills. desired state e) Recognize that change is the with functional line a) Perils of Strategy-Culture Conflict b) Data Availability complete department, c) Special alert control
the company transformation process. direction of the firm and in any group are separated competitive advantage of flexibility & adaptability to cope with
norm, not the exception. e) Offer assistance and managers in dominant STRATEGIC COMPETITIVENESS division or even entire d) Implementation control
Strategic Formulation d) Implementing and managing the change exercise overall financial different SBUs are built have rapid technological change & shifting b) Creating a strong fit between ABOVE-AVERAGE RETURNS c) Data Quality
Strategy Implementation e) Track progress and make required training functions f) Grouping the businesses on SBU org, instead or mere (i) Monitoring strategic thrusts
precedes Strategy at every level of the organization control over the semi- similarities patterns of international trade & strategy & culture d) Data Timeliness
follows Strategy Formulation. course corrections lines helps the firm in strategic narrowly circumscribed (ii) Milestone Reviews
Implementation. autonomous divisions competition c) Changing a problem culture activities of sub-units