This presentation discusses about strategic management in Principles of Management

1. STRATEGIC MANAGEMENT
R.ArunKumar,AP/Mech,RIT

2. DEFINITION:
 The decisions and actions that determine the long-run
performance of an organization.
 What the managers do to develop an organization’s strategy.
 It involves all the management functions.
R.ArunKumar,AP/Mech,RIT

3.  They are the plans for how the organization will do whatever
it is in business to do.
 Helps an organization to attract and satisfy its customers in
order to achieve its goals.
R.ArunKumar,AP/Mech,RIT

4. WALMART (vs) KMART
R.ArunKumar,AP/Mech,RIT

5. BUSINESS MODEL:
 Design which defines how a company is going to make money.
 Business model focuses on two factors:
1. Whether customer will value what the company is
providing?
2. Whether the company can make any money doing that?
R.ArunKumar,AP/Mech,RIT

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15. IMPORTANCE OF STRATEGIC MANAGEMENT:
 Can make a difference in how well an organization can
perform?
 Managers face continually change in situations.
 Organizations are complex and diverse.
R.ArunKumar,AP/Mech,RIT

16. Interbrand/BusinessWeek
100 Top Global Brands (2005)
1. Coca-Cola
2. Microsoft
3. IBM
4. General Electric
5. Intel
Harris Interactive/Wall Street Journal
National Corporate Reputation (2005)
1. Johnson & Johnson
2. Coca-Cola
3. Google
4. United Parcel Service
5. 3M Company
Hay Group/Fortune
America’s Most Admired Companies
(2006)
Great Place to Work Institute/Fortune
100 Best Companies to Work For (2006)
1. General Electric
2. FedEx
3. Southwest Airlines
4. Procter & Gamble
5. Starbucks
1. Genentech
2. Wegman’s Food Markets
3. Valero Energy
4. Griffin Hospital
5. W. L. Gore & Associates
R.ArunKumar,AP/Mech,RIT

17. Interbrand/BusinessWeek
100 Top Global Brands (2015)
1. Apple
2. Google
3. Coca - Cola
4. Microsoft
5. IBM
Harris Interactive/Wall Street Journal
National Corporate Reputation (2016)
1. Johnson & Johnson
2. Coca-Cola
3. Google
4. United Parcel Service
5. 3M Company
Hay Group/Fortune
America’s Most Admired Companies
(2016)
Great Place to Work Institute/Fortune
100 Best Companies to Work For (2016)
1. Apple
2. Alphabet
3. Amazon
4. Berkshire Hathaway
5. Walt Disney
1. Google
2. ACUITY Insurance
3. The Boston Consulting
Group (BCG)
4. Wegman’s Food Markets
5. Quicken Loans
R.ArunKumar,AP/Mech,RIT

18. STRATEGIC MANAGEMENT PROCESSES:
R.ArunKumar,AP/Mech,RIT

19. STRATEGIC MANAGEMENT PROCESSES:
 Step 1: Identifying the organization’s current mission, goals
and strategies
 Mission is the reason for a firm’s being.
 Provides clues to what the organizations see as their purpose.
R.ArunKumar,AP/Mech,RIT

20. STRATEGIC MANAGEMENT PROCESSES:
 Step 1: Identifying the organization’s current mission, goals
and strategies
Mission of Infosys:
 To achieve our objectives in an environment of fairness, honesty
and courtesy toward our clients, employees, vendors and society at
large.
R.ArunKumar,AP/Mech,RIT

21. STRATEGIC MANAGEMENT PROCESSES:
 Step 2: Doing an external analysis
R.ArunKumar,AP/Mech,RIT

22. STRATEGIC MANAGEMENT PROCESSES:
 Step 2: Doing an external analysis
 Analyzing environment is the critical step in strategic
management process.
 Find out the opportunities (smart phones) and threats.
 Opportunities are the positive trends and threats are the negative
trends.
R.ArunKumar,AP/Mech,RIT

23. STRATEGIC MANAGEMENT PROCESSES:
 Step 2: Doing an external analysis
R.ArunKumar,AP/Mech,RIT

24. STRATEGIC MANAGEMENT PROCESSES:
 Step 3: Doing an internal analysis
 Gives information about organization’s specific resources and
capabilities.
R.ArunKumar,AP/Mech,RIT

25. STRATEGIC MANAGEMENT PROCESSES:
 Step 3: Doing an internal analysis
 Gives information about organization’s specific resources and
capabilities.
 Here strengths and weakness are analyzed.
R.ArunKumar,AP/Mech,RIT

26. STRATEGIC MANAGEMENT PROCESSES:
 Step 4: Formulating strategies
 After analyzing all the factors the strategies will be formulated.
 Three types of strategies are: corporate, business and
functional.
R.ArunKumar,AP/Mech,RIT

27. STRATEGIC MANAGEMENT PROCESSES:
 Step 5: Implementing strategies
R.ArunKumar,AP/Mech,RIT

28. STRATEGIC MANAGEMENT PROCESSES:
 Step 6: Evaluating results
 Adjustments and corrective actions.
R.ArunKumar,AP/Mech,RIT

29. TYPES OF STRATEGIES:
1. Corporate Strategy
1.1 Growth strategy
1.1.1 Concentration
1.1.2 Vertical integration
1.1.2.1 Backward vertical integration
1.1.2.2 Forward vertical integration
1.1.3 Horizontal integration (Related and Unrelated)
1.1.3.1 Related horizontal integration
1.1.3.2 Unrelated horizontal integration
1.2. Stability strategy
1.3. Renewal strategy
1.3.1 Retrenchment strategy
1.3.2 Turnaround strategy
2. Business Strategy
3. Functional Strategy
R.ArunKumar,AP/Mech,RIT

30. CORPORATE STRATEGY:
 Specifies what businesses a company is in or wants to be in?
 Top management’s overall plan for the entire organization
and its strategic business units.
R.ArunKumar,AP/Mech,RIT

31. CORPORATE STRATEGY:
 Corporate strategies are classified into three types:
1. Growth
2. Stability
3. Renewal
R.ArunKumar,AP/Mech,RIT

32. CORPORATE STRATEGY:
1. Growth Strategies:
 With growth strategy, an organization expands the number of
markets served or products offered.
 Expands in current businesses or new businesses.
1.1 Concentration
1.2 Vertical Integration
1.3 Horizontal Integration
1.4 Diversification
R.ArunKumar,AP/Mech,RIT

33. CORPORATE STRATEGY:
1.1 Concentration:
 Focuses only on primary line of business and increases the
number of products offered.
 e.g.: CRI Pumps, Coimbatore.
R.ArunKumar,AP/Mech,RIT

34. CORPORATE STRATEGY:
1.2 Vertical Integration:
1.2.1 Backward vertical integration.
 e.g.: eBay online payment mode
1.2.2 Forward vertical integration.
 e.g.: Bata showrooms
R.ArunKumar,AP/Mech,RIT

35. CORPORATE STRATEGY:
1.3 Horizontal Integration:
 Company grows by combining with competitors.
 e.g.: RNAIPL
R.ArunKumar,AP/Mech,RIT

36. CORPORATE STRATEGY:
1.4 Diversification:
1.4.1 Related diversification (variety of business in same field)
 e.g. Godrej
1.4.2 Unrelated diversification (different field)
 e.g. Tata Group of India
R.ArunKumar,AP/Mech,RIT

37. CORPORATE STRATEGY:
2. Stability Strategies:
 Organization continues to do what is currently doing.
 Serves the clients by offering same product.
 e.g.: Iruttu Kadai
R.ArunKumar,AP/Mech,RIT

38. CORPORATE STRATEGY:
3. Renewal Strategies:
 Arises when the organization is in problem.
3.1 Retrenchment Strategy (short run renewal)
3.2 Turnaround Strategy (problems are more serious)
R.ArunKumar,AP/Mech,RIT

39. CORPORATE PORTFOLIO ANALYSIS:
 In case of collection of businesses, management uses BCG (Boston
Consulting Group) matrix.
R.ArunKumar,AP/Mech,RIT

40. COMPETITIVE STRATEGIES:
 Strategy focused on how an organization should compete in each of
its Strategy Business Unit (SBU).
R.ArunKumar,AP/Mech,RIT

41. ROLE OF COMPETITIVE ADVANTAGE:
1. Quality as a competitive advantage:
 Iruttu Kadai
R.ArunKumar,AP/Mech,RIT

42. ROLE OF COMPETITIVE ADVANTAGE:
2. Sustaining competitive advantage:
 MIT
R.ArunKumar,AP/Mech,RIT

43. ROLE OF COMPETITIVE ADVANTAGE:
Five forces Model:
R.ArunKumar,AP/Mech,RIT

44. NEW ORGANIZATION STRATEGIES:
1. e-Business Strategies:
R.ArunKumar,AP/Mech,RIT

45. NEW ORGANIZATION STRATEGIES:
2. Customer Service Strategies
R.ArunKumar,AP/Mech,RIT

46. NEW ORGANIZATION STRATEGIES:
3. Innovation Strategies:
R.ArunKumar,AP/Mech,RIT