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STRATEG

Y
1. Introduction
 The word strategy comes from the Greek
word ‘Strategos’ which mean general. In
military science, strategy means the art and
science of directing military forces in a war
or battle.
 In the modern term, strategy is used in
business to describe how an organization is
going to achieve its overall objectives. Also,
most organizations have several alternatives
for achieving its objectives.
 Thus, strategy is concerned with deciding
which alternative is to be adopted to
accomplish the overall objectives of the
organization.
2. Definition
 A strategy is a unified, comprehensive and
integrated plan that relates the strategic
advantages of the firm to the challenges of the
environment. It is designed to ensure that the
basic objectives of the enterprise are achieved
through proper execution by the organization.
 Strategy is a plan of action or policy designed to
achieve a major or overall aim.
 Strategy is a broad long term plan designed to
achieve the overall objectives of the firm.
2. Definition
• Strategy is the direction and scope of
an organization over the long term,
which achieves advantage in a
changing environment through its
configuration of resources and
competences with the aim of fulfilling
stakeholder expectations.
3. Strategic decisions
3. Nature of Strategies
 Strategy includes the determination and
evaluation of alternative paths to achieve
an organization’s objectives & mission
and eventually a choice of the alternative
that is to be adopted.
 The nature and characteristics of
strategies can be listed out as follows: -
- Objectives Oriented.
- Future Oriented.
- Comprehensive and Integrated.
- Strategy Alternatives.
- Related to environment (Micro & Macro)
- Allocation of Resources.
4. Importance of Strategy
 Strategy provides a framework within which
the members of the organization takes
necessary decision. Also, they are useful
guidelines for day to day activities. In
general, strategies provide following
benefits to the organization and they are as
follows: -
- Aids (helps) in decision making.
- Aids (helps) in communication.
- Ensures better co – ordination.
- Facilitates utilization of resources.
- Facilitates planning.
- Facilitates Control.
- Enhances corporate image.
5. Five P’s of Strategy
 A strategy is a plan or course of action or
a set of decision/rules making a pattern
or creating a common thread.
 There are five P’s of strategy and they
are as follows: -
- Strategy is a PLAN.
- Strategy is a PLOY.
- Strategy is a PATTERN.
- Strategy is a POSITION.
- Strategy is a PERSPECTIVE.
6. Strategic Management
 “Strategic management consists of the
analysis, decisions, and actions an organization
undertakes in order to create and sustain
competitive advantages.”
 Key Attributes of Strategic Management:
 Directs the organization toward overall goals
and objectives.
 Involves the inclusion of multiple stakeholders
in decision making.
 Needs to incorporate short-term and long-term
perspectives.
 Recognizes tradeoffs between efficiency and
effectiveness.
6. Strategic Management
 A continuous, iterative process aimed at
keeping an organization as a whole
appropriately matched to its environment
(Certo and Peter)
 Keeping the business in tune with
management and marketing forces both
outside and inside the firm
7. Benefits of strategic
management
 Establish the mission
 Formulate philosophy  Establish procedures
 Establish policies  Provide facilities
 Setting objectives  Provide capital
 Developing strategy  Set standards
 Plan the Organizational  Establish programs
structure
and plans
 Provide personnel
 Control information
 Activate people
8. Elements of strategic management
A) Strategic Position
 The Organization's Environment
 Political Economic Social Technological
Environmental Legal
 Sources of Competition
 Opportunities and Threats
 Strategic Capability of the Organization
 Resources and Competences
 Strengths and Weaknesses
A) Strategic Position
 Expectations and Purposes
 Corporate Governance, Stakeholders, Ethics
and Culture
 Sources of Power and Influence
 Communication of Purpose: Mission and
Objectives
B) Strategic Choices
 Bases of competitive advantage at
business level
 Scope of activities at corporate level
 Portfolio
 Market spread, e.g. international
 Value added by corporate parent (parenting)
 Directions and methods of development
 Directions: Product/Market
 Methods: Internal/organic, M&A, strategic
alliances
C) Strategy into Action

 Structuring the organization


 Marshalling resources (people,
information, finance, technology)
 Managing change
9. Steps to strategic
management
 Environmental analysis
 Establish organizational direction
 Strategy formulation
 Strategy implementation
 Strategic control
A) Environmental Analysis

 Process of examining the


organization’s environment to
determine:
 Strengths
 Weaknesses
 Opportunities
 Threats
B) Environmental structure

 General environment
 Social, economic, political, legal,
technical
 Operating environment
 International, supplier, labor,
competition, customer
 Internal environment
 Organizational, marketing, financial,
personnel, production
C) Methods of Environmental
Forecasting

 Expert opinion  Cross-impact


analysis
 Trend
extrapolation  Multiple scenarios

 Trend correlation  Demand/hazard


forecasting
 Dynamic modeling
D) Establish Organizational
Direction

 Establishing an organizational
direction for the company involves
determining two indicators:
 Organizational mission – the reason why
the organization exists
 Objectives – measurable targets to track
the growth of the business
10. Role of Strategies in
Business
 Strategies like policies play an important role
in business. The importance of strategies can
be briefly stated as follows: -
 Helps to attain objectives.
 Helps to maximize risks.
 Aids Decision making.
 Facilitates short term planning.
 Facilitates Organizing, Directing & Control.
 Facilitates Optimum use of Resources.