Presentation

on
introduction to strategic management

Presented By:
Ditty Garg
MBA, Lecturer MBA Department
Meaning & Definition of strategy
 Strategy is defined as the determination of the basic long-
term objectives and goals of an enterprise and the
formulation of plans and the acquisition, allocation and

Presented By: Ditty Garg

utilisation of resources necessary to accomplish these
goals.
 It is a unified, comprehensive and integrated plan
designed to assure that the basic objectives of the
enterprise are achieved.
Nature and scope of strategy
1. Strategic Issues Warrant Top Management Decisions.
2. These Involve the Allocation of Large Amounts and

Presented By: Ditty Garg

Resources.
3. Strategic Issues are Likely to have Impinging Impact on
the Long Term Prosperity of the Enterprise.
4. These are Future Oriented.
5. These Demand due Weightage to the Firm’s External
Environment.
6. Strategic Management Stresses both Efficiency and
Effectiveness.
Importance/ need of strategy
1. Strategies are needed to give companies a direction.
2. By setting objectives and drawing up a strategy to accomplish these,
companies can invest resources, train people, build up production
capacity and take a clear position within their environment.
3. It helps in coordinating all strategic initiatives within a company into

Presented By: Ditty Garg

a single cohesive pattern. A company-wide master strategy can
ensure that differences of opinions are ironed-out and one
consistent course of action is followed throughout the company,
avoiding overlapping, conflicting and contradictory behavior.
4. Well planned strategies facilitate optimum resource allocation and
hence minimizes the wastage.
5. It helps in conscious evaluation of all the available options before
committing to a course of action.
6. Having detailed strategies allows the companies to run with
clockwork precision, reliability and efficiency of a machine.
Strategic management
 Strategic management is the process of systematically
analysing various opportunities and threats vis-à-vis
organisational strengths and weaknesses, formulating

Presented By: Ditty Garg

and arriving at strategic choices through critical
evaluation of alternatives and implementing them to
meet the set objectives of the organisation.
 It is a continuous process of relating the organisation with
its environment by suitable course of action involving
strategy formulation and its implementation.
Business policy
 Business: Business means exchange of commodities and
services for increasing abilities.

Presented By: Ditty Garg

 Policy: Policies are the guidelines to action. Policies
include guidelines, procedures, rules, programs and
budgets established to support efforts to achieve stated
objectives.
 Business Policy: Business policy is a principle or a group
of related principles, along with their consequent rules
of action that provide for the successful achievement of
specific organisation/ business activities. Accordingly, a
policy contains both principle and rule of action. Hence,
it is a well developed statement of directions and goals.
Features of a business policy
1. Policies guide action to accomplish predetermined
objectives.
2. A policy complements the other policies of the

Presented By: Ditty Garg

organisation.
3. A good policy is not altered very often.
4. Policy should be fair and honest
5. A successful policy is communicated to all. It is well
known, understood and accepted by all.
6. Policy should be in writing.
7. It should be simple and free from ambiguity.
8. Business policy should be consistent with public policy.
9. It should comply to ethical standards.
Functions of strategic management
1. It provides the management a perspective which gives equal
importance to present and future opportunities and
problems.
2. It provides the management mechanisms to cope with highly
complex environment.

Presented By: Ditty Garg

3. It provides the management the techniques to manage changes.
4. It provides approach to problem solving.
5. It facilitates exploitation of the most effective means to
overcome difficulties and face competition.
6. It facilitates deployment of limited resources among critical
activities.
7. It improves communication and coordination in the
organisation.
8. It enhances systematic business decisions.
Process of strategic management

Presented By: Ditty Garg

5. Feedback
Strategic decision making
 Strategic decision making is the process of selecting
alternatives among the existing situation to make
decision that have long term implication for the

Presented By: Ditty Garg

organisational performance. E.g. new product
development, replacement of old machines with the new
machines.
 Strategic decision making requires more creative
approach. These decisions are made in accordance with
written policies, procedures or rules.
Features of strategic decision making
1. Top Management Involvement
2. Allocation of Large amounts of Resources

Presented By: Ditty Garg

3. Effect on Long Term Prosperity of Firm
4. Future-Oriented
5. Multi-Business Consequences

 Levels at which strategy operates

Levels Structure Strategy

Presented By: Ditty Garg

Corporate Level
Corporate

Strategic Business Level

Business Unit

Functional
Functional Level
Corporate level strategy
 At the corporate level, strategies are formulated according to
organisation wise policies. These are value oriented, conceptual
and less concrete than decisions at the other two levels. These are

Presented By: Ditty Garg

characterised by greater risk, cost and profit potential as well as
flexibility. Mostly, corporate level strategies are futuristic,
innovative and pervasive in nature. They occupy the highest level
of decision making and cover the actions dealing with the
objectives of the firm. Such decisions are made by the top
management of the firm. Examples of such strategies include
acquisition decisions, diversification, structural redesigning etc.
The Board of Directors, CEO are the primary groups involved in
this level of strategy making.
Business level strategy
 The strategies formulated by each SBU to make best use
of its resources given the environment it faces, come
under the category of business level strategies. At such a

Presented By: Ditty Garg

level, strategy is a comprehensive plan providing
objectives for SBUs, allocation of resources among
various functional areas and coordination between them
for achievement of corporate level objectives. These
strategies operate within the broad constraints and
policies set by the corporate strategy.
Functional level strategy
 This strategy relates to a single functional operation an the
activities involved therein. This level is at the operating
end of the organisation. The decisions at this level

Presented By: Ditty Garg

within the organisation are described as tactical. The
strategies are concerned with how different functions of
the enterprise like marketing, finance, manufacturing
etc. contribute to the strategy of other levels.
 Strategic decisions at different levels
Corporate Business Functional
Level Strategy Level Strategy Level Strategy
TYPE OF DECISION Conceptual Mixed Operational

Presented By: Ditty Garg

IMPACT Significant Major Insignificant
RISK INVOLVED High Medium Low
PROFIT POTENTIAL High Medium Low
TIME HORIZON Long Medium Low
FLEXIBILITY High Medium Low