Strategic Management – 1

Presentation by
Dr. U. Srinivasa
Raghavan
About the Speaker…
 Dr. U. Srinivasa Raghavan
 Previous Position:
Secretary to Govt. of India; Chairman, Postal Services Board and
Director General, Dept. of posts
 Educational Qualifications:
 M. Sc. (Physics); M.A. (Economics); M.B.A; B.L; Ph.D.,
 Fellowships:
 Hubert H. Humphrey Fellow (USA)
 SPURS Fellow, MIT,USA
 Experience:
 Indian Postal Service (Class I) – 37 years
 International:
 Head, Finance/Admin/Training, CIRDAP, Dhaka, Bangladesh– 4 years
 Teaching Experience: Examples:
 IIM ,BIM; NIRD; SIBM; NIBM; Madras Varsity; Siddhartha; Bajaj;
Maharishi;
 Editorship:
 Asia Pacific Journal on Rural Development
 Worked With:
 World Bank; ADB; UNCRD;IFAD; FAO; Com-SEC;
Strategy – The Basic
Concept
 A company’s strategy consists of the
combination of competitive moves and
business approaches that managers
employ to please customers, compete
successfully and achieve organizational
objectives.
The Essence of Strategy

 The Essence of Strategy is to achieve a

long-term sustainable advantage over

the firm’s competitors in every business

it chooses to participate
Strategic Management
 It is defined as the set of decisions and
actions that result in the formulation and
implementation of plans designed to
achieve a company’s objective. It
comprises of nine critical tasks.
9 Critical Tasks
1. Formulate the company’s mission
2. Conduct an analysis that reflects the company’s
internal conditions and capabilities
3. Assess the company’s external environment
4. Analyze the company’s options by matching its
resources with the external environment
5. Identify the most desirable options
6. Select a set of long-term objectives
7. Develop annual objectives and short term
strategies
8. Implement the strategic choices
9. Evaluate the success of the strategic process as
an input for future decision making
Business – Context
Internal & External
Environment


 Strategic Management
Model
Company’s mission
& social responsibility

External
Environment Possible? Internal
Remote Analysis
Industry Desired?
Operating
Strategic analysis and choice

Feedback
Feedback

Long-term Generic and grand

objectives strategies
Short-term Functional Policies that
objectives; reward tactics empower
system action
Restructuring,
Legend reengineering & refocusing
Major impact the organization
Strategic control
Minor Impact
& continuous improvement
 The Five Tasks

Task 1 Task 2 Task 3 Task 4 Task 5

Evaluating
Developing Performance,
Crafting a Implementin Monitoring
a Strategic
Setting Strategy to g and New
Vision and
Objectives Achieve the Executing Development
Business
Objectives the Strategy s, and
Mission Initiating
Corrective
Adjustments

Recycle
Improve / Improve /
to Tasks
Revise as Revise as Change Change
1,2,3 or 4
Needed Needed as as
as
Needed Needed
Needed
Dimensions of
Strategic Decisions
 Strategic issues
 require top-management decisions
 require large amounts of the firm’s
resources
 often affect the firm’s long-term
prosperity
 are future oriented
 usually have multi-functional or multi-
business consequences
 require considering the firm’s external
environment
3 levels of strategy

 Corporate level

 Business level

 Functional level
 Alternative Strategic
Management Structures
Alternative 1 – Single business firms

Corporate /
Corporate /
Business
Business Level
Level

Functional Financial /
POM / R&D Marketing HR
Accounting
Level Strategies Strategies Strategies
Strategies
 Alternative Strategic
Management Structures
Alternative 2 – Multiple business firms

Corporate /
Corporate
Business
Level Level

Business
Business 1 Business 2 Business 3
Level

Functional Financial /
POM / R&D Marketing HR
Accounting
Level Strategies Strategies Strategies
Strategies
Strategy is
Partly Planned & Partly
Reactive

t r at eg y
s
Company nd oned s
e
Experience Aba featur
Planned
s, Know- Strategy
how, New initiatives plus ongoing strategy
Resource features continued from prior periods
Strengths Actual
& Company
Weakness Strategy
es and Adaptive Reactions to
Competitiv Changing Circumstances
e
Capabilitie Reactive
s Strategy
 Understanding a Company’s
Strategy – What to look for?
Planned actions and
initiatives to out
Action to diversify the compete rivals.
company’s revenue Moves to react and
base and enter to respond to
altogether new changing external
industries or circumstances.
businesses.
Actions to THE PATTERN
strengthen the OF ACTIONS Actions to alter
company's resource AND geographic
base and coverage.
competitive
BUSINESS
capabilities. APPROACHES
Actions and approaches Actions to merge
that define how the
THAT DEFINE with or acquire a
company manages R&D, A COMPANY’S rival company to
production, sales & STRATEGY strengthen the
marketing, finance and company’s business
other key functions. position.
Actions to capitalize on Actions to form
new opportunities or to strategic alliances
defend against threats and collaborative
to the company’s well- partnerships.
Preparing for
Future Marketing
Conditions Reactive / Follower Proactive / Leader

COMPANY APPROACHES

Rapid Rushing to catch Aggressively

Revolutionary up to keep from altering strategy
Change being swamped by to make waves
FUTURE MARKET

the waves and drive change

CONDITIONS

Gradual Revising strategy Anticipating

Evolutionary (hopefully in time) change and
Changeto catch the waves initiating strategic
actions to ride the
crest of the waves
How strategies get
crafted?
 The Chief Architect approach

 The Delegation approach

 The Collaborative or Team approach

 The Corporate Intrapreneur approach

 Hierarchy of
Objectives & Strategies
Ends Means Strategic Decision Makers
(What is to be (How is it to be
achieved?) achieved?)
Board of Corporate Business Functional
Directors Managers Managers Managers

Mission, including
goals & philosophy
  
Long-term objectives Grand strategy
  
Annual objectives Short-term
strategies & policies
  
Note:  indicates a principal responsibility;  indicates a secondary responsibility.
Benefits of
Strategic Management
 Strategy formulation activities enhance the
firm’s ability to prevent problems.
 Group-based strategic decisions are likely to be
drawn from the best available alternatives.
 The involvement of employees in strategy
formulation improves their understanding.
 Gaps and overlaps in activities among
individuals and groups are reduced.