1.

Strategy and strategic management

A strategy is all about integrating organizational activities and utilizing and

allocating the scarce resources within the organizational environment so as
to meet the present objectives.

While planning a strategy it is essential to consider that decisions are not

taken in a vacuum and that any act taken by a firm is likely to be met by a
reaction from those affected, competitors, customers, employees or
suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of

events and the need to take into consideration the likely or actual behavior of
others.

Strategy is the blueprint of decisions in an organization that shows its

objectives and goals, reduces the key policies, and plans for achieving these
goals, and defines the business the company is to carry on, the type of
economic and human organization it wants to be, and the contribution it
plans to make to its shareholders, customers and society at large.

Strategic management is the management of an organization’s resources to

achieve its goals and objectives.

Strategic management involves setting objectives, analyzing the competitive

environment, analyzing the internal organization, evaluating strategies, and
ensuring that management rolls out the strategies across the organization.

2. Briefly discuss types of strategy

STRATEGY, this word would use only in military administration. Strategy

refers to the “deployment” of troops from their viewpoint. They’ve
expressed the maneuvering of troops into position before the enemy is
engaged. But now, this word is used in the business and management sector.

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 The businessman can substitute “resources” for troops. And also deploy
different kinds to achieve objectives.
Different types of strategies in marketing (strategic management)? Such as:-

1. Competitive Strategy
2. Corporate Strategy
3. Business Strategy
4. Functional Strategy, and
5. Operating Strategy

1. Competitive Strategy:
Firstly, competitive strategy is the first of the kinds of strategies in strategic
management. It refers to a plan that combines the clout of the external situation.
Along with the integrative concerns of the personal status of an organization.
The competitive strategy aims at gaining a competitive advantage in the
marketplace against competitors. Competitive advantage comes from strategies
that lead to some uniqueness in the market. Winning a competitive strategy is
grounded in sustainable competitive advantage. Examples of the competitive
strategy include contrast strategy, low-cost strategy, and focus or market-niche
strategy.

2. Corporate Strategy:
Secondly, corporate strategy is a type of strategy in strategic management. It draws
up at the top level by the senior management of a diversified company.

3. Business Strategy:
Thirdly, the different types of strategies in marketing (strategic management)’s
third one is a business strategy. Business strategy formulates at the business-unit
level. It is popularly known as the ‘business-unit strategy.’ This strategy
emphasizes the building up of the company’s competitive position of products or
services. Business strategies are compos of a competitive and cooperative
approach. The business strategy covers all the activities and tactics for competing
in denial of the competitors. And behavior management addresses various strategic
matters. As Hill and Jones have remarked, the business strategy consists of plans of
action. Its strategic managers who adapt to use a company’s resources.

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4. Functional Strategy:
Fourthly, the functional strategy is a type of strategy in strategic management. A functional
strategy refers to an approach those points up a particular functional area of an organization. It
sets down to achieve some objectives of a business unit by maximizing resource productivity.
Once in a blue moon, functional strategy names departmental strategy since each business
function frequently devolves with a section. Examples of functional strategy comprise
production strategy, marketing strategy, human resource strategy, and financial strategy.

5. Operating Strategy:
Finally, the operating strategy is the fifth type of strategy in strategic management.
It gives form to the operating units of an organization. A company may develop an
operating strategy. For an instance, for its sales zones. An operating strategy is put
across at the field level, usually to achieve on-hand objectives. In some companies,
managers develop an operating strategy for each set of annual goals in the
divisions.

3. Discuss characteristics of strategic decision

Characteristics of strategic decision

The characteristics of strategic decisions are as follows:

1. Activities match the environment.

 The main strategy is to match the organization’s activity with the external as
well as the internal environment in which it operates. Strategic decisions are
best formulated when it is about environments like environmental
opportunities and environmental threats.

1. The scope of activity of an organization is a concern.

 These decisions focus more on the activity of an organization for scope.

These activities change from one company to the other. Some of the
companies have limited their production to only one type of product whereas
many other companies have many varieties of products. To the strategic
decisions, the range of these activities is fundamental.

1. Activities match with the capability of resources.

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  Strategies are not only focused on environmental opportunities and
environmental threats; rather, they also focus on the resource base of an
organization.

1. Activities match the resource base.

2. Decisions like operations are affected.
3. The magnitude of strategies and nature are affected.
4. A company’s long term direction is also affected.

4. Mention major importance of strategic management

Mention major importance of strategic management

Strategic management provides overall direction by developing plans and policies

designed to achieve objectives and then allocating resources to implement the
plans. Ultimately, strategic management is for organizations to gain a competitive
edge over their competitors. A manager’s decisions and actions that determine the
performance of the company can also be grouped together as strategic
management. For the manager to make the best decisions, the general and
competitive organizational environment must be thoroughly understood and
analyzed.

Importance of Strategic Management

Strategic management’s two primary components, to formulate and
implement strategies, might be anticipated to have a number of advantages.

1. Because the environment for most firms is changing so quickly, strategic

management is the only approach to foresee potential issues and
opportunities. It enables an organization to form opinions on long-term
projections rather than on-the-spot judgments.
2. Strategic management offers financial advantages. Based on empirical
research and logical reasoning, it is possible to assert that the influence of
strategic management is mainly that better financial performance in terms of
growth and profitability of businesses with an advanced strategic
management system having a significant influence on the formulation and
management of strategies.
3. People work effectively once they are aware of what is expected of them and
where the company is headed. Strategic management gives all the employees
specific goals and objectives for the company’s future. Additionally, this
lessens conflict. It offers management and staff a strong motive to
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 accomplish the company’s goal. Additionally, it makes sure that the senior
executives agree on key strategic decisions and challenges.
4. Group involvement in strategic management enhances the quality of
strategic decisions. Owing to the unique viewpoints of group members, the
practice of group discussion for decision-making allows the invention of
alternative methods and better monitoring of opinion. Therefore, it is likely
that the finest options will be picked and used.
5. Enhanced employee motivation is a result of strategic management since it
helps employees and managers better grasp the objectives and
understand how the incentive system works. Additionally, they are more
aware of the strategic plan’s built-in productivity-reward correlation. As a
result, rewards are likely to be followed by goal-directed behavior.
6. Strategic management reduces resistance to change. Greater knowledge of
the factors influencing a decision and the limitations of potential alternatives
are probable to occur from a participatory strategy-making procedure, which
also has the added bonus of making changes more acceptable with less
resistance. Resistance to change is made harmless by the procedure, which
further eliminates the ambiguity that is linked to change.

5. Analytical tools of environmental analysis

An environmental analysis is a strategic technique used to identify all
internal and external factors that could affect a company’s success. Internal
components reveal the strengths and shortcomings of a company, while
external components represent the opportunities and risks. This exists
outside of the company.

Importance of environmental analysis

Organizations need to do environmental analysis because it helps them:

 Find opportunities: By looking at the outside world, organizations can find

new trends and chances to enter new markets or make new products or
services.
 Identify threats: It helps businesses find threats to their business, such as
new competitors, changes in regulations, or a slowing economy.
 Create effective strategies: Organizations can create effective strategies
that are in line with their goals and objectives when they understand how the
outside world affects their business.

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  Anticipate change: Environmental scanning helps organizations plan ahead
for changes in the outside world and create strategies to deal with them.
 Make informed decisions: It helps organizations learn more about the
outside factors that affect their business so that they can make better
decisions.

Environmental analysis tools

Environmental analysis is frequently used to assist businesses. It is used before
launching a new product or service. 

For example, survey the landscape of competitors, customers, economic

conditions, market conditions, and so on. PESTEL is a popular project
management tool for performing this analysis.

It refers to the factors that are political, economic, social, and technological. The
various components of a PESTEL analysis are listed alphabetically below.

Political

Political issues refer to the level of government intrusion into an organization’s

operations. Primary concerns include taxes, tariffs, regulations, elections, and
political stability. 

For example, different political parties hold divergent viewpoints on raising the
minimum wage. Small businesses may be affected by an election.

When one candidate proposes raising the minimum wage, it may impact their
product/service prices and ability to retain current employees.

Economic

Businesses in the United States first consider the overall health of the American
economic factors. Growth, employment, inflation, and interest rates are just a few
examples. Organizations operating outside of the United States will concentrate on
exchange rates. 

A startup, for example, may assess the current state of the economy to determine
whether or not it will be able to survive. The long-term revenue and expenses of a
company are affected by economic conditions.

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Social

Shifts in age, demographic changes, changing attitudes toward safety and health,
customer preferences, and technical improvements. All are examples of social
challenges. 86 percent of young people, for example, use social media.

As a result, of successful business strategies, millennials are more likely to run

promotional ads, especially on social media platforms.

Technology

The technology involves research and development, robotics, automation, and any
other type of technological advancement. New technologies are referred to as
“technological disruption.” It has the ability to change the cast of leading
competitors dramatically.

For example, the popularity of Facebook was a technological challenge for

Myspace. It was once the most popular social media network in the early 2000s.

Environmental

Climate change, weather, air quality, and natural disasters are examples of
environmental factors. Changes in the environment threaten some industries more
than others.

Farmers, for example, could watch the Weather Channel or read the Farmer’s
Almanac. Because pesticide treatment, irrigation schedule, planting dates, and
fungicide application are all affected by the weather.

Legal

Legal factors involve employment, health, and safety policies. Customer safety and
discrimination laws can also have an impact on a company’s capacity to operate.

Congress, for example, passed the Dodd-Frank Act in 2009. Following the Great
Recession, banks were subjected to strict requirements to protect customers.

6. Interanal and external analysis

An internal and external strategic analysis refers to reviewing your
organization’s current state from an internal and external perspective. The
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 output of completing an internal and external analysis – also known as a
strategic analysis – is to have a clear picture of your organization’s current
state.

Before any organization jumps into the core of strategic planning process, it’s vital
to clearly understand where your organization is today. Without clearly defining
where you are today (your current state), you can’t define your bold destination of
the future (vision) or create the roadmap to get there (your annual strategic plan).

Completing an internal and external analysis lays the groundwork and foundation
for the bones of your strategic plan, influencing everything from your competitive
advantages, growth strategy, and major themes that influence your entire strategic
plan’s framework.

What is an internal analysis?

An internal analysis examines your organization’s core competencies today that

are influenced by internal factors – factors that are not driven by external market
dynamics. This analysis would look at the organization’s strengths and weaknesses
in meeting the needs of your customers or stakeholders

As you dive deeper into an internal analysis process, you will examine internal
factors that give an organization advantages and disadvantages in meeting the
needs of its market, customers, partners, and even employees. Any analysis of
company strengths should be market-oriented/customer-focused because strengths
are only meaningful when they assist the firm in meeting customer needs.

Internal Factors to Consider

An internal analysis can look at all internal factors affecting a company’s business
performance. Here are the three most common factors to consider as you conduct
your internal analysis;

Your Organization’s Resources

A good starting point to identify resources is to look at tangible and intangible

resources available to your organization.

Tangible resources are the easiest to identify and evaluate financial resources, and
physical assets are identified and valued in the firm’s financial statements.

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Intangible resources are largely invisible, but over time become more important to
the firm than tangible assets because they can be a main source of competitive
advantage. Such intangible resources include reputational assets (brands, images,
etc.) and technological assets (proprietary technology and know-how).

Your Organization’s Capabilities

Organizational capabilities are used to refer to a firm’s capacity for undertaking a

particular productive activity. Our interest is not in capabilities per se but in
capabilities relative to other firms. We will use the functional classification
approach to identify the firm’s capabilities. A functional classification identifies
the organizational capabilities of each of the principal functional areas.

Your Human Resources (Employees)

Technically, this could fall underneath your organization’s resources, but it’s worth
separating human resources into its own category. After all, without your
organization’s human capital, you wouldn’t exist!

Analyzing Your External Factors

An external analysis examines the external factors and forces that impact your
organization’s operating environment. External factors, by nature, exist beyond the
walls of your organization and internal environment. They are forces and dynamics
beyond your control, but still, impact your organization level and position in the
marketplace.

The goal of these exercises is to identify external opportunities, threats, trends, and
strategic uncertainties.

External Factors to Consider

An external analysis can be used to look at all external factors affecting a

company. Here are the three most common factors to consider as you conduct your
external analysis:

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Market Trends

Market-level data, including overall size, projected growth, profitability, entry

barriers, cost structure, distribution system, trends, and key success factors in your
competitive market.

Industry Data and Trends

This data looks at what’s happening in your industry, including factors like
vendors, suppliers, competitors, and buyers’ power.

Operating Environment Trends

This looks at global forces, demographic changes, political winds, ecological and
natural issues, technological trends, economic factors, and social/cultural shifts.
This is most often completed using a PESTLE analysis.

7. DISCUSS THE COMPONENT OF EXTERNAL ENVIROMENT

Environment analysis
External environment analysis refers to the macro-environmental forces, industry,
and competitor analysis as it helps in influencing and potentially impacts the
organization. The external environment is of two types: the microenvironment and
the macro environment. Each organization is positively affected by the
environment analysis.

Organizations don't exist in a vacuum. Rather, each organization operates in an

environment that affects everything, from the availability of skilled workers, to the
price of raw materials. Understanding your organization's external environment
helps you proactively take advantage of opportunities and nimbly sidestep threats.

Types of external environment factors that affect businesses:

1. Technological factors

As technology continues to advance, companies can benefit from these

breakthroughs or face challenges in competing with them. For example, a company
that manufactures GPS devices for personal cars may experience a decline in
business because of the integration of GPS on mobile devices, but it can confront
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these challenges by developing new products. Other companies, such as health care
providers, can use modernized methods to collect information from their patients, keep
patient records and streamline patient care.

2. Economic factors

The state of the economy plays an important role in every aspect of daily life from
the well-being of personnel to the ability of a company to thrive. When the
economy trends downward and unemployment rises, businesses may have to work
harder to keep their staff and change their processes to continue earning revenue. If
the company produces products for retail sale, for instance, it may consider
lowering the price to increase sales and positively affect its revenue.

3. Political and legal factors

As political officials leave office and new ones replace them, the policies they
implement often affect businesses in relevant industries. Because of the
inconsistent nature of politics, businesses monitor legislative bills closely to
prepare for potential changes. Policies that can have long-term effects on
companies include:

4. Demographic factors

Companies with successful products and services evaluate the demographics of

their target market to ensure they meet the needs of those who benefit from their
offerings. They also perform tests to measure how well they serve their customers.
This helps them understand if their target market has changed and how they can
develop better ways to serve their loyal customers and earn new ones.

5. Social factors

Where people live, their personal values and their socioeconomic status affect
what, where and why people make purchases. Businesses take social factors into
consideration when developing and marketing products, and many use current
events, movements and social issues to appeal to their customers. For example, a
company that supports a women's organization may earn the trust and loyalty of
customers who identify as female. Catering to the specific preferences and
expectations of underrepresented groups, who have more influence on the market
today than in past years, can also contribute to customer satisfaction and business
growth.
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6. Competitive factors

Businesses can increase their market share and stay relevant to their customers by
keeping track of their competitors. They can identify and evaluate successes and
challenges, thus learning what to incorporate into their own processes and how to
prevent revenue loss. They can also use the information they gather to develop
ideas for product changes, product relaunches and new product development.

7. Global factors

Executives have a duty to keep track of both domestic and global issues, especially
if they conduct business internationally. By learning about social issues that affect
those in other countries and their cultural norms, consumer trends and economic
status, company leaders can provide their teams with relevant training. This
enables them to develop products or offer services that meet the needs of
international customers by providing solutions to challenges they face as
consumers.

8. Ethical factors

Because each individual has a distinct concept of ethics and morality, some
companies may find it challenging to balance the personal lives of staff members
with their expectations in the workplace. Employees' leisure activities, such as
social media accounts, can reflect on their employer. As representatives of the
company, they have a responsibility to avoid behavior that could negatively affect
the business. Managers can address issues such as sharing classified information or
the harassment of a colleague outside of work by establishing guidelines and
taking disciplinary action when necessary.

9. Natural factors

As environmental awareness continues to grow, more consumers have realized the

effects of business processes on the planet. Some consumers have used their
purchases to support companies that develop ecologically friendly practices, such
as using compostable packaging and solar energy. By paying attention to these
external concerns and changing their operations, businesses can make changes that
help them protect the environment, retain customers and increase revenue.

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