Strategic management involves developing a strategy to achieve long-term organizational objectives. It is a process that includes formulating strategy, implementing strategy, and evaluating strategy. Strategic decisions require top management involvement, large resource commitments, and consideration of external factors. Strategies can be formulated at the corporate, business, and functional levels. The strategic management process helps organizations effectively plan for and adapt to changes in their environment.

1. Strategic Management

2. Strategic Management
“Without a strategy the organization is like a
ship without a rudder, going around in circles.”
- Joel Ross and Michael Kami
2

3. Learning Outcomes
 Meaning & definition
 Dimensions of Strategic Decisions
 Level of Strategy
 Characteristics of Strategic Management Decision
 Formality in Strategic Management
 Value of Strategic Management
 Role of chief executive in Strategic Management

4. STRATEGIC MANAGEMENT
Strategy:
 It is a plan or pattern of action set to achieve long
term objective of organizations
 Action occur in a sequence
 It is about future action based on forecasts, guesses
and anticipated change both in the environment and
it also actively considers what the competitors will do,
or have done.
 It is a plan of action, about change, doing a co-
ordinated set of things differently expecting that it
will ensure competitive advantage and organizational
success.

5. Strategy ...
 Strategies are the means by which long term
objectives will be achieved. David
 Consists of competitive moves & business
approaches to produce successful
performance
 Management’s “game plan” for
 Running the business
 Strengthening firm’s competitive position
 Satisfying customers
 Achieving performance targets

6. Definition
According to David (2005):
‘Strategies are the means by which long-term
objectives will be achieved.’
According to Wheelen & hunger (202):
‘A strategy of a corporation forms a comprehensive
master plan stating how the corporation will achieve
its mission and objectives. It maximises competitive
advantage and minimizes competitive disadvantage.’

7. Importance of Strategy
1. To defeat new entrant
2. To maximize earning
3. To minimize suppliers pressure
4. To counter substitute products through quality or
product differentiation
5. To acquire a strategic position

8. Strategic Thinking
Three Important Strategic Questions
1. Where are we now?
2. Where do we want to go?
3. How will we get there?

9. Characteristic of strategy
 Long term
 Action plan
 Competitive advantages
 Stakeholders’ expectation
 Strategic Fit
 Based on strategic Decision

10. Strategic Management
 It is about identification and description of the
strategies
 Analysis of environment
 It is predictable planning
 It is applicable in both small & large organization
 It is a process of:
 Formulating strategy
 Implementing strategy
 Evaluating strategy

11. Strategic Management...
 It refers to the managerial process of forming a
vision, setting objectives, crafting a strategy,
implementing the strategy & evaluation of the same
for corrective action/adjustments for achieving
corporate/business objectives
 Art & science of formulating, implementing,
and evaluating, cross-functional decisions that
enable an organization to achieve its objectives.

12. Definition of Strategic Management
 According to David (2005)-
‘Strategic Management can be defined as the art
and science of formulating, implementing and
evaluating cross-functional decisions that enable an
organization to achieve its objectives.’
 According to Wheelen and hunger (2002)
‘Strategic Management is a set of managerial
decisions and actions that determines the long-term
performance of a corporation.’

13. Process of strategic management
 Formulation
 Strategic formulation refers to the process of choosing the
most appropriate course of action the realization of
organizational goals and objectives and thereby achieving the
organizational vision.
 Implementation
 Implementation is the process that turns strategies and plans
into actions in order to accomplish strategic objective and
goals.
 Evaluation
 It is final phase of strategic management.
 The purpose of strategic evaluation is to evaluate the
effectiveness of strategy in achieving organizational objectives.

14. Strategic Management Model
Strategic Management Model
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Mission
Objectives
Strategies
Policies
Feedback/Learning
Environmental
Scanning
Societal
Environment
General Forces
Task
Environment
Industry Analysis
Structure
Chain of Command
Resources
Assets, Skills
Competencies,
Knowledge
Culture
Beliefs, Expectations,
Values
Reason for
existence
What results
to
accomplish
by when Plan to
achieve the
mission &
objectives Broad
guidelines for
decision
making
Programs
Activities
needed to
accomplish
a plan
Budgets
Cost of the
programs
Procedures
Sequence
of steps
needed to
do the job
Process
to monitor
performance
and take
corrective
action
Performance
External
Internal

15. Strategy Formulation
Strategy Selection
Vision & Mission
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
External Opportunities & Threats

16. Strategy Implementation
Annual Objectives
Policies
Resource Allocation
Employee Motivation

17. Strategy Evaluation
Internal Review
External Review
Corrective Actions
Performance Metrics

18. The Five Tasks of Strategic Management
 Develop strategic vision & mission
 Setting objectives
 Crafting strategies to achieve objective
 Implementing the strategies
 Evaluating & correcting the strategies

19. Dimensions of Strategic
Decisions
1 . Strategic issues require top-
management decisions
– Strategic decisions overarch several
areas of a firm’s operations
– Usually only top management has the
perspective needed to understand
their broad implications
– Usually only top managers have the
power to authorize necessary
resource allocations

20. Dimensions of Strategic
Decisions
2. Strategic issues require large
amounts of the firm’s resources
 They involve substantial allocations of
people, physical assets, and money
 Strategic decisions commit the firm to
actions over an extended period
 In highly competitive firms, achieving and
maintaining customer satisfaction
frequently involves commitment from
every facet of the firm

21. Dimensions of Strategic
Decisions
3. Strategic issues often affect the firm’s
long-term prosperity
 Strategic decisions commit the firm for a long
time, typically 5 years; however the impact
lasts much longer
 Once a firm has committed itself to a strategy,
its image and competitive advantages are
usually tied to that strategy
 Firms become known for what they do and
where they compete. Shifting away from that
can jeopardize their previous gains.

22. Dimensions of Strategic
Decisions
4. Strategic issues are future-oriented
 They are based on what managers
forecast, rather than what they know
 Emphasis is on the development of solid
projections that will enable a firm to seek
the most promising strategic options
 A firm will succeed only if it takes a
proactive (anticipatory) stance toward
change

23. Dimensions of Strategic
Decisions
5. Strategic issues usually have
multifunctional or multi-business
consequences.
 Strategic decisions have complex
implications for most areas of the firm
 Decisions about customer mix, competitive
emphasis, or organizational structure involve
a number of the firm’s SBUs, divisions, or
program units

24. Dimensions of Strategic
Decisions
6. Strategic issues require considering the
firm’s external environment
 All businesses exist in an open system. They
affect and are affected by external conditions
that are largely beyond their control
 Successful positioning requires that strategic
managers look beyond operations and consider
what are the other relevant areas likely to
impact its strategic moves.

25. Dimension of Strategic Decision
1. Strategic issues require top management decisions
2. Strategic issues require allocation of large amounts
of company resources
3. Strategic issues often affect the firm’s long term
prosperity
4. Strategic issue are future oriented
5. Strategic issue usually have multifunctional or
multi-business consequences
6. Strategic issues require considering the firm’s
external environment

26. Level of Strategy
1. Corporate level
1. Growth/Expansion Strategy
2. Stability strategy
3. Retrenchment Strategy
4. Combination Strategy
2. Business Level
1. Cost Leadership Strategy
2. Differentiation Strategy
3. Focus Strategy
3. Functional Level
1. R & D Strategy
2. Operations strategy
3. Financial strategy
4. Marketing Strategy
5. Human Resource strategy

27. Level of Strategy
 Single Business Firms
Corporate/ Business Level
Functional Level
Corporate/Business
Level
R & D
Strategies
Financial
Accounting
Strategies
Marketing
Strategies
Human
Resource
Strategies

28. Level of Strategy
 Multiple Business Firms
Corporate Level
Business Level
Functional Level
Corporate
Strategies
Business 1 Business 2 Business 3
R & D
Strategies
Financial,
Accounting
Strategies
Marketing
Strategies
Human
Resource
Strategies

29. Corporate level strategy
 Corporate Strategies, also known as grand or root
strategies, are fundamentally concerned with selection of
businesses in which organization should be in and with the
development & coordination of the portfolio of businesses.
 It focus on
1. Growth/Expansion Strategy
2. Selection of business
3. Stability strategy
4. Retrenchment Strategy
5. Combination Strategy

30. Business Level strategy
 Formulated to meet the objectives of a business
unit for developing and sustaining competitive
advantage of a business or set of business units.
 It depends on the industry structure and the
forces that shape competition in that industry
and positioning of the organization in that
industry.
 It focus on
1. Cost Leadership Strategy
2. Differentiation Strategy
3. Focus Strategy

31. Functional/Operational Level Strategy
 It is primarily concerned with successfully
implementing the strategic decisions made at
Corporate and business unit level through optimal
utilization of resources and competencies of the
business unit.
 It focus on
1. R & D Strategy
2. Financial strategy
3. Marketing Strategy
4. Human Resource strategy

32. Characteristic of strategy
 Long term
 Action plan
 Competitive advantages
 Stakeholders’ expectation
 Strategic Fit
 Based on strategic Decision

33. Strategic Decision
 Selecting the best alternative among different
alternative is known as strategic decision.
 Strategic decisions deal with the long run future of
an organizations and are rare , consequential and
directive.
 Strategic decisions are means to achieve ends these
decisions encompass the definition of the business,
products and market to be served, functions to be
performed and major policies needed for the
organization ionto execute decisions to achieve
objectives.

34. Importance of
strategic Decision
 Organizational effectiveness
 Improvement in operational capability
 Competitive advantages
 Resource Management
 Stakeholders Interest
 Strategic Control

35. Characteristics of strategic management
decisions
1. Long-term directions
2. Trying to achieve competitive advantages for the
firm
3. Scope of the Firm
4. Strategic fit
5. Building on or stretching the firm’s resources and
competencies
6. Requires major changes in the organization of
resources and products
7. Affect operational decisions
8. Affected by values and expectations of top
stakeholders
9. Complex and uncertain

36. Formality in strategic management
 Formality refers to the degree to which participants,
responsibilities, authority, and discretion in decision
making are specified.
 It varies widely among the companies.
 It is an important consideration in the study of
strategic management, because greater formality is
usually positively correlated with the cost,
comprehensiveness, accuracy, and success of
planning.

37. Three Modes of Formality
 Entrepreneurial Mode – most small firms
 Planning Mode – most large firms
 Adaptive Mode – most medium size firms

38. Forces Determining Formality
 Organizational Size
 Predominant Management Styles
 Complexity of Environment
 Production Process
 Purpose of the Planning System
 Stage of Firm’s Development

39. Value of strategic management
 A strategy is made on rational and logical manner, thus its
success are ensured.
 Strategy is a planned procedure so it reduce frustration and
achieve the target easily
 It brings growth in the organization because it seeks
opportunities
 Strategic management not only implement the strategy but it
evaluate and revise the weakness which helps to remain the
companies strength in future.
 Strategic management looks on PESTEL & SWOT analysis and
it helps on naturalise the threats in such a way that they
become an opportunity for their success.
 Strategic management focuses on proactive approach which
enables organization to grasp every opportunity that is
available in the market

40. Benefits of Strategic
Management
 Financial benefits
 Improvement in sales
 Improvement in profitability
 Improvement in productivity
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41.  Non-Financial benefits
 Enhanced awareness of external threats
 Improved understanding of competitors’
strategies
 Increased employee productivity
 Reduced resistance to change
 Understanding of performance-reward
relationships
 Enhances problem-prevention capabilities
Benefits of Strategic Management41

42. 1. Identification of opportunities
2. Objective view of management problems
3. Improved coordination and control
4. Minimizes adverse conditions and changes
5. Decisions to better support objectives
6. Effective allocation of time and resources
7. Internal communication among personnel
Benefits of Strategic Management
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43. Role of chief executive in Strategic
Management
1. Roles in formulating strategy
 Define and provide long-term direction to the
firm
 Work as a bridge in between the board of
directors and business managers
 Allow managers from all levels to participate in
decision making

44. Role of chief executive in strategic
management...
2. Roles in implementing strategy
 Provide guidelines to the entire organizations
 Make managers and organizational members
more responsive to environmental changes
 Help to unify the organization
 Create a more proactive management posture
 Promote development of business models to
enhance bottom line success for the firm
 Provide managers with a rationale for
evaluating competing budget requests

45. Strategy Makers: The CEO
 As a figurehead (organization head)
 Leadership Role
 Interpersonal Role
 Decision Role
 As an entrepreneur
 As a disturbance handler
 As a resource allocator
 As a negotiator
 Information Role
 Monitor
 Disseminator
 Spokesperson
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