UNIT- 1ST

STRATEGIC MANAGEMENT
Introduction or Meaning

 Strategic management is the ongoing planning, monitoring, analysis and assessment of all
necessities an organization needs to meet its goals and objectives.
 Changes in business environments will require organizations to constantly assess their
strategies for success.
 The strategic management process helps organizations take stock of their present
situation, chalk out strategies, deploy them and analyze the effectiveness of the
implemented management strategies.
 Strategic management strategies consist of five basic strategies and can differ in
implementation depending on the surrounding environment.
 Strategic management applies both to on-premise and mobile platforms.
 Strategic management is based around an organization's clear understanding of its mission;
its vision for where it wants to be in the future; and the values that will guide its actions.
 The process requires a commitment to strategic planning, a subset of business management
that involves an organization's ability to set both short- and long-term goals. Strategic
planning also includes the planning of strategic decisions, activities and resource allocation
needed to achieve those goals.
 Having a defined process for managing an institution's strategies will help organizations
make logical decisions and develop new goals quickly in order to keep pace with evolving
technology, market and business conditions. Strategic management can, thus, help an
organization gain competitive advantage, improve market share and plan for its future.
Benefits of Strategic Management

 Strategic management is generally thought to have financial and nonfinancial benefits.

 A strategic management process helps an organization and its leadership to think about
and plan for its future existence, fulfilling a chief responsibility of a board of directors.
 Strategic management sets a direction for the organization and its employees.
 Unlike once-and-done strategic plans, effective strategic management continuously plans,
monitors and tests an organization's activities, resulting in greater operational efficiency,
market share and profitability.
Scope of Strategic Mamnagement

 Strategic scope refers to the products and services a company plans to offer over a
specific period, and indicates where and to which target markets they will be sold.
 Strategic management is both the process and beliefs to determine and control the
organizational affiliation in its vibrant environment. It is a process to describe approaches
and procedures to help management become accustomed to the current business
environment through the use of objectives and strategies.
Importance Of Strategic Mnagement

 Allows a company to set a clear direction for employees

 Increases the efficiency of employees
 Enables a business to create a better environment
 Acceptance of organizational changes
 Resource allocation
 Increase in rate of investments
 Improves managerial skills
Nature Of Strategic Management

 Act as road map

 Better handling of corporate decisions
 Facilitates growth objectives and strategies
 Ensures the firm remains prepared
 Helps in best utilization of resources
 Serves as a hedge against uncertainty
 Helps to understand trends in advance
 Helps to avoid hazard response
 Provides the best possible fit
 Helps build competitive advantage and core competencies
 Prepares the firm to not face the future but even shape the future in its favour
Characterstics

 Achieving Competitive Advantage: Strategic Mgmt. helps organizations to identify and capitalize on their unique strengths, which can
provide a competitive advantage over other organizations in the industry.
 Managing Risk: Strategic Mgmt. involves identifying potential risks and developing strategies to mitigate or avoid them. This helps
organizations to minimize the impact of external factors on their operations.
 Encouraging Innovation: Strategic Mgmt. encourages organizations to be innovative and take risks in order to stay ahead of the
competition. This includes developing new products, services, or processes.
 Improving Performance: Strategic Mgmt. helps organizations to improve their overall performance by establishing clear goals and
objectives, aligning resources, and implementing effective strategies.
 Enhancing Communication: Strategic Mgmt. encourages communication and collaboration across all levels of the organization. This
helps to ensure that everyone is working towards the same goals and objectives.
 Adapting to Change: Strategic Mgmt. helps organizations to adapt to changes in their environment, including changes in technology,
customer preferences, and market conditions.
 Promoting Growth: Strategic Mgmt. helps organizations to identify opportunities for growth and to develop strategies to pursue them.
This can include expanding into new markets, developing new products or services, or acquiring other companies.
Strategic Management Process

 Environment scanning : refers to a process of collecting, scrutinizing and providing information for
strategic purposes. It helps in analyzing the internal and external factors influencing an organization.
 Strategy Formulation- Strategy formulation is the process of deciding best course of action for
accomplishing organizational objectives and hence achieving organizational purpose.
 Strategy Implementation- Strategy implementation implies making the strategy work as intended or
putting the organization’s chosen strategy into action. Strategy implementation includes designing the
organization’s structure, distributing resources, developing decision making process, and managing
human resources.
 Strategy Evaluation- Strategy evaluation is the final step of strategy management process.
 The key strategy evaluation activities are: appraising internal and external factors that are the root of
present strategies, measuring performance, and taking remedial/corrective actions. Evaluation makes
sure that the organizational strategy as well as it’s implementation meets the organizational objectives.
Strategic Managemet Model Dimension

Strategic management process involves the entire range of decisions. Typically, strategic
issues have six identifiable dimensions:
 Strategic issues require top-management decisions.
 Strategic issues involve the allocation of large amounts of company resources
 Strategic issues are likely to have significant impact on the long-term prosperity of the
firm.
 Strategic issues are future oriented
 Strategic issues usually have major multifunctional or multibusiness consequences
Levels of Strategy
 The corporate strategy defines the organization’s overall direction and the high-level ideas
of how to move towards it. These plans are usually created by a select strategy group such as
the CEO and the top management. Generally, this is the group involved because they have a
deep understanding of the company and the strategic business knowledge needed to steer the
organization in the right direction.
 The business-level strategy is the second tier in the strategy hierarchy. Business-level
strategy refers to companies' deliberate and purposeful actions to achieve competitive
advantage within their specific market segments.
 Functional level strategies are the actions and goals assigned to various departments that
support your business level strategy and corporate level strategy. These strategies specify the
outcomes you want to see achieved from the daily operations of specific departments (or
functions) of your business.
Role of Strategy in Business Policy

 Strategy defines how a firm will achieve long-term success. Determining the strategy is a
critical decision for management because it involves a significant commitment of
resources and, once initiated, it is very difficult and costly to change.
 Policies facilitate solving recurring problems and guide the implementation of strategy.
Policies are essential instruments for strategy implementation.
 A strategy provides a direction in which the organisation needs to go for achieving the
organisational goals by employing various resources. A policy provides guidelines to the
employees for decision making and smooth operations.