Chapter
Introduction & Overview of Strategic
Management Process
Strategic Management:
Concepts & Cases
Ch 1 -1
Strategic Management –
Defined
Art & science of formulating,
implementing, and evaluating, cross-
functional decisions that enable an
organization to achieve its objectives
Ch 1 -2
Strategic Management
In essence, the strategic plan is a company’s
game plan
Ch 1 -3
Strategic Management
achieves a firm’s success
through integration ––
Management Marketing
Finance/Accounting Production/Operations
Research & Development MIS
Ch 1 -4
Strategy Formulation
Vision & Mission
External Opportunities & Threats
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
Ch 1 -5
Issues in Strategy
Formulation
New business
opportunities
Businesses to abandon
Allocation of resources
Expansion or
diversification
International markets
Mergers or joint ventures
Avoidance of hostile
takeover
Ch 1 -6
Strategic management
Important terms
• Planning- is deciding in advance what is to be
done, when where, how and by whom it is to
be done.
• Business plan
• Policy- rules & regulations.
• Business policy-
• Strategy- course of action.
• Business strategy
Mission-(most obvious purpose )- what your business is all
about to your customers, employees, suppliers and the
community
reflects every facet of your business: the range and nature of
the products , pricing, quality, service, marketplace position,
growth potential, use of technology, and your relationships
with your customers, employees, suppliers, competitors and
the community.
Vision- (aspiration) - The vision statement is your articulation
of your dream of where you want your business to go in the
future.
Objectives-end results.
Strategic management
(introduction)
Strategy-strategies
Generalship- the actual direction of
military force or the art of general
Examples:
singer India diversified its business in
to consumer goods & color TVs
Kotak Mahindra finance ltd adopted
divestment strategy in corporate
lending & focusing retail, insurance &
information services.
Definitions
Alfred D Chandler(1962)
“The determination of the basic long term goals &
objectives of an enterprise & the adoption of the course
of action & the allocation of resources necessary for
carrying out these goals’’
William F Glueck (1972)
“A unified, comprehensive & integrated plan designed
to assure that the basic objective of the organization are
achieved”
Definition
• The determination of the long run goals and
objectives of an enterprise, the adoption of
courses of action and the allocation of
resources necessary for carrying out these
goals
Alfred Chandler, Strategy and Structure
Levels of Strategy
CORPORATE CORPORATE
STRATEGY HEAD OFFICE
BUSINESS
STRATEGY Division A Division B
R&D R&D
FUNCTIONAL Personnel Personnel
STRATEGIES
Finance Finance
Production Production
Marketing/Sales Marketing/Sales
Levels of Strategy
• Corporate strategy... defines the scope of the
business in terms of the industries and markets in
which it competes.
– includes decisions about diversification, vertical
integration, acquisitions, new ventures,
divestments, allocation of scarce resources
between business units
• Business strategy... is concerned with how the firm
competes within a particular industry or market... to
win a business unit must adopt a strategy that
establishes a competitive advantage over its rivals.
• Functional strategy... the detailed deployment of
resources at the operational level
Decision making
Conventional decision making
Strategic decision making
Issues in strategic decision making
• Criteria for decision making
• Rationality
• Creativity
• Variability
• Person- related factors
• Individual v/s group decision making
Strategic management process
Establishment of strategic intent
Formulation of strategies
Implementation of strategies
Strategic evaluation & control
Establishment of strategic intent
a)Creating & communicating a
vision
b)Designing a mission
statement
c) Business definition
d)Setting objectives
Formulation of strategy
a. Performing environmental appraisal.
b. Performing organizational appraisal.
c. Considering strategies at all the levels.
d. Undertaking strategic analysis.
e. Exercising strategic choice.
f. Formulating strategies.
Implementation of strategies
a. Structural implementation
b. Behavioral implementation
c. Functional implementation
d. Operational strategies
Performing strategic evaluation
&control
a. Performing strategic evaluation
b. Exercising strategic control
c. Reformulating strategies
