Professional Documents
Culture Documents
Chapter One
The Nature of Strategic Management
1.1. An Introduction
• A typical dictionary will define the word strategy
as something that has to do with war and
deception of an enemy.
• In business organizational context the term is not
much different.
• Businesses have to respond to a dynamic and
often hostile environment for pursuit of their
mission.
• Strategy seeks to relate the goals of the
organization to the means of achieving them.
1.2. The Meaning of Strategic Management
• The word strategy is derived from Greek word called
“strategos”, which means, generalship-actual direction of
military force as directed from policy governing its deployment.
• strategy is a long range blueprint of an organization's desired
image, direction and destination, what it wants to be, what it
wants to do and where it wants to go.
• Strategy is an idea, plan and action taken by people and /or firm
in successful competition with competitors.
Contd..
Management Marketing
Finance/Accounting Production/Operations
Discussion Questions
1. Does strategic management is more of
science or art ? Which comes first
(art/science in strategic management?
2. Do you agree, if the vision statements may
not have time frame?
1.4. The Strategic Management Model
Contd…
• The strategic management process can best be studied
and applied using a model. Every model represents
some kind of process.
Competition
• With the globalization, e-commerce and other
changes in the business environment, todays
business world has become hyper competitive
where the organization can no longer survive
without executing proper competitive strategy.
Diversification
• With the rapid changing business environment and
increased uncertainty the business risk has increased
drastically.
• To diversify the business risk companies now engage
in diversified operations where they focus on more
than one business area/industry rather than
specializing in one area.
• The strategic management should be able to identify
diversified business opportunities and manage them
well.
Contd…
Active pressure groups
• In the modern world there are active pressure
groups operating such as environmental activism
and consumer protectionism.
• Thus, Strategic management should identify
these external pressure groups and hear about
their concerns.
Contd…