2. This presentation is a combination of work
done by the following authors:
Alicia Schetteman and Dr.K.Prabhaka.
3. What is a strategy?
How to create strategies that lead to superior
performance?
How to implement?
How you have to relate to the environment?
Why strategy?
4. Strategy is a set of related actions that
managers take to increase organization’s
performance.
If it results in superior performance to that of
its rivals it is said to have competitive
advantage.
Example: Wal Mart, American Airlines, Airtel
5. Strategic planning is not
A substitute for strategic thinking, acting,
and learning
A substitute for leadership
6. 1. Know what you’re talking about
2. Know what your goal for planning is
3. Know what strategic planning will NOT do
4. Strategic planning flows from mission
5. Share your strategic planning work with others
6. Focus, focus, focus
7. Trade assistance with other organizations (Jea
Nae Remala)
8. You need to know where you are now to know
where you want to go
9. Need to move goals to action plans
10. Tie goals to budgets and performance
7. • Address critical performance issues
• Create the right balance between what the
organization is capable of doing vs. what the
organization would like to do
• Cover a sufficient time period to close the
performance gap (3-5 years reasonable time)
• Visionary – convey a desired future end state
• Flexible – allow and accommodate change
• Guide decision-making at lower levels –
operational, tactical, individual
8. How to most effectively manage a
organizational strategy making process to
create competitive advantage.
9. • SMP is the process by which managers select
and then implement a set of strategies that
aim to achieve a cometitive advantage.
• Strategy formulation is selection of strategies
• Strategy implementation is the task of putting
strategies in to action; it includes designing;
delivering; and supporting products;
improving efficienty and effectiveness of
organiztions; desinging organizational
structure; Control systems and culture.
10. Rational planning by top management?
Defining the Mission and Setting Top-Level Goals
External Analysis of Opportunities and Threats
Internal Analysis of Strengths and Weaknesses
Selection of Appropriate Strategies
Implementation of Chosen Strategies
Basic Strategic Planning Model
13. • Mission
– Sets out why the organization exists and what it
should be doing from point of view of customer.
• Major goals
– Specify what the organization hopes
to fulfill in the medium to long term.
• Objectives
– Are objectives to be attained that lead to superior
performance.
14. Perception is strong and sight is weak. In
strategy it is important to see distant things
as if they were close and to take a distanced
view of close things.Miyamoto Musashi 1584-
1645, legendary Japanese swordsman
16. Identify strengths
◦ Quality and quantity of resources available
◦ Distinctive competencies
Identify weaknesses
◦ Inadequate resources
◦ Managerial and
organizational deficiencies
17. • Cost leadership
– Attaining, then using the lowest total cost basis as
a competitive advantage; Example of Intel
• Differentiation
– Using product features or services to distinguish
the firm’s offerings from its competitors;Apple
Computers
• Market niche focus
– Concentrating competitively on a specific market
segment; Nala Appakadai
18. Focus is on improving the effectiveness of
operations within a company.
◦ Manufacturing
◦ Marketing
◦ Materials management
◦ Research and development
◦ Human resources
20. Vertical integration
Diversification
Strategic alliances
Acquisitions
New ventures
Business portfolio restructuring
21. In real life, strategy is actually very
straightforward. You pick a general direction
and implement like hell-Jack Welch in
Winning, 2005
22. • Designing organizational structure
• Designing control systems
– Market and output controls
– Bureaucratic controls
– Control through organizational culture
– Rewards and incentives
• Matching strategy, structure, and controls
– Congruence (fit) among strategy,
structure, and controls
23. The only constant is change.
Success requires adapting strategy and
structure to a changing world.
24. General managers
◦ Responsible for the overall (strategic) performance
and health of the total organization.
Operations managers
◦ Responsible for specific business
functions or operations.
25.
26. Vision, eloquence, and consistency
Commitment to the vision
Being well informed
Willingness to delegate and empower
Astute use of power
Emotional intelligence
27. Strategy making in an unpredictable world
◦ Creates the necessity for flexible strategic
approaches.
Strategy making by lower-level managers
◦ Strategy evolves through autonomous action.
Serendipity and strategy
◦ Accidental discoveries and happenstances can
have dramatic effects on strategic direction.
Intended and emergent strategies
◦ Realized strategies are combinations of intended
and emergent strategies.
31. Planning under uncertainty
◦ Scenario planning for dynamic environmental
change
Ivory tower planning
◦ Lack of contact with operational realities
◦ The importance of involving operating managers
◦ Procedural justice in the decision-making process
Engagement, explanation, and expectations
Planning for the present: Strategic Intent
◦ Recognition of the static nature of the strategic
fit model
◦ Strategic intent in focusing the organization on
winning by achieving stretch goals
32. • Cognitive biases systematically influence the
rationality of decision makers;Psychologists have
articulted more than fifty cognitive biases.
FIGURE 1.5 ( Adopted from Strategic Mangement by Hill and Jones, 2009 e )
33. Pitfalls of groupthink
◦ Failing to question underlying assumptions.
◦ Coalescing around a single person or policy.
◦ Filtering out conflicting information.
◦ Developing after-the-fact rationalizations.
◦ Having an emotional (nonobjective)
commitment to an action.
34. How to create strategic alternatives
How to select alternative that is most suitable
for organization
Implement the strategies that will help the
stakeholders to maximise their wealth.
