Strategy Formulation and

Implementation

Prepared by:
CHANDAN KUMAR
DHARA ANIL GADA
DEVRATH DUBEY
BRUNELLA ROY
BHAVESH K. N.
Learning Objectives
• Define the components of strategic management.
• Describe the strategic planning process and SWOT
analysis.
• Understand grand strategies for domestic and
international operations.
• Define corporate-level strategies and explain the
portfolio approach.

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Learning Objectives (contd.)
• Describe business-level strategies, including Porter’s
competitive forces and strategies and partnership
strategies.
• Explain the major considerations in formulating
functional strategies.
• Discuss the organizational dimensions used for
implementing strategy.

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Strategic Management
• Set of decisions and actions used to
implement strategies that will provide a
competitively superior fit between the
organization and its environment so as to
achieve organizational goals

• Responsibility = top managers and

chief executive

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Strategic Management

Managers ask such questions as...

• What changes and trends are occurring?

• Who are our customers?
• What products or services should we
offer?
• How can we offer these products or
services most efficiently?

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Grand Strategy

• General plan of major action to achieve long-

term goals
• Falls into three general categories
1. Growth
2. Stability
3. Retrenchment
A separate grand
strategy can be
defined for global
operations
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Grand Strategy: Growth
• Growth can be promoted internally by
investing in expansion or externally by
acquiring additional business divisions
- Internal growth = can include development of
new or changed products
- External growth = typically involves
diversification – businesses related to current
product lines or into new areas

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Grand Strategy: Stability
• Stability, sometimes called a pause strategy,
means that the organization wants
• to remain the same size or
• to grow slowly and in a controlled fashion

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Grand Strategy: Retrenchment
• Retrenchment = the organization goes through a
period of forced decline by either shrinking current
business units or selling off or liquidating entire
businesses

• Liquidation = selling off a business nit for the cash

value of the assets, thus terminating its existence

• Divestiture = involves selling off of businesses that no

longer seem central to the corporation

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 Global Corporate Strategies
High Transnational
Globalization Strategy
Strategy • Seeks to balance global
• Treats world as a efficiencies and local
single global market
responsiveness
Need for Global Integration

• Standardizes global
• Combines standardization
products/advertising
and customization for
strategies
product/advertising
strategies

Export
Strategy Multi-domestic Strategy
•Domestically focused • Handles markets
independently for each
•Exports a few country
domestically produced
products to selected • Adapts product/advertising
countries to local tastes and needs

Low
Low Need for National Responsiveness High
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Global Strategy

• Globalization = product design and

advertising strategies are standardized
around the world
• Multi-domestic = adapt product and
promotion for each country
• Transnational = combine both globalization
and national responsiveness

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 Purpose of Strategy
• The plan of action that prescribes resource
allocation and other activities for dealing with the
environment, achieving a competitive advantage,
that help the organization attain its goals

Strategies focus on:

● Core competencies
● Developing synergy
● Creating value for customers

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Three Levels of Strategy in Organizations
Three Levels of Strategy in Organizations

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Strategic Management Process
Exhibit 8.3

Scan External Identify Strategic

Environment – Factors –
National, Opportunities,
Global Threats Implement
Strategy via
Evaluate Formulate Changes in:
Current Mission, Define new Strategy – Leadership
SWOT Mission culture,
Goals, Corporate,
Strategies Goals, Grand Business, Structure, HR,
Strategy Functional Information &
control
Scan Internal systems
Identify Strategic
Environment – Core
Factors –
Competence,
Strengths,
Synergy, Value
Weaknesses
Creation

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Strategy Formulation vs. Implementation
• Strategy Formulation = stage of strategic
management that involves planning and
decision making that lead to the
establishment of the organization’s goals and
of a specific strategic plan
• Strategy Implementation = stage of strategic
management that involves the use of
managerial and organizational tools to direct
resources toward achieving strategic
outcomes

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Checklist for Analyzing Organizational Strengths and
Weaknesses

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Portfolio Strategy
• Mix of business units
and product lines
BCG Matrix
that fit together in a
logical way to
provide synergy and
competitive
advantage

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 Five Forces Affecting Industry Competition

•Internet reduces Potential New

barriers to entry Entrants

Internet blurs differences among

competitors in an industry

Threat of Substitute Rivalry Bargaining

Products among Power of
Competitors Buyers
•Internet expands market size, but •Internet shifts greater power
creates new substitution threats to end consumers

•Internet tends to increase the

bargaining power of suppliers Bargaining Power of Suppliers

Source: Based on Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980).

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Competitive Edge Through
Competitive Strategies
• Differentiation = attempt to distinguish products or services
from that of competitors
• Cost leadership = aggressively seeks efficient facilities,
pursues cost reductions, and uses tight cost controls to
produce products more efficiently than competitors
• Focus = concentrates on a specific regional market or buyer
group

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Continuum of Partnership Strategies

Organizational Combination Acquisitions

Mergers

Joint Ventures
Strategic
Alliances
Strategic Business Partnering

Preferred Supplier Arrangements

Low High
Degree of Collaboration
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Implementing Strategy Tools
• Leadership
• Structural design
• Information and control systems
• Human resources

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 Tools for Putting Strategy into Action
Environment
Organization
Leadership
 Persuasion
 Motivation
 Culture/values

Structural Design
 Organization Chart Human Resources
 Teams  Recruitment/selection
Strategy  Transfers/promotions Performance
 Centralization
Decentralization,  Training
 Facilities, task design  Layoffs/recalls

Information and Control Systems

 Pay, reward system
 Budget allocations
 Information systems
 Rules/procedures

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THANK YOU…..!

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