1) Strategic drift is the gradual deterioration of competitive action that results when an organization fails to acknowledge and respond to changes in the business environment. 2) There are four phases of strategic drift: incremental change, strategic drift, flux, and transformational change or death. Strategic drift occurs in phase 2 when small incremental changes fail to keep up with rapid environmental changes. 3) Phase 3, flux, occurs when there is a huge gap between strategy and environmental requirements. Management tries to minimize this gap but efforts are indecisive, leading to declining performance, internal conflicts, and customer alienation.

1. Presenters
SAROJ RAJ UPRETI
SAGAR BHATTA
KALIKA PRASAD MARAHATTA

2. .
STRATEGIC DRIFT
due to change in environment
Whatisstrategicdrift?
Strategic drift can be defined as gradual deterioration
of competitive action that results in the failure of
organization to acknowledge and respond to changes
in business environment.

3. $
importance
of understanding strategic drift
To comply with legal policies
and procedures08
02
To understand the need of
acquisition, merger, and
diversification
03To maintain existence of
its own
04
To match resources and
potentiality with
opportunities
05
To gain competitive
advantage
06 To welcome innovation
07
To understand consumer
needs and expectations
To identify external threats
to weaknesses of the
business
01

4. CHANGE
SCALING
Phase 2
Strategic drift
Phase 3
Flux
Phase 4
Transformational change or
death
Phase 1
Incremental change
Amount of
change
Environmental change
Transformational
change
Death

5. Phase 1 : Incremental stage
Little significant
changes in the
external
environment
Business remains in
touch with the
external
environment
01
02
03
Small incremental
changes in business
strategy
This is the phase where
business tries to move
with small changes seen in
the external environment.
There is not much
deviation between
business strategy and
environmental changes.

6. s
Why Incremental
Change? Alignment with
environmental change
The success of
past
Experimentation of new
ideas and strategies

7. Phase 2: Strategic Drift
This is the phase where small, incremental changes in
business strategy fails business to move with rapid changes
in the external environment.
Homogeneous mindset
Preservation of status quo
Lack of focus on external environment
1
2
3

8. 5 Reasons for Strategic Drift
It may be easy to see major changes with
hindsight, but it may not be easy to see their
significance as they are happening.
The problem of hindsight
1
Managers try to minimise the extent to which
they are faced with uncertainty by looking for
answers that are familiar.
Building on the familiar
2

9. The core capabilities may become a limit. The
formula of success is hard to imitate by
competitors but it may provoke a routine, making
the habits of the business hard to question.
Core rigidities
3
The success of a company is based on an
excellent relationship between customers,
suppliers, and employees.
Relationship becomes
shackles
4
First symptoms of strategic drifts are hard to
identify. However, once the shortcomings of a
business are identified, it becomes an
opportunity for competitors.
Lagged performance
effects
5

10. Ways to Avoid Strategic Drift
Encourage diverse perspective
Continuous innovation
Promote an external focus
Industry benchmarking & market research
Monitor performance

11. This is the phase where there is huge gap
between strategy of the business and
requirement of the environment.
Management tries to minimize such gap but
efforts turn out to be indecisive.
Declining performance &
low employee morale 1
Fluctuation in strategies
but not in clear direction 2
Top management conflict
and managerial changes 3
Internal disagreement on
right strategies and morale 4
Customers becoming
alienated 5
Phase 3 : Flux

12. The 3 possibilities
Phase 4 :
Transformational
change or death