Semester: January-June 2023

Course Name: Strategic Management

Course Code: MGT 4205

Prof. Dr._Arif_Rahman_MGT, BUP 1

 Introduction of the Course
Instructor

Dr. Md. Arifur Rahman

BBA, MBA (MGT, RU), PhD (Industrial Economics)
Professor
Dept. of Management Studies
Bangladesh University of Professionals
Email: drarif2students@gmail.com
Call or Inbox SMS: 01769021712, 01886016040

Prof. Dr._Arif_Rahman_MGT, BUP 2

Introduction of the Students

Prof. Dr._Arif_Rahman_MGT, BUP 3

 Introduction of the
Course
 Strategic management is an advance course to pursue knowledge about
business strategies developed by the strategy makers at various level to gain
competitive advantages.

 This course is designed to develop a better understating about how to

develop business strategies based on business environment and implement
those strategies as well as finally control them.

 Under this course, there are several chapters including strategic

management, company mission, the external environment, internal analysis,
long-term objectives and strategies, multi-business strategy, strategy
implementation, strategy control and innovation and talent management
strategy.

Prof. Dr._Arif_Rahman_MGT, BUP 4

 Introduction of the
Course
Text
book:
Strategic Management, Formulation, and Pearce
Implementation, Robinson and Amita Mital (12th Control: II,
Edition)
Recommended Books:
1. Strategic Management Concepts and Cases: Fred R. David & Forest R.
David
(Fifteenth Edition)
2. Theory of Strategic Management with Cases: Charles W.L. Hill & Gareth R.
Jones
(8th Edition)

Prof. Dr._Arif_Rahman_MGT, BUP 5

 Course Objectives

 To understand the types of strategic decisions for which managers at

different levels of the company responsible.
 To realize which goal of a company is most important: survival, profitability,
or growth.
 To analyze the environmental factors that affect the performance of a firm.
 To comprehend the generic strategies of low-cost leadership, differentiation, and
focus.
 To understand the creation of sets of long-term objectives and grand strategies
options.
 To understand how functional tactics are used in strategy implementation.
 To learn about four types of strategic control.

Prof. Dr._Arif_Rahman_MGT, BUP 6

 Learning Outcomes
On completion of this unit, you should be able to:
 Appreciate the importance of strategic management to gain
sustainable
competitive advantages;
 Recognize corporate, business and functional level strategy;
 Understand the newest trends in mission components;
 Evaluate the factors of external environment and their influence on
business performance;
 Conduct value chain analysis and SWOT analysis;
 Apply different frameworks to perform a comprehensive internal analysis;
 Apply generic strategy and grand strategies in different context;

Prof. Dr._Arif_Rahman_MGT, BUP 7

 Assessment Strategy

Remarks Distribution

Final Exam 50%

One Mid-term 20%
4 Class Tests 10%

Term Paper (Individual) including Presentation 10%

Assignments and Case Studies 5%
Class attendance & Attitude 5%
Total 100%
Prof. Dr._Arif_Rahman_MGT, BUP 8
Chapter:01

Prof. Dr._Arif_Rahman_MGT, BUP 9

 Strategy
Strategy means a plan of action or policy designed to achieve a major or
overall aim.

By strategy, managers mean their large-scale, future-

oriented plans for interacting with the competitive environment to
achieve company objectives.

A strategy is a
company’s
game plan.

Prof. Dr._Arif_Rahman_MGT, BUP 10

 Strategy
A strategy reflects:
 a company’s awareness of how, when and where it should
compete;
 against whom it should compete; and
 for what purpose it should compete.

A business strategy is a set of competitive moves and actions that business

uses to attract customers, compete successfully, strengthening performance,
and achieve organizational goals. It outlines how business should be carried
out to reach the desired ends.

Prof. Dr._Arif_Rahman_MGT, BUP 11

 What is Management?

Conceptual Definition
Management is a process of getting things done through others.
Functional Definition
Management is a set of activities consisting of planning, organizing, leading
and controlling.

Management is the process of designing and maintaining an environment in which

individuals, working together in groups, efficiently accomplish selected aims.
H.Weihrich and H.
Koontz

Prof. Dr._Arif_Rahman_MGT, BUP 12

 Expansion of the Basic
Definition
 As managers, people carry out the managerial functions of planning,
organizing, staffing, leading and controlling.
 It applies to managers at all organizational level.
 The aim of all managers is to create surplus.
 Management applies to any kind of organization.
 Management is concerned with productivity, which implies effectiveness
and
efficiency.

Prof. Dr._Arif_Rahman_MGT, BUP 13

 Strategic Management
Strategic management is defined as the set of decisions and action that
result in the formulation and implementation of plan designed to
achieve company’s objectives.

Strategic management is a comprehensive and ongoing management process

aimed at formulating and implementing effective strategies; a way of
approaching business opportunities and challenges.
R.W. Griffin

Prof. Dr._Arif_Rahman_MGT, BUP 14

 Nine Critical Tasks of Strategic
Management
 Formulate the company’s mission
 Conduct an internal analysis
 Assess the external environment – competitive and general
contexts
 Analyze the company’s options by matching its resources
with
the external environment
 Identify the most desirable options in light of the mission

Prof. Dr._Arif_Rahman_MGT, BUP 15

 Nine Critical Tasks of Strategic Management

 Select a setof long-term objectives and grand strategies that will

achieve the most desirable options
 Develop annual objectives and short-term strategies that
are compatible with long-term objectives and grand strategies
 Implement the strategic choices
 Evaluate the success of the strategic process for future decision
making

Prof. Dr._Arif_Rahman_MGT, BUP 16

 Dimensions of Strategic
Decisions
1. Strategic issues require top-
management decisions
 Strategic decisions overarch several areas
of a
firm’s operations
Usually only top management has the
perspective needed to understand their
broad implications
Usually only top managers have the power
to authorize necessary resource allocations

Prof. Dr._Arif_Rahman_MGT, BUP 17

Dimensions of Strategic Decisions
(contd.)
2.Strategic issues require large amounts of the
firm’s
resources
They involve substantial allocations of people,
physical assets, and money
Strategic decisions commit the firm to actions over
an extended period
In highly competitive firms, achieving and
maintaining customer satisfaction frequently
involves commitment from every facet of the firm

Prof. Dr._Arif_Rahman_MGT, BUP 18

 Dimensions of Strategic Decisions
(contd.)
3.Strategic issues often affect the firm’s long-term prosperity
Strategic decisions commit the firm for a long time, typically 5 years;
however the impact lasts much longer
Once a firm has committed itself to a strategy, its
image and competitive advantages are usually tied to
that strategy
Firms become known for what they do and where they
compete.
Shifting away from that can jeopardize their previous gains.

Prof. Dr._Arif_Rahman_MGT, BUP 19

Dimensions of Strategic Decisions
(contd.)

4.Strategic issues are future-oriented

They are based on what managers forecast, rather
than what they know
Emphasis is on the development of solid
projections that will enable a firm to seek the
most promising strategic options
A firm will succeed only if it takes a proactive
(anticipatory) stance toward change

Prof. Dr._Arif_Rahman_MGT, BUP 20

 Dimensions of Strategic Decisions
(contd.)
5.Strategic issues usually have multifunctional or
multibusiness consequences.
Strategic decisions have complex implications for
most areas of the firm
Decisions about customer mix, competitive
emphasis, or organizational structure involve a
number of the firm’s SBUs, divisions, or
program units
All of these areas will be affected by allocations or
reallocations of responsibilities and resources.

Prof. Dr._Arif_Rahman_MGT, BUP 21

 Dimensions of Strategic Decisions
(contd.)

6.Strategic issues require considering the firm’s external

environment
All businesses exist in an open system.They affect and are
affected by external conditions that are largely beyond their
control
Successful positioning requires that strategic managers look
beyond operations and consider what relevant others are likely to
do
Must consider competitors, customers, suppliers,
creditors, government and labor

Prof. Dr._Arif_Rahman_MGT, BUP 22

Three Levels of Strategy

Corporate
level

Business level

Functional level

Prof. Dr._Arif_Rahman_MGT, BUP 23

 Corporate-level

At the top of this hierarchy is the corporate level, composed principally of a

board of directors and the chief executive and administrative officers.
They are responsible for the firm's financial performance and for the achievement
of nonfinancial goals, such as enhancing the firm's image and fulfilling its social
responsibilities.
They also set objectives and formulate strategies that span the activities and
functional areas of these businesses.
Corporate-level strategies focus on long-term plans, typically for a three to five
year period.

Prof. Dr._Arif_Rahman_MGT, BUP 24

 Business level

In the middle of the decision making hierarchy is the business level,
composed principally of business and corporate managers.
These managers must translate the statements of direction and intent
generated at the corporate level into concrete objectives and strategies
for individual business divisions, or SBUs.
In essence, business-level strategic managers determine how the firm
will compete in the selected product-market arena.

Prof. Dr._Arif_Rahman_MGT, BUP 25

 Functional level
At the bottom of the decision making hierarchy is the functional level,
composed principally of managers of product, geographic, and functional areas.
They develop annual objectives and short term strategies in such areas as
production, operations, research and development, finance and accounting,
marketing, human relations.
However, their principal responsibility is to implement or execute the
firm's strategic plans.
Whereas corporate and business level managers center their attention on
"doing the right things" managers at the functional level center their attention on
doing things right.

Prof. Dr._Arif_Rahman_MGT, BUP 26

Alternative Strategic Management
Structures

Prof. Dr._Arif_Rahman_MGT, BUP 27

 Characteristics of Strategic
Management Decisions: Corporate level

 Often carry greater risk, cost, and profit

potential
 Greater
 needhorizons
Longer time for flexibility
 Choiceof businesses, dividend policies, sources of long-
term financing, and priorities for growth

Prof. Dr._Arif_Rahman_MGT, BUP 28

Asst. Prof. Mohammad Ali (Rana), MGT, B1-
 Characteristics of Strategic
Management Decisions: Business level
 Help bridge decisions at the corporate and functional levels
 Less costly, risky, and potentially profitable than corporate-
level decisions
 More costly, risky, and potentially profitable than functional-level
decisions
 Include decisions on plant location, marketing segmentation,
and distribution

Prof. Dr._Arif_Rahman_MGT, BUP 29

Asst. Prof. Mohammad Ali (Rana), MGT, B1-
 Characteristics of Strategic
Management Decisions: Functional level
 Implement the overall strategy formulated at
the corporate and business levels
 Involve action-oriented operational issues
 Relatively short range and low risk
 Modest costs: depend upon available
resources
 Relatively concrete and quantifiable

Prof. Dr._Arif_Rahman_MGT, BUP 30

Asst. Prof. Mohammad Ali (Rana), MGT, B1-
 Formality in Strategic
Management
Formality is the degree to which participation, responsibility, authority,
and discretion in decision-making are specified in strategic management.

It is an important consideration in the study of strategic management,

because greater formality is usually positively correlated with the cost,
comprehensiveness, accuracy, and success of planning.

In particular, formality is associated with the size of the firm and with its
stage of development.

Prof. Dr._Arif_Rahman_MGT, BUP 31

 Forces Determining
Formality

 OrganizationalSize  Problems in the Firm

 Predominant Management  Purpose of the Planning
Styles System
 Complexity of
 Stage of Firm’s
Environment Development
 Production Process

Prof. Dr._Arif_Rahman_MGT, BUP 32

 Three Modes of
Formality
Entrepreneurial mode
 Some firms especially smaller ones, follow an entrepreneurial mode.

 They are basically under the control of a single individual,

and they produce a limited number of products or services.

 In such firm, strategic evaluation is informal, intuitive, and limited.

Prof. Dr._Arif_Rahman_MGT, BUP 33

 Three Modes of
Planning mode
Formality
 Very large firms make strategic evaluation part of a comprehensive,
formal planning system, an approach that Henry Mintzberg called the
planning mode.

Adaptive mode
 Adaptive mode associate with medium-sized firms in relatively
stable environments.
 For firms that follow the adaptive mode, the identification and evaluation
of alternative strategies are closely related to existing strategy.

Prof. Dr._Arif_Rahman_MGT, BUP 34

 Three Modes of
Formality
 EntrepreneurialMode – most small firms
 Planning Mode – most large firms
 Adaptive Mode – most medium size
firms

It is not unusual to find different modes within the same

organization. For example, ExxonMobil might follow an entrepreneurial
mode in developing and evaluating the strategy of its solar subsidiary but follow
a planning mode in the rest of the company.

Prof. Dr._Arif_Rahman_MGT, BUP 35

 Strategy
 Ideal
Makers
strategic team includes decision makers from all three
levels
(the corporate, business, and functional).
 In addition, the team obtains input from company planning staff and
from lower level managers and supervisors.
 Top managers must give final approval
 Strategic decisions coincide with managers’ responsibilities

Prof. Dr._Arif_Rahman_MGT, BUP 36

 Strategy Makers:The CEO

A firm’s CEO plays a dominant role in strategic

planning
 The CEO’s principal duty is giving long-term
direction to the firm
 The CEO bears ultimate responsibility for the
firm’s
success and strategic success
 CEOs are typically strong-willed,
company-oriented individuals

Prof. Dr._Arif_Rahman_MGT, BUP 37

 Benefits of Strategic
Management
 Managers at all levels interact in planning and implementing
strategy.
 Similar to participative decision making.
 Assessing strategy formulation requires looking at
nonfinancial evaluations as well as financial ones.
 Promoting positive behavioral consequences enables achievement of
financial goals.
 Enhance the firm’s ability to prevent problems.
 Group-based strategic decisions are likelyto be drawn from
best alternatives.
 Resistance to change is reduced.

Prof. Dr._Arif_Rahman_MGT, BUP 38

 Strategic Management Process

 Businesses vary in formulation and other

processes.

 Strategicmanagement is a process—a flow of

information through interrelated stages of analysis
toward the achievement of some goals.

Prof. Dr._Arif_Rahman_MGT, BUP 39

Strategic Management
Model

Prof. Dr._Arif_Rahman_MGT, BUP 40

Thank You

Prof. Dr._Arif_Rahman_MGT, BUP 41