This presentation gives a detailed account of - What is strategy? - What are the various levels of strategy? - Stories of exemplar strategies - Criteria for Strategic Decision Making - Phases of strategic Management - Elements of strategic Management - Implementation of strategic management model

1. Introduction
Strategic Management and Business Policy

3. The Concept of Strategy
Origin Application
- A Plan or a course of action or a set of decision
making rules
- A pattern of activities that are derived from
objectives and goals
- Activities pursued to move an organisation from
where it is to where it has to be
- Related to resources required for implementing
the plan
- Connected to strategic positioning, establishing
trade off between activities and creating a fit
among them
- Planned coordination of major goals and actions
of the firm

4. Simply Put!!!
STRATEGY
MEANS TO ACHIEVE
OBJECTIVES

5. LevelsofStrategy
Corporate
Level
SBU Level
Functional
Level
Societal Level
Operational Level

6. CORPORATE
LEVEL
STRATEGY
WHAT? “ A comprehensive plan of action that covers
various functions performed by different SBUs”
WHY? This Plan deals with:
- Objectives of the Company
- Allocation of Resources
- Coordination of SBUs for Optimal and effective performance
HOW? The Coca Cola company invests huge amounts on its business expansion
projects in all the six operating regions of the world. It currently operates in
more than 200 countries which is a clear depiction of its growth strategy.
A growth strategy is a clear example of a corporate level strategy that helps
any company achieve its objectives and allocate resources optimally.

7. SBU/Business
LEVEL
STRATEGY
WHAT?
Any part of the business organisation which is treated separately for
strategic management purposes
A comprehensive plan that provides objectives for SBUs, allocates
resources among functional areas and coordinates between them
hence making optimal contribution to achievement of corporate level
objectives.
HOW? Reliance Industries Limited operates in textile fabrics, yarns, fibres,
and a variety of petrochemical products. For each product group, the
nature of market in terms of customers, competition, and marketing
channel differs.
Hence, the SBU level strategy for each product group will also be
different.
SBU
SBU Level
Strategy

8. FUNCTIONAL
LEVEL
STRATEGY
WHAT? “A relatively restricted plan that provides objectives for specific functions,
allocates resources among different operations and coordinates between
them hence making optimal contribution to the achievement of SBU as well
as corporate level objectives”.
The functional areas of a business that are commonly assigned function-
specific goals are human resources, production, research and development,
marketing, and perhaps information technology.
HOW? Advertising of a new product is launched 60 days prior to shipment of the first
product. This relates to the functional strategy of the marketing department
of an organisation.
Functional strategies have a shorter time span than business-level or
corporate –level strategies.

9. SOCIETAL
LEVEL
STRATEGY
“Generalised view of how the company relates itself to the society”
It is concerned with a particular need or a set of needs that the
company strives to fulfil in general.
- A societal strategy is a strategy that is formulated at a level higher
than the corporate level strategy.
- It is primarily based on the mission statement of an organisation.
- Most of the corporate level strategies are based on this strategy.

10. OPERATIONAL
LEVEL
STRATEGY
One step down the functional level , most companies usually set the
operational level strategies.
Each functional area has multiple operations for example marketing
has sales and advertising as its core operations.
Hence each functional (Marketing here) could have multiple
operational strategies ( Advertising strategy, sales strategy, etc).
Operational strategies deal with highly specific and narrowly defined
area.

11. STRATEGY STORIES!!!
This Scandinavian furniture giant- Ikea, has made it to the top of the furniture world all thanks to its un-imitable
strategy.
This company designs furniture on mass production and the perfect interdependence of its manufacturing,
shipping and design methods has enabled it to set its foot all across the globe.
While it is on the right strategic path, it is also important to know what does not form a part of the much talked
about Ikea success strategy:
IKEA Does Not:
- Sell High end Furniture
- Take Custom Orders
- Self Manufacture
COST
SAVING!!!!!

12. DECISION
MAKING
STRATEGIC
DECISION
MAKING
VS
Most important managerial function
Most important senior
management function

13. STRATEGIC
DECISION
MAKING
Strategic tasks by their very nature are complex and varied, hence decision
making while performing such tasks is in itself a complicated, intriguing and
enigmatic process.
Strategic
Management
Choice
regarding
course of action
to adopt
What is our business?
What will it be ?
What should it be ?
Ultimate
Strategic
Decision

14. STRATEGIC
DECISION MAKING
ISSUES
Being a complex process, strategic decision making is incomprehensible
and cannot be analysed or explained easily hence it is important to
consider certain issues related to the same:
1. Criteria for Decision Making:
The process of decision making is closely related to objective setting as objectives measure the efficiency and
effectiveness of the decision making process.
The are three major viewpoints concerned with setting criteria for decision making
Maximisation
This concept is based on the thinking that objectives are those attributes which are set at the highest point.
The firm directs itself towards achieving these objectives and thereby maximising its returns hence the term
maximisation.
Satisficing
This concept is based on the thinking that objectives should be set in such a manner that they can be achieved
realistically, through the process of optimisation.

15. Incrementalism
This concept is based on the thinking that behaviour of the firm and the process of decision making are highly
complex. Through this concept the firm moves towards attainment of objectives in small, logical and incremental
steps.
2. Rationality in Decision Making:
Rationality refers to exercising a choice from among various alternative courses of action in such a way that it
leads to the achievement of objectives in the best manner possible.
Rationality may mean different things to different people.
For some, a decision is rational if it leads to maximisation of profits, for others a decision is rational if it takes into
consideration the interests of all parties concerned.
3. Creativity in Decision Making:
Creativity in decision making requires the decision to be original and different.
Under a creative strategic decision making process, novel and untried means may be looked for and adopted to
achieve objectives in an exceptional way.

16. 4. Variability in Decision Making:
Given an ideal set of conditions, two decision makers may arrive at totally different conclusions.
Hence a decision may be analysed in different ways by different individuals, depending on their perception of the
problems and solutions and they may arrive at different conclusions.
This phenomena occurs because of variability in decision making.
5. Person Related Factors:
There are multiple person related factors that directly influence strategic decision making, some of which include:
Age
Education
Creativity
Risk
Taking
Intelligence
Cognitive
style
Personal
Values
Positive role in strategic decision making process

17. 6. Individual vs Group Decision Making
An organisation that posses special characteristics , operates in a unique environment.
Decision makers who understand the unique characteristics and environment of their organisation are always at an
advantage to undertake effective strategic decision making.
Individuals such as the CEO or Entrepreneurs play the most important role in taking individual strategic decisions.
However, as organisations become bigger and more complex, they are faced with turbulent and ever changing
environment.
In such cases, it is important that individuals come together in groups for the purpose of strategic decision
making.

18. I N T R O D U C T I O N
T O

19. STRATEGIC MANAGEMENT DEFINED :
Strategic management may be defined as the dynamic process of
FORMULATION
IMPLEMENTATION
EVALUATION
CONTROL
of strategies to realise the Strategic Intent.

20. STRATEGIC MANAGEMENT
What it is: What it is not
Dynamic:
It is a continual
and ever evolving
iterative process.
One Time:
It is not a static
or mechanistic
process

21. STRATEGIC MANAGEMENT
Phases
Establishing
Strategic Intent
- Vision
- Mission
- Objectives
- Business
Definition
Strategy Formulation
Analytical phase of
thinking, analysing and
planning strategies
Strategy
Implementation
‘Putting Into Action’
through a number of
managerial and
administrative actions
Evaluation and control
Assessing the
appropriateness of
formulation and
effectiveness of
implementation.

22. STRATEGIC MANAGEMENT
Elements
1. Creating and Communicating
Vision
2. Designing a Mission Statement
3. Defining the Business
4. Adopting the Business Model
5. Setting Objectives
1. Performing Environmental
Appraisal
2. Performing Organisational
Appraisal
3. Formulating Corporate Level
Strategies
4. Formulating Business Level
Strategy
5. Undertaking Strategic Analysis
6. Exercising Strategic Choice
7. Preparing Strategic Plan
Establishing Hierarchy of Strategic
Intent
Strategy Formulation

23. STRATEGIC MANAGEMENT
Elements
1. Activating Strategies
2. Designing the Structure, System and
processes
3. Managing Behavioural
Implementation
4. Managing Functional
Implementation
5. Operationalising Strategies
1. Performing Strategic Evaluation
2. Exercising Strategic Control
3. Reforming Strategies
Implementation of Strategies Performing Strategic Evaluation and
Control

24. STRATEGIC MANAGEMENT
Model
HIERARCHY
OF STRATEGIC
INTENT
What the
Organisation Stands
For?
Objectives
What is to be achieved within a given period of time?
Business Model
How the organisation creates revenue?
Business Definition
Explains the business of the firm in terms of
customer needs, customer groups and
alternative technologies
Mission
Relates the organisation
to society
Vision
What ultimately the firm
would like to become
1.

25. STRATEGIC MANAGEMENT
Model
ENVIRONMENTAL
AND
ORGANISATIONAL
APPRAISAL
OPPORTUNITIES
THREATS
STRENGTHS
WEAKNESSES
“Opportunities and threats operating in the environment are identified along with strength and weaknesses of the
organisation in order to create a match between them in a manner such that opportunities can be availed and the
impact of threats neutralised. Hence, enabling the organisation to capitalise on strengths and minimise the
weaknesses.”
2.

26. STRATEGIC MANAGEMENT
Model
FORMULATION
OF
STRATEGIES:
Levels OPERATIONAL
FUNCTIONAL
BUSINESS
CORPORATE
How to manage a portfolio
of businesses?
How to develop
competitive advantage in
individual businesses?
3.

27. STRATEGIC MANAGEMENT
Model
STRATEGIC
ALTERNATIVES
AND CHOICE
Strength
Weakness
Threats
Opportunities
Best
Strategic
Alternative
This phase of the strategic management model is required for evolving alternative strategies out of the multiple
possible options and choosing the most appropriate strategy in the light of environmental opportunities and
threats and corporate strengths and weaknesses.
4.

28. STRATEGIC MANAGEMENT
Model
IMPLEMENTATION
OF STRATEGY
Threats
Putting the strategic plan into action
through 6 sub processes:
Project
Implementation
Procedural
Implementation
Resource
AllocationStructural
Implementation
Behavioural
Implementation
Functional
Implementation
5.

29. STRATEGIC MANAGEMENT
Model
EVALUATION
OF
STRATEGY
Threats
ORGANISATIONAL
PERFORMANCE
This last phase appraises (Evaluates) the
implementation of strategies and measures
performance of the organisation.
The feedback from strategic evaluation is used for
exercising strategic control.
6.

30. Threats
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