STRATEGIC MANAGEMENT

Birat Shrestha
Ace Institute of Management, PU
BBA Sec A
[learninghub.ace.edu.np]
April 2023
1. INTRODUCTION
Meaning of Strategy
 Strategy is an action plan to reach somewhere
 Strategic plan is a bridge to somewhere rather than
nowhere
 A strategy of a corporation forms a comprehensive
master plan stating how the corporation will achieve its
mission and objectives
 It is developing a competitive advantage
 Strategies are the means by which long-term objectives
are achieved
 CEOs and a bear
◦ Two CEOs hiking in the woods
◦ A bear comes in front and snarls up
◦ The first CEO puts on the knapsack and a pair of jogging
shoes
◦ The second CEO says – “hey you can’t outrun that bear”
◦ The first CEO say – “yes, but I can definitely outrun you”
Meaning of Strategic Management
 Strategic management can be defined as the
art and science of formulating, implementing,
and evaluating cross-functional decisions that
enable an organization to achieve its
objectives
 Strategic management is that set of
managerial decisions and actions that
determines the long-run performance of a
corporation
 Strategic management allows an organization
to be more proactive than reactive in
shaping its own future
 Process of Strategic Management

EVALUATION
ENVIRONMENTAL STRATEGY STRATEGY AND
SCANNING FORMULATION IMPLEMENTATION CONTROL
 Strategic Management Model
Strategy Evaluation
Environmental Strategy Formulation and
Scanning Implementation Control

EXTERNAL
Societal Vision
Environment: Reason
General Forces for Mission
Task existence What Strategies
results to
Environment accomplish
Industry Analysis by when
Plan to Policies
achieve
the Broad
mission & Programs
guidelines
objectives for
INTERNAL decision Activities
needed to Budgets
Structure making
accomplish
Chain of Command a plan Cost of
Procedures
Culture the
Beliefs, program
Sequence
Expectations,Values of steps Performance
Resources needed to
Assets, Skills, do the job Actual
Competencies, results
Knowledge

Feedback/Learning
Environmental Scanning
 Monitoring, evaluating, and disseminating of
information from the external environments
to key people within the corporation
 The purpose – identify strategic factors –
internal and external factors that determine
the future of the corporation
 Conducting environmental scanning –
SWOT analysis
◦ Internal (operating) – Strengths and Weaknesses
◦ External (remote – PESTL and industry) –
Opportunities and Threats
Strategy Formulation
 The development of long range plans for the
effective management of environmental
opportunities and threats in the light of
corporate strengths and weaknesses
 It includes defining
◦ The corporate vision (aim) and
mission (business achievement precise definition)
◦ Specifying achievable objectives (SMART criteria)
◦ Developing strategies - corporate
strategy(direction of the business towards growth),
business strategy (SBU or product level decisions),
functional strategy (operating decisions in each
departments)
◦ Setting policy guidelines (operating rules and
regulations)
 Strategy Implementation
 Program
◦ A statement of the activities or steps needed to
accomplish a plan
◦ It makes the strategy action-oriented
◦ It may involve re-structuring the corporation, changing the
internal culture, beginning the new research effort, forming
a strategic alliance
 Budgets
◦ A statement of a corporation’s program in terms of dollars
◦ Detailed cost of each program
 Procedures
◦ It is Standard Operating Procedures (SOP)
◦ Sequential steps or techniques that describes how a
particular task is to be done
◦ Detailed activities to complete the corporation’s programs
Evaluation and Control
 It is the process in which corporate
activities and performance results are
monitored
 Comparison of actual performance with
desired performance
 Strategic adjustments as per performance
Feedback/Learning Process
 Strategies and programs are taken back
for revisions and corrections
 Poor performance (as measured in
evaluation and control) – indicates
something has gone wrong with either
strategy formulation or implementation –
or key variable such as new competitor
was ignored during environmental
scanning or assessment
Levels of Strategy
 Corporate Level Strategy
◦ Developed by top-management on the basis of vision,
mission and organizational value
◦ It defines the organizational direction- stability, growth,
retrenchment, combination
 Business Level Strategy
◦ Based on corporate level guidelines linking functional
strategy
◦ Formulated at separate strategic business unit level with
different natures of products to gain competitive advantages
by each SBUs
◦ Cost leadership, differentiation, focus
 Functional Level Strategy
◦ It is day-to-day operational in nature
◦ It is related to functional department of each SBUs
◦ Production strategy, Marketing Strategy, Human Resource
Strategy, Finance Strategy, R&D Strategy
Characteristics of Strategic
Management
Top Management Involvement
for resources

Future Oriented with mission,

Operates in Dynamic
Environment - PEST

Multi-disciplinary – Marketing,
Finance, HR, Operations
Formality in Strategic Management
 Formality refers to the fulfillment of an
establishment procedures and systems for
accomplishing a task
 All the members from top-level to
subordinate levels need to fulfill specified
formalities
 It refers to the degree to which
participants, responsibilities, authority and
discretion in decision-making are
specified
 Determinants of Formality

Management Production
Styles Process
Complexity in
Size of the Trust with the
the
Organization Employees
Environment
Purpose of
Stage of Firm
Planning
Development
System
 Models of Formality

ENTREPRENEURIAL PLANNING ADAPTIVE

Associated with
Followed by small
medium-sized
firms controlled Large firms
firms that
by a single person operating under
emphasize the
a comprehensive
incremental
They produce formal planning
modification of
limited number of system based on
the competitive
products objectives
approach
Strategic Performs business
A reactive
evaluation is in a systematic
approach adapting
informal and way
to the
intuitive
environment
Questions/Answers/Discussions
THANK YOU/BEST WISHES