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A strategy is a way of doing something. It usually includes the formulation of a goal and set of
action plans for accomplishment of that goal.
The concept of strategy is very old. It originated from the Greek term strategia which means the
art or science of being general. Effective Greek generals needed to lead an army, win and hold
territory, protect cities from invasion, destroy the enemy, and so forth. Each objective needed a
different deployment of resources. The Greeks knew that strategy was more than fighting battles.
Effective generals had to determine the right lines to supply, decide when to fight and when not
to, and manage the armys relationships with citizens, politicians and diplomats. Effective
generals had, therefore, to plan and act. For Greeks, strategy had both a planning component and
an action component; it is no different even today.
Examples of Corporate Strategy in 2009
GM files for Chapter 11 bankruptcy
Chrysler is sold to Fiat and leaving bankruptcy
Best Buy is adding patio furniture to its product assortment
A strategy is a business approach to a set of competitive moves that are
designed to generate a successful outcome
A strategy is managements game plan for
Strengthening the organizations competitive position
Satisfying customers
Achieving performance targets
Three big questions involved in a strategy
Where are we now?
Where do we want to go?
How will we get there?
How do we know if we got there?

Strategic Management
Strategic management may be understood as the process of formulating, implementing and
evaluating business strategies to achieve organizational objectives. A more comprehensive
definition of strategic management is:That set of managerial decisions and actions that determine the long-term performance of
corporation. It includes environment scanning, strategy implementation and evaluation and
control. The study of strategic management, therefore, emphasis monitoring and evaluating
environmental opportunities and threats in the light of a corporations strengths and weaknesses.
Strategic management, therefore, involves four steps as given below:
1. Analyze the opportunities and threats or constraints that exist in the external
2. Formulate strategies that will match the organizations strengths and weaknesses with the
environmental threats and opportunities.
3. Implement the strategies.
4. Evaluate and control activities to ensure that the organizations objectives are achieved.

Strategic management process begins with the scanning of the external environment and the
internal environment and ends with monitoring the activities of the organization.
Environmental Scanning:Environment of an organization comprises external and internal factors. Environment needs to be
scanned in order to determine trends and projections of factors that will affect fortune of the
organization. Scanning must focus on task environment. Not that elements outside the task
environment are ignored, but they receive less attention. Scanning helps identity threats and
opportunities prevailing in the environment. In formulating a strategy, a company seeks to take

advantage of the opportunities while minimizing the threats. What might be a threat to one
company may be an opportunity for another.
Strategy Formulation:Strategies are formulated at three levels:
1. Corporate level
2. Business unit level, and
3. Functional level
Strategy Implementation:Strategies formulated need to be implemented. Implementing strategies requires such actions as
altering sales territories , adding new departments, closing facilities, hiring new employees,
changing an organizations pricing strategies, developing financial budgets, formulating new
employee benefits, establishing cost-control procedures, changing advertising strategies, building
new facilities, training new facilities, transferring managers among divisions, and building a
better computer information system.
Strategy Evaluation:The strategic management process results in decisions that can have significant and long-lasting
consequences. Strategy evaluation, therefore, assumes greater relevance. Strategy evaluation
helps determine the extent to which the companys strategies are successful in attaining its
objectives. Basic activities involved in strategy evaluation are:1. Establishing performance targets, standards and tolerance limits for the objectives,
strategies and implementation plans.
2. Measuring the performance in relation to the targets at a given time. If outcomes are
outside the limits, inform managers to take action.
3. Analyze deviations from acceptable tolerance limits.
4. Execute modifications where necessary and are feasible.