STRATEGIC MANAGEMENT

UNIT - 1
Terminologies:
1.Strategy
‘A course of action, including the specification of resources
required, to achieve a specific objective.’
2. Strategic plan
‘A statement of long-term goals along with a definition of
the strategies and policies which will ensure achievement of
these goals.’ CIMA:
3. Strategy is the direction and scope of an organisation over
the long term. Which achieves advantage in a changing
environment through its configuration of resources
and competences with the aim of fulfilling stakeholder
expectations
Contd..
4. ‘The basic characteristic of the match an organisation
achieves with its environment is called its strategy
5. ‘Corporate strategy is the pattern of major objectives,
purposes and goals and essential policies or plans for
achieving those goals, stated in such a way as to define
what business the company is in or is to be in and the kind
of company it is or is to be.’
6.‘Corporate strategy is concerned with an organisation’s basic
direction for the future: its purpose, its ambitions, its
resources and how it interacts with the world in which it
operates.’
Features of Strategy

• Strategy is Significant because it is not possible to foresee

the future. Without a perfect foresight, the firms must be
ready to deal with the uncertain events which constitute the
business environment.
• Strategy deals with long term developments rather than
routine operations, i.e. it deals with probability of
innovations or new products, new methods of productions,
or new markets to be developed in future.
• Strategy is created to take into account the probable
behavior of customers and competitors. Strategies dealing
with employees will predict the employee behavior.
Strategic management process:
• Environmental Scanning- Environmental 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.
After executing the environmental analysis process,
management should evaluate it on a continuous basis and
strive to improve it.
• Strategy Formulation- Strategy formulation is the process
of deciding best course of action for accomplishing
organizational objectives and hence achieving
organizational purpose. After conducting environment
scanning, managers formulate corporate, business and
functional strategies.
Contd..
• 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.
 What is the difference between Vision,
Mission, Purpose, Strategy, and Tactics?
• Vision – a vision is a statement of what you would like to become. It should be
enduring and an ultimate stretch goal – most likely something that will never be
attained.

• Mission – a mission is a statement of how we will accomplish our vision. It should

include a summary of core competencies and competitive differentiation.
• Purpose – a purpose is a statement of why we exist/reason for being – think self-
actualization for an organization. It should energize stakeholders to focus on
something greater than oneself.

• Strategy –a strategy is a plan to beat the competition to achieve your Vision and
Mission and Purpose. It is what you are going to do to dominate your
market/segment through competitive positioning and value chain optimization.
Research shows that it takes 3-5 years for a real strategy to start to take hold so it
changes very little. If you are talking strategies (plural), you are not focused on
strategy you are focused on tactics.

• Tactics – Tactics are specific actions that you will take to implement the strategy.
It is how you are going to do it – M&A, people, process, technology, etc. Tactics
are actions taken by everyone in the organization and should be aligned with and
focused on strategy. Tactics are many and will change periodically as
improvements take place and market dynamics change.
Roles and Responsibilities of Key
Stakeholders

• Providing detailed requirements and a financial plan:

• Committing the necessary resources:
• Taking ownership of appropriate deliverables:
• Keeping abreast of project progress and cascading
information to others who need to know:
• Establish the training and support requirements:
• Identifying and resolving any project issues and risks,
especially those associated with managing change during
the transition phase:
• Communicating throughout the life of the project:
• Project closure:
Business Model:

• A business model is the conceptual structure supporting the

viability of a business, including its purpose, its goals and its
ongoing plans for achieving them.
• At its simplest, a business model is a specification describing
how an organization fulfills its purpose. All business processes
and policies are part of that model. According to management
expert Peter Drucker, a business model answers the following
questions: Who is your customer, what does the customer
value, and how do you deliver value at an appropriate cost?
• A business model is similar to a business plan in its makeup and
content. However, a business plan specifies all the elements
required to demonstrate the feasibility of a prospective
business, while a business model demonstrates the elements
that make an existing business work successfully.
Balanced Score Card: Kaplan and D.P. Norton
Balanced Score Card:
• The balanced scorecard is a strategy performance
management tool – a semi-standard structured report,
supported by design methods and automation tools, that can
be used by managers to keep track of the execution of
activities by the staff within their control and to monitor
the consequences arising from these actions.
• The phrase 'balanced scorecard' primarily refers to a
performance management report used by a management
team, and typically this team is focused on managing the
implementation of a strategy or operational activities
What is the balanced scorecard?

• A system of corporate appraisal which looks at financial and

non-financial elements from a variety of perspectives.
• An approach to the provision of information to management
to assist strategic policy formation and achievement.
• It provides the user with a set of information which
addresses all relevant areas of performance in an objective
and unbiased fashion.
• A set of measures that gives top managers a fast but
comprehensive view of the business.