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Strategic Management

Prof. Rushen Chahal Concepts and Process of Strategic management

Strategy

The strategy is about winning !

The early days


Initially strategos refered to a role (a general in command of an army). Later it came to mean the art of the general, which is to say the psychological and behavioral skills with which he occupied the role. By the time of Pericles (450 BC) it came to mean managerial skill (administration, leadership orienta-tion, power). And by Alexanders time (330 BC) it refered to the skill of employing forces to overcome opposition and to create a unified system of global governance

The strategy and tactics by Clausewitz

The tactics: using the army to win the battle. The strategy: using the battles to win the war.

A Definition of Strategy

Strategy is:

the direction and scope of an organisation, over the long term, which achieves advantage for the organisation, through configuration of its resources, within a changing environment, to meet the needs of markets, and to fulfill stakeholder expectations.

The purpose of the strategy?


The strategy are likely to be concerned with scope of an organizations activities, The strategy is to do with the maching of activities of an organizaton to the environment in which operat The strategy is also to do with the maching of the organizatons activities to its resource capability, The strategy have major resource implications for the organization The strategy are likely to affect operational decisions, The strategy will be affected by values and expectations of those who have power in and around the organizaton, The strategy likely to affect the long term direction of an organization

Different types of managerial problem


Important problems: changing of established rules and processes Urgent problems: maintaining the established rules and processes

Urgent problems Important problems Not important problems

Not urgent problems

Crisis management Strategic management (I really must get around to (I have to do..)
doing)

Tactical management

Operational management (I always seems to get (Ill probably ende up just


trapped doing..) doing..)

The difference between the strategic and operational types of management


Strategic management Operational management Ambiguity, Complexity, Non-rutine decisions Organization-wide Fundamental, and significant change Envirionment or expectation driven Simple modells, and Routinised decisions Operationally specific Small-scale change Resource driven

The difference of the strategic and traditional approache


Strategic approache
Concentrate on the environment Built on appraisal of the market and competition Aims to utilize of the competitive advantages

Traditional approache
Concentrate on the company Built on appraisal of the past achievement of the company Aims to continue of the past trends

The Process View: Competitive Strategy as a Sequence of Steps that may overlap
Tasks :
Competitive & Industry Analysis

Key Questions ...

Where do we stand ?

Strategy formulation

Where do we want to go ?

Implementation and Control

How do we get there ?

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Basic model of the strategic management process

Strategic analysis

Strategic choice

Strategy implementation

The strategic analysis


The strategic analysis is concerned with understanding the strategic position of an organizaton. The main factors of the strategic analysis: organization.
The environment: provide on one hand threats upon the firm, and the same environment provide opportunities. The resources: provide tools to ansvere the environmantal challenges, and determine strengths and weaknesses of the organizations, Culture and expectations: determine values and expectations of those who have power in and around the organizaton,

The strategic choice and decision


The strategic choice is concerned with the strategic options, and a series of strategic decisions. The main factors of the strategic choice: Identifying and generating strategic options, Evaluate of the strategic options in the context of the strategic analysis to assess their relaitive merits Selection of new strategy, selectiong those option which the organization (and the main stakeholders) will pursue

The strategic implementation


The strategic implementation is concerned with the translation of strategy into action, projects, and programms. The main factors of the implementation process: Planning and allocating resources, and set up the controll systems Re-form the organizational structure, design a new culture if it needs. Managing strategic change

Strategy development routes


Strategy as outcome (of cultural and political processes) Imposed strategy

Intended strategy

Realised strategy

Unrealised strategy

Patterns of strategy development

Continuity

Incremental

Flux

Transformational

Strategic evolution and consolidation


Strategic decisions eg Product launch

Acquisition

Divestment

Overseas expansion Evolving strategic direction

Strategies evolve and inform strategic decisions, which in turn consolidate strategic direction

The dynamics of paradigm change


The paradigm Development of strategy Implementation Corporate performance if unsatisfactory

Step 1 Tighter control

Step 2 Reconstruct or develop new strategy

Step 3 Abandon paradigm and adopt a new one

Source: Adapted from P. Grinyer and J.-C. Spender,Turnaround: Managerial recipes for strategic success, Associated Business Press, 1979, p. 203

Industry and Competitive Analysis - Questions

Tasks :
Competitive & Industry Analysis
("Where do we stand?") What is our business ? How do we create value ? What are our organizational and/or technological capabilities ? Who are we in business with ? How is our business/industry changing ? What drives this change ? What are our strengths and weaknesses ? What opportunities open up, and what threats exist ?

Strategy formulation
("Where do we want to go ?")

Implementation and Control


("How do we get there?")

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