Presenters

SAGAR BHATTA
SAROJ RAJ UPRETI KALIKA PRASAD MARAHATTA
STRATEGIC DRIFT
due to change in environment

What is strategic drift?

Strategic drift can be defined as gradual deterioration
.

of competitive action that results in the failure of

organization to acknowledge and respond to changes
in business environment.
 importance
of understanding strategic drift
To identify
To gain
external threats to 01 05 competitive
weaknesses of the
advantage
business
To understand the
need of acquisition, 02 06 To welcome innovation
$
merger, and
diversification

To maintain To understand
03 07
existence of its consumer needs
own and expectations

To match resources To comply with

and potentiality 04 08 legal policies and
with opportunities procedures
CHANGE SCALING Environmental change

Transformational
change

Amount of
change

Death

Phase 1 Phase 2 Phase 3 Phase 4

Incremental change Strategic drift Flux Transformational change or
death
 Phase 1 : Incremental stage

01 03
This is the phase where
business tries to move
with small changes seen in
02 Business the external environment.
remains in There is not much
Little
touch with deviation between
significant
the external business strategy and
changes in
environment environmental changes.
the external
environment
Small
incremental
changes in
business
strategy
Why Incremental
Change? Alignment with
environmental change

Experimentation of new
ideas and strategies
s

The success of
past
Phase 2: Strategic Drift
This is the phase where small, incremental changes in
business strategy fails business to move with rapid changes
in the external environment.

1 Homogeneous mindset

2 Preservation of status quo

3 Lack of focus on external environment

5 Reasons for Strategic Drift

The problem of hindsight

1 It may be easy to see major changes with
hindsight, but it may not be easy to see their
significance as they are happening.

Building on the familiar

2 Managers try to minimise the extent to which
they are faced with uncertainty by looking for
answers that are familiar.
 Core rigidities

3 The core capabilities may become a limit. The

formula of success is hard to imitate by
competitors but it may provoke a routine, making
the habits of the business hard to question.

Relationship becomes

4
shackles
The success of a company is based on an
excellent relationship between customers,
suppliers, and employees.

Lagged performance

5
effects
First symptoms of strategic drifts are hard to
identify. However, once the shortcomings of a
business are identified, it becomes an
opportunity for competitors.
Ways to Avoid Strategic Drift

Encourage diverse perspective

Continuous innovation

Promote an external focus

Industry benchmarking & market research

Monitor performance
 Phase 3 : Flux
Declining performance &
low employee morale 1
Fluctuation in strategies
but not in clear direction 2
Top management conflict
and managerial changes 3
This is the phase where there is huge gap
4
Internal disagreement on
between strategy of the business and
right strategies and morale
requirement of the environment.
Management tries to minimize such gap but
Customers becoming
alienated 5 efforts turn out to be indecisive.
Phase 4 :
Transformational change
or death

The 3
possibilities