1. By:
RAKHI AGARWAL

2. Strategic Management
Strategic management analyzes the
major initiatives taken by a company's
top management, usually involving
resources and performance
in external environments.
The process entails:
 Specifying the organization's mission,
vision and objectives.
 Developing policies and plans, often in
terms of programs that are designed to

3. .
 "Strategic management assesses its
competitors and sets goals and
strategies to meet all existing and
potential competitors. It then reassesses
each strategy regularly to determine
whether it has succeeded
or needs replacement by a new strategy.
"
 Involves two major processes:
 formulation of strategy.
 implementation of strategy.

4. Formulation
Formulation of strategy involves:
 analyzing the environment in which
the organization operates,
making a series of strategic
decisions about how the
organization will compete,
ends with a series of goals or
objectives and measures for the
organization to pursue.

5. Implementation
It involves –
decisions regarding how the
organization's resources (i.e., people,
process and IT systems) will be aligned
and mobilized towards the objectives.
It results –
in how the organization's resources are
structured, leadership arrangements,
communication, incentives, and
monitoring mechanisms to track
progress towards objectives, among

6. Concept of strategic
management
 Portfolio theory
 Experience curve
 Industry structure and profitability
 Competitive advantage
 Value chain

7. Portfolio theory
 Harry Markowitz
 “hole in the middle” problem.
(1980)
 It refers to decisions regarding the
business or industry in which the
organization competes, or which
products and services should be
offered.

8. Experience Curve
 It is a hypothesis dating from the late 1960's
that direct per unit costs decline by 20-30%
every time cumulative production doubles.
 Costs decline due to a variety of factors,
such as the substitution of labour for
capital (automation), and technological
sophistication.
 Firms could achieve a competitive advantage
through lower cost per unit and higher
market share.
 The experience curve was very influential in

10. Industry structure and
profitability
 Porter identified the forces that shape the industry
structure or environment. The framework involves the
bargaining power of buyers and suppliers, the threat of
new entrants, the availability of substitute products, and
the competitive rivalry of firms in the industry. These
forces affect the organization's ability to raise its prices
as well as the costs of inputs (such as raw materials) for
its processes.
 The framework helps describe how a firm can use these
forces to obtain a sustainable competitive advantage.
Companies can maximize their profitability by competing
in industries with favourable structure and by selecting
the right generic competitive strategy. Competitors can
take steps to grow the overall profitability of the
industry, or to take profit away from other parts of the

11. Competitive advantage
 Porter discussed the concepts of
competitive advantage and the value chain in
a 1985 book. Competitive advantage refers to
the attributes that allow an organization to
outperform its competition.
 These attributes may be market position,
superior skills, or superior resources. In
Porter's view, strategic management should
be concerned with building and sustaining
competitive advantage

12. Decision making:
 The process of examining your
possibilities options, comparing them,
and choosing a course of action.
 It can be regarded as the cognitive
process resulting in the selection of a
belief or a course of action among
several alternative possibilities.
 Every decision-making process produces
a final choice that may or
may not prompt action.

13. Problem analysis v/s
decision-making
PROBLEM ANALYSIS:-
 Analyze performance, what should the
results be against what they actually
are.!
 Problems are merely deviations from
performance standards
 Problem must be precisely identified and
described

14. Decision-making
 Objectives must first be established
 Objectives must be classified and
placed in order of importance
 Alternative actions must be
developed
 The alternative must be evaluated
against all the objectives

15.  The alternative that is able to
achieve all the objectives is the
tentative decision.
 The decisive actions are taken, and
additional actions are taken to
prevent any adverse consequences
from becoming problems and
starting both systems (problem
analysis and decision-making) all
over again

16. Group decision-making
techniques
Consensus decision-making:
 tries to avoid "winners" and "losers".
 requires that a majority approve a given
course of action, but that the minority
agree to go along with the course of
action.
 if minority is not satisfied then
amendments are made accordingly.

17. Voting-based methods:
 Range voting: lets each member
score one or more of the
available options. The option with
the highest average is chosen.
 Majority: requires support from
more than 50% of the members of
the group.

18. Individual decision-making
techniques
Pros and cons:
 listing the advantages and disadvantages
of each option.
 Contrast the costs and benefits of all
alternatives. Also called "rational
decision-making".
Simple prioritization:
 choosing the alternative with the highest
probability-weighted utility for each
alternative.
 Satisficing: examining alternatives only

19. Corporate Goals
Goals or objectives are the targets
which must be
achieved in order to fulfil the corporate
aims.
Corporate objectives are the
goals that the whole organization
is trying to achieve.

20.  Maximising the amount of profit earned
by the organization.
 Maximising shareholder’s wealth (share
prices)
 Growth in the size of the firm
 Diversification to spread risk to counter
seasonal decline in the sales of the
product.
 Focus on core capabilities
 Increasing market standing

21. Corporate strategy
 Corporate strategy is the organization’s
plan of action which, when implemented,
will lead to the achievement of the
corporate objectives.
 Strategy cannot be considered before
the firm’s goals are clearly established.

22. THANK YOU