Business competitive environment

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AUTHOR NAME: SHAZILA ANDLEEB
ARTICLE ON : STRATEGIC MANAGEMENT

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DISCUSSION ON THE NEED FOR
STRATEGIC MANAGEMENT IN A
COMPETITIVE BUSINESS ENVIRONMENT?
Presentation
Key administration is both the procedure and rationality for deciding and controlling the
authoritative relationship in its the earth. As a procedure, it endeavors to characterize
methodologies and procedures to aid administration adjust to the dynamic of today,
through the utilization of targets and methods. Key administration attempts to
accomplish compelling and effective projects to perform the association's mission. As a
rationality, it changes how director takes a gander at contenders, clients, markets and
even the association itself. Its target is to empower administration's attention to the key
ramifications of ecological occasions and interior choice.
Lawrence and William (1988) characterized key administration as a stream of choices
and movements, which prompts the improvement of a viable methodology or
procedures to help attain corporate destinations. The key administration methodology is
the path in which strategists focus targets and settle on vital choices.
Strategic administration's principle center is the accomplishment of hierarchical
objectives looking into the inner and outside ecological components.
Watchman (1985) contends that the quintessence of forming thorough technique is
relating an organization to nature's turf. Vital administration allows the deliberate
administration of progress. It empowers association to intentionally assemble assets
towards a sought future.

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Chandler (1962) likewise placed that any successful fruitful technique is reliant on
structure, along these lines to attain any compelling budgetary execution the association
needs to adjust its structure.
The destination of this paper is to inspect the calculated and hypothetical methodology
of key administration on the execution of business association.
The destinations of the paper are:
i. To inspect the essentialness and importance of key administration in an association.
ii. To inspect the viability of key administration.
iii. To perceive how key administration impact execution of the business association.
Foundation to key administration improvement
Truly, vital administration is a moderately youthful subject. It has its establishes in the
financial and social speculations of the 1930s and 1940s - maybe considerably prior.
Yet it just truly started to rise as a different theme in the 1960s and 1970s. Indeed
today, there is just incomplete agreeement on the key standards of key administration
with numerous perspectives, plans and ideas. This makes the theme intriguing and
testing.
Prescriptive Strategy Processes

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A prescriptive procedure is one whose target is characterized ahead of time and whose fundamental
components have been created before the method begins.' This full run of exercises is known as the
prescriptive methodology process. There are various method hypotheses that demonstrate
components of this methodology inside prescriptive technique and these are highlighted in the model
above right.
Emergent Strategy Processes

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A rising system does not have the same settled goal. The entire methodology is more trial with
different conceivable conclusions relying upon how matters create.
Dissecting assets and capacities
Any association wanting to go outside its home nation needs to consider its assets. Global and
worldwide movement will extend the assets of numerous associations, even those that are as of now
profoundly included universally. This film sets out a structure for examining the current vital global or
worldwide position of the association - critical for those arranging future universal movement.
Prescriptive reason conveyed through mission, targets and morals
Since global extension has both profits and expenses, it is key to characterize obviously the general
explanations behind universal and worldwide development - generally the expenses may be more
amazing than the profits! This feature gives structures a percentage of the issues that need to be
investigated when setting universal and worldwide destinations.
Reason rising up out of learning, innovation and advancement
Advancement is regularly significant to effective worldwide and worldwide development. Be that as it
may there is no 'enchantment recipe' for this conclusion. This implies that basically characterizing the
reason as far as some unbending global goals is exceedingly prone to come up short. There
requirements to be a more open-finished and trial methodology to the entire procedure of moving
comprehensively. This is well on the way to emerge from investigating information and engineering
nearby the advancement process itself. The part clarifies the primary issues and sets out a percentage
of the key ways that development could be administered to attain universal achievement.

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Building key choices at the business level
Any association arranging worldwide and worldwide development will have countless - maybe by
bringing down its expenses, maybe by a joint wander or a procurement. The part serves to structure
the procedure of creating choices for an individual business range.
Picking between key alternatives
In the wake of creating technique alternatives, the following sensible step is to pick between them -
whether for an association in one nation or an association arranging universal development. The part
gives a legitimate and organized method for selecting the best choice (or alternatives in a few cases).
This is an essential venture in creating a worldwide or worldwide system for an association from a
prescriptive procedure point of view.
Discovering the Strategic Route Forward
A significant number of the late victories in global and worldwide system have not hailed from
prescriptive vital arranging - simply take a gander at Google and Facebook, for instance. This part
investigates a few choices, centering especially on the Learning-based key course advance. The
fundamental standards are the same for one nation or for a lot of people. Anyhow the included
muddling of worldwide development makes such taking in technique much more crucial.strategic
Management fifth Edition (and the prior releases under the title of Corporate Strategy) is one of the
few course readings - conceivably even the one and only - to investigate this course in profundity .
Actualizing the system
Worldwide and Global systems need to be actualized. Anyhow how would you go about this
assignment? What are the paramount components of such a methodology? This feature outlines a
percentage of the fundamental issues, including a framework of the Balanced Scorecard.
Overseeing Strategic Change
At the point when new worldwide and worldwide systems are created and presented, there are
regularly individuals issues. Some individuals will like the techniques and help them while others will
oppose changes that debilitate their parts and obligations. How would we oversee such open doors
and issues? There is additional multifaceted nature in managing such issues on a worldwide or
worldwide premise.
The corporate reason
The corporate reason alludes to the bigger objectives of the association. Going far past piece of the
pie or productivity destinations, corporate reason alludes to that bringing together vision which offers
intending to the business that the organization is included in.

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The Economic Goals
Understanding the company's long haul investment objectives is the beginning stage in procedure
detailing. As Pearce and Robinson rightly put it, three investment objectives must drive the method
of any association – survival, gainfulness and development despite the fact that the relative stress
may shift at distinctive purposes of the organization's lifecycle.
Vital Planning in cutting edge business
Reason characterizes why the organization exists. In any case intention is excessively general and
elevated amount for most individuals in an association to appreciate completely. Vital arranging
draws from the corporate reason to think of a significant blue print regarding characterizing the client
segment(s), the items and administrations to be offered and how to offer these items and
administrations. The character of vital arranging is to utilize the past to get a fix on what the
organization is great at and how to power these qualities. It is likewise about picturing the future to
comprehend where the organization is powerless and what it must do to beat these shortcomings.
In a quick paced environment described by Moore's law, quickly changing customer tastes and quick
response time, key arranging has not gotten superfluous. The main distinction is that contrasted with
past times worth remembering, arranging must be more adaptable and the arranging cycle must be
much shorter. As opposed to being thrown in stone, the essential arrangement must experience
update at short interims.
By and large, key arrangements hold the accompanying parts:
Regular
scanning
Continuous
scanning
Ad hoc
scanning

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involves looking around and collecting a wide range of data systematically. Data can be
collected by any organization. The difference between the nimble and not-so-nimble
organizations lies in the way the data is interpreted. Indeed, making sense of discrete data is
probably an organization’s greatest strength today.
Planning for uncertainty
Strategic planning in uncertain situations, poses special challenges. If the prevailing uncertainty
is not properly considered, the firm might end up facing threats it is ill equipped to deal with. At
the other extreme, the firm may show too much caution and not exploit opportunities that have
the potential to yield excellent returns. Many companies take strategic decisions relying totally
on their gut instincts during times of uncertainty. Intuition is useful but has to be backed with
some numbers for strategic planning to be effective. Here we cover some tools available to deal
with uncertain situations where hard numbers may not be available and various assumptions
have to be made.
Real Options as a planning tool
In the real world, the demand for a product and the price which it can command are uncertain.
So, there is considerable uncertainty about the cash flows which will be generated. How do we
decide which project should be taken up? Martha Amram and Nalin Kulatilaka1
suggest the use
of real options while evaluating a project. Real options look at both the upside and downside
when an investment is being planned. Thus, a timing option, in the form of a delayed expansion
in capacity could create value in a situation of uncertain demand. Putting up a plant in an
overseas market currently fed by exports may generate new growth options. An exit option in the
form of a plant closure increases the value of the investment decision. By looking at strategic
decisions in terms of options and then using information from financial markets to value these
options, planning can be more effective.
Developing strategic decision making skills
Having scanned the environment, companies must be able to take critical strategic decisions. In
fast paced, intensively competitive markets, how can companies develop superior strategic
decision making skills? According to Kathleen Eisenhardt, effective strategy formulation is
about2
:
 Building collective intuition
 Encouraging healthy conflict
 Maintaining a pace so that decisions are taken within a stipulated time
 Defusing political behavior.
Operationalising the strategy and modernization
1
Harvard Business Review, January – February, 1999.

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Annual objectives are used to break down long-range goals into what needs to be achieved
during the year. So they must be focused, specific and measurable. Examples of annual
objectives include:
 To reduce employee attrition by 10% by the end of the year.
 To reduce time from order receipt to order execution by 20%
 To increase the number of employees, who are Six Sigma Certified Black Belts by 30%
Functional strategies represent the action plans for the subunits of the company. Functional
strategies outline how key functional areas like marketing, finance, operations, R&D and human
resources must be managed. Functional strategies must be framed with respect to each key
activity. For example, in the case of pricing, the following issues must be addressed:
a) What segment is being targeted – mass market or premium end of the market?
b) How much of price discrimination should be practiced across customer segments?
c) Is the cost structure aligned with the price?
d) What kind of discount can be offered, given the cost structure?
e) Should the price be above or below that of competitors?
Communication is an integral part of operationalising the strategy. Meetings, informal
conversations, e-mails, and other communication channels can be used to communicate the
importance of the company's strategy and the role of different groups in implementing it.
Communication must focus on the following.
 Rationale for the company's strategy.
 How the initiatives that are being carried out, support the corporate strategy.
 The implications if the plans are implemented successfully.
 The implications if the company fails to implement its plans.
 The attitudes and behaviors expected from each person in the team.

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Source: Charles Roxburgh, “Hidden flaws in Strategy,” McKinsey Quarterly, 2003 No.2,
Behavioral issues in strategic planning in competitive business
A competitive advantage is the distinct way in which an organization is positioned in the market
to obtain an edge over its competitors. This status is most commonly evidenced by the
organization’s ability to generate and maintain sustained levels of profitability above the
industry average. The process that is primarily associated with helping an organization attain
competitive advantage is strategic planning . This can be defined as a disciplined and systematic
effort to develop, plan, and specify an organization’s strategy, as well as assigning
responsibilities and resources for executing it.
Over
optimism
Underestimating the
challenges involved
Loss
aversion
Few investment
proposals
Over
confidence
Underestimating
risks
Misaligned
time horizon
Focus on incremental
innovation
Misaligned
risk profile
Putting career over
company
r ririsksrisks
Typical distortions in strategic
decision making

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A generic strategic planning process in modern business environment
Management decisions in the strategy development process are concerned with the
following:
 The scope of the organization’s activities. The most overlooked element of strategy,
this addresses questions such as Where will we operate? What customers will we
target? Which competitors will we avoid or take on? What parts of the value chain
will we do ourselves, and what should we outsource?
 Aligning an organization’s activities with its environment. This is the idea of finding
a strategy that creates a desirable level of “fit.” Environments often change, and
strategies must be dynamic and flexible to effectively address these changes.
 Matching an organization’s activities to its resource capability. This requires
working within our means while winning customers and generating profits.
 The implications of change throughout the organization. These are likely to be
complex in nature and will require excellence in execution or strategy
implementation.
 Allocating and reallocating an organization’s significant resources. This requires us
to seek resource optimization in using our assets where they can be most highly
valued.

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 The values, expectations, and goals of those influencing strategy. Decision-makers
understand what is happening and have a clear sense of where the organization
needs to go both now and in the future.
 The direction in which the organization will move in the long run. This can be five to
ten years or more, depending on the natures of change, dynamism, and
competition affecting an industry.
The answer to these questions is no—especially not these days. what we do and do not
mean by analysis.
Defining Analysis
What Analysis Is What Analysis Is Not
Methods The practiced application of
proven technologies. It combines
science, art, and craft.
Constant usage of industry
conventions and one-off
solutions. Using the same
things over and over again.
Process A method and planned set of
steps designed to effectively break
a situation into its component
elements and recompose it in a
way that addresses a challenge or
question.
Ad hoc. “We just kind of know
what it is and how to do it.
Fortunately, we have gotten by
so far,” “We just know these
things,” or “We hire pricy
consultants to do it for us.”
Output Actionable insight, intelligence,
meaning, and implications derived
from data and information. Future-
oriented, accurate, resource-
efficient, objective, useful, and
timely (FAROUT).
Synthesis in the form of
repackaged, reorganized,
reclassified data and
information. Often a “cut and
pasted” summary of the
information at hand. No
meaningful conversion.

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Data sources Legal and ethical gathering of data
or information, driven by the
client’s needs defined in the
structuring of the analytical
question. Sources and their
content are qualified and
validated.
Seeking and using data or
information from illegal
sources or by unethical
means, often incomplete.
Mostly “nice to know” data that
does not inform or that clients
already knew.
Support
systems
Using application-relevant
communication, information, and
management systems to
supplement your thinking.
A software application or
solution you can acquire and
apply off the shelf. Magic-
bullet solutions.
Timing Provided well in advance of any
decisions to be made. Early
warning.
Rushed to provide support to
an answer that has already
been decided. Too late.
Communication
channel
Conducted in whatever way the
decision-maker can best
understand and use it. Much face-
to-face and interactive discussion.
Done via “formal” reports with
a specific format.
Always in writing. Too much e-
mail and “push.”
Questions
answered
What?
So what?
Now what?
What then?
Huh?
What is this about?
Is there anything critical or
new here?
What can I take away or do

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with this?
Catalyst Forthcoming decisions. Yours or
your boss’s discussed needing to
know something. The need to
better position your organization in
its marketplace.
What you think or hope is
important to the executive.
The need to demonstrate that
we are actually doing
something. Our rivals are
doing it, and so should we.
INFORMATION AS A STRATEGIC RESOURCE
IMPACT ON COMPANY’S STRATEGY

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Information impacts on all aspects of the organization: marketing, distribution,
production, operations management, management economics, finance, public policy,
industry dynamics, office automation, human resource management as shown on the
Figure above. The wheel is spinning round and in its center is Information Resource
Management. Information and communication technologies provide continuous
information flow, which the organization should use in forming its corporate strategy and
accomplishing its management activities in decision making.
Strategy has become an over-used and much-abused terms, being frequently made
unnecessarily complicated. At a simple level, the following Figure captures the
underlying and interrelated dimensions of any organization's strategy formulation and
implementation: business opportunities, organizational competencies and governance
(COG).
Because of the quickly changing environment, the process of strategy formulation
transforms from an apparently formal and systematic set of procedures for analysis and
planning to an adhoc reaction by the senior management of an organization to perceived
problems and information about them. In strategy formulation, managers must consider
both information about internal and external forces.

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The context in which competitive strategy is formulated
The opportunities and threats in the industry must be considered within the context of the
organization's strengths and weaknesses, all of which cannot be divorced from the
broader social setting and the leadership and vision of the key people for implementation.
.
Strategic management & the link to marketing in modern business
Businesses that succeed do so by creating and keeping customers. They do this
by providing better value for the customer than the competition.
Marketing management constantly have to assess which customers they are
trying to reach and how they can design products and services that provide
better value (“competitive advantage”).
The main problem with this process is that the “environment” in which
businesses operate is constantly changing. So a business must adapt to reflect
changes in the environment and make decisions about how to change the
marketing mix in order to succeed. This process of adapting and decision-
making is known as marketing planning.
Where does marketing planning fit in with the overall strategic planning of a
modern business?
Strategic planning is concerned about the overall direction of the business. It is
concerned with marketing, of course. But it also involves decision-making
about production and operations, finance, human resource management and
other business issues.
The objective of a strategic plan is to set the direction of a business and create
its shape so that the products and services it provides meet the overall
business objectives.
Marketing has a key role to play in strategic planning, because it is the job of
marketing management to understand and manage the links between the
business and the “environment”.Sometimes this is quite a straightforward task.

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For example, in many small businesses there is only one geographical market
and a limited number of products (perhaps only one product!).
Concluding notes
The classical views of strategy have focused on understanding industry structures and
developing suitable capabilities to position the firm effectively in relation to competitors. But in
today’s complex and changing environment, when the very boundaries of many industries are
being constantly reshaped, does it make sense to try and understand the evolving industry
structure? Are ad hoc short-term movements the only way to cope with the uncertain
environment? Is long term strategic planning no longer relevant?
To strike a balance between speed and direction, two different time horizons are needed – a
long term horizon for setting the direction and a short term horizon to focus on operational
initiatives. Hagel and Seely Brown have come up with a frame work called FAST – Focus,
Accelerate, Strengthen, Tie all together. Focus refers to long term positioning, and
specialization and capability building in the chosen area of business. Accelerate means moving
fast in the short term. Strengthen means removing road blocks that prevent faster movement
in the short run. This includes building shared meaning and trust and making appropriate
investments in information technology. Tie it all together means integrating these three
components across networks of organizations to amplify learning and accelerate capability
building. As they mention3: “The sequential approach of traditional strategies simply cannot
generate the rapid learning and capability building that one from moving quickly back and forth
between a very short-term operational horizon and a much longer term strategic horizon”.
REFERENCES
Source: Charles Roxburgh, “Hidden flaws in Strategy,” McKinsey Quarterly, 2003 No.2, Google
search engine
BIBLIOGRAPHY:
1. Corporate Information Systems Management-J. Cash, F. McFarlan, J. McKenney
2. Managing with Information-Jerome Kanter
3. Information Acumen-Lisa Bud-Frierman, 1994
4. Information Resources Management-John Beaumont, Ewan Sutherland, 1995
5. Information Management-Blaise Cronin, 1994
6. Management Information Systems-Terry Lucey, 1996
7. Managing Information-Periodical, Moira Duncan
8. Internet –Information Resources Management Association

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