CBM 121 STRATEGIC MANAGEMENT A.

Classical Administrator - approach to decision-

making is largely concerned with measuring and
CHAPTER 1: WHY IS STRATEGY AND WHY IS IT
improving skills and processes within organizations.
IMPORTANT
Planning - involves considering the future, deciding the
WHAT IS STRATEGY? aims of the organization and developing a plan of
Strategy - is an over-arching approach taken to meet action.
or exceeds one’s goal Organizing - involves marshalling the resources
A firm gains a competitive advantage by offering necessary to achieve these aims and structuring the
goods or services consumers’ value more than organization to complete its activities. Both roles
competitors or similar but at a lower price, resulting in remain crucial.
business profits. Commanding - despite its outdated relevance in
Never ending cycle of analysis Western organizations, is crucial for maximizing
employee return, often the most costly aspect of a
 Formulation business.

 Implementation Co-ordinating - involves focusing and, in particular,

unifying people's efforts to ensure success.
 Feedback
Controlling - involves monitoring that everything works
Direct competitors cooperate occasionally to create as planned, making adjustments where necessary and
win-win scenarios. When competitors cooperate with feeding this information back so that it can of value in
one another to achieve strategic objective, it is called the future.
co-opetition.
B. Design Planner - emphasized that the principal role
Competitive benchmarking is not "strategy" of a leader is to plan the development of an
WHAT IS AN OBJECTIVE? organization beyond the short term.

Use S.M.A.R.T formula C. Role Player

 Specific  Approach views the job of the strategic

decision-maker as more than that of a
 Measurable reflective and analyzing planner and controller.

 Achievable  The decision-maker's role becomes one of

learning, supporting and positively enabling
 Relevant rather than directing.
 Time-bound D. The Competitive Positioner - The competitive
STRATEGY VS. OBJECTIVE: KEY DIFFERENCES positioner understands the power of the external
environment and focuses almost exclusively on
A strategy helps you create a plan for how you want to achieving competitive advantage.
achieve a goal
E. The Visionary Transformer - approach depends
PURPOSE ultimately on pragmatism: the ability to achieve a
vision by listening, acting and learning rather than
A strategy is meant to solve problems and determine a
adopting plans or rigid approaches.
pathway towards a goal. An objective has measured
elements that relate to the execution of the strategy F. The Self-Organizer
and when it should be finalized.
 Complex and fast-moving business
EXECUTION environment, there is an advantage in being a
"learning organization" that adapts to change.
To build a strategy, you need to have an overview of
Petere Senge,
your core values and the motivations for why you are
coming up with a strategy.  Self-organizing businesses need to be
designed and led by people who can create an
CHAPTER 2: THE DIFFERENT VIEWS OF STRATEGY
organization where its constituent parts and,
THE DIFFERENT VIEWS/APPROACHES OF STRATEGY above all, its people continually self-organize

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 strategic issues, fluidly developing. STEPS IN THE STRATEGIC MANAGEMENTPROCESS

G. The Turnaround Strategist - This decision-making Strategy Analysis and Identification

approach focuses on turning around the performance
 The Strategic Management Process
of an organization in decline, perhaps when a visionary
leader has failed. It is autocratic, ruthless and swift,  Internal Analysis
and it is more context-specific.
 External Analysis
CHOOSING THE RIGHT APPROACH
 Firm Performance
 Gathering right information
Identification and analysis
 Developing market awareness
 Is a process that involves researching an
 Deciding what action needs to be taken organization's business environment analysis
why' within with it operates - is essential to
 Accessing risk formulate strategic planning for decision
making and smooth working of organization.
 Thinking critically
A SWOT analysis is a technique used to identify
 Taking account for unexpected strengths, weaknesses, opportunities, and threats for
your business or even a specific project. It's most
THE STRATEGIC MANAGEMENT PROCESS
widely used by organizations—from small businesses
- process describes its method by which and non-profits to large enterprises.
managers conceive of and implement a Strategy Formulation
strategy that can lead to a sustainable
competitive advantage What resources and capabilities do we need to
compete successfully in each future scenario?
VISION, MISSION, VALUES
• Which strategic initiatives should we put in place to
A vision is a statement about what an organization respond to each?
ultimately wants to accomplish. It captures the
company's aspiration. • How can we shape our expected future environment?

Obtaining Commitment to the Vision involves: Strategy Implementation and Evaluation

 Explaining the context and the vision;  Organizational Design

 Getting people to understand why the vision is  Corporate Governance, Business Ethics, and
important to both the themselves; organization Strategic Leadership
and
Strategy Formulation
 Making people believe the vision is attainable;
Is the process of using available knowledge to
 Making people believe it will be attained document the intended direction of a business and the
actionable steps to reach its goals?
MISSION STATEMENTS
Strategy Implementation and Evaluation
Which describes what an organization actually does
the products and services it plans to provide and the  Is the process of putting a strategy into action?
markets in which it will compete.
 This includes all the steps necessary to ensure
Customer-Oriented Mission the strategy is executed correctly, such as
planning, organizing, staffing, directing, and
A customer oriented mission defines a business in controlling.
terms of providing solutions to customer needs.
 Strategy evaluation is assessing whether the
Product-Oriented Missions strategy is effective and achieving its goals.
Define a business in terms of a good or service HOW IS 'STRATEGY' MADE
provided rather than in terms of the customer needs to
be met. STRATEGIC PLANNING

 A PROCESS IN WHICH AN ORGANIZATION'S

LEADERS DEFINE THEIR VISION FOR THE

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 FUTURE AND IDENTIFY THEIR  internal processes
ORGANIZATION'S GOALS AND OBJECTIVES.
 Learning and growth.

Basic Principles that can Strategic Management to be

SCENARIO PLANNING successful
 Scenario planning is a strategic planning  Creating unique Strategic Position for the
technique that involves creating and analyzing proposition
alternative future scenarios to help
organizations anticipate and prepare different  Consider availability or potential availability of
resources
STRATEGY AS PLANNED EMERGENCIES
 Understand the importance of values and
 STRATEGIC PLANNING FOR incentives
EMERGENCIESINVOLVES DEVELOPING A SET
OF PROACTIVESTRATEGIES AND ACTIONS TO  Gain people’s emotional commitment to the
EFFECTIVELYRESPOND TOUNEXPECTED strategy
EVENTS THAT COULD DISRUPT
 Be open to strategic ideas wherever they
HOW TO PUT STRATEGY INTO ACTION originate

TO PUT A FIRM'S STRATEGY INTO ACTION A  Keep the strategy flexible

BUSINESS MODEL MUST
BASIC MANAGEMENT CONCEPTS
A) TRANSLATE THE FIRM'S STRATEGY INTO
COMPETITIVE TACTICS AND INITIATES AND Strategic management can be either prescriptive or
descriptive.
B) IMPLEMENT THE STRATEGY THROUGH EFFECTIVE
STRUCTURES, PROCESSES, CULTURE AND  Prescriptive strategic management means
PROCEDUR AND PROCEDURES developing strategies in advance of an
organizational issue.
Benefits
 Descriptive strategic management means
Competitive advantage - cost leadership, putting strategies into practice when needed.
differentiation specific niche
Both methods of strategic management employ
Achieving goals - roadmap, SMART management theory and practices.
Sustainable growth -anticipating to future trends and Peter Dracker - refers to founding father of
adapting to changing environment management studies
Cohesive organizations - shared understanding a) The financial perspective describes the economic
consequences of actions taken in the other three
Increased managerial awareness - think critically
perspectives.
Strategic Management can either be
b) The customer perspective defines the customer
- Prescriptive - in advance and market segments in which the business unit will
compete.
- Descriptive - when needed
c) The internal business process perspective
A balanced scorecard is a documented set of describes the internal processes needed to provide
objectives and measures expressed from the point of value for customers and owners.
view of four key areas of organizational concern called
perspectives. d) The learning and growth (infrastructure)
perspective defines the capabilities that an
Robert Kaplan and David Norton introduced the organization needs to create long-term growth and
concept in a Harvard Business Review article in 1992. improvement.
It has been widely adopted. Its role is to help  This last perspective is concerned with three
organizations take a wide-ranging view of four types of major enabling factors: employee capabilities,
strategically important objectives and their measures: information systems capabilities, and
 financial, employee attitudes (motivation, empowerment
and alignment).
 customer
STEPS IN STRATEGIC MANAGEMENT PROCESS
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  The strategic analysis

 Internal analysis

 External analysis

 Firm performance

Identification and analysis

Is a process that involves researching an
organization's business environment analysis why'
within with it operates - is essential to formulate
strategic planning for decision making and smooth
working of organization.

Strategy formulation

 Do we need to complete successfully what

resources and capabilities do us future
scenario? Each

 Which strategic initiatives should we initiatives

should we put in place to respond to each?

 How can we shape our expected for our

environment

Strategy Implementation and evaluations

 Organizational design

 Corporate, governance, business ethics and

strategic leadership

How is Strategy Made

Strategic Planning
- A process in which an organization leaders
define their vision for the future and identify
their organization's goals and objectives.

Scenario Planning
- scenario planning is a strategic planning
technique that involves creating and analyzing
alterative future to helps organizations
anticipate and prepare different

Strategy as Planned Emergencies.

- -Strategic planning for emergencies involves
developing op proactive strategies and actions
to effectively respond to unexpected events.