further subsequent chapters, which includes in-depth discussions of one of the major components of the model.
You will understand how companies determine their
mission including broad statement about its purpose, philosophy and goals.
You will understand how a company profile reflects internal
of the strategic process to serve as a basis for control and as an input for future decision making. Thus, you will understand a strategy reflects a companys awareness of how to compete against whom, when, where and for what.
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ix. Monitoring, evaluation and review of the strategic alternative chosen is undertaken in this mode. This can provide a feedback on the changes in the implementation if required. As can be seen, this provides a rational approach to strategic decision-making and it can be successfully practiced by Indian organizations, which now have to operate in a competitive environment.
specialization of labour is losing its credibility. Organizations are becoming more responsive, flexible, and adaptable to changing business situations. In such environments that are charged with high level of competition, developing competitive edge for survival and growth has become imperative for companies. What do you think will Business Strategy Concepts and Techniques Benefit Foreign Businesses as much as Domestic Firms? Give an example.
STRATEGIC MANAGEMENT
environment. Strategic management need not always be a formal process. It can begin with answering a few simple questions: 1.Where are we now? 2.In no changes are made, where will we be in the next one year? Next two years? Next three years? Next five years? Are the answers acceptable? If the answers are not acceptable, what actions should the top management take? With what results and payoffs? Today, as you know that business is becoming more complex due to rapid changes in environment. It is becoming increasingly difficult to predict the environment accurately. The internal and external environments of organizations are now driven by multitudes of forces that were hitherto non-existent. Earlier the changes in technology were not so rapid but today the information from all over the globe is pouring in through the computers. The world in fact has shrunk. This has created fierce competition as the customers and stakeholders have become more aware of their rights. Think of yourself as a consumer who has got several alternatives to choose from ? You as a customer looks for real value for your money. You have become aware of quality and cost ratios and then diligently select the products. You are now more demanding for better service in the least possible time. This has brought in new rules of business that companies all over the world are evolving through their experience. The obsolesce has become so rapid that the time when you are in the process of buying a computer it might have already become obsolete in some part of the globe. The number of events that affect domestic and world market are now far too many and too often. Over reliance on experience in such situations may really work out to be very costly for companies. E.g. Reliance has shifted to more creativity, innovation and new ways of looking at business and doing it in novel ways. The earlier concepts of having highly fictionalized departments and developing
The need is now to distinguish between long-range planning and strategic planning. The importance of strategic management in setting the directions for growth of organizations is being increasingly realized these days. The evolution of objectives after setting directions for growth of organizations has become necessary. The technique of strategic management is used as a major vehicle for planning and implementing major changes in organization. The implementation of the strategic plans needs good teamwork and understanding of the concept at grass root Have a Look at the Difference Between the Two
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In todays business world, where changes are by leaps and bounds, some organizations may decide for radical changes through re-engineering of their business processes to gain strategically better position
i. Defining the vision of the company ii. Defining the mission of the company iii. Determining the purposes or goals iv. Defining the objectives v. Environment scanning vi. Carrying out corporate appraisal vii.Developing strategic alternatives viii.Selecting a strategy ix. Formulating detailed strategy x. Preparing a plan xi. Implementing a strategy xii.Evaluating a strategy
STRATEGIC MANAGEMENT
Comprehensive Model of Strategic Management Working Model of Strategic Management After looking at the above given flow charts I will now discuss each phase in detail. Let us, now discuss in details the model of strategic management
So, lets talk about our own Rai University, find out what is the vision statement and list down various purposes of our vision statement. Vision is a theme, which gives a focused view of a company. It is a unifying statement and a vital challenge to all different units- of an organization that may be busy pursuing their independent objectives. It consists of a sense of achievable ideals and is a fountain of inspiration for performing the daily activities. It motivates people of an organization to behave in a way which would be congruent with the corporate ethics and values. Many firms do not have clear vision statements. An indirect method of knowing whether a firm has reached the stage of corporate strategic management is emergence of a vision statement. Vision of a firm cannot be high jacked from a company; however, the vision statement of another firm may definitely inspire a firm. It has to be evolved after a lot of deliberations, brainstorming, and thinking. It is pertinent that you as an individual working in a firm should become an active participant and collaborator in accomplishing corporate objectives. You must understand and share the vision of the firm because you would have to contribute in transformation of vision into a reality through his or her actions. The basic framework of vision should condition total behaviour of people of an organization. Personal objectives of individuals are very important to them and only to fulfill these objectives people join organizations. Vision of a company when translated into action program must be able to meet personal needs of people. This includes the need of achievement also. Vision of a firm thus encompasses personal objectives of people, which they try to achieve. Step 1. Name of the company Step 2. Practices that have made the company successful The primary purpose of the strategic management process is to enable companies to achieve strategic competitiveness and earn above-average returns. Research have indicated that companies that engage in strategic management generally out perform those that do not. The attainment of an appropriate match or fit between a companys environment and its strategy, structure, and processes has positive effects on the companys performance. Bruce Henderson, founder of the Boston Consulting Group, pointed out that a company cannot afford to follow intuitive strategies once it becomes large, has layers of management, or its environment changes substantially. As the worlds environment becomes increasingly complex and changing, todays companies, as one way to make the environment more manageable, use strategic management. Strategic competitiveness is achieved when a company successfully formulates and implements a value-creating strategy. By implementing a value-creating strategy that current and potential competitors are not simultaneously implementing and that competitors are unable to duplicate, a company achieves a sustained or sustainable competitive advantage.
STRATEGIC MANAGEMENT
Vision of a company is rather a permanent statement articulated by the CEO of the company who may be Managing Director, President, Chairman, etc. The purpose of a vision statement is to: i.Communicate with the people of the organization and to those who are in some way connected or concerned with the organization about its very existence in terms of corporate purpose, business scope, and the competitive leadership. ii. Cast a framework that would lead to development of interrelationships between firm and stakeholders viz. employees, shareholders, suppliers, customers, and various communities that may be directly or indirectly involved with the firm. iii. Define broad objective regarding performance of the firm and its growth in various fields vital to the firm.
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So long as a company can sustain (or maintain) a competitive advantage, investors will earn above-average returns. Aboveaverage returns represent returns that exceed returns that investors expect to earn from other investments with similar levels of risk (investor uncertainty about the economic gains or losses that will result from a particular investment). In other words, above average-returns exceed investors expected levels of return for given levels of risk. In the long run, companies must earn at least average returns and provide investors with average returns if they are to survive. If a company earns below average returns and provides investors with below-average returns, investors will withdraw their funds and place them in investments that earn at least average returns. Internationally these types of companies are prime take over targets, a concept that is picking up in India. A framework that can assist companies in their quest for strategic competitiveness is the strategic management process, the full set of commitments, decisions and actions required for a company to systematically achieve strategic competitiveness and earn above-average returns. This process is illustrated in Figure below. This diagram will show you about the areas I will be discussing in coming lectures.
Is guided by the companys strategic intent and strategic mission, and is represented by strategies that are formulated or developed and subsequently implemented or put into action. Strategy Implementation Strategic competitiveness and above-average returns result when a company is able to successfully formulate and implement value-creating strategies that others are unable to duplicate. Strategy Evaluation and Control Links the elements of the strategic management process together and helps companies continuously adjust or revise strategic inputs and strategic actions in order to achieve desired strategic outcome So, Lets get down to an activity, which is aiming at how companies in your city are doing strategic, planning. This will help you to gain experience interacting on a professional basis. Now perform the following steps: Step1. Use the telephone to contact local business owners or top managers. Find out a company that does strategic planning. So its a kind of phone interview Step 2. Seek answers to the following questions or else you can design your own question. 1. How does your company conduct strategic planning? 2. Who is involved in the process? 3. Does your company have a formal mission statement? 4. How was the statement developed? 5. When was the statement last changed? 6. What are the benefits of engaging in strategic planning? Notes
STRATEGIC MANAGEMENT
Situation Analysis, Strategy Formulation and Strategy Implementation. Situation Analysis In the form of information gained by scrutinizing the internal environment and scanning the external environment, is used to develop the companys strategic intent and strategic mission. Strategy Formulation
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