What Is Strategic Management?

Two CEOs went for camping. Suddenly a bear arrives. Now the environment threats
were same for both. One CEO took out his joggers and prepared for running. The
other CEO said you can not outrun the bear.

The first CEO replied “but I can outrun you! So the bear gets you!”

Strategy is how to outperform your competitor given the same threats and
opportunities of the environment.
Defining Strategic
Management
• Formulating = Strategic Planning

• Implementing

• Evaluating

• Cross Functional Decisions to achieve long term objectives

• Functional = Management + Marketing + Finance + Accounts + Production + Operation +

R&D + Information System

• Long term planning = projection of today’s trend and not strategic planning
Stages of Strategic Management
1. Formulation = Vision + Mission :
• Opportunities and Threats for long term objective
• Strength and Weakness
• HR Recruitment
• To add and subtract resources and technology in businesses, markets and products, process
outsource, JV, hostile take over, PESTEL, its implications

2. Implementation
• HR Policies for training & motivation for company’s objective (per division) to create enthusiasm
and pride towards company’s objective

3. Evaluation
• Success today is not necessarily success tomorrow
• Corporate division, function
• IFI + EFE + Measuring performance GAP and then CAP (Corrective Action Plan)
Integrating Intuition and
Analysis
• Decision = Data + Intuition

• Data = Industry 4.0 i.e. IoT, IIoT, IoS, Big Data, Algorithm, Human
Interface, Augmented Virtual Reality

• Intuition = Inference from PESTEL + Experience of Similar Situations +

Readings + Networking + Meditation
Adapting to
Change
• The only constant is change

• Disruptive innovation

• Do things right

• Do right things

• Current trends = e commerce

• Blogs, tweets, YouTube, tumbler, Facebook, reddit, Instagram, LinkedIn

Key Terms in Strategic
Management
Competitive
Advantage
• Sustainable competitive differential advantage (SCDA)

• Strategies to cash on like:

• Cash rich + Lower fixed asset through outsourcing e.g. Apple
• Sales thru ecommerce like Amazon
Strategists
• All decision makers who have responsibility of steering the
organization for long term

• CEO, Business Unit Heads

• It can be a support function also called Chief Strategy

Officer
Vision and Mission
Statements
• Vision = What we want to become

• Mission = How (through products, markets, operations) distinguishing

it from the competition
External Opportunities and Threats
• This is relevant to industries
Internal Strengths and Weaknesses
• Relevant to competition
Long-Term
Objectives
• Long Term Objectives = Strategies to Achieve Them

• Annual Objective = Budget

• Policies = Specific repetitive action for lowest strata of the HR finally

converted into ISO 9000

• Development of bots, robots / cyber-physical systems

Strategies
• Where are we now

• Where we want to go

• How we are going to get there

The Strategic-Management
Model
Benefits of
Strategic
Management
Why Some Firms Do No Strategic
Planning
1. No formal training in strategic management
2. No understanding of or appreciation for the benefits of planning
3. No monetary rewards for doing planning
4. No punishment for not planning
5. Too busy “firefighting” (resolving internal crises) to plan ahead
6. To view planning as a waste of time, since no product/service is made
7. Laziness; effective planning takes time and effort; time is money
8. Content with current success; failure to realize that success today is no
guarantee for success tomorrow; even Apple Inc. is an example
9. Overconfident
10. Prior bad experience with strategic planning done
sometime/somewhere
Guidelines for Effective
Strategic Management
R. T. Lenz offers six guidelines for effective strategic management:
1. Keep the process simple and easily understandable.
2. Eliminate vague planning jargon.
3. Keep the process nonroutine, so vary assignments, team
membership, meeting formats, settings, and even the planning
calendar.
4. Welcome bad news and encourage devil’s advocate thinking.
5. Do not allow technicians to monopolize the planning process.
6. To the extent possible, involve managers from all areas of the
firm.
Comparing Business and Military
Strategy
• Alexander the Great

• Napoleon

• Sun Tzu
Conclusio
n
• Managerial Policy is all functions going for policies and the total
organization called managerial policy when added with business units
and corporate and with strategy it is called Corporate Strategy

• Retreat twice a year creating ownership for candor and

empowerment