You are on page 1of 14

Archana Shrivastava

Strategic Management Process

Defining vision, mission, business

Environmental Analysis

Organizational Analysis

Setting objectives and Goals Reset if required Identifying alternatives and Goals Reformulate if required

Choice of Strategy

Reimplement if required

Implementation of Strategy

Strategy Evaluation and Control

Feedback

Strategic Management Process


Strategic

Intent

Setting of organizational vision, mission and objectives in the starting point of strategy formulation It makes it clear what an organization stands for Vision-what an organization wishes to achieve in long run Mission -Reason for existence Business Definition- Defines kind of functions the business perform and differentiation Objectives represents desired results which the organization wishes to attain.

Strategic Management Process


Environmental
Factors

Analysis

which influence environment directly including suppliers, customers, and competitors Factors which influence the firm indirectly including social, technological, political, legal, economic factors etc.

Strategic Management Process


Organizational
SWOT

Analysis

Analysis

Strategic Management Process


Identification
Stability-

of strategic Alternatives

same product, same market, existing technology, improved customer service Expansion- broadens customer group, customer functions and technology Retrenchment- reduce scope in terms of customer group, customer function or alternative technology Combination- all above taken together

Modernization

technology as a strategic tool to increase production, productivity or reduced cost, competitive strength Integration- Vertical integration- forward or backword, Horizontal integration- ownership over competitors Diversification-change in business definition either in terms of customer functions, customer groups or alternative technology. To minimize risk, threat, weaknesses, avoid current instability in profit and sales, higher utilization of resources, capitalizing organization strength

Joint Ventures temp. partnership for synergetic advantage to share risk, to diversify, expand, distinctive competence, manage political and cultural difficulty, technological advantage, and to explore unexplored market Strategic Alliance- companies remain independent but unite to pursue set agreed goals. Mergers- Companies merge to become larger, competitive advantage, tax benefits, overcome weakness Acquisition- Orgn which acquire another , it is acquisition and for organization which is acquired is merger.

Takeover Divestment Turnaround

Strategy-

Choice of Strategy
While

making a choice , two types of factors have to be considered:


Objective

Quantified

Corporate

portfolio analysis Competitors Analysis Industry Analysis


Subjective

Quantified and based on experience of people

Corporate Portfolio Analysis


Experience

Curve PLC Concept BCG Matrix GE Nine cell Matrix nine positions are defined in terms of business strength factorsmarket share, profit margin, ability to compete, market knowledge, competitive positiion, technology, management caliber and industry attractiveness factors- market size, growth rate, profit, competition, economies of scale, technology, other environmental factors

Corporate Portfolio Analysis

Space Diagram- The strategic position and action evaluation-extension of two dimensional portfolio analysis which helps an organization to hammer out an appropriate strategic posture. Dimensions like orgs competitive advantage, financial strength, environmental stability Hofers Product Market evaluation matrix- 15 cell matrix taking competitive position and stages of product/market evolution dimensions Directional Policy Matrix Developed by Shells uses two dimensions business sector prospects and companys competitive capabilities

Implementation of Strategy
Project

Implementation Procedural Implementation Resource Allocation Structural Implementation Functional Implementation Behavioral Implementation leadership. Organizational culture, values and ethics, corporate governance, organizational politics

Evaluation and Control


Steps
Setting

Performance standards Measuring actual performance Analyzing variance Taking corrective actions