INTRODUCTION TO

STRATEGY
• Strategies are the means by which long-term objectives will be achieved.
• "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" (William F.
Glueck, and Lawrence R. Jauch).
• The role of strategy is to identify the general approaches that the
organization utilize to achieve its organizational objectives. Therefore, the
choice of strategy is so central to the study and understanding of strategic
management.
• a company strategy is a game plan for growing the business , staking out a
market position , attracting and pleasing customers , competing
successfully
Strategy is derived from Greek word “strategos” which means generalship- actual
direction of military force
No definite meaning assigned to strategy

In military sense it refers to action taken against another

in management there are two perspectives

1) strategy as action inclusive of objectives setting .

2) strategy as action exclusive of objective setting.

 A. OBJECTIVE INCLUSIVE
Chandler defined strategy is the determination of long- term goals and
objectives of enterprise and adoption of course of action and allocation of
resources necessary for carrying out these goals

Andrews professor at Harvard business:

Strategy is the pattern of objectives ,purpose or goals and major policies and
plans for achieving these goals
 B. OBJECTIVE EXCLUSIVE

STANFORD RESAERCH INSTITUTE , USA:

Strategy is a way in which a firm , reacting to its environment , deploy its

principal resources and marshals its main effort in pursuit of its purpose.
• MICHAEL PORTER

Strategy is creation of unique and valued position involving a different

set of activities
DEFINITIONS OF STRATEGY
Strategy is an action that managers take to attain one or more of the organization’s goals.

Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future.

A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational
environment so as to meet the present objectives.

While planning a strategy it is essential to consider that decisions are not taken in a vaccum and that any act taken by a firm is likely to be met
by a reaction from those affected, competitors, customers, employees or suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of events and the need to take into consideration the likely or actual
behavior of others.

Strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving
these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the
contribution it plans to make to its shareholders, customers and society at large.
 FEATURES OF STRATEGY
Strategy is a major course of action through which an organisation tries too relate itself with the
environment.

Strategy is a relative combination of actions aimed to meet a articular situation to solve certain
problems

Strategy is forward looking , it has orientation towards future

Strategy may involve contradictory action either simultaneously or with gap.

Strategy is a commitment to undertake one set of action rather than another.

 FEATURES OF STRATEGY
Strategy is Significant because it is not possible to foresee the future. Without
a perfect foresight, the firms must be ready to deal with the uncertain events
which constitute the business environment.

Strategy deals with long term developments rather than routine operations,
i.e. it deals with probability of innovations or new products, new methods of
productions, or new markets to be developed in future.

Strategy is created to take into account the probable behavior of customers

and competitors. Strategies dealing with employees will predict the employee
behavior.
Strategy is a well defined roadmap of an organization. It defines the overall
mission, vision and direction of an organization.

The objective of a strategy is to maximize an organization’s strengths and to

minimize the strengths of the competitors.

Strategy, in short, bridges the gap between “where we are” and “where we
want to be”.

Without strategy the organisation is like a ship without a ridder

DISTINGUISHING CHARACTERISTICS
• The process of strategy formulation results in no immediate action.
• Therefore, strategy must next be used to generate strategic projects through a search
process.
• Thus, strategy becomes unnecessary whenever the historical dynamics of an organization
will take it where it wants to go (when the search process is already focused on the
preferred areas).
• Strategy formulation must be based on highly aggregated, incomplete and uncertain
information about classes of alternatives (at the time of strategy formulation it is no
possible to enumerate all the project possibilities which will be uncovered).
• Successful use of strategy requires strategic feedback.
• Since both strategy and objectives are used to filter projects, they appear similar.
However, they are distinct. Objectives represent the ends which the firm is seeking to
attain, while the strategy is the means to these ends.
• Strategy and objectives are interchangeable; both at different points in time and at
different levels of organization. A typical hierarchical relationship results: elements of
strategy at a higher managerial level become objectives at a lower one
 THREE MODELS OF STRATEGY
• The models of strategy that are implicated in the literature have been
categorized into three distinct groups by Ellen E. Chaffee:
• Model I - Linear strategy
• This approach focuses on planning such that goals, and the means of
achieving them, are the results of strategic management.
• This model is inherent in Chandler's definition cites above. In linear
strategy, leaders of the organization plan how they will deal with
competitors to achieve their organization's goals.
 THREE MODELS OF STRATEGY
• Model II - Adaptive strategy
• This approach corresponds to the notion of incrementalism.
• "Strategy is concerned with the development of a viable match between the
opportunities and the risks present in the external environment and the organization's
capabilities and resources for exploiting these opportunities." (Hofer, 1973).
• In adaptive strategy, the organization and its parts change, proactively or reactively, in
order to be aligned with consumer preferences.
• Model III - Interpretive strategy
• Like adaptive strategy this approach sees the organization and its environment as clearly
related, but the emphasis is placed on managers "holding a cognitive map that provides
a view of the world, helps interpret the changes the organization faces, and provides
appropriate responses" (Weick, 1983).
• In interpretive strategy, organizational representatives convey meanings that are
intended to motivate stakeholder in ways that favor the organization.
 SCOPE OF STARTEGY
• The company’s scope encompasses three dimensions—
• the target customer or offering,
• geographic location, and
• vertical integration (that is, whole product).
• Each dimension may vary in relevance (for example, the customer may be
more important than geographic location). Clearly defining the boundaries
in each area should make it obvious which activities to concentrate on (and
which ones to avoid).
• The company’s scope does not determine exactly what should be done
within those boundaries, as there is room for experimentation and
initiative.
• However, it should specify where the company or business will not go. This
will prevent employees from wasting resources on projects that do not fit
the corporate strategy.
SCOPE OF STARTEGY
• STRATEGY AS PLAN – a directed course of action to achieve an intended set
of goals; similar to the strategic planning concept;
• STRATEGY AS PATTERN – a consistent pattern of past behavior, with a
strategy realized over time rather than planned or intended. Where the
realized pattern was different from the intent, he referred to the strategy
as emergent;
• STRATEGY AS POSITION – locating brands, products, or companies within
the market, based on the conceptual framework of consumers or other
stakeholders; a strategy determined primarily by factors outside the firm;
• STRATEGY AS PLOY – a specific maneuver intended to outwit a competitor;
and
• STRATEGY AS PERSPECTIVE – executing strategy based on a "theory of the
business" or natural extension of the mindset or ideological perspective of
the organization.
 IMPORTANCE OF STARTEGY
• STRATEGY AS LEARNING = Senge claimed that an organization would need
to be structured such that:[59]
• People can continuously expand their capacity to learn and be productive.
• New patterns of thinking are nurtured.
• Collective aspirations are encouraged.
• People are encouraged to see the "whole picture" together.
• STRATEGY AS MARKETING= The basic premise is that a strategy should not
be judged by internal company factors but by the way customers see it
relative to the competition.
• Crafting and implementing a strategy involves creating a position in the
mind of the collective consumer. Several techniques enabled the practical
use of positioning theory
 IMPORTANCE OF STARTEGY
• STRATEGY AS ADAPTING TO CHANGE= In 1969, Peter Drucker coined the
phrase Age of Discontinuity to describe the way change disrupts lives.
• In an age of continuity attempts to predict the future by extrapolating from
the past can be accurate.
• But according to Drucker, we are now in an age of discontinuity and
extrapolating is ineffective. He identifies four sources of discontinuity
• STRATEGY AS OPERATIONAL EXCELLENCE = Process management uses
some of the techniques from product quality management and some of the
techniques from customer service management. It looks at an activity as a
sequential process. The objective is to find inefficiencies and make the
process more effective.
 IMPORTANCE OF STARTEGY
• STRATEGY AS PROBLEM SOLVING=
• Diagnosis:
• Guiding Policy:
• Action Plans
• INFORMATION- AND TECHNOLOGY-DRIVEN STRATEGY=
• Peter Drucker conceived of the "knowledge worker" in the 1950s.
• He described how fewer workers would do physical labor, and more would
apply their minds.
• In 1984, John Naisbitt theorized that the future would be driven largely by
information: companies that managed information well could obtain an
advantage, however the profitability of what he called "information float"
(information that the company had and others desired) would disappear as
inexpensive computers made information more accessible.