STRATEGIC MANAGEMENT

MBA SEM III-SC301

Objectives:
1 To expose participants to various perspectives and concepts in the
field of Strategic Management
2 To help participants develop skills for applying these concepts to the
solution of business problems
3 To help students master the analytical tools of strategic management.
UNIT 1
1 .1 Understanding Strategy:
Concept of strategy, Corporate, Business and Functional Levels of
Strategy.

1.2 Introduction to Strategic Management:

Meaning and Characteristics of strategic management, strategic
management Vs. operational management.

1.3 Four Phases in Strategic Management Process:

Stakeholders in business and their roles in strategic
management.

•
1.4 Contd

1.4 Hierarchy of Strategic Intent:

Meaning & attributes of strategic intent,
Meaning of Vision, Process of envisioning,
Meaning of mission, difference between Vision Mission,
Characteristics of good mission statements,
Business definition using Abell’s three dimensions,
Objectives and goals, Linking objectives to mission & vision.
Critical success factors (CSF), Key Performance Indicators (KPI),Key Result Areas
(KRA).
1.5 Analyzing Company’s External Environment: Environmental
appraisal Scenario planning – Preparing an Environmental Threat and
Opportunity Profile (ETOP). Analyzing Industry Environment: Industry
Analysis - Porter’s Five Forces Model of competition, Entry & Exit
Barriers, Strategic Group analysis.
1.1
Concept of ‘Strategy’
“It is the determination of long term goals and
objectives of the organization and the adoption of
the course of action with appropriate allocation of
resources for achieving targets”.
Examples:
i)Tata Motors-Entry in to Passenger Cars along with
Trucks Division(1998)
ii)Bajaj Auto – Shift from Scooters to Motor
Cycles(2003)
1.1

Types of Strategies
1 Intended Strategy- Entrepreneurship, Product, Process,Business
Models
2 Emergent Strategy: Which Strategy to adopt for current and futuristic
business situations
3.Competitive Strategy: Market Share, Changing Technology –
Competition Severity
1.1

• Levels of Strategies
• Corporate Level Corporate
• Business Level
• Functional Level
• Example Business
Tata Motors Function
Corporate Level :Corporate Office Mumbai
Business Level :Truck Division and Car Division Pune
Functional level : R&D, Mfg,Marketing,Finance Etc.
1.2
Characteristics of Strategic Management
1 Strategic Management is a well considered planned and
organized approach to Business Management
2.Strategic Essentials
i)Vision ii) Mission and iii) Objectives
are essential elements in Strategic Management
3.SM is based on Systems approach (Input-Process-Output)
4.SM is normally a long term futuristic approach
5.SM is a dynamic and flexible Process needs continuous
review
6. Effective Implementation/Execution is the Essence of SM
1.2 Contd

• Strategic Management Vs Operational Management

SM OM
1 Is long term Management 1.Day to day Management
2 Is Planned and Executed 2 is executed by functional
by Sr. Executives/Board level Executives/Operational level
3. Based on Future plans 3.Based on regular Schedules
4.Calls for thorough Study 4. Based on targets setout
and evaluation
5.Needs Planning for resources 5.Base on existing resources
and Restructuring
UNIT 1.3
The 4 phases of Strategic Management
1.Strategy Formulation:
Selection and evaluation of essential criteria for adopting Strategic Management in an organization

2.Strategy Choice
Options and Choices of strategies available to an organizations

3. Strategy Implementation/Execution
Essential aspects and actions to be taken to ensure effective strategy Execution

4. Strategy Evaluation and Control

Ensuring Objectives of Cost Quality and Schedules and taking correective steps in time
4 Phases of SM
1.Strategy Formulation

i) Business Environment ii) Vision/Mission/Objective iii) CSFs& Business Drivers

2 Strategy Choice 3.Strategy implementation

Strategic Options/Choice Restructuring&Resource Allocation

4. Strategy Evaluation &Control – Momentum & Leap Control

1.3 contd--

Stake holders in business

Any person or entity which has direct or indirect interests in an
organization is a STAKE HOLDER of the Organization
There are basically 2 types of Stake Holders
1.External Stake Holders : PEST
Politics,Economy,Society and Technology
2.Internal Stake Holders:
Promoters,Financiers,Investers,Employees,Suppliers,Customers.Compet
itors
1.3 Contd

Roles of Stake Holders in Business

A. Roles of External Stake Holders: PEST
Politics :Policy on Industrialization, Product ,process and locational supports,
Budgetary provisions, Interest rates and Taxation , International Trade
Barriers Etc
Economy: Availability of funds,GDP/GNP,Exchange rates, Insurance and financial
Security Etc
Society: Levels of Education availability of skilled labor, Infrastructural facilities,
CSR provisions,Tradeunionism and local customs/culture
Technology: Access and affordability,Added value,Competitive advantage, Reskill
and up skill issues
1.3 Contd.

Roles of Internal Stake Holders

1 Promoters: Business Accumen, Intent ,Vision,Mission, business ethics,values,
cultural issues,Risk taking Capacity and financial credibility,family business
issues, Interventions in day to day business,etc
2. Financiers/Investers/Share Holders: Credit and Recovery policies,NPA s and
adherence to Central bank guidelines,PSUs Vs Private Vs Cooperative Banks,VC
s,Institutional Investers,share holders
3.Employees: Skills,Capabilities,Loyalty,Reliability,Promotability,Risk taking
capability, Culture character and Team work
1.4 Heirarchy of Strategic Intent

• Strategic intent is the term used to describe the aspirational plans,

overarching purpose or intended direction needed to reach an
organizational vision.
• Beneficial change results from the strategic intent, ambitions and
needs of an organisation.
• The hierarchy of strategic intent covers the vision and mission,
business definition and the goals and objectives.
•
HEIRARCHY

1.SRATEGIC INTENT/PURPOSE

2.STRATEGIC VISION

3.STRATEGIC MISSION

4.STRATEGIC OBJECTIVES
VISION
What is a VISION of an organization?
• VISION
• A vision statement describes what an organization desires to achieve
in the long-run, generally in a time frame of five to ten years, or
sometimes even longer. It depicts a vision of what the company will
look like in the future and sets a defined direction for the planning
and execution of Corporate Level Strategies
Characteristics of
Good Vision Statement

1. Forward Looking

2. Motivating and inspirational

3. Reflective of a company’s culture and core values

4. Aimed at bringing benefits and improvements to the organization in the future

5. Defines a company’s reason for existence and where it is heading

Examples of Vision Statements

• MICROSOFT
”To Create Local Opportunity , growth and impact in every community and country around the world”

• TATA Group
“We will be bold and agile, courageously taking on challenges, using deep customer insight to develop innovative solutions.
We will invest in our people and partners, enable continuous learning, and build caring and collaborative relationships
based on trust and mutual respect”

• INFOSYS
"To be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered
by best-in-class people”
• ASM GROUP
• To be a World Center of Learning that excels in Management and Information Technology, Education, Research, Training,
and Consultancy”
•
•
MISSION

• What is the MISSION of an organization?

• A Mission statement is a concise explanation of
the organization's reason for existence. It describes
the organization's purpose and its overall intention
• The Mission statement supports the vision and serves to
communicate purpose and direction to employees, customers,
vendors and other stakeholders
Characteristics of
Good Mission Statement

1.Keep it short. - Consider long term applicability

2 Be specific and realistic on your target customers, employees and

potential business investors
Examples of ‘Mission’ Statement

• NETFLIX

“We promise our customers stellar service, our suppliers a valuable partner, our investors
the prospects of sustained profitable growth, and our employees the assurance of Excellent
Career Prospects”

• Bajaj Auto Ltd:

Focus on Value for Money Total elimination of wastes, Continual Improvement based
manufacturing.

• ASM Group
Provide Excellence in Education, Unique Pedagogical Opportunities and in developing
Capable, Committed global managers for all levels of corporate and society
‘Business’ Definition

Business Definition Using Derek Abell’s 3D Model

1.Customer needs
In the Abell Model all customer needs that are relevant to the company are identified and
listed. These customer needs are determined on the basis of the product as a result of which a
link is made to customer benefits.

• Example: A software manufacturer responds to the needs of the customer by only delivering
packages that can be installed by laypeople very easily. In addition, they offer virus free
software and the possibility to clean up the software on a monthly basis. They also provide
clear manuals and a telephone helpline. (user friendly)
Abell’s Model contd…

• 2. Technologies
• The term ‘technologies’ should be interpreted broadly. In addition to technologies that are used to create a
product, there are also technologies that are used to put a product on the market. Which marketing campaign
must be used and in which way is the market research on a product carried out?

• Example: A software manufacturer uses the latest technologies in his software products. In addition, the
manufacturer offers support to customers by means of a 24-hour helpdesk and he guarantees the best possible
information provision.

• 3. Customer groups / Buyers

• Marketing is all about buyers. Without buyers there would not be a market. Each organization wants to get down to
the core of the buyers and therefore customer segmentation is very important. By having a thorough knowledge of
the various target groups, an organization can make targeted product offers.
• Example: A software manufacturer delivers products to B2B and B2C customers. The manufacturer reaches these
groups by deploying their own Account Managers, distributive trade, retail trade and trade associations
•
•
•
•
•
Organizational ‘Goals and Objectives’

• These are Organizational strategies and action plans

• Goals and objectives are statements of what you want your small business to
accomplish.

• Goals are usually set first, followed by objectives that help you measure your
progress toward those goals.

• After establishing your goals and objectives, determine the specific actions and
steps required to reach them. These are your company's strategies and action plans
Critical Success Factor CSFs and KRAs

• Critical success factor (CSF)

• Is a management term for an element that is necessary for an
organization or project to achieve its mission. To achieve their goals
they need to be aware of each key success factor (KSF)
• Key Result Area(KRA).
• The Aspects or Areas in Which the Objectives/Targets are set are
known as Ker Result Areas
• Key Performance Indicators(KPIs) Based on the KRAs the Areas In
Which specific Performance of Employees/Executives is Measured are
the Key Performance Indicators
1.5
Analyzing Company’s External Environment

• Definition of Business Environment:

• Every Organization exists and has to operate in its relevant Business
Environment consisting of its major Stake Holders who have Interest
and also can influence the Organizational Strategic decision making
process. These Stake holders formulate the Organizational relevant
business Environment
• There basically 2 major Segments in a Business Environment
1.5 1.The External Environment :
Elements of External Environment (PESTEL)
1.Politics, Politics
2.Economy, External
3.Society, (PESTEL) Internal
4.Technology, Finance
5.Eletronics Process
2.The Internal Environment Profits
Elements of Internal Environment
1.The Promoters,
2. The Financiers including Share holders,
3.collaborators,
4.Suppliers,
5.Employees.Customers,
1.5-Analysing Companies External Environment

• Environmental Scanning/Appraisal
1.5 Contd------

Scenario Planning
• Also known as scenario thinking or scenario analysis, is a strategic
planning method that some organizations use to make flexible long-term plans
• ETOP Environmental Threat and Opportunity Profile
• Threats : Market situation,Finance situation,migrant
labor,unemployment,health and safety(pandemic), education,Economic
depression across the globe,
• Opportunities : Online Marketing,Online Education,Industry
4.0(AI,ML,Robotics),Diversification,Agro based Industries
1.5Scenario Planning
1.5 ‘ETOP’ PROFILE
Porter’s 5forces Model of Competition
Entry and Exit Barriers to Business

• Entry barrier are any type of factor that prevents entrants from
competing in an industry. Exit barriers are any type of factor that keep
companies competing in a business, even though they might be earning
low or even negative profits.
Entry barrier are any type of factor that prevents entrants from
competing in an industry.
• Exit barriers are any type of factor that keep companies competing in a
business, even though they might be earning low or even negative profits.
Understanding entry and exit barriers can help in understanding industry
attractiveness (profitability and pricing structure) as well as in developing
actions to raise or lower the barriers, relative to the company’s interests.
Entry and Exit barriers to business
Strategic Gap Analysis
• What Is Strategic Gap Analysis?
Strategic gap analysis is a business management technique that requires
an evaluation of the difference between a business endeavor's best
possible outcome and the actual outcome. It includes recommendations
on steps that can be taken to close the gap
.
• Strategic gap Analysis aims to determine what specific steps a company
can take to achieve a particular goal. A range of factors including the time
frame, management performance, and budget constraints are looked at
critically in order to identify shortcomings.

• The analysis should be followed by an implementation plan.

Target
Cost P Strategic Gap
Quality Actual P-Performance
Delivery T T-Time
ASSIGNMENT FOR UNIT 1
Q1What do you understand by the term Strategy? What are the salient
features and characteristics of Strategic Management? Compare Strategic
Management with Operational Management

Q2 Explain the 4 phases in Strategic Management .Explain the concept of

Stake holders in Business and their major roles and Influence on Strategic
decision making in the organization(Both Internal and External Stake
holders)

Q3.Explain the concept and implications of VISION,MISSION ,OBJECTIVES

AND GOALS in a Strategically Managed Organization. Give examples of
Vision and Mission Statements of 2 major Organizations in India

Q4. Explain in details the Concepts and implications of Porter’s 5 forces for
Industry Competition

Last Date for submission –

07-2021