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Strategic Management Module.pptx

  1. 1. 1 Subject: Strategic Management Module Number: I Module Name: Introduction to Strategic Management
  2. 2. 2 Syllabus • Introduction. • Business Definition Introduction. • Vision, Mission, Goals and Objectives. • The Concept of Strategy. • Introduction to Business Policy. • Strategic Management Process. • Levels of Strategy. • Challenges of Strategic Management – Indian Scenario. Strategic Management
  3. 3. 3 Course Objectives: 1. To discuss the concept and definition of Strategic Management. 2. To explain the challenges to strategic Management. 3. To distinguish different between Vision, Mission, Goal and Objectives. 4. To understand the process of strategic Management. 5. To identify the levels of Strategy. 6. To know the Concept of Business Policy. Strategic Management
  4. 4. 4 Course Outcomes : 1. Analyze the applicability of Strategic Management 2. Recognize the importance and utility of the strategic Management process. 3. Integrate the learning in handling various levels of Strategy in Business. 4. Assimilate the Challenges to Strategic Management. Strategic Management
  5. 5. 5 Table of Content: • Introduction • The Concept of Strategy. • Vision, Mission, Goals and Objectives. • Introduction to Business Policy. • Strategic Management Process. • Levels of Strategy. • Challenges of Strategic Management – Indian Scenario. Strategic Management
  6. 6. 6 Concept, Meaning, Definition: Strategy is the determination of the long-term goals and objectives of an enterprise and the adoption of the courses of action and the allocation of resources necessary for carrying out these goals. Strategy is management’s game plan for strengthening the organization’s position, pleasing customers, and achieving performance targets. Types of strategy Strategy can be formulated on three different levels: · corporate level · business unit level · functional or departmental level. Strategic Management
  7. 7. 7 Strategic Management - Definition “The determination of the basic long-term goals & objectives of an enterprise and the adoption of the course of action and the allocation of resources necessary for carrying out these goals”. -Chandler Strategic Management
  8. 8. 8 CONCEPT OF STRATEGIC MANAGEMENT Strategic Management • The art and science of developing, putting into practise, and assessing cross-functional choices that help the company accomplish its goals is referred to as strategic management. Strategic management often involves a cross-functional or general organisation as well as a specific expertise. • The field of strategic management is broad and encompasses practically all organisational functional areas. This top-level management discipline encompasses all functional aspects of a business, including marketing, finance and accounting, human resources, and production and operations. Strategic management therefore has a bigger role in an organization's success or failure than any one functional area.
  9. 9. 9 Strategic Management • Setting vision, mission, objectives, and strategies under strategic management can serve as a model for developing operational strategies in other functional areas. As a result, top-level management in an organization lays the way for other functional or operational management. • The process of strategic management is more heavily influenced by top-level managers like the chairman, managing director, and corporate level planners. • Functional or operational level management works with the specific aspects of the firm, whereas strategic management deals with organizational level and top level challenges.
  10. 10. 10 Strategic Management VISION, MISSION AND PURPOSE VISION STATEMENT • Setting organizational goals is guided and inspired by the vision statement. Vision is where you envision yourself at the goal or milestone that lies beyond the horizon. It is a straightforward aim or dream. The typical flavors of a vision are "Being Most Admired," "Among the Top League," "Being Known for Innovation," "Being Largest and Greatest," and so on. Usually, a vision statement doesn't include terms like "most lucrative," "cheapest," etc. Vision is not SMART, in contrast to objectives. • Neither timelines nor mathematics are related to it. The cause to which we seek to bind the stakeholders is represented through a vision (mostly employees and sometime share-holders). People, as they say, work more effectively when they are working for a cause rather than a specific objective.
  11. 11. 11 Strategic Management • They are given that reason via vision. Vision is an overarching assertion that is often vast and general. Therefore, unless the organization is entering a completely other line of business, a vision statement does not alter. • The "how" component should never be carried by vision. For instance, the vision statement "To be the most admired brand in the aviation industry" is excellent, but it may be ruined by adding the phrase "To be the most admired brand in the aviation industry by offering world-class in-flight services." The exclusion of "how" was made since it may change over time.
  12. 12. 12 Strategic Management Features of a good vision statement: • · Easy to read and understand. • · Compact and Crisp to leave something to people’s imagination. • · Gives the destination and not the road-map. • · Is meaningful and not too open ended and far-fetched. • · Excite people and make them get goose-bumps. • · Provides a motivating force, even in hard times. • · Is perceived as achievable and at the same time is challenging and compelling, stretching us beyond what is comfortable.
  13. 13. 13 Strategic Management Mission Statement The goal that drives an organization is referred to as its mission. Once more, the mission is expressed in a single sentence and is a verb. In some ways, mission is the path toward realizing the vision. For a luxury goods firm, for instance, the vision may be to "be among the most respected luxury brands in the world" and the goal would be. 'To add style to the lives’ A good mission statement will be : • Clarity: While there are several points of view, we firmly believe that the purpose should simply offer what, not "how and when." Instead of "Making individuals meet their career via excellent career advice and education," we would prefer the objective of "Making People Meet Their Career." A mission statement without a "how and when" component gives the company creative leeway to pursue more expansive strategic options.
  14. 14. 14 Strategic Management • Must have a clear connection to the objectives and strategy of the company: For instance, if your company's objective is to "Bring Style to People's Lives," you cannot have a marketing plan that calls for mass production and distribution. It would be better if you either started selling luxury goods to high-end clients OR changed your goal statement to "Help individuals build houses.“ • Should not be same as the mission of a competing organization. It should touch upon how its purpose it unique.
  15. 15. 15 • An entity that engages in the trading of commodities, services, or both with customers is referred to as a business (sometimes known as an enterprise or company). In capitalist economies, businesses are prevalent. The majority of them are privately owned and run with the goal of making a profit to enhance the wealth of their owners. Businesses may also be owned by the government or be nonprofits. The term "company" can refer to a firm that is held by numerous people, but it also has a more specific connotation. • Goals : It is where the business wants to go in the future, its aim. It is a statement of purpose, e.g. we want to grow the business into Europe. • Objectives: The establishment of objectives provides an aim for the company. Then, strategies to reach these goals can be developed. This could inspire the workers. Additionally, it helps the company to track its advancement toward its stated objectives. Strategic Management BUSINESS, OBJECTIVES AND GOALS
  16. 16. 16 Strategic Management The Difference between goals and objectives: • Goals are broad; objectives are narrow. • Goals are general intentions; objectives are precise. • Goals are intangible; objectives are tangible. • Goals are abstract; objectives are concrete. • Goals can't be validated as is; objectives can be validated.
  17. 17. 17 Strategic Management TOYOTA Vision -Toyota aims to achieve long-term, stable growth economy, the local communities it serves, and its stakeholders. Mission -Toyota seeks to create a more prosperous society through automotive manufacturing. IBM Vision Solutions for a small planet Mission At IBM, we strive to lead in the invention, development and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide.
  18. 18. 18 Strategic Management Strategic Management Process Budget-oriented Management or forecast-based planning techniques are insufficient for a major organisation to survive and thrive in the fiercely competitive business world of today. The company must engage in strategic planning that clearly identifies objectives, evaluates the internal and external environment, develops a plan of action, puts the plan into action, monitors progress, and makes modifications as needed to stay on course.
  19. 19. 19 Strategic Management A simplified view of the strategic Management process is shown by the following diagram:
  20. 20. 20 Strategic Management Strategic Management Process a) STRATEGIC INTENT The strategic intent manifests as a variety of business opportunities and challenges that are designated as short- term projects. The strategic goal must be able to be communicated to all personnel and must represent a substantial stretch for the business. It should place more of an emphasis on tomorrow's potential than on today's issues. The competitive elements, the variables essential to success in the future, should be specified in the strategic aim. b) Environmental Scan The environmental scan includes the following components: • Analysis of the firm (Internal environment) • Analysis of the firm's industry (micro or task environment) • Analysis of the External macro environment (PEST analysis)
  21. 21. 21 c) Strategy Formulation The creation of long-term strategies for the efficient management of environmental opportunities and dangers, in light of business strengths and weaknesses, is known as strategy formulation. It comprises stating the firm mission, outlining realistic goals, creating a strategy, and establishing policy standards. d) Strategy Implementation It is the practise used to implement strategy and policies via the creation of programmes, budgets, and procedures. Changes to the organization's general culture, structure, and/or management system may be necessary during this process. Strategic Management
  22. 22. 22 e) Evaluation & Control Following the strategy's implementation, it is crucial to monitor and assess development so that adjustments may be made as necessary to keep the overall plan on course. The strategic planning process's control phase is referred to as this. It might be essential to create mechanisms that allow for progress tracking, but the work is well worth it. Performance benchmarks should be established here as well so that they can be measured and leadership can make the necessary modifications to assure success. Evaluation and control consists of the following steps: i) Define parameters to be measured ii) Define target values for those parameters iii) Perform measurements iv) Compare measured results to the pre-defined standard v) Make necessary changes Strategic Management
  23. 23. 23 Corporate Level Strategy Corporate level strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of businesses. Strategic Management Business Unit Level Strategy A division, product line, or other profit centre that may be planned separately from the company's other business units might be considered a strategic business unit. The coordination of operational units is less important at the business unit level than creating and maintaining a competitive edge for the generated goods and services. Functional Level Strategy The operating divisions and departments make up the functional level of the organisation. Business procedures and the value chain are tied to the strategic concerns at the functional level. The creation and coordination of resources is necessary for business unit level plans in marketing, finance, operations, human resources, and R&D to be implemented successfully and efficiently.
  24. 24. 24 Levels of Strategy Strategic Management
  25. 25. 25 Challenges to Strategic Management 1. Costly to perform for small and medium businesses. Similar to marketing and effective human resource management, strategic planning increases an organization's costs significantly. To successfully apply the strategic planning process, managers or strategic planners must be employed, further efforts must be made to analyse the internal and external surroundings, and some instruments must be devised. All firms execute these tasks to some level (who doesn't keep an eye on company performance or research competitors? ), but primarily large businesses are able to employ qualified staff to carry out strategic plans. 2. The process is very complex. The process of strategic planning includes several interconnected processes that demand ongoing modification. Unexpected circumstances may also come into play and alter the overall approach, impacting the strategic planning process. Strategic Management
  26. 26. 26 Strategic Management 3. Low rate of successful implementation. Strategic planning is seldom successfully put into practice because of its complexity and strong commitment to strategic goals. Failure is frequently attributed to inadequate execution, while operational and strategic goals are more frequently out of alignment in these situations. Despite the fact that strategic management provides a lot of advantages for the business, there are some challenges as well: 1. It comes with significant costs. 2. 2. The procedure is difficult. 3. 3. There is no assurance of success. The reasons listed above explain why small and medium-sized businesses are typically hesitant to create their own strategy departments.
  27. 27. 27 Self Assessment Question 1. Who is called the Father of Strategic Management? a) Chandler. b) Igor Ansoff. c) Michael Porter. d) John Nash Answer (b) 2. What is the starting point of Strategic Intent? a) Goal. b) Objective. c) Vision. d) Mission Answer (c) Strategic Management
  28. 28. 28 Self Assessment Question Hierarchy of Strategic Intent: i. Vision > Mission > Goals > Objectives > Plans ii. Mission > Vision > Goals > Objectives > Plans iii. Plans > Vision > Mission > Goals > Objectives iv. Goals > Vision > Mission > Objectives > Plans i) iii) iv) ii) Answer (a) Strategic Management
  29. 29. 29 Self Assessment Question 1. SWOT stands for a) Services worldwide optimization and transport. b) Special weapons for operations for timeless. c) Strength weakness opportunities and threats. d) Strength worldwide overcome threats Answer (c) 2. Which of the following is not a major element of the strategic management process? a) Formulation strategy. b) Implementing strategy. c) Evaluating strategy. d) Assigning administrative tasks Answer (d) Strategic Management
  30. 30. 30 Self Assessment Question 1. Competitive advantage can be best described as a) Increased efficiency. b) What sets an organization apart. c) A strength and the organizations. d) Intangible resources Answer (a) 2. An organization strategy ___ a) Remains set in place longer than the mission and objectives. b) Generally forms over a period of time as events unfold c) Trends to be formed at the same time the mission is developed d) None Answer (b) Strategic Management
  31. 31. 31 Case Study Strategic Management The case is about the success of Chinese multinational electronics company Xiaomi in India. Xiaomi employed an ‘online sales’ strategy to carve out a place for itself in the country’s smartphone market. The case covers Xiaomi India’s generic strategies, such as cost leadership, and how it overcame the competition in a short space of time. The subsidiary opted for local manufacturing to capture the market, reduce costs, offer quality products at affordable prices, and get closer to customers. This strategy was in keeping with the government’s ‘Make in India’ campaign. Not content with online sales, Xiaomi India ventured offline with a three-pronged strategy to meet customers’ needs. The case dwells upon its offline strategy along with analyst comments on Xiaomi India’s present and future. The question was whether the momentum would last and whether the company would retain its top position in the smartphone category in India.
  32. 32. 32 Document Links Strategic Management Topic URL Notes Introduction to Strategic Management. PDF.pdf Complete Notes of Strategic Management. Concept of Strategic Management. YB_097.pdf Complete Notes of Strategic Management. Process of Strategic Management. content/uploads/2021/02/Lecture-NotesPart1.pdf Notes on Strategic Management Process.
  33. 33. 33 Video Links Strategic Management Topic URL Notes Strategic Management Introduction to Strategic Management. Strategic Management Process. Process of Strategic Management. Case Study Strategic Management. Complete Case study discussion on Strategic Management
  34. 34. 34 E-Book name Chapter Page No. Notes URL Introduction to Strategic Management 1st to 6th - Covers all the Contents of Strategic Management covered in Module. ntextbooks/textbooks/73 E- Book Link Strategic Management
  35. 35. 35 1. Strategic Management – Pearce and Robinson. All India Travellors ND 1988. 2. Strategic Management – An Integrative perceptive A.C. Hak & N. Smajluf. Prentice Hall, 1984. 3. Competitive Strategies – Michael Porter 4. Competitive Advantage of Nations – Michael Porter 5. Strategic Management Concepts and Application – Samuel, C.Corto and J. Paul peter, McGraw Hill, 2nd Ed. 6. Strategic Management – Gregory G.Dess and Alex miller McGraw Hill. 7. Exploring Corporate Strategy – Text and Cases, Gerry Johnson & kevar Scholes, Prentice Hall References: Strategic Management