STRATEGIC MANAGEMENT

Dr. Jyoti Bhanage

Introduction to Strategic Management

The Oxford Dictionary defines strategy as: “A plan of action designed to achieve a
long-term or overall aim”. Strategy provides an integrative summary of the most
important internal and external factors to be taken into account by an organization.
Such overview helps to line up the organization both internally as well as with its
external environment. A strategy explains how a company plans to compete in a
market and how it intends to grow at a profit.
Strategic management process is a continuous culture of appraisal that a business
adopts to outdo the competitors. It is a complex process that also covers
formulating the organization's overall vision for present and future objectives.
Strategy Management Process
A strategic plan in place can enable
you to track progress toward goals.
When each department and team
understands your company's larger
strategy, their progress can directly
impact its success, creating a top-
down approach to tracking key
performance indicators (KPIs).
When leaders formulate a strategy, it
helps them understand their
strengths and weaknesses. This way,
they can capitalize on what they are
good at and improve on their weaker
aspects.
TYPES OF STRATEGIC MANAGEMENT
There are three levels at which
strategies are typically used: The
corporate, business and functional
level.
1. Corporate Level: Corporate level
strategies are the strategic plans of an
organization's top management. They
form the mission and vision statement
and have a fundamental impact on the
firm’s long-term performance. They
guide decisions around growth,
acquisitions, diversification and
investments.
2. Business Level: Business 3. Functional Level: Functional
level strategies integrate into level strategies are designed to
the corporate vision, but with answer how functional departments
a focus on a specific business. like Marketing, HR or R&D can
At this level, the vision and support the defined business and
objectives are turned into corporate strategies of an
concrete strategies that inform organization.
how a business is going to
compete in the market.
Functional Strategies-
A functional strategy is the approach a business functional takes to achieve
corporate and business unit objectives and strategies by maximizing
resource productivity. It deals with a relatively restricted plan that provides
the objectives for a specific business function.
Examples of functional strategies in this area: product development,
diversification, and market penetration.
 Marketing Strategy
Strategic Marketing is the use of marketing disciplines to attain organizational
goals by developing and maintaining a sustainable competitive benefit. It
addresses high-level considerations such as what markets to target, which
services to offer, and how to price and promote them.
P’s of market strategies are:
product, price, promotion, place, packaging, positioning and people.
A marketing strategy sets out your business goals, including who your ideal
customers are and how you intend to reach them. It's your plan of action and the
blueprint to the marketing activity you will do in the coming months and years to
grow your business.
 Financial Strategy
The financial strategy can be defined as a complex long-term plan for the
organization of systemic activity for achieving its financial goals through the
formation, allocation (reallocation) and use of financial resources.
A financial strategy enables you to assess your financial needs and the
resources required to support and meet your objectives –
 to fulfill your organizations' overarching objective .
 as well as plan for continued growth to enable business success and
sustainability.
 helps to build on insights from business context.
Financial strategy
 H. R. Strategy
HR strategy is a roadmap for solving an organization's biggest challenges with people-
centric solutions. This approach requires HR input during policy creation and elevates
the importance of recruitment, talent management, compensation, succession planning
and corporate culture.
3 Cs of employee engagement: Career, competence and care in HR strategy.
Different strategies in HR-
 Training and development strategies.
 Recruitment strategies.
 Outsourcing strategies.
 Collaboration strategies.
 Restructuring strategies.
 Operational Strategy
An operations strategy is actually decisions an organization makes regarding the
production and delivery of its goods. Organizations may study each step they take
toward manufacturing or delivering a product an operation, and all decisions
regarding these numerous operations are the operations strategy. An organization's
operations strategy works in cycle with its overall business strategy, helping the
organization to achieve its long-term goals and improve competitiveness in the
marketplace. For example, a company that produces and sells computers may have
the following operations:
 Obtaining materials
 Working with suppliers
 Designing new computers
 Manufacturing computer designs
 Managing employees
 Delivering finished computers to sellers or consumers
STRATEGY FORMULATION & IMPLEMENTATION
STRATEGY FORMULATION
Strategy formulation is the process of using available knowledge to document the
intended direction of a business and the actionable steps to reach its goals. This
process is used for resource allocation, prioritization, organization-wide alignment,
and validation of business goals.
Another classic example of strategy formulation comes from Apple's
approach to designing its famous Macintosh computers in the 1980s.
Taking advantage of an opening in the tech industry that nobody else
knew of, Apple came up with a strategy to kickstart a new era with its
Macintosh series.
Strategy provides a vision of the future, confirms the purpose and values
of an organization, sets objectives, clarifies threats and opportunities,
determines methods to leverage strengths, and mitigate weaknesses (at a
minimum). As such, it sets a framework and clear boundaries within
which decisions can be made.
Benefits and Risks of Strategic Management
Risks in Strategic Management Benefits of Strategic Management
 Shifts in consumer demand and  Discharges Board Responsibility.
preferences.  Forces An Objective Assessment.
 Legal and regulatory change.  Provides a Framework For
 Competitive pressure. Decision-Making.
 Merger integration.  Supports Understanding & Buy-In.
 Technological changes.  Enables Measurement of Progress.
 Senior management turnover.  Provides an Organizational
 Stakeholder pressure. Perspective.
 The Future Doesn't Unfold As
Anticipated.
 It Can Be Expensive.
Business Environment, Components of Environment
The word 'business environment' indicates the aggregate total of all people,
organizations and other forces that are outside the power of industry but that
may affect its production. The economic environment includes economic
conditions, economic policies and economic system of the country. Non-
economic environment comprises social, political, legal, technological,
demographic and natural environment. Some of the examples of a business
environment are values, culture, competition, market segmentation,
demographics, business cycle, and economic security.
Components-The resources and regulatory factors include air, soil, water, land,
climate, weather, temperature, pH level, moisture, composers and
decomposers.
Environment plays an important role in healthy living and the existence of life
on planet earth. Earth is a home for different living species and we all are
dependent on the environment for food, air, water, and other needs. Therefore,
it is important for every individual to save and protect our environment.
Environmental Scanning, Analysis of Strategies and
Choice of Strategy.
Environmental scanning is necessary because there are rapid changes taking
place in the environment that has a great impact on the working of the business
firm. Analysis of business environment helps to identify strength weakness,
opportunities and threats. Environmental scanning is a process that
systematically surveys and interprets relevant data to identify external
opportunities and threats that could influence future decisions. It is closely
related to a S.W.O.T. analysis and should be used as part of the strategic
planning process.
Strategic analysis is essential to formulate strategic planning for decision
making and smooth working of that organization. With the help of strategic
planning, the objective or goals that are set by the organization can be fulfilled.
THANK YOU