03/01/2025 DR.

ASHUTOSH KUMAR 1
 INTRODUCTION TO
STRATEGIC
MANAGEMENT

03/01/2025 DR. ASHUTOSH KUMAR 2

03/01/2025 DR. ASHUTOSH KUMAR 3
What is Strategy?

•Strategy is an action that managers

take to attain one or more of the
organization’s goals.
•Strategy can also be defined as “A
general direction set for the company
and its various components to achieve a
desired state in the future.
•Strategy results from the detailed
strategic planning process”.

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Implementation is concerned with

…
the efforts of…

translating
strategies
into
actions
on a
daily
"Walking" those plans—
missions, goals, and
operational programmes
—is challenging.
 Walking those plans
has been
'unexpectedly'
difficult for some
firms.
Wal-Mart's failed
foray in the
German grocery
market.
Amongst its
woes, is
Yahoo!’s
inability to
execute.
…the digital camera inventor
filed
for bankruptcy in January
2012, after losing its
competitiveness to rivals.
What is •A company’s strategy is the
coordinated set of actions that its

Strateg managers take in order to

outperform the company’s
competitors and achieve superior
y? profitability.

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 All • What is our present situation?

Business • Industry conditions and competitive

pressures, market standing, competitive
strengths and weaknesses, and future
es Face prospects in light of changes taking place in
the business environment

Three • What should the company’s future direction be

and what performance targets should we set?
Central • What buyer needs to try to satisfy
• Which growth opportunities to emphasize?
Question • Where to head and what outcomes to strive
to achieve?

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 All
Business •3. What’s our plan for running the
company and achieving good results?

es Face • Challenges managers to craft a

series of competitive moves and

Three business approaches—henceforth

called a strategy—for heading the
firm in the intended direction,
Central staking out a market position,
attracting customers, and
Question achieving the targeted outcomes

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 •Strategy is all about choosing How:

Strateg • How to position the firm in the marketplace

y Is •

•
How to attract customers

How to compete against rivals

about • How to achieve the firm’s performance

targets

Making • How to capitalize on opportunities to grow

the business

Choices
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• How to respond to changing economic and
market conditions
•The origins of strategic management can be retraced to 1911, when
Harvard Business School introduced an integrative course in
management called ‘business policy’ aimed at the creation of general
management capability.
The Genesis
•In 1969, the Association to Advance Collegiate Schools of Business a of Strategic
regulatory body for business schools, made the course of business
policy a mandatory requirement for the purpose of recognition. Manageme
nt
•In 1977, a research symposium at the University of Pittsburgh helped
to move from business policy through strategic planning to strategic
management.
•The term 'Business Policy' had been traditionally used though titles
such as Strategic Management, Corporate Strategy, Corporate Strategy
and Policy, Competitive Strategy, etc. are now used extensively for the

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course.
•Starting from day-to-day planning in earlier times, managers tried
to anticipate the future through preparation of budgets and using
EVOLUTION
control systems. OF
•With time these techniques failed to adequately emphasise the
role of future long-range planning. Later long-range planning was STRATEGIC
replaced by strategic planning, and later by strategic management:
a term that is currently used to describe the process of strategic
decision making.
MANAGEMEN
•The first phase of evolution of strategic management, which can T
be traced back to the mid-1930s, rested on the paradigm of ad hoc
policy-making.
•Due to the increasing environmental changes in 1930s and 40s in
the U.S. planned policy formulation replaced ad hoc policy-making.

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Levels at
which
Strategy
operates

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Definition of Strategic
Management
According to Glueck :
•"Strategic management is a stream of decisions and action
which leads to the development of an effective strategy or
strategies to help achieve corporate objectives".

According to Ansoffs :
•"Strategic management is a systematic approach to a major
and increasingly important responsibility of general
management to position and relate the firm to its
environment in a way which will assure its continued
success and make it secure from surprises".

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 Definition of Strategic
Management
•Strategic management is defined as the dynamic process of
formulation, implementation, evaluation and control of
strategies to realise the organisation’s strategic intent.

•The first phase consists of establishing the strategic intent for

the organisation.
•The second phase of the formulation of strategies is
concerned with the devising of a strategy or a few strategies.
•The third phase of implementation is the ‘putting into action’
phase.
•The fourth, and the last, phase of evaluation and control
involves assessing how appropriately the strategies were
formulated and how effectively they are being implemented.

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Model of Strategic Management Process

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Strategic Intent
•Strategic intent refers to the pre-defined future state that the
organisation is planning to reach within a stipulated period of
time.
•The term strategic intent was popularised by Gary Hamel and
C.K Prahalad. They defined strategic intent as the reason of
existence of an organisation and the ends it wants to achieve.
It shows the beliefs and values of an organisation.
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Strategic
Intent
•To achieve a certain future state and to
achieve certain ends the organisation
should take certain courses of action.
These ends can be either long-term or
short-term. While the long-term ends
have broad focus, the short-term ends
are narrow in nature.

•For an organisation to become effective,

it is very important for every staff
member to have an understanding of
the strategic intent. Hence, the strategic
intent should be achievable as well as
understandable.
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Hierarchy of
strategic
intent :

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 •A vision is a Big Picture of “What” the organization wants
to achieve in Future.
•It should inspire people in the organization. It excites
people to be part of “What.” And also motivate to put
their energy and time to achieve the future. How do you
write a good vision statement? What does a vision stamen
include? Let’s take an example of an agriculture business:

Vision
•
“A Vibrant Economy is driven by value-added agriculture”
Here the Vibrant Economy has the ability to inspire the
people involved in this agricultural business. A good vision
statement inspires to create a movement. It describes the
desired outcome to invoke a mental image of the

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organization.
 The
• Good visions are inspiring and exhilarating.
• Visions represent a discontinuity, a step function and a jump
ahead so that the company knows what it is to be.

Benefit •

•
Good visions help in the creation of a common identity and
a shared sense of purpose.
Good visions are competitive, original and unique. They

sa •
•
make sense in the marketplace as they are practical.
Good vision foster risk taking and experimentation.
Good vision fosters long-term thinking.

Vision •

•
Good visions represent integrity: they are truly genuine and
can be used to the benefit of people.
Infosys vision is "To be a globally respected corporation

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that provide best of breed business solutions, leveraging,
technology, delivered by best-in-class people".
Mission

•A Mission is about what the organization does to achieve the vision.

•A mission is an action statement to achieve the vision. A mission statement is not
required to be inspirational. Instead, it provides a clear focus on what an organization
does and what it doesn’t.

•What should be included in a mission statement?

•What do you think a good mission statement can look like for the above vision
statement? 26
 •Let’s see the below example…

•“To create and facilitate the development of value-added

agriculture”

•Here “Create and facilitate” are two clear focus areas.

• The organization put its energy into these two areas.
•The organization makes efforts for the development
(Create) and to ease (facilitate) the agriculture business. And
whatever is not mentioned here, the organization is not
involved. It is a clear direction about what the organization
Mission does and what it doesn’t.
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 •A mission statement is simple, direct and operative.
•Now the question is –
• how do you write a powerful mission statement?
• What makes an effective mission statement?
•Let’s see the following characteristics of a good mission statement:
• Simple: Mission statement language should be of everyday life. We
do not use words like stakeholder values, financial goals, and best
practices in daily life.
•For example, a mission statement – “Help people in achieving work
using best practices.”
•How many people dream about best practices? The answer is very
Mission
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few; do you believe, people talk in such a language. The answer is
‘NO.’
 • Short: The mission statement should be easy to remember.
Each person in organizations should be aware of the mission
statement to use in context with the work he/she does.
• Operative: A mission statement should provide a clear
direction. It should focus on what an organization does. It also
gives a clear route about initiative and resource allocation.

•So, what kinds of resources needed for the mission statement

mentioned above for the agriculture business?
•Probably SME, who can provide their services for the
development and facilitation of the agriculture business.

Mission
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•And farmers involved for the financial support in the venture.
 •A mission statement should help to
understand:
•“Who we are”,
•“What we do” and to

Missio •“which industry we belong to”

•For example, mission statements like “Increasing

n customer satisfaction”.
•Well, it is impossible, anyways – does it provide to which
industry a mission belongs to? Or what the organization

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controls? The answer is NO, and hence we cannot claim it
as a mission statement. An organization should try to find
out a mission statement, which can drive them.
Mission
•For example :
•Infosys mission statement is "To achieve
our objectives in an environment of fairness,
honesty and courtesy towards our clients,
employees, vendors and society at large".

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© AZHAR KAZMI & ADELA KAZMI 32
Mission statement: To create the most compelling car company of the 21st century
by driving the world’s transition to electric vehicles.
Vision statement: To accelerate the world’s transition to sustainable energy.

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Mission statement: Offer a wide range of well-designed, functional home furnishing
products at prices so low that as many people as possible will be able to afford them.

Vision statement: To create a better everyday life for the many people.
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Business
•Business definition refers to the description of products,
services, activities, functions, and markets in which an
organisation deals.

Definitio •It is a component of mission statement which forms the

foundation for all the strategic planning processes and
shows the organisation a way to achieve success.

n: •It discusses the operations of the business but does not

exactly specify the reasons behind particular operation.

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Some of •What are the products, services, or markets in which the
the organisation operates?
•Who are the target customers?
questions •Which activities and functions are performed to satisfy the

that are customers?

•What are the resources and capabilities utilised to satisfy
needed to the customers?
•This concept applies to both the product and service
answer organisations. Business definition is usually marketing
oriented. It focuses on customers as they are the strength
while of the organisation.

defining a •For example :

•Some organisations like Reliance Industries Limited, Tata
business Group, and Birla Group have wide scope, but some other
organisations like Infosys, Wipro, etc., have limited scope.
are :
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 •Goals denote what an organisation hopes to
accomplish in a future period of time. They represent
the future state or outcome of effort put in now.

Goals •Goals for the above-mentioned vision of agriculture

business can be defined as, but not limited to:

and •Improve profitability

•Increase volume

Objective •Provide stability

s •Objectives are the ends that state specifically how

the goals shall be achieved. They are concrete and
specific in contrast to goals that are generalised.

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A goal is a broad definition, saying “improve profitability”. It lacks the specifics
and defined in general and broad terms. Objectives, on the other hand, are quite
specific and further define the goal. To continue with ‘profitability’ example,
objectives can be defined as:

15k$ net profit as % of the sale in a year

10k$ net profit as % of investment in a year.

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Strategic Objective Examples
•Increase sales growth 6-8% in the next 5 years. (P&G)
•Cut corporate overhead costs by $30 million per year. (Fortune Brands)
•Operate 6,000 stores by 2010 – up from 3,000 in the year 2000. (Walgreen’s)
•Reduce greenhouse gases by 10 percent (from a 1990 bast) by 2010. (BP Amoco)

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 • Specific: It is entirely job-related. In the above example, “sales”
and “investment” are related to the job.
• Measurable: Objectives are always defined in measurable terms.

(SMART) We can measure the above objectives using a target of 10k$ and
15k$ profit.

Characterist • Attainable: Objectives should be attainable within the provided

environment and resources. Organizations need to analyze what

ics of is required to achieve defined objectives and need to need to

make sure it continuously.

Objectives • Relevant: Objectives should be aligned with goals. These goals

are further aligned with the mission and vision of the
organization.
• Time-Bounded: Objectives should be achievable within the
provided time period and in our example, we identified time ‘a
year’.

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Business Model
•A business model is a framework for how a company will create value. Ultimately, it
distills the potential of a business down to its essence.
•A business model answers fundamental questions about the problem you are going to
solve, how you will solve it, and the growth opportunity within a given market.
•Creating a successful business model is essential, whether you are starting a new
venture, expanding into a new market, or changing your go-to-market strategy.

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Business Model
•A business model is the foundation for your company and products. It captures the
main idea of how your business will generate revenue.
• A business plan goes into greater detail — it is a document that explains how you will
make the business model work.
• Your business plan will likely include your company's goals, the resources
and methods you will use to achieve those goals, and even your expected timelines and
financial performance.
•Together, your business model and business plan describe the intended value of your
product and how you plan to deliver this value to your customers.

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Business Model
•The success of Amazon.com as a virtual bookseller,
•Dell Computers as an Internet-based marketer,
•Google as a search engine, and
•Southwest Airlines as a low cost-carrier or
•Wal-Mart as a retailer is attributed to their respective
business model.
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 What Does • Developing a strategic vision, a mission
the statement, and a set of core values
• Setting objectives for measuring the firm's
Strategy- performance and tracking its progress
• Crafting a strategy to move the firm along
Making, its strategic course and achieve its
objectives
Strategy- • Executing the chosen strategy efficiently

Executing and effectively

• Monitoring developments, evaluating
Process performance, and initiating corrective
adjustments

Entail?

© McGraw-Hill Education.
 Strategic Management Levels

© McGraw-Hill Education.
 A Strategic Vision + Mission + Objectives + Strategy = A Strategic Plan

• Its strategic
vision, business
mission, and core
• ELEMENTS OF A
values
FIRM’S STRATEGIC • Its strategic and
PLAN financial
objectives
• Its chosen
strategy

© McGraw-Hill Education.