Management Presentation (Academic)

1. Strategic Management
Presentation on the Topic
‘Different Levels of Strategies,
Relevance of Strategic Management in 21st Century ’
Supervised By :
Dr. Sujit Kumar Dubey
Institute of Management Studies,
Banaras Hindu University
Presented By :
Amrita Sinha,
Roll Num : 003
MBA (3rd Semester)
Session : 2016-18

2. Strategic management involves the formulation and implementation of the major
goals and initiatives taken by a company's top management on behalf of owners,
based on consideration of resources and an assessment of the internal and
external environments in which the organization competes
Different Levels of Strategic Managements :
 Corporate Level Strategy
 Business Level Strategy
 Functional Level Strategy

3. Corporate Level Strategy :
 Corporate level strategies are formulated by the top management with
inputs from middle level management and lower level management in the
formulation process and designing of sub strategies.
 Decisions are complex and affects the entire organization
 It is concerned with the efficient allocation and utilization of scarce
resources for the benefit of the organization
 Corporate level strategies are mapped out around the goal and objectives
of an organization. They seek to translate these goals and objectives to
reality
 Typical examples of decisions made are decisions on products and markets

4. Types of corporate Strategy:
The three main types of corporate strategies are Growth strategies, stability
strategies and retrenchment.
 Corporate level strategies are formulated by the top management with
inputs from middle level management and lower level management in the
formulation process and designing of sub strategies.
Growth Strategy :
 As name implies, corporate strategies are those corporate level strategies
designed to achieve growth in key metrics such as sales / revenue, total
assets, profits etc.
The two basic growth strategies are: Concentration strategies and
Diversification strategies.

5. Concentration Strategy :
The two main types of concentration strategies are vertical growth strategy and
horizontal growth strategy:
Vertical growth strategy: By utilizing this strategy, the company participates in
the value chain of the product by either taking up the job of the supplier or
distributor. If the company assumes the function or the role previously taken up by a
supplier, we call it backward integration, while it is called forward integration if a
company assumes the function previously provided by a distributor.
Horizontal growth strategy: Horizontal growth is achieved by expanding
operations into other geographical locations or by expanding the range of products
or services offered in the existing market. Horizontal growth results into horizontal
integration which can be defined as the degree in which a company increases
production of goods or services at the same point on an industry’s value chain.

6. Diversification Strategy:
Two basic types of diversification strategies are concentric and conglomerate :
Concentric Diversification: This is also called related diversification.
It involves the diversification of a company into a related industry.
This strategy is particularly useful to companies in leadership position as the firm
attempts to secure strategic fit in a new industry where the firm’s product
knowledge, manufacturing capability and marketing skills it used so effectively in the
original industry can be used just as well in the new industry it is diversifying into.
Conglomerate Diversification: This is also called unrelated diversification;
it involves the diversification of a company into an industry unrelated to its current
industry.
This type of diversification strategy is often utilized by companies in saturated
industries believed to be unattractive, and without the knowledge or skill it could
transfer to related products or services in other industries.

7. Stability Strategy
Stability strategies are mostly utilized by successful organizations operating in a reasonably
predictable environment. It involves maintaining the current strategy that brought it success
with little or no change.
There are three basic types of stability strategies, they are:
No change Strategy: When a company adopts this strategy, it indicates that the company is
very much happy with the current operations, and would like to continue with the present
strategy. This strategy is utilized by companies who are “comfortable” with their competitive
position in its industry, and sees little or no growth opportunities within the said industry.
Profit Strategy: In using this strategy, the company tries to sustain its profitability through
artificial means which may include aggressive cost cutting and raising sales prices, selling of
investments or assets, and removing non-core businesses. The profit strategy is useful in two
instances:
 To help a company through tough times or temporary difficulty; and
 To artificially boost the value of a company in the case of an Initial Public Offering (IPO)

8. Stability Strategy
Stability strategies are mostly utilized by successful organizations operating in a reasonably
predictable environment. It involves maintaining the current strategy that brought it success
with little or no change.
Types :
Pause/ Proceed with caution Strategy: This strategy is used to test the waters before
continuing with a full fledged strategy. It could be an intermediate strategy before proceeding
with a growth strategy or retrenchment strategy. The pause or proceed with caution strategy
is seen as a temporary strategy to be used until the environment becomes more hospitable or
consolidate resources after prolonged rapid growth.

9. Retrenchment Strategies
Retrenchment strategies are pursued when a company’s product lines are
performing badly as a result of finding itself in a weak competitive position or a
general decline in industry or markets. The strategy seeks to improve the
performance of the company by eliminating the weakness pulling the company
back.
Examples of retrenchment strategies are:
Turnaround Strategy: This strategy is adopted for the purpose of reversing the
process of decline. This strategy emphasizes operational efficiency and is most
appropriate at the beginning of the decline rather than the critical stage of the
decline.
Divestment Strategy: Divestment also known as divestiture is the selling off of
assets for the different goals a company seeks to attain. This strategy involves the
cutting off of loss making units, divisions or Strategic Business Units (“SBU”).

10. Retrenchment Strategies
Retrenchment strategies are pursued when a company’s product lines are
performing badly as a result of finding itself in a weak competitive position or a
general decline in industry or markets. The strategy seeks to improve the
performance of the company by eliminating the weakness pulling the company
back.
Examples of retrenchment strategies are:
Liquidation Strategy: Liquidation strategy is considered a last resort strategy, it is
adopted by company’s when all their efforts to bringing the company to profitability
is futile. The company chooses to abandon all activities totally, sell off its assets and
see to the final close and winding up of the business.

11. The Business Strategy :
The Business strategy is a detailed plan outlined on how to deliver value to customer
at the same time positioning itself as having a competitive advantage over the
competitor. The five types of business level strategies are as follows.
1. Cost Leadership – Organizations compete for a wide customer based on price. This
can include:
 Building state of art efficient facilities (may make it costly for competition to imitate)
 Maintain tight control over production and overhead costs
 Minimize cost of sales, R&D, and service.
How to Obtain a Cost Advantage?
Determine and Control Cost
Reconfigure the Value Chain as Needed
Risks
Technology
Imitation
Tunnel Vision

12. The Business Strategy :
2. Differentiation - Value is provided to customers through unique features and
characteristics of an organization's products rather than by the lowest price. This is
done through high quality, features, high customer service, rapid product innovation,
advanced technological features, image management, etc. (Some companies that
follow this strategy: Rolex, Intel, Ralph Lauren)
Create Value by:
Lowering Buyers' Costs – Higher quality means less breakdowns, quicker response to
problems.
Raising Buyers' Performance – Buyer may improve performance, have higher level of
enjoyment.
Sustainability – Creating barriers by perceptions of uniqueness and reputation,
creating high switching costs through differentiation and uniqueness.
Risks of Using a Differentiation Strategy
Uniqueness
Imitation
Loss of Value

13. The Business Strategy :
3. Focused Low Cost- Organizations not only compete on price, but also select a small
segment of the market to provide goods and services to. For example a company that
sells only to the U.S. government.
4. Focused Differentiation - Organizations not only compete based on differientation,
but also select a small segment of the market to provide goods and services.
Focused Strategies - Strategies that seek to serve the needs of a particular customer
segment (e.g., federal govt).
•Companies that use focused strategies may be able serve the smaller segment (e.g.
business travelers) better than competitors who have a wider base of customers. This
is especially true when special needs make it difficult for industry-wide competitors
to serve the needs of this group of customers. By serving a segment that was
previously badly segmented an organization has unique capability to serve niche.
Risks of Using Focused Strategies:
Maybe out focused by competitors (even smaller segment)
Segment may become of interest to broad market firm(s)

14. The Business Strategy :
5. Using an Integrated Low-Cost/Differentiation Strategy
This new strategy may become more popular as global competition increases. Firms
that use this strategy may see improvement in their ability to:
Adaptability to environmental changes.
Learn new skills and technologies
More effectively leverage core competencies across business units and products lines
which should enable the firm to produce produces with differentiated features at
lower costs.

15. The Functional Level Strategy :
Functional Level Strategy:
Functional level strategy is a response to operational level strategy.
It advocates for the business to see its management decisions as specific to a
functional area of the organization, such as marketing, human resources, finance,
information management and public relations.
The advantages of this are that employees and resources can be assigned to the
tasks that best suit their skills and interests.
If you have an employee with expertise in HR, for instance, it makes logical sense to
assign her to the human resources function instead of the finance division.
Functional level strategy aims to see people and resources as an end in themselves,
not a means to an end.

16. The Functional Level Strategy :
Functional Level Strategy: Disadvantages
•Functional level strategy is quite useful from the standpoint of valuing the innate
worth of the people and resources with an organization, but there are some
disadvantages that are particularly evident in smaller businesses.
•Oftentimes, small businesses combine several functions into one or a few
departments. A business might not have enough staff or resources to separate HR,
technology, finance and other departments from one another.
•All of these functions might be performed by a few or even just one person. In these
cases, functional level strategy is more difficult to employ because the tasks and
strategies a business undertakes begin to look more like operations than they do
functions.
•A good business manager can employ operational level strategy where it is a
appropriate and use functional level strategies where they fit in best.
•.

17. Relevance of Strategic Management in 21st Century :
With the advent of the Liberalisation and globalization, the tactics and
strategies necessary for success have become more complicated,
sophisticated, and even radical.
To succeed in the long term, companies must compete effectively and
outperform their rivals in a dynamic, and often turbulent environment
It is important for organizations to be flexible, using strategies that help the
workforce adapt to change and modify strategies that don't work
Being a flexible provider of goods and services is critical to achieving
business leadership. Having adaptable processes that deliver this flexibility to
the customer is of major importance

18. Relevance of Strategic Management in 21st Century :
 Strategic thinking is a combination of convergent, divergent and creative
thinking combined with critical judgement .
To succeed in the long term, one must focus on Organizational Missions
Technology Revolution
Globalization and the Global Economy
Competition and Competitive Advantage
Future Challenges

19. References
 Harvard Business Review., Michael Porter., HBR’s 10 Must Reads on Strategy
(including featured article “What Is Strategy?” by Michael E. Porter)
 Phanish Puranam., Bart Vanneste., Corporate Strategy: Tools for Analysis and
Decision-Making
 Walter Kiechel., The Lords of Strategy: The Secret Intellectual History of the New
Corporate World