Introduction to Strategic

Management
 Good Strategy and good strategy execution are
the most trustworthy signs of good management

• Strategy: The formulation of organizational objectives, scopes and

action plans for getting advantage.
• Description of Strategy:
- Strategy: A declaration of intent
- Strategic intent: A tangible corporate goal, a point of view about
the competitive positions a company hopes to build over a decade
- Strategic planning: the systematic determination of goals and the
plans to achieve them
- Strategy formulation: the entire process of conceptualizing the
mission of an organization, identifying the strategy and developing
long-range performance goals.
- Strategy implementation: Those activities that employees
and managers of an organization undertake to enact the
strategic plan and achieve the performance goals
- Objectives: the end, the goals
- Plans: the product of strategy, the means to the end
- Strategic plan: a written statement that outlines the
future goals of organization, including long-term
performance goals
- Policies: broad guidelines to action, which establish the
parameters or rules.
• The strategy developed by:
- Senior management
- Approved by the board
- Negotiated and revised as they filter throughout the
organization
- Organization then develop plans to achieve goals
- The strategic planning process led by senior
management , who will continuously monitoring the
dynamic environment to make adjustments to the
strategy.
The Reality of the Strategic Process:

Emergent
Strategy

Intended strategy Realized Strategy

Discarded
Strategy
• Intended Strategy: the agreed-upon strategy
arrived at through the formal planning process
• Discarded Strategy: Deemed inappropriate
due to changing circumstances
• Emergent Strategy: The plan that changes
incrementally due to environmental changes
• Realized Strategy: Executed representing some
planned and some emergent strategy.
• Triggering events to stimulate a change in strategy:
- New CEO
- Threat of a change in ownership
- External intervention: ex. Customer complaint about a
defect or a financial backer refusing to invest any
more in the organization
- Performance gap
- Strategic inflation: rapid changes in technology,
customer preferences, or industry regulations will
trigger a change in strategy.
• A good strategy recognizes:
- The complexity of realities
- To be effective, strategic management
anticipates future problems
- Provides an alignment with external
contingencies and internal competencies
- Recognizes multiple stakeholders and is
- Concerned with measurable performance
• Organization’s basic strategies are classified into:
1. Corporate Strategy: Organizational level decisions that focus
on long-term survival. Corporate strategies are concerned
with questions such as : should we be in business? What
business should we be in?
2. Business Strategy: Plans to build a competitive focus in one
line of business. Business strategies are concerned with
questions such as: How should we compete? Should we
compete by offering products at price lower than those of the
competition or by offering the best service? It is also
concerned with how to build a competitive position and with
the best way to compete in that line of business.
 Benifits of Strategy Formulation
• Clarity: It is focused and guided decision making about resource
allocation
• Coordination: Everyone is working toward the same goals
• Efficiency: Daily decision making is guided toward the question
‘does it fit with our strategy?’
• Incentives: Employees understand the behaviours and
performance that will be rewarded
• Adjustment to change: If a major change is under consideration,
understanding the current strategy is essential
• Career development: Helps potential employees decide if they
want to work for the company, if there is a skills fit and training
and development they will need to undergo.