The document provides an overview of strategic management, detailing its importance in formulating and implementing strategies to achieve organizational goals. It discusses components such as vision, mission, and functional strategies, along with the process of strategy management, which includes goal-setting, situation analysis, and implementation. Additionally, it outlines the benefits and risks of strategic management, emphasizing improved decision-making, resource allocation, and potential challenges in execution.

1. MODULE 1
Unit 1
Introduction to Strategic Management
Concept and process of Strategic
Management, Benefits and Risks of
Strategic Management, Vision and
Mission,
Functional Strategies: Human Resource
Strategy, Marketing Strategy, Financial
Strategy, Levels of Strategies: Corporate,
Business and Operational Level Strategy
M.COM I SEM I STRATEGIC MANAGEMENT
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2. • Strategic management is the concept of
identification, implementation, and
management of the strategies that managers
carry out to achieve the goals and objectives
of their organization.
• It can also be defined as a bundle of
decisions that a manager has to undertake
which directly contributes to the firm’s
performance.
• The manager responsible for Strategic
management must have a thorough
knowledge of the internal and external
organizational environment to make the right
decisions.
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3. • The basic concept of strategic
management consists of a continuous
process of planning, monitoring, analysing
and assessing everything that is necessary
for an organization to meet its goals and
objectives.
• In simple words, it is a management
technique used to prepare the organization
for the unforeseeable future.
• Strategy management helps create a vision
for an organization that helps to identify
both predictable as well as unpredictable
contingencies.
• It involves formulating and implementing
appropriate strategies so the organization
can attain sustainable competitive
advantage.
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4. Components of
Strategy Management
• Strategic Intent
• Strategic Intent of an organization clarifies the
purpose of its existence and why it will continue
to exist. It helps paint a picture of what an
organization should immediately do to achieve
the company’s vision.
• Mission
• Mission component of strategy management
states the role by which an organization intends to
serve its stakeholders. It describes why an
organization is operating that helps provide a
framework within which the strategies to achieve
its goals are formulated.
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5. • Vision
• The visual component of strategy
management helps identify where
the organization intends to be in
the future. It describes the
stakeholder dreams and
aspirations for the organization.
• Goals and Objectives
• Goals help specify in particular
what must be done in order to
attain an organization’s mission or
vision. Goals make the mission
component of strategy
management more prominent.
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6. Process of Strategy
Management
• Setting the Goal – The first and foremost
stage in the process of strategic
management requires the organization to set
the short term and long-term goals it wants
to achieve.
• Initial Assessment – The second stages says
to gathers as much data and information as
possible to help state the mission and vision
of the organization.
• Situation Analysis – It refers to the process of
collecting, scrutinizing and providing
information for strategic purposes. It helps in
analyzing the internal and external
environment that is influencing an
organization.
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7. • Strategy Formulation – Strategy formulation is
the process of deciding the best course of action
to be taken to achieve the goals and objectives
of the organization.
• Strategy Implementation – Executing the
formulated strategy in such a way that it
successfully creates a competitive advantage for
the company. In simple words, putting the
chosen plan into action.
• Strategy Monitoring – Strategy Monitoring
involves the key evaluation strategies like
considering the internal and external factors that
are the root of the present strategies and
measuring the team performance.
• SWOT Analysis – It helps in determining the
Strengths, Weaknesses, Opportunities and
Threats (SWOT) of an organization and taking
remedial/corrective courses of actions to fight
these weaknesses and threats.
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8. BENEFITS OF STRATEGIC
MANAGEMENT
1. Improved decision-making: Strategic management
provides a framework for better decision-making by
allowing leadership to assess the potential impact of
their decisions on the overall strategic objectives of
the organization.
2. Enhanced collaboration: Strategy management
encourages collaboration between departments and
functions ensuring that everyone is working toward
the same goals and objectives.
3. Better organizational performance: Strategy
management also helps organizations to focus on
the areas that need improvement, identify the best
ways to achieve their goals and objectives, and
measure progress.
•
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9. Effective resource
allocation: Strategic management
encourages organizations to utilise
their resources more efficiently by
ensuring that resources are allocated
to the most important areas.
Increased customer
satisfaction: Strategy management
helps organizations to better
understand their customers and
develop strategies to meet their
needs.
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10. Financial
Benefits of
Strategic
Management
Financial Liquidity Monitoring
Strategic management enables businesses to keep an eye on cash flow and make
sure that the money they have available is aligned with long-term objectives.
Also, it enables business leaders to raise money when necessary for ongoing
operations.
Better Revenue Generation
Senior executives might modify their strategic vision to consider local reality by
soliciting candid, diverse viewpoints from business-unit chiefs. This cooperative,
back-and-forth method aids a business in understanding its clientele and
ultimately increases sales, thus making revenue generation one of the biggest
benefits of strategic management.
Increasing market share and profitability
This is one of the important benefits of strategic management. One can
approach the proper target market with the aid of strategic management skills.
All industries can investigate better consumer segments, products, and services,
as well as comprehend the market circumstances of the sector in which they are
engaged, if they have a highly concentrated plan and strategic thinking.
Prevents Legal Risks
One of the major benefits of strategic management is that it enables businesses
to include employee policies. Additionally, it enables the organisation to develop
internal procedures and checks to address board member and shareholder
conflicts of interest.
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11. Non-Financial
Benefits of
Strategic
Management
Discharges Board Responsibility
The primary justification given by most organisations for having a
strategic management process is that it relieves the Board of Directors of
responsibilities.
Forces An Objective Assessment
The discipline of strategic management gives the board and senior
management the ability to truly stand back from day-to-day operations
and consider the organization's future.
Make Better business decisions
One of the key benefits of strategic management is that it makes a
framework Every member of the workforce within which they can make
daily operational decisions from business perspective and know that they
are all leading the company in the same direction.
Supports Understanding & Buy-In
The board and employees can better comprehend the direction, the
rationale behind it, and the advantages it brings if they are allowed to
participate in the strategic conversation. While some people only need to
know, many people need to comprehend in order to have their complete
support.
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12. Enables Measurement of Progress
Enabling measurement of progress is one of the many benefits of
strategic management. An organisation must create goals and
success criteria as part of a strategic management process. In
order to develop targets and keep these crucial metrics in front of
the board and senior management, the business must first
identify the factors that are essential to its continued success.
Rejuvenate human resources
One of the benefits of strategic management is to make strategic
decisions on developing a hiring strategy based on comprehensive
feedback which attracts the most capable professionals to ensure
the company
Provides an Organizational Perspective
Handling operational challenges rarely takes into account the
interdependence of the organization's many parts as a whole. In
order to create a strategy that is best for the entire company, not
just a single component, strategic management adopts an
organisational viewpoint and examines all the components and
their interactions.
Creating a better future
The effectiveness of your organisation is increased when strategic
decisions are put into practise, which is one of their most
outstanding advantages. Setting the tone for the entire
organisation begins with the decisions you make today. A
proactive strategy reduces potential dangers.
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13. Risks of
Strategic
Management
1.Limitation of Assumption
2.Problem in Analyzing Environment
3.Unrealistic Mission and Objectives
4.Problem of Setting Target
5.Lack of Commitment of Lower Level
6.Problem of Resistance
7.More theoretical in Nature
8.Problem of Internal Politics
9.Problem of Traditional Management
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14. Risks involved in Strategic
Management
• Strategic management is an intricate and
complex process that takes an organisation into
unchartered territory.
• It does not provide a ready-to-use prescription
for success. Instead, it takes the organisation
through a journey and offers a framework for
addressing questions and solving problems.
• Strategic management is not, therefore, a
guarantee for success; it can be dysfunctional if
conducted haphazardly
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15. • It is a costly exercise in terms of the time that
needs to be devoted to it by managers.
• The negative effect of managers spending
time away from their normal tasks may be
quite serious.
• A negative effect may arise due to the non-
fulfilment of the expectations of the
participating managers, leading to frustration
and disappointment.
• Another negative effect of strategic
management may arise if those associated
with the formulation of strategy are not
intimately involved in the implementation of
strategies.
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16. VISION
“Good business leaders
create a vision, articulate
the vision, passionately
own the vision, and
relentlessly drive it to
completion.”
–Jack Welch, former CEO
of General Electric
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17. M.COM I SEM I STRATEGIC MANAGEMENT
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18. • Many skills and abilities separate effective
strategic leaders like Howard Schultz from
poor strategic leaders.
• One of them is the ability to inspire
employees to work hard to improve their
organization’s performance.
• Effective strategic leaders can convince
employees to embrace lofty ambitions and
move the organization forward.
• In contrast, poor strategic leaders struggle
to rally their people and channel their
collective energy in a positive direction.
• An organization’s vision describes what
the organization hopes to become in the
future.
• Well-constructed visions clearly articulate
an organization’s aspirations.
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19. Company Vision
Alcoa
To be the best company in the world–in the eyes of our
customers, shareholders, communities and people.
Avon
To be the company that best understands and satisfies
the product, service and self-fulfillment needs women–
globally.
Chevron
To be the global energy company most admired for its
people, partnership and performance.
Google To develop a perfect search engine.
Kraft Foods Helping people around the world eat and live better.
Proctor and Gamble
Be, and be recognized as, the best consumer products
and services company in the world.
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20. •FIND OUT VISION STATEMENTS OF
ANY 5 COMPANIES……..
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21. MISSION
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22. • In working to turnaround Starbucks, Howard Schultz sought to renew
Starbucks’s commitment to its mission statement: “to inspire and
nurture the human spirit—one person, one cup and one neighborhood
at a time.”
• A mission such as Starbucks’s states the reasons for an organization’s
existence.
• Well-written mission statements effectively capture an organization’s
identity and provide answers to the fundamental question “Who are
we?” While a vision looks to the future, a mission captures the key
elements of the organization’s past and present
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23. Ranboxy Petrochemicals: To become a research based global company.
Reliance Industries: To become a major player in the global chemicals business and
simultaneously grow in other growth industries like infrastructure.
ONGC: To stimulate, continue and accelerate efforts to develop and maximize the
contribution of the energy sector to the economy of the country.
Cadbury India: To attain leadership position in the confectionery market and
achieve a strong national presence in the food drinks sector.
Hindustan Lever: Our purpose is to meet everyday needs of people everywhere – to
anticipate the aspirations of our consumers and customers, and to respond
creatively and competitively with branded products and services which raise the
quality of life.
McDonald: To offer the customer fast food prepared in the same high quality
worldwide, tasty and reasonably priced, delivered in a consistent low key décor and
friendly manner.
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24. • It helps to ensure unanimity of purpose within the organisation.
• It provides a basis or standard for allocating organisational resources.
• It establishes a general tone or organisational climate.
• It serves as a focal point for individuals to identify with the organisation’s
purpose and direction.
• It facilitates the translation of objectives into tasks assigned to responsible
people within the organisation.
• It specifies organisational purpose and then helps to translate this purpose
into objectives in such a way that cost, time and performance parameters
can be assessed and controlled
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25. •FIND OUT MISSION STATEMENTS OF
ANY 5 COMPANIES……..
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26. Functional Strategy
According to Gareth R. Jones,
“Functional strategy is a plan of
action to strengthen an
organization’s Functional and
organizational resources, as well
as its coordination abilities, in
order to create core
competencies.”
Corporate and Business
strategies give birth to
functional strategies, which
are implemented in the
organization through
functional and operational
implementation.
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27. • According to Thompson and Strickland, “The
term functional strategy refers to the managerial game
plan for a particular functional activity, business
process, or key department within a business.
• A company’s marketing strategy, for example,
represents the managerial game plan for running the
marketing part of the business.
• A company’s new product development strategy
represents the managerial game plan for keeping the
company’s product lineup fresh and in tune with what
buyers are looking for.”
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28. • Each functional department carries out its own functional
responsibility by executing short- and medium-term
plans to play its role in meeting overall corporate
objectives.
• For example, in marketing strategy; the process may
focus on selecting the target market, developing a market
plan that may satisfy the overall needs of the target
customers.
• In human resource strategy, the functions may deal with
recruitment and selection of the employees, their
retention, training and development, evaluation, and
remuneration part.
• Financial strategy may go with issues of funding, shares,
debt financing, depreciation etc.
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29. • The functional strategies relate to the
operating divisions and thus connect to
business processes and value chain.
• Higher-level strategies depend upon
these strategies as they provide input to
the business level and corporate level
strategies.
• Once the higher-level strategies are
formulated, the functional units
translate them into the course of action
plan, which each department is
supposed to complete within a due
course of time for the success of the
strategy.
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30. An organization with multi-units
dealing in several businesses at a
same time, create a business
strategy for each business and each
business with separate sets of
departments constitute their own
functional strategies for each
department.
For example, if an
organization decides to go
for differentiation strategy,
all the activities of each
department, must be
focused on fulfilling that
purpose only.
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31. FEATURES OF FUNCTIONAL STRATEGY
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32. • It acts to achieve corporate and business unit
objectives by maximizing resource productivity.
• It is the game plan to manage a principal
subordinate activity within a business.
• Functional strategy is concerned with
developing and nurturing a distinctive
competence to provide a company or business
unit with a competitive advantage.
• The orientation of the functional strategy is
dictated by its parent business unit’s strategy.
• Functional strategy is narrower in scope than
business strategy. It contains relevant details of
the overall business game plan by setting out
the actions, approaches and practices which are
to be employed in managing a particular
function.
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33. Functional Strategies
• Human Resource Strategy
• Marketing Strategy
• Financial Strategy
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34. Marketing Strategy
• A marketing strategy for a service-oriented
organization would be to create a lasting,
long-term link between the organization
and the customers. Their functional
strategy will include social media
marketing, lead generations and SWOT
(Strength, Weakness, Opportunity &
Threats) Analysis to study the competition.
• These strategies focus on identifying target
audiences, understanding market
dynamics, creating value propositions, and
developing marketing campaigns to reach
customers effectively.
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35. • Apple has a clear marketing strategy
focusing on creating a powerful
brand image associated with
innovation, quality, and luxury.
• This is done through high-impact
product launches, minimalist and
creative advertising, and cultivating
a sense of exclusivity around its
products.
• They also meticulously control their
retail environments (both physical
and online) to ensure the buying
experience is aligned with their
brand image.
• Marketing & Advertising Strategy of Apple: A critical lens
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36. • A company like Coca-Cola might
have a marketing strategy to
strengthen its brand image by
associating it with happiness and
fun.
• This could involve launching a global
advertising campaign focusing on
these themes, local events, and
experiences that resonate with this
message.
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37. Finance Strategy
• When you have your corporate
strategies down pat, you must raise
the required finances. For a startup,
it can be seed funding, investor
money or bank financing. Other
financial strategies include capital
budgeting and dividend strategies for
equity shareholders.
• This strategy involves financial
planning and management, such as
budgeting, cost control, cash flow
management, capital structure, risk
management, and investment
decisions.
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38. • Apple maintains a very large cash reserve,
which gives them significant flexibility in
strategic investments, acquisitions, and
R&D.
• Despite their cash holdings, they also use
debt financing strategically, taking
advantage of low-interest rates.
• A startup might have a financial strategy of
securing additional capital to fuel its rapid
growth.
• This could involve pursuing venture capital
funding, maintaining a lean operational
budget to extend their financial runway, and
planning for a future initial public offering
(IPO).
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39. Human
Resource
Strategy:
•HR strategies include
decisions about recruitment,
selection, training,
performance management,
compensation, and employee
retention.
•The aim is to attract,
develop, and retain a
workforce that can effectively
execute business strategies.
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40. • Apple works hard to attract and retain top
talent, offering competitive compensation
packages, opportunities for career
development, and a work environment that is
both challenging and rewarding.
• They also foster a culture of secrecy and
urgency around their product development,
which helps drive innovation.
• Google has a human resource strategy of
attracting and retaining the best talent in the
industry.
• They do this by providing a great work
environment, excellent compensation
packages, opportunities for career growth,
and other perks like free meals and employee
wellness programs.
• Talent Management Strategy & Practices
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41. Three levels of strategy are the
different levels of strategic
management that run across the
organization from the highest
corporate level to the bottom
functional level.
The three levels of strategy include the
• Corporate-level Strategy,
• Business-level Strategy, and
• Functional-level Strategy.
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42. M.COM I SEM I STRATEGIC MANAGEMENT
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43. • The difference between the three
levels of strategy is who to
implement the strategy. Since they
are affecting in the different levels;
• Corporate level strategy involves
top-level management.
• Business level strategy involves the
ability to compete of each business
unit.
• Functional level strategy involves
every single function in every
business unit.
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44. Corporate Level Strategy
• Corporate level strategy is the
highest level of all three levels of
strategy.
• The corporate level strategies are
used to define and guideline the
direction for the company in the big
picture.
• To put it simply, the corporate
strategy is the main theme of all
strategies within an organization.
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45. • There are three main themes of the corporate
level strategy includes growth strategy, stability
strategy, and retrenchment strategy.
• Growth strategy is a strategy that focused on
expanding the business to increase the revenue
in various ways: find new customers, selling
existing products to the new market, merger,
acquisition, and diversification. The growth
strategies are simply found in the Ansoff
Product-market matrix.
• Stability strategy is a strategy that focused on
stable the business (as its name) to improve the
current business without investment or
divestment.
• Retrenchment strategy is a strategy that focused
on stable the company’s financial position by
stop unprofitable operations to cut the
company’s expenses.
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46. Business Level
Strategy
• Business level strategy is how the company competes
with others in the market with its products or services.
• For the business level strategy, the company needs to
determine what is the competitive advantage for each
business unit.
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47. • There are 4 types of competitive
advantages for the business level
strategy following the Porter’s generic
model: cost leadership, differentiation,
cost focus, and focus differentiation.
• Cost leadership is a strategy that the
company produce products in huge
amounts or with low-cost labor to
compete.
• Differentiation is a strategy that seeks
advantage from the different by
developing brands that stand out from
the competitor.
• Cost focus is like the cost leadership
strategy but focused on the niche
market instead of the mass market.
• Focus differentiation is like
differentiation strategy but focused on
the niche market instead of the mass
market.
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48. Functional Level Strategy
• The functional level strategy is a strategy that is
implemented by each function in a business to
support the business-level strategy. Functional
level strategies typically are developed by
functional area executives.
• A business’s functional are include accounting,
finance, production, marketing, procurement,
service, research and development (R&D), human
resources, and logistics.
• To put it simply, the functional level strategy is
a strategy that uses in each department of a
single business unit.
• Additionally, if you ever heard about the Value
Chain (by Michael E. Porter), the functional level
strategy is strategies that are implemented in
each element of the Value Chain.
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49. M.COM I SEM I STRATEGIC MANAGEMENT
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50. Unit 2 Strategy Formulation, Implementation
and Evaluation
a) Strategic Formulation: Issues of strategic Choice, Stages and
Importance of strategic Formulation, Formulation of Alternative
Strategies: Mergers and Acquisitions, Joint Ventures, Diversification,
Turnaround, Divestment and Liquidation.
b) Corporate Portfolio Analysis- SWOT Analysis, BCG Matrix, GE Nine
Cell Matrix, Hofer’s Matrix, Importance and Problems of Strategic
Implementation, Importance, and Techniques of Strategic Evaluation
and Control
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51. Issues of
strategic
Choice
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Strategic choice is the mental process of selecting the
best or most appropriate strategy from the stock of
alternatives that serves the enterprise objectives.
‘Strategic choice’ involves selecting from among
several alternatives the most appropriate strategy
which will best serve the enterprise objectives.
To choose a good strategic option, past data, current
data, forecasted data, and various other factors
should be examined carefully.
The selection process becomes a complex job
because it is influenced by various factors.

52. Environmental
Constraints
• The dynamic elements of environment affect
the way in which choice of strategy is made.
• The survival and prosperity of a firm depend
largely on the interaction of the elements of
environment—such as shareholders, customers,
suppliers, competitors, the government and the
community.
• These elements constitute the external
constraints.
• The flexibility in the choice of strategy is often
governed by the extent and degree of the firm’s
dependence on the environment.
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53. Dynamism
of Market
Sector:
• Glueck has said, “The strategic choice is
affected by the relatively volatility of market
sector the firm chooses to operate in.”
Market forces vehemently influence the
choice of strategy.
• For example, a firm which obtains bulk
supply of its raw materials or components in
a competitive market will have greater
flexibility in its strategic choice than another
firm which must depend for its supplies on
an oligopolistic market.
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54. Intra-
Organisational
Factors:
• Organisational factors also affect the
strategic choice.
• These include organisational mission,
strategic intent, goals, organisation’s
business definition, resources, policies,
etc.
• Besides these factors, organisational
strengths, weaknesses, and capability to
implement strategic alternatives also
affect the strategic choice
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55. Corporate
Culture:
• In choosing a strategic alternative, strategy
makers must consider pressures from the
corporate culture.
• They must assess a strategy’s compatibility with
that culture. Every organisation has its own
corporate culture.
• It is made of a set of shared values, beliefs,
attitudes, customs, norms, etc.
• The successful functioning of an organisation
depends on ‘strategy-culture fit’.
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56. Industry and
Cultural
Backgrounds:
• Industry and cultural backgrounds
affect strategic choice.
• For example, executives with strong
ties within an industry tend to choose
strategies commonly used in that
industry.
• Other executives who have come to
the firm from another industry and
have strong ties outside the industry
tend to choose different strategies
from what is being currently used in
their industry.
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57. Pressures
from
Stakeholders:
• The attractiveness of a strategic alternative is
affected by its perceived compatibility with
the key stakeholders in a corporation’s task
environment.
• Creditors want to be paid on time. Unions
exert pressure for comparable wage and
employment security.
• Governments and interest groups demand
social responsibility. Shareholders want
dividends.
• All these pressures must be given some
consideration in the selection of the best
alternative.
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58. Impact of
Past
Strategies:
• It has been noticed that the choice of
current strategy may be influenced by
what type of strategies have been
used or followed in the past.
• Pearce and Robinson have said, “A
review of past strategy is the point at
which the process of strategic choice
begins. As such past strategy exerts
considerable influence on the final
strategic choice.”
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59. Personal
Characteristics:
• Personal factors like own perception,
views, interests, preferences, needs,
aspirations, personal disposition,
ambitions, etc., are important and
play a vital role in affecting strategic
choice.
• Even the most attractive alternative
might not be selected if it is contrary
to the attitude, mindset, needs,
desires and personality of the
selector/strategist himself.
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60. Value
System:
• The role of value system in choosing a
strategic alternative is well recognized.
• While evaluating the strategic
alternatives, different executives may
take different positions because of
differences in their personal values.
• Guth and Tagiuri found that personal
values were important determinants of
the choice of corporate strategy.
• Similarly, value system to top
management affects the types of strategy
that an executive chooses.
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61. Managerial
Attitude
towards
Risk:
• Managerial attitude towards
risk is an important factor that
influences the choice of strategy.
• Individuals differ considerably
in their attitude towards risk
taking. Some are risk prone,
others are risk averse.
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62. Managerial
Power
Relations:
• Choice of strategy is also influenced
by the power play among different
interest groups.
• William Guth in his study found that
strategic choice is significantly
affected by interpersonal relations
and power relationship among
members of the top management
team.
• Power politics is a crucial factor
determining the choice of strategy.
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https://www.businessmanagementideas.com/strategic-management/factors-affecting-strategic-choice/21044

63. Stages of strategic Formulation
• Strategy Formulation is an analytical
process of selection of the best
suitable course of action to meet the
organizational objectives and vision.
• It is one of the steps of the strategic
management process.
• The strategic plan allows an
organization to examine its resources,
provides a financial plan and
establishes the most appropriate
action plan for increasing profits.
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64. M.COM I SEM I STRATEGIC MANAGEMENT
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65. Establishing Organizational Objectives:
This involves establishing long-term goals of
an organization. Strategic decisions can be taken once
the organizational objectives are determined.
Analysis of Organizational Environment:
This involves SWOT analysis, meaning identifying the
company’s strengths and weaknesses and keeping
vigilance over competitors’ actions to understand
opportunities and threats.
Strengths and weaknesses are internal factors which
the company has control over. Opportunities and
threats, on the other hand, are external factors over
which the company has no control. A successful
organization builds on its strengths, overcomes its
weakness, identifies new opportunities and protects
against external threats.
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66. Forming quantitative goals: Defining targets so as to meet the company’s short-term
and long-term objectives. Example, 30% increase in revenue this year of a company.
Objectives in context with divisional plans: This involves setting up targets for every
department so that they work in coherence with the organization as a whole.
Performance Analysis: This is done to estimate the degree of variation between the
actual and the standard performance of an organization.
Selection of Strategy: This is the final step of strategy formulation. It involves
evaluation of the alternatives and selection of the best strategy amongst them to be
the strategy of the organization.
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https://businessjargons.com/strategy-formulation.html

67. Importance
of strategic
Formulation
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68. Formulation of Alternative Strategies
• Mergers and Acquisitions
• Joint Ventures
• Diversification
• Turnaround
• Divestment and Liquidation.
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https://www.ihmnotes.in/assets/Docs/Sem-5/Strategic%20Management/Ch-3%20STRATEGY%20FORMULATION.pdf