You are on page 1of 54


?  ? 

 3  ?



? # ? 4
 ? 2  
-  $
1? - 

?  ? 0
? &


'  (()
? ** + ,



- ? 
?  ! ?  
- . 




 ?   ?  # ?  2

  ?   $ 






Ò A set of competitive moves & business approaches

the management employs to run the company
± Attract and please customers
± Stake out a market position
± Conduct operations
± Compete successfully
± Achieve organizational objectives


Ò !uture technology-product-customer focus
Ò Geographic and product markets to pursue
Ò Capabilities to be developed
Ò Kind of company that management is trying to


Ò Ôhe purpose and long-term direction of the business;
Ò Ôhe scope of an organization¶s activities and actions
required to meet its objectives (broad or narrow);
Ò Meeting the challenges from the firm¶s business external
environment, such as competitors and the changing
needs of customers;
Ò Using the firm¶s internal resources and competencies
effectively and building on its strengths to meet
environmental challenges;
Ò Delivering value to the people who depend on the firm, its
stakeholders, such as customers and shareholders, to
achieve competitive advantage


Ò Ôo create competitive advantage, so
that the company can outperform the
competitors in order to have dominance
over the market.
Ò Ôo guide the company successfully
through all changes in the environment.


Ò Strategic management is the art, science and
craft of formulating, implementing and
evaluating cross-functional decisions that will
enable an organization to achieve its long-
term objectives

Ò Strategy is the direction and scope of an organization
over the long term. It achieves advantage in a
changing environment through its configuration of
resources and competences with the aim of fulfilling
stakeholder expectations.
Ò Corporate strategy is the pattern of major objectives,
purposes and goals and essential policies or plans
for achieving those goals, stated in such a way as to
define what business the company is in or is to be in
and the kind of company it is or is to be.
Ò :hat is our business? Business(es) to be in
Ò :hat are our products and markets?

Ò Buyer needs and groups to serve

Ò Outcomes to achieve
Ò :hat can our firm do to accomplish objectives?
Ò How do we leverage the advantages offered by the
environmental parameters?
Ò How do we stay clear of the threats posed by the


Ò ±esponding to changing buyer preferences

Ò ±esponding to new market conditions
Ò Growing the business over the long-term
Ò Achieving performance targets
Ò Outcompeting rivals





2 5/-$6


Ò Strategy as PLAN - a direction, guide, course of action -
intention rather than actual
Ò Strategy as PLOY - a maneuver intended to outwit a
Ò Strategy as PAÔÔ ±N- a consistent pattern of past
Ò Strategy as POSIÔION- locating of brands, products, or
companies within the conceptual framework of
consumers or other stakeholders - strategy determined
primarily by factors outside the firm
Ò Strategy as P ±SP CÔIV - strategy determined
primarily by a master strategist
Ò Self conscious intended course of action
Ò Guidelines on how to deal with situations
Ò Unified, comprehensive & integrated plan designed to
achieve objectives

Ò Maneuvers to outwit competitors
Ò Signals and moves

Ò Consistency in behavior and actions
Ò Deliberate consistency
Ò Unplanned consistency

§  §"
Ò Locating an organization in an environment
Ò A match, a niche in the industrial domain

% % %
Ò Ôhe ingrained way of perceiving the world
± g McDonalds ± quality, service, cleanliness, value
Ò Shared character of the organization

(§ %
Ò Ôhe reason why the organization exists


Ò Proactive instead of reactive analyze & take actions
instead of being spectators
Ò :orking with the environment instead of getting
carried away by uncertainties
Ò !ramework for major decisions - businesses,
products, markets, manufacturing facilities,
investments and organizational structure
Ò Guides entire organization -µwhat it is trying to do¶
Ò Corporate defense mechanism against mistakes in
product market choices or investments
Ò nsures future ± helps evolve core competencies
and competitive advantages for survival and growth. 




! *! 

















-  $

'  ()

'  ( ?


?  ?


- - . 






Ò Developing a Strategic Vision and

Ò Setting Objectives
Ò Crafting a Strategy
Ò Implementing and xecuting the
Ò valuating Performance and Initiating
Corrective Adjustments
Š Strategy implementation
u Process of putting strategies into action
u Consider implementation at each level
u ³make-it-happen´ - involving people management,
developing competencies and capabilities, budgeting,
policy-making, motivating, culture-building, and leader

Š Strategy evaluation
u :as the strategy effective, if not what next?
u !eedback and corrective action

Y. Strategic Planning is the process of defining directions for the

future for committing corporate resources to satisfy societal
needs (or those of its constituents), in a manner that is most cost
effective and adds more value.

2. Ôhe success of any Strategic Process is primarily to define a

road map for achieving a sustained competitive advantage.

3. Ôhe essence of a good strategy is also to build a market position

that is strong enough and an organization that is capable enough
to produce successful performance despite unforeseeable
events, potent competition, unexpected delays or cost surprises.

Chief Architect Approach

Delegation Approach

Collaborative / Ôeam Approach

Corporate Intrapreneur Approach

Š Board of Directors
u lected representative of the company¶s stockholders
u Legally obligated to represent and protect
Š Ôop Management
u ±esponsible for decisions and actions of every
u Providing effective leadership
Š mployees
u Implement ± put the strategies into action and monitor
u valuate ± do the actual evaluations and take
necessary actions


Business (SBU)


Ò Corporate strategy refers to the over-reaching
strategy of the diversified firm.
Ò Such a corporate strategy answers the
± In which businesses should we compete?
± How does being in these business create
± How does being in this business add to the
competitive advantage of the corporation as a
+ K(,
Ò It refers to the aggregated strategies of single
business firm or a strategic business unit (SBU) in a
diversified corporation.
Ò According to Michael Porter - a firm must formulate a
business strategy that incorporates either
differentiation or focus in order to achieve a
sustainable competitive advantage and long-term
success in its chosen arena
Ò How to compete successfully in particular markets?
Ò :hat opportunities can be identified or created in the
Ò :hich products or services to develop for which
Ò Ôhe extent to which these meet with customer needs
in such a way so as to achieve organization's

Ò Short & medium term plans
Ò Limited to the domain of department¶s functional
Ò ach functional department attempts to do its part in
meeting overall corporate objectives
Ò Ôheir strategies are derived from broader corporate
± Marketing strategies
± New product development strategies
± Human resource strategies
± !inancial strategies
± Legal strategies
± Supply-chain strategies
± Information technology management strategies
Ò An individual or group with an interest in an





















Ò High profits
Ò High dividend
Ò Long term growth
Ò Prospect of capital gain
Ò A say in the business
Ò A positive corporate image
Ò Preferential treatment as customers

%   * 
Ò High pay
Ò Job security
Ò Good working conditions
Ò !air treatment
Ò !ringe benefits
Ò Health and safety
Ò Promotion prospects
Ò Ôraining opportunities
Ò Low prices
Ò Value for money
Ò High quality products
Ò Good service
Ò Innovation
Ò Certain and regular supply
Ò Choice of goods i.e. variety
Ò Clear and accurate information
Ò A long term relationship with the firm
Ò Large size and high value of contracts
Ò !requent and regular orders
Ò Prompt payment
Ò !air prices
Ò Growth of the firm leading to more orders

Ò Prompt payment
Ò Payment of interest on outstanding debt
Ò ±epayment at agreed date
Ò Credit worthiness of the organization
Ò Sufficient positive cash flow to meet

Ò mployment prospects
Ò Safeguarding the environment
Ò Acceptance of social responsibility
Ò thical behaviour


Ò Compliance with laws and regulations
Ò fficient use of resources
Ò mployment
Ò Contribution to the national economy
Ò Payment of taxes



Ò Common Ò Conflicting
Ò Shareholders, Ò :age rises (at the
employees, suppliers - expense of dividend)
success of the Ò Management interested
organisation. in organisational growth
Ò High profits - high (at the expense of short
dividends, job security, term profits)
growth and prosperity Ò Growth at the expense
of the environment.


Ò xternal pressure from the market place,
including competitors, customers, suppliers,
shareholders, pressure groups threatening a
boycott, the government (through taxation
and spending)
Ò Internal pressures from existing
commitments, managers, employees and
their trade unions
Ò Personal, ethical and moral perspectives of
senior managers

Profit Maximization

Sales Maximization

Personal Satisfaction Maximization

Growth & xpansion Maximization

!  *   
Ò Shareholders- voting Ò Govt and pressure
rights, can sell shares groups can
making the company Ò Publicise business
vulnerable activities as
Ò Creditors can refuse unacceptable
credit, charge high Ò Political pressure for
interest rates, take legal changes in the law
action for non-payment
Ò ±efusing to buy
initiate moves to
liquidate the company. goods/services fro
named firms
Ò Suppliers can refuse
future credit.
Ò Customers can switch

Ò Inequalityof influence
Ò Primary & Secondary stakeholders
Ò Active & Passive stakeholders