Strategic Management Notes

1. STRATEGIC MANAGEMENT
“With out a strategy, an organization is The word strategy is derived from the ancient Greek word
like a ship with out a rudder, going strategia, which connoted the art and science of directing
military forces.
around in circles. It’s like a tramp; it
The strategic management is the modern term for
has no place to go.” what was earlier called business policy.
Strategic management is defined as “the set of Def: “it is a process of formulating, implementing and
decisions and actions which leads to the evaluating cross functional decisions that enable an
development an effective strategy or strategies to organization to achieve its objectives.”
help achieve corporate objectives.”
Elements of strategic
management Def: Strategic management is indeed managing for the future or
1. Strategic analysis competing for the future
2. Strategic choice
3. Strategy implementation
4. Strategy evaluation. Approaches or modes of Strategy implementation
strategic management
Components of strategy 1. Establish annual objects.
1. Entrepreneurial mode 2. Devise policies
1. Scope 2. Adaptive mode 3. Motivate employees
2. Mission and objectives 3. Planning mode. 4. Allocate resources
3. Identification of 5. Develop a strategy of
sustainable competitive supportive culture
advantage Levels of strategy 6. Create an effective
4. Organization organization structure
5. Resource deployment 1. corporate strategy 7. Channel marketing efforts
6. Synergy (two or more 2. SBU level strategy 8. Prepare budgets
sub systems working (Strategic Business 9. Develop and utilize
together to produce Unit) information system
more than the total of 3. functional strategy 10. Link employee rewards to
what they might produce 4. Operating strategy. organizational performance
working alone.)
Benefits of strategic management Need for strategic management
1. It provides an objective view of management problems 1. To provide guide lines
2. It gives encouragement to forward thinking 2. Probability for better
3. It allows major decisions & supports established objectives performance
4. it facilitates better delegation, co-ordination, monitoring 3. Improves coordination
performance evaluation and control. 4. Systematize business
5. Strategic management makes the management dynamic, decisions
appropriate to the environment and result and future oriented. 5. Improves communications,
6. It helps for increased employee productivity and reduced allocation of resources.
resistance to change

2. Functions of strategic management Challenges for strategic management
1. Planning for future 1. Technological advancement and strategic
2. Developing organization structure management
3. Motivating people 2. Product/service innovation &development
4. Providing leadership 3. Global issues and strategic management
4. Quality issues and social issues
Components of corporate Strategic management process
strategy I. Implementation
The three phases are;
Mission Strategy formulation 1. Mobilization and allocation of
Purpose Implementation resources
Objectives and goals Evaluation and control 2. Structuring of authority and
Policies, procedures and rules responsibility
3. Tasks and information flows
4. It involves a number of
II. Strategy formulation administrative and operational
decisions
1. Determination of mission and objectives
2. SWOT analysis
• Analysis of Strengths and Weaknesses of the firm III. Evaluation and control
• Analyzing Environmental Opportunities and
Threats 1. Continuous monitoring of the
3. Generation of alternative strategies environment and
4. Choosing the most appropriate strategy implementation of the
Suitability, feasibility, acceptability strategy is essential.
2. The evaluation providing the
Strategic planning (or) corporate planning feedback for modifications
Def: It is “concerned with the determination of the basic long-term
Benefits of strategic planning
goals and objectives of an enterprise, and the adoption of courses
of action and allocation of resources necessary for carrying out
1. It provides roadmap for the
these goals.” ---Alfred chandler
firms
2. It helps the firm utilize its
Levels of strategic planning resources in the best possible
VISION manner.
1. Corporate - level strategic A vividly 3. It minimizes the chances of
planning descriptive image of mistakes and unpleasant
2. Business - level strategic what a company wants surprises
planning to be or wants to be 4. It creates a framework for
3. Functional - level strategic known for future. internal communication
planning among personnel.
Elements of mission statement
MISSION
1. Clarity
• A statement of a firm’s unique purpose and the scope of 2. Broad and enduring
its operations in product and market terms. 3. Identity and image
• Mission sets the direction for the strategic development of 4. Unique& realistic
the organization. 5. Adapted to the target audience

3. Objectives (VS) goals Role of objectives
1. Long term 1. short term 1. Direction
2. General 2. specific 2. Co-ordination
3. Less measurable 3. more measurable 3. Bench marks for
success
4. motivation
Characteristics of objectives Importance of objectives
objectives form a hierarchy justify the organization
objectives form a network provide organization
multiplicity of objectives help strategic planning
long and short range objectives provide standards for
assessment and control
help decentralization