Strategic Mamanagemnt

1. T

6. Why some
companies
fail?

7. 1.How to attract & please customers.
2.How to respond too changing conditions.
3.How to grow the business.
4.How to manage each functional piece of business
and develop needed facilities.
5.How to achieve performance targets
6.Are we in the right fields?
7.Are there new competitors?
8.What strategies should we pursue?
Key Strategic Management Questions

8. Meaning
&
Nature of Strategic Management
Module-1
What's the use of running if you are not on the
right road
-German proverb

9. • Meaning
• Importance and relevance
• Characteristics of Strategic Management
• The Strategic Management Process
• Relationship between a Company’s Strategy and
its Business Model

10. A management’s plan for growing the
business, staking out a market
position, attracting and pleasing
customers, competing successfully,
conducting operations and
achieving targeted objectives‘

11. What is Strategic Management?
“Strategic Management can be defined
as the art and science of formulating,
implementing, and evaluating
cross-functional decisions that
enable an organisation to achieve
its objectives”

12. Three Big Strategic Questions
• Where Are We Now?
• Where Do we Want to Go?
• How Will We Get There?
12

13. Strategic Management achieves a
firm’s success through integration –
–
Management
MIS
Production/Operations
Finance/Accounting
Marketing
Research & Development

14. In Nutshell
In essence, the strategic plan
is a company’s game plan

15. “Without a strategy the
organization is like a ship
without a rudder, going
around in circles.”
“Quote”

18. Understanding the Origin
“Strategos”
 The main task of the general – to
lead, to direct, to show the way to
the army.

20. • https://www.youtube.com/watch?v=Hz4FNBj
1APA

22. Understanding the Origin
“The Art of War” - the oldest military manual
written approximately 400-320 b.C. by an
ancient Chinese general, Sun Tzu.
• “Sun Tzu and the Art of Business” (Mark McNeilly).
• “Sun Tzu: War and Management” (Hou, W., Sheang, L.
And Hidajat, B.)
• “Sun Tzu: the Art of War for Managers: 50 Strategic
Rules” (Gerald Michaelson).
• “The Art of Strategy: A New Translation of Sun Tzu’s
‘The Art of War’” (Wing).

23. Sun Tzu’s Military Strategy
and Management
“An army shouldn’t go to war, unless it is certain
that it has an advantage over the enemy.”
• Lesson: Management should not only know their own internal capability but
also the resources and competences of their competitors.
“A territory must be conquered as quickly as
possible, and unnecessary blood shed should be
avoided.”
Lesson: Management should avoid unnecessary waste of time and
resources.

24. Levels of Strategy

25. Three Levels of Strategy
Corporate level:
board of directors, CEO &
administration [Highest]
Business level:
business and corporate managers
[Middle]
Functional level:
Product, geographic, and functional
area managers [Lowest]

26. Who Performs the Five
Strategic Management Tasks?
Senior Corporate Level
Executives
Subsidiary Business Unit
Managers
Functional Area Managers
Operating Managers

29. mportance of
Strategic Management
It is the sum total of all the clever decisions taking by the
managers across the organization at different points of time
for the benefit and success of the business.

30. • A well-formulated strategy can bring various
benefits to the organization in present as well as in
future.
• It takes into account the future and anticipates for
it.
• A strategy is made on rational and logical manner,
thus its efficiency and its success are ensured.
• It brings growth in the organization because it seeks
opportunities.
• strategic management organizations can avoid
helter & skelter and they can work directionally.

31. Characteristics/Features of SM

32. 1. Uncertain
2. Complex
3. Organization wide
4. Fundamental
5. Long-term
implication
6. Implication

33. Characteristics of Strategic Decisions
• Long-term direction of an organisation
• Achieving advantage
• Scope of an organisation’s activities
• Matching the activities of an organisation to the
environment
• Building on or ‘stretching’ resources and competences
• Major resource changes
• Affect operational decisions
• Affected by the values and expectations of those in
power

34. • Strategic decisions have major resource propositions for an organization. These
decisions may be concerned with possessing new resources, organizing others or
reallocating others.
• Strategic decisions deal with harmonizing organizational resource capabilities with
the threats and opportunities.
• Strategic decisions deal with the range of organizational activities. It is all about
what they want the organization to be like and to be about.
• Strategic decisions involve a change of major kind since an organization operates in
ever-changing environment.
• Strategic decisions are complex in nature.
• Strategic decisions are at the top most level, are uncertain as they deal with the
future, and involve a lot of risk.
• Strategic decisions are different from administrative and operational decisions.
Administrative decisions are routine decisions which help or rather facilitate
strategic decisions or operational decisions. Operational decisions are technical
decisions which help execution of strategic decisions. To reduce cost is a strategic
decision which is achieved through operational decision of reducing the number of
employees and how we carry out these reductions will be administrative decision

35. THE STRATEGIC MANAGEMENT PROCESS

36. Monitoring developments,
evaluating performance &
making corrective
adjustments
Implementing
&
Executing the strategy
Crafting a strategy to achieve
the objectives and vision
Setting Objectives
Developing a
strategic objectives
Revise as needed in light of
actual performance, changing
conditions, new opportunities
and new ideas

37. A strategic vision is a road map
showing the route a company
intends to take in developing and
strengthening its business,
it paints a picture of a company’s
destination and provides a
rationale for going there
Developing a strategic objectives

38. Why is a Strategic Vision
Important?
A managerial imperative exists to look beyond today and
think strategically about
– Impact of new technologies
– How customer needs and expectations are changing
– What it will take to outrun competitors
– Which promising market opportunities ought to be
aggressively pursued
– External and internal factors driving what a company needs to
do to prepare for the future
?

39. Every company has Strategy-
making, strategy- executing role-
it is flawed thinking to look on the
tasks of managing strategy.
A company’s strategy is at power
only when its many pieces are
united.
A company’s strategic plan lays
out its future direction,
performance targets and strategy
Crafting a strategy to achieve the objectives
and vision

40. Strategy implementation is an
internal, operations-driven activity
involving organizing, budgeting,
motivating, culture-building,
supervising, and leading to
“make the strategy work”
as intended!
Strategy Implementation
The Fourth Task of Strategic Management

41. Strategy competitive and above
average returns result when a
company is able to
successfully formulate
implement value-creating
strategies that others are
unable to duplicate as –
• Its Operations oriented task
• Most demanding and time
consuming part of the process
Implementing and executing strategy

42. Implementing Strategy
• Creating fits between way things
are done and what it takes for
effective strategy execution
• Getting the organization to
execute strategy proficiently and
efficiently
• Producing excellent results in a
timely manner

43. What Does Strategy
Implementation Include?
• Building a capable organization
• Allocating resources to strategy-critical activities
• Establishing strategy-supportive policies
• Motivating people to pursue objectives
• Tying rewards to achievement of results
• Creating a strategy-supportive corporate culture
• Installing needed information, communication, and
operating systems
• Instituting best practices for continuous improvement
• Exerting strategic leadership

45. • Involves deciding how to
– Respond to changing buyer
preferences
– Outcompete rivals
– Respond to new market
conditions
– Grow the business over
the long-term
– Achieve performance
targets
Our strategy
will be . . .
Crafting a Strategy

46. 10 Commandments for Crafting Successful Business
Strategies
1. Always put top priority on crafting and executing
strategic moves that enhance a firm’s competitive
position for the long-term and that serve to
establish it as an industry leader.
2. Be prompt in adapting and responding to changing
market conditions, unmet customer needs and
buyer wishes for something better, emerging
technological alternatives, and new initiatives of
rivals. Responding late or with too little often puts a
firm in the precarious position of playing catch-up.

47. 3. Invest in creating a sustainable competitive
advantage, for it is a most dependable
contributor to above-average profitability.
4. Avoid strategies capable of succeeding only in the
best of circumstances.
5. Don’t underestimate the reactions and the
commitment of rival firms.
Contd……

48. 6. Consider that attacking competitive weakness is
usually more profitable than attacking
competitive strength.
7. Be judicious in cutting prices without an
established cost advantage.
8. Employ bold strategic moves in pursuing
differentiation strategies so as to open up very
meaningful gaps in quality or service or
advertising or other product attributes.
Contd…

49. 9. Endeavor not to get “stuck back in the pack” with no
coherent long-term strategy or distinctive competitive
position, and little prospect of climbing into the ranks
of the industry leaders.
Contd…
10. Be aware that aggressive strategic moves to
wrest crucial market share away from rivals often
provoke aggressive retaliation in the form of a
marketing “arms race” and/or price wars.

50. BUSINESS MODEL VS BUSINESS
STRATEGY

51. • Sets forth the economic logic of how an enterprise’s
strategy can deliver value to customers@ a price and
cost that yields acceptable profitability
• Management storyline for how & why the company’s
product offerings and competitive approaches will
generate a revenue stream and have an associated cost
structure that produces attractive earnings and ROI
• Broadly to its competitive initiatives and business
approaches

52. • A company’s business model relates to whether the
revenue cost-profit economics of its strategy demonstrate
the viability of the business enterprise as a whole
• Companies that have been in the business for a while and
are making acceptable profits have a proven business
model
• In other words- The proprietary method used to acquire,
service, and retain customers

53. Let’s explore

54. What’s Business Model?
• It’s a leading Internet based company offering
online based services globally.
• They also developed cutting edge applications
for users
• Leverages on the advertising model-

58. Behind this GREAT success, there’s
strategy
• Plan of action intended to accomplish a goal
• Google’s context (Taken from its 2010 strategy)
• Cloud computing would be the centerpiece
• Advertising would continue to form the lion’s
share

60. End of Module-1