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Presenters
SAROJ RAJ UPRETI
SAGAR BHATTA
KALIKA PRASAD MARAHATTA
.
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.
$
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
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
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.
s
Why Incremental
Change? Alignment with
environmental change
The success of
past
Experimentation of new
ideas and strategies
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
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
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
Ways to Avoid Strategic Drift
Encourage diverse perspective
Continuous innovation
Promote an external focus
Industry benchmarking & market research
Monitor performance
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
The 3 possibilities
Phase 4 :
Transformational
change or death

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Strategic drift

  • 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