STRATEGIC MANAGEMENT

Definition

 Strategic Management is a process through

which managers:
 Formulate and implement strategies geared to,
 Optimising strategic goal achievement
 Given in a available environmental and internal
 Strategic analysis
 Strategic choice
 Strategic implementation
 Strategic evaluation
Strategic Intent

 Strategic intent means the purposes the

organisation strives for.
 Strategic intent of an organisation is
established in the form of a hierarchy
consisting of several layers.
 Vision
 Mission
 Business Definition
 Business Model
 Objectives
Plans
Plans

Standing Plans Single-Use

Plans

1. Mission
1. Programmes
2. Objectives
2. Budgets
3. Policies
3. Schedules
4. Procedures
4. Projects
5. Rules
5. Standards
6. strategies
Environmental Scanning

 Environmental scanning is the process by

which organisations monitor their relevant
environment to identify opportunities and
threats affecting their business for the
purpose of taking strategic decisions.
Strategic Management Process

 Core Competency
 Synergy
 Value creation

 https://youtu.be/54chzTSStN8
Steps involved in Strategic Management
Process

 Strategic Intent: Establishment of Mission,

Vision and Strategic Goals
 External Analysis
 Internal Analysis
 Fixing Quantitative targets
 SWOT Analysis and Strategy Formulation
 Performance analysis: Evaluation and Control
Type of Strategist

 Shareholders
 Board odf Directors
 Chief Executives
 Role of Managers
 Financial Controllers, Company Secretaries
and Auditors
 Audit and Executive Committee
 Strategic Business Unit
McKinsey 7-S Framework
Levels of Strategy

 Corporate level/company strategy

 Business / Competitive Strategy
 Functional strategy
 Corporate Level Strategy Formulation

 Growth / Expansion Strategy

 Concentration or Market Penetration
 Market Development
 Product Development
 Innovation
 Diversification Strategy
 Horizontal Integration
 Concentric or Related diversification
 Conglomerate or unrelated diversification
 Vertical
 Forward
 Backward
 Corporate Level Strategy Formulation

 Stability
 Incremental Growth
 Profit
 Sustainable Growth
 Pause Strategy
 Retrenchment / Defensive Strategy
 Harvest
 Divestments
 Outright sale to another company, Leverage buy outs and Spin-off.
 Turnaround
 Liquidation
 Bankruptcy
Corporate Level Strategy Formulation

 Combination Strategies
 Joint ventures
 Strategic alliance
 Consortia
Business Level Strategy Formulation

 Porters Competitive Strategies

 Differentiation strategy
 Cost Leadership
 Focus
Functional Level Strategy

 Research and Development strategy

 Operation / production strategy
 Financial strategy
 Marketing strategy
 Human Resource Strategy
Strategic Business Unit
(SBU’s)
 SBU is any part of a business organisation
treated separately for strategic management
process.
 It can be a single business or collection of the
related businesses
 It has its own group of competitors
 It has a CEO responsible for managing
business and creation of profit.
Strategy Implementation

 Models of Strategy Making

 Entrepreneurial Model/Mode
 Adaptive Model\Mode
 Planning Model/Mode
 Organizing, staffing and controlling
 Programmes
 Budgets
 procedures
Strategy Evaluation

 Strategic Evaluation and Control is the

process of determining the effectiveness of a
given strategy in achieving organisational
objectives and taking corrective action
wherever required.
Criteria of Strategic
Evaluation
 Consistency
 Consonance
 Advantage
 Feasibility
Steps of Evaluation

 Fixing Benchmark of Performance

 Measurement of Performance
 Analysing Variance
 Taking corrective action
Techniques of Strategic Control
A. Evaluation Techniques for Strategic Control

 Premise Control
 Implementation Control
 Strategic Surveillance
 Special Alert Control
 Strategic leap control
 Strategic issue management
 Systems modeling
 Strategic field analysis
 Scenarios
Responsibility Centers

 Standard Cost Centre

 Revenue Centre
 Expense Centre
 Profit Centre
 Investment Centres
Operational Control

 Internal Analysis
 value Chain Analysis
 Quantitative Analysis
 Qualitative Analysis
 Comprehensive Analysis
 key-factor Rating
 Balanced Score card
 Network technique
 MBO
 Memorandum of Understanding
 Budgetary Control
 Zero-based Budegeting
Synergy

 Synergy refers to the ability of two or more units

or companies to generate greater value and
performance working together than could have
generated working apart.
 Six forms of Business Synergy
 Shared know-how
 Shared tangible resources
 Pooled negotiating power
 Coordinated strategies
 Vertical Integration
 Combined business creation
Relevance of Synergy

 Complementary Skills
 Increase Communication
 Efficient Performance
 Sharing Best Practices
 Alliance
Motivational Techniques

 Supportive Culture: the implementation of strategy must

take into account the history of organisation and dominant
cultural values.
 Clarity of direction
 Decision making structure and processes
 Management style
 Integration of efforts
 Performance orientation
 Compensation
 HRD
 Organisation vitality
 Risk taking
 Organisational Image
Culture and sub-culture

 Short –term motivational Programme: like;

communication programmes, morale-
building, visibility of charismatic leaders, use
of awards, language, symbols, gestures, etc.
 Performance management
 Individual motivators: Mastery, approval, risk
and adventure, security, power and influence.
Strategic Control and
Assessment
 Measure Performance
 Compare performance to goals and standards
 Corrective action.
Global Strategy
 Globalisation Strategy:
 Treats world as a single global market
 Standardise global product/ advertising strategies
 Multidomestic Strategy :
 Handles markets independently for each country
 Adapts products/ advertising to local taste and needs
 Transnational Strategy
 Seeks to balance global efficiencies and local responsiveness
 Combines standardisation and customisation for products/
advertising
 Export Strategy
 Domestically focused
 Exports a few domestically produced products to selected
countries
Strategic Decision Making

 Mintzberg: Strategic Decisions are important,

in terms of action taken, the resources
committed, or the precedents set
 Classes of Decision Making
 Decision making under certainty
 Decision making under risk
 Decision making under Uncertainty
Levels of Decision

 Top Management Strategic Decisions

 Middle Level Strategic Decision/Tactical
Decisions
 Lowe level Management decisions/
Operational Decisions
Process of Strategic
Decision Making
 Planning Process: 7 factors involved in
Strategic planning:
 Decision Parameters
 Decision Criteria
 Decision conditionality
 Decision alternatives
 Technical Model
 Technological Model
 Correction factor
Process of Strategic
Decision Making
 Programming system
 Performing Modalities
 Profitability Factors
 Developmental Growth
Issues in Strategic Decision Making

 Contextual Issues
 Personality/Style
 Role of Values
 Role of Consensus
 Nature of Strategic Decision
 Direction
 Finance
 People
 Risk
Corporate Strategies – BCG
Matrix
Business Level Strategy Formulation –
Michael Porter- Five Forces Model
Porters Value Chain Analysis
Life Cycle Model
SWOT Analysis
 Balanced Score Card
Drs. Robert Kaplan (Harvard Business School) and David Norton as a framework for managing and measurement organizational performance
Blue Ocean Strategy
• iTunes: When iTunes entered the market, it solved the
recording industry’s problem of consumers illegally
downloading music while simultaneously addressing
the demand for digital, a la carte songs. iTunes’ Blue
Ocean Strategy created an entirely new category of
music sales that allowed artists to profit and consumers
to buy single songs versus entire albums. ITunes has
dominated this market space for years and is largely
credited with driving the growth of digital music.
https://youtu.be/dtHcO7pTPmo
Ansoff Matrix
Ansoff Matrix Strategy

• Market Penetration: How to sell more of your

existing products or services to your existing
customer base?
• Market Development: How to enter new markets?
• Product and Development: How to develop
existing products or services.
• Diversification: How to move into new markets
with new products or services, increase your
sales with your existing customer base as well as
acquisition.
 Best practice tip is to use Ansoff at least once a year in strategic
planning for your business to identify potential new markets, new
products as well as product development opportunities.