2. Prof. DEBASISH DUTTA
Planning is the most basic of all managerial
functions. It involves selecting mission and
objectives and the actions to achieve them.
Plans provide a rational approach to achieving
preselected objectives.
Planning
3. Prof. DEBASISH DUTTA
Corporate Planning gives the high-level, long-
horizon plan that identifies financial
opportunities and links them directly and
tactically to key value-driven business
strategies.
It links those financial KPIs with pragmatic
operational cause and effect indicators and
help tie those opportunities to plan and
optimize at a high level over the long term.
Corporate Planning
6. Prof. DEBASISH DUTTA
BUSINESS POLICY
Definition
Business policy is the study of the functions and
responsibilities of senior management, the crucial
problem that affect the success in the total
enterprise, and the decision that determine the
direction of the organisation and shape its future.
The problems of policy in business, like those of
policy in public affairs, have to do with the choice
of purposes, the moulding of orgaisational identity
and character, the continuous definition of what
needs to be done, and the mobilisation of
resources for the attainment of goals in the face of
competition or adverse circumstances.
Christensen and others
7. Prof. DEBASISH DUTTA
The definition covers
1.It is considered as the study and of the functions
and responsibilities of the senior management.
2.It relates to those organisational problem that
affect the success of the total enterprises.
3.It determines the future course of action that an
organisation has to adopt.
4.It involves choosing the purpose.
5.It defines what needs to be done in order to
mould the character and identity of organisation.
6.It is concerned with mobilisation of resources,
which help the organisation to achieve its goals.
8. Prof. DEBASISH DUTTA
Characteristics of Business Policy
Definite and clear policies help to prevent
deviations from accepted course and helps in
achieving desired goal and therefore the
characteristics are:
Simplicity
Clarity
Flexibility
Certainty
Consistency
Comprehensive
Relevant
Stability
10. Prof. DEBASISH DUTTA
Traditional Planning Vs. Strategic Planning
Traditional Planning Strategic Planning
1. It is concerned with goal
derived from established
objectives
2. It is concerned with
individual objectives
3. May be carried out lower
management
4. It is more functional or
unit wise or departmental
wise approach.
5. It deals with goals that is
validated through past
experiences
1. It is concerned with new
objectives and strategies.
2. It combines activities that
form an unique value chain
3. It is performed by top
management
4. It is integrated and have
corporate level and business
level approach
5. It has less procedures and
may trade in unchartered
path
12. Prof. DEBASISH DUTTA
The word ‘strategy’, deriving from the Greek
noun strategus, meaning ‘commander in chief’,
was first used in the English language in 1656.
The development and usage of the word
suggests that it is composed of stratos (army)
and agein (to lead).
In a management context, the word ‘strategy’
has now replaced the more traditional term –
‘long-term planning’ – to denote a specific
pattern of decisions and actions
STRATEGY
13. Prof. DEBASISH DUTTA
In the descriptive and prescriptive
management texts, strategic management
appears as a cycle in which several activities
follow and feed upon one another.
The strategic management process is typically
broken down into five steps
Strategic Management
14. Prof. DEBASISH DUTTA
Model of Strategic Management
VISION AND
MISSION
STATEMENT
SCANNING
ENVIRONMENT
DEVELOPING
STRATEGIC
CHOICES
IMPLEMENTATION
EVALUATION
Step 1
Step 2
Step 3
Step 4
Step 5
15. Prof. DEBASISH DUTTA
The first step in the strategic management model
begins with senior managers evaluating their
position in relation to the organization’s current
mission and goals.
The mission describes the organization’s values
and aspirations; it indicates the direction in which
senior management is going.
Goals are the desired ends sought through the
actual operating procedures of the organization
and typically describe short-term measurable
outcomes.
Vision and Mission Statement
16. Prof. DEBASISH DUTTA
Environmental analysis looks at the internal
organizational strengths and weak-nesses and
the external environment for opportunities and
threats.
The factors that are most important to the
organization’s future are referred to as
strategic factors and can be summarized by the
acronym SWOT – Strengths, Weaknesses,
Opportunities and Threats.
Scanning Environment
17. Prof. DEBASISH DUTTA
Strategic formulation or developing strategic
choices involves senior managers evaluating the
interaction between strategic factors and
making strategic choices that guide managers
to meet the organization’s goals.
Some strategies are formulated at the
corporate, business and specific functional
levels. The term ‘strategic choice’ raises the
question of who makes decisions and why they
are made.
Developing Strategic Choices
18. Prof. DEBASISH DUTTA
Strategy implementation is an area of activity
that focuses on the techniques used by
managers to implement their strategies.
In particular, it refers to activities that deal
with leadership style, the structure of the
organization, the information and control
systems, and the management of human
resources.
Leadership is the most important and difficult
part of the strategic implementation process.
Implementation
19. Prof. DEBASISH DUTTA
Strategy evaluation is an activity that
determines to what extent the actual change
and performance match the desired change
and performance.
Evaluation
20. Prof. DEBASISH DUTTA
The strategic management model depicts the
five major activities as forming a rational and
linear process. It is, however, important to
note that it is a normative model, that is, it
shows how strategic management should be
done rather than describing what is actually
done by senior managers.
The strategic decision-making implies a
potential gap between the theoretical model
and reality.
Conclusion
21. Prof. DEBASISH DUTTA
Levels of Strategy
1.Corporate Level Strategies
2.Business Level Strategies
3.Functional Level Strategies
22. Prof. DEBASISH DUTTA
Corporate Level Strategies
Corporate level strategies are basically about
decisions related to allocating resources
among the different businesses of a firm,
transferring resources from one set of business
to others and managing and nurturing a
portfolio of business in such a way that the
overall corporate objectives are achieved. An
analysis based on business definition provides
a set of strategic alternatives that an
organisation can consider.
23. Prof. DEBASISH DUTTA
Business Level Strategies
Business Level Strategies are the courses of
action adopted by a firm for each of its
businesses separately to serve identified
customer groups and provide value to
customer by satisfaction of their needs
In the process the firm uses its competencies
to gain, sustain, and enhance its strategic or
competitive advantage.
24. Prof. DEBASISH DUTTA
Functional Level Strategies
Functional Level Strategies deals with a
relatively restricted plan which provides the
objectives for a specific function, for the
allocation of resources among different
operations within that functional area and for
enabling a coordination between them for an
optimal contribution to the achievement of the
business and corporate level objectives.
Functional strategies are implemented through
functional and operational implementation.
26. Prof. DEBASISH DUTTA
Strategic Choice
Process of strategic choice consists of following
four steps:
1.Focusing on alternatives
2.Considering the selection factors
3.Evaluation of strategic alternatives
4.Making the strategic choice
27. Prof. DEBASISH DUTTA
Focusing on alternatives
The aim of focusing on alternative is to narrow
down the choice to a manageable number of
feasible strategies.
A decision maker would, in practice, limit the
choice to a few alternatives, rather focuses on
reasonable number of alternatives.
28. Prof. DEBASISH DUTTA
Considering the selection factors
It determines the criteria on which the
evaluation of strategic alternatives can be
based.
It can be divided into two groups:
1. Objective Factors: Based on analytical
techniques.
2. Subjective Factors: Based on personal
judgment.
29. Prof. DEBASISH DUTTA
Evaluation of strategic alternatives
It basically involves bringing together the
results of the analysis carried out on the basis
of the objective and subjective factors.
There is no set procedure and strategists may
use any approach which suits the
circumstances. Both objective and subjective
factors have to be considered together.
30. Prof. DEBASISH DUTTA
Making the strategic choice
This leads to a clear assessment of which
alternative is the most suitable under the
existing conditions. One or more strategies has
to be chosen for implementation.
A blueprint that will describe the strategies and
the conditions under which they would operate
has to be made.
31. Prof. DEBASISH DUTTA
Strategic Analysis
-- Establishing long-term objectives
-- Generating alternative strategies
-- Selecting strategies to pursue
-- Best alternative - achieve mission & objectives
Nature of Strategy Analysis
32. Prof. DEBASISH DUTTA
Strategic Analysis
Corporate Level
The analysis focuses on the question of what
should a corporate entity do regarding the
several business that are there in its portfolio.
It can be done through corporate portfolio
analysis and various techniques like BCG
matrix etc.
33. Prof. DEBASISH DUTTA
Strategic Analysis
Business Level
It refers to industry and competition analysis.
The industry and competition are vital for
consideration in making strategic choice.
Porter’s five forces model, experience curve
analysis, SWOT analysis etc. help in business
level analysis.
35. Prof. DEBASISH DUTTA
SWOT Matrix
Strengths-Opportunities (SO)
Weaknesses-Opportunities (WO)
Strengths-Threats (ST)
Weaknesses-Threats (WT)
Four Types of Strategies
36. Prof. DEBASISH DUTTA
SO Strategies
Use a firm’s
internal strengths
to take advantage
of external
opportunities
SO
Strategies
Strengths
Weaknesses
Opportunities
Threats
SWOT
37. Prof. DEBASISH DUTTA
WO Strategies
Improving internal
weaknesses by
taking advantage
of external
opportunities
WO
Strategies
Strengths
Weaknesses
Opportunities
Threats
SWOT
38. Prof. DEBASISH DUTTA
ST Strategies
Use a firm’s
strengths
to avoid or
reduce the impact
of external
threats
ST
Strategies
Strengths
Weaknesses
Opportunities
Threats
SWOT
40. Prof. DEBASISH DUTTA
SWOT Matrix
Leave Blank
Strengths – S
List Strengths
Weaknesses – W
List Weaknesses
Opportunities – O
List Opportunities
SO Strategies
Use strengths to take
advantage of
opportunities
WO Strategies
Overcoming weaknesses
by taking advantage of
opportunities
Threats – T
List Threats
ST Strategies
Use strengths to avoid
threats
WT Strategies
Minimize weaknesses and
avoid threats
42. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
This is based on the pioneering efforts of the
General Electric (GE) company of the US and
supported by the consulting firm McKinsey &
Company of the US.
It is a typical 9 cell Matrix.
43. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
The vertical axis represents industry
attractiveness, which is a weighted
composite rating based on eight different
factors.
These factors are:
1.Market size and growth rate
2.Industry profit margin
3.Competitive intensity
4.Seasonality
5.Cyclicality
6.Economics of scale
7.Technology and social environment
8.Legal and human aspects
44. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
The horizontal axis represents business
strength competitive position which a
weighted composite rating based on seven
factors.
These seven factors are:
1.Relative market share
2.Profit margins
3.Ability to compete on price & quality
4.Knowledge of customer and market
5.Competitive strength and weaknesses
6.Technological capability
7.Calibre management
45. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
The two composite values for industry
attractiveness and business
strength/competitive position are plotted for
each business in a company’s portfolio. The
pie chart circles denote the proportional size of
the industry and the dark segment represent
the company’s market share.
46. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
The 9 cell matrix are grouped on the basis of
low to high industry attractiveness, and weak
to strong business strength. The zones of
three cells each are made, denoting different
combinations represented by green, yellow,
and red colours.
The green zone indicates expansion
strategies, yellow zone suggests stability and
consolidation and red zone suggests
retrenchment, liquidation, or turnaround.
47. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
Low
High
Medium
AverageStrong Weak
IndustryAttractiveness
Rating Scale: 1 = Weak ; 10 = Strong
6.7
3.3
10.0
1.0
1.03.36.7
Business Strength and competitive Position
48. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
Advantages over BCG Matrix:
It offers an intermediate classification of medium and
average ratings.
It incorporates a larger variety of strategic variables like
the market share and industry size.
It is a powerful analytical tool to channel corporate
resources to business that combine medium to high
industry attractiveness with an average to strong
business strength/competitive position.
49. Prof. DEBASISH DUTTA
GE Nine-Cell Matrix
Drawback of the 9 cell matrix:
It only provides a broad strategic prescription
rather than specifics of business strategy.
