2. Meaning
The concept of strategy in business has been borrowed
from military science where it implies the art of the
military general to fight the enemy
• The term strategy began to be use in business with
increase in competition and complexity of operations
• Strategy provides a direction or a sense of
purpose to an organization
• They form the basis for operational plans and
influence the other areas of management
3. Cont
Definition:
“Strategy is the complex plan for bringing the
organization from a giving posture to a desired
position in a future period of time” D. L. Cleland and
W. R. King
Nature of Strategy
• It is a contingent plan as it is designed to meet the
demands of a particular situation
It provides direction in which human and physical
4. Cont
resources will be deployed for achieving organizational
goals
• It relates an organization to its external environment
It is an interpretative plan formulated to interpret and
give meaning to other plans
It is the right combination of different factors
It is forward looking
It is generally formulated at the top level management
5. Cont
It is means to an end not an end itself
It is generally long term in nature
It is flexible and dynamic
It is action oriented
Essential of good strategy
It must be consistent with the goals and policies of the
organization
It should be designed to fit the opportunities and
threats of external environment
6. Cont
It should be in appropriate time
A proper match should be created between risk and
return
It should be appropriate in the light of available
resources
It must fulfill ethical and social responsibilities
It must be feasible
7. Cont
Importance of strategy
Helpful in facing environmental challenges
It serves as the long term guide towards the
achievement of objectives
It ensures more efficient and effective utilization of
organizational resources
It facilitates good coordination and control
It helps in maintaining or increasing the firm’s market
share in the face of competition
8. Cont
Strategic Management:
“It is defined as the set of decisions and actions
resulting in formulation and implementation of
strategies designed to achieve the objectives of an
organization” Pearce and Robinson
Importance of Strategic Management:
1. Changing Conditions can be Anticipated by firms
2. It sets clear objectives and Directions
3. It gives effectiveness to the firms
9. Cont
4. Research and Development can be done easily
5. It provides financial benefits
6. Problems and opportunities can be anticipated
7. Group interaction for decision making (Quality
Decisions)
8. Greater employee motivation (Participation)
9. It minimizes resistance to change
10. Accomplishment of long-term objectives
11. Analyzing Environment
10. Cont
12. Treats can be identified
13. Helpful to face competition effectively
14. Effective control device
15. Maximization of profits
16. Uncertainties can be faced easily
17. Diversification of Risk
18. Improves managerial skills
11. Cont
Process of Strategic Management:
1. Statement of corporate Mission and Objectives
2. Environmental Analysis
3. Identification of Strategic Alternatives
4. Choice of right strategy
5. Implementation of Strategy
6. Evaluation and Control of Strategy
