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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
create
 


 


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
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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.

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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.
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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
environment?

 
 

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
 
 

 
 
 

 





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Ò Strategy as PLAN - a direction, guide, course of action -
intention rather than actual
Ò Strategy as PLOY - a maneuver intended to outwit a
competitor
Ò Strategy as PAÔÔ ±N- a consistent pattern of past
behavior
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
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Ò Self conscious intended course of action
Ò Guidelines on how to deal with situations
Ò Unified, comprehensive & integrated plan designed to
achieve objectives

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Ò Maneuvers to outwit competitors
Ò Signals and moves

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

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

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

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Ò Ôhe reason why the organization exists

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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. 
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Ò Developing a Strategic Vision and


Mission
Ò Setting Objectives
Ò Crafting a Strategy
Ò Implementing and xecuting the
Strategy
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.
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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
stockholders
Š Ôop Management
u ±esponsible for decisions and actions of every
employee
u Providing effective leadership
Š mployees
u Implement ± put the strategies into action and monitor
performance
u valuate ± do the actual evaluations and take
necessary actions
  

Corporate

Business (SBU)

Operational
  


   
Ò Corporate strategy refers to the over-reaching
strategy of the diversified firm.
Ò Such a corporate strategy answers the
questions
± In which businesses should we compete?
± How does being in these business create
synergy?
± How does being in this business add to the
competitive advantage of the corporation as a
whole?
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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
market?
Ò :hich products or services to develop for which
market?
Ò Ôhe extent to which these meet with customer needs
in such a way so as to achieve organization's
objectives
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Ò Short & medium term plans
Ò Limited to the domain of department¶s functional
responsibility
Ò ach functional department attempts to do its part in
meeting overall corporate objectives
Ò Ôheir strategies are derived from broader corporate
strategies.
± Marketing strategies
± New product development strategies
± Human resource strategies
± !inancial strategies
± Legal strategies
± Supply-chain strategies
± Information technology management strategies
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Ò An individual or group with an interest in an
organization

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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

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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
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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
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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

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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
obligations

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

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

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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.

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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
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Profit Maximization

Sales Maximization

Personal Satisfaction Maximization

Growth & xpansion Maximization



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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.
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Ò Customers can switch
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Ò Inequalityof influence
Ò Primary & Secondary stakeholders
Ò Active & Passive stakeholders

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