2. • The strategic management process means defining the
organization’s strategy.
• It is also defined as the process by which managers
make a choice of a set of strategies for the organization
that will enable it to achieve better performance.
• Strategic management is a continuous process that
appraises the business and industries in which the
organization is involved; appraises it’s competitors; and
fixes goals to meet all the present and future
competitor’s and then reassesses each strategy.
3. Strategic management process has
following four steps:
• Environmental Scanning- Environmental scanning
refers to a process of collecting, scrutinizing and
providing information for strategic purposes. It helps in
analyzing the internal and external factors influencing
an organization. After executing the environmental
analysis process, management should evaluate it on a
continuous basis and strive to improve it.
• Strategy Formulation- Strategy formulation is the
process of deciding best course of action for
accomplishing organizational objectives and hence
achieving organizational purpose. After conducting
environment scanning, managers formulate corporate,
business and functional strategies.
4. • Strategy Implementation- Strategy implementation implies
making the strategy work as intended or putting the
organization’s chosen strategy into action. Strategy
implementation includes designing the organization’s
structure, distributing resources, developing decision
making process, and managing human resources.
• Strategy Evaluation- Strategy evaluation is the final step of
strategy management process. The key strategy evaluation
activities are: appraising internal and external factors that
are the root of present strategies, measuring performance,
and taking remedial / corrective actions. Evaluation makes
sure that the organizational strategy as well as it’s
implementation meets the organizational objectives.
5.
6. MEANING OF STRATEGY
• The word "Strategy" is derived from the Greek word
"Strategia", which means Generalship.
• The term strategy entered the business world from
military services where it was originally used.
• Strategy tries to achieve synergy and balance between
objective, resources and concept to maximize the
possibility of success and fruitful results.
• The purpose of formulating strategy is to bring
consistency and alignment in the activities of an
organisation, which can be accomplished by various
methods and resources.
7. • Strategy refers to determining the
fundamental long-term organisational goals
and at the same time developing plans,
acquiring, allocating and deploying resources
in order to achieve those goals.
8. • Strategy helps an organisation to minimize the strength
of competitors by maximizing its own strengths.
• Strategy work as a blueprint of an organisation that
define its vision, mission and also helps in determining
the future course of action.
• Strategy is formulated to achieve current goals of
enterprise by optimum allocation and utilization of
internal resources and by collaborating different
organisational pursuits.
9. • According to William F. Glueck :
• "Strategy is a unified, comprehensive and
integrated plan designed to ensure that the basic
objectives of the enterprise are achieved".
• According to Alfred D. Chandler :
• "Strategy is the determination of the basic long
term purpose and objective of an enterprise and
the adopting of course of action and allocation of
resources necessary for carrying out these goals".
10. Importance of Strategy
• Following are the importance of strategy explain in details :
• 1. Ensures Proper Allocation of Resources -
While formulating a strategy the strategist have to keep in mind information that
they have access to and appraise all possible outcomes before selecting a particular
alternative. A good strategy help the organisation in allocating resources in the
efficient manner.
2. Provide Direction -
Organisations lose their purpose in absence of proper guiding strategies. Strategies
direct an organisation to achieve its goals.
3. Synchronizes Activities -
• The comprehensive strategy help the organisation in synchronizing the strategic
initiatives taken at different levels.
11. .
• 4. Facilitates Decision Making -
• Strategy facilitates decision making as strategy and strategic initiatives act as a point of reference
for any action.
• 5. Help Accomplishing Goals -
• Strategies enable a company to achieve its goals and create a market position by allocating
resources, providing proper training to employees, enhancing the capacity of production etc.
• 6. Improve Communication and Commitments -
• Strategy helps in confirming company-wide actions communication and levels of commitment
between different department of the organisation by giving a clear description of the vision and
responsibilities.
• 7. Enables Comparison of Alternative Actions -
• Strategy ensures that the valuable resources are allocated optimally. Strategies helps in analyzing
the record of previously adopted strategic initiatives and allow the top level management to
compare the alternative actions and select the best option among them for different business units.
12. Nature of Strategy
• The nature of strategy as explain by following points :
• 1. Set of Actions -
• Strategy is an arrangement of different action that are taken in verifying situation to achieve
certain objectives or to solve some problems.
• 2. Relates an Organisation with the Environment -
• Formulating strategy is an important activity by which the enterprise can relate to its
environment. With the help of strategy an organisation can interact with the factors of external
environment so that the management can take necessary steps to achieve the organisational
goals.
• 3. Provide Structure -
• Strategy develops a fundamental road map for providing guidance to the enterprise for
making relation decisions and achieving organisational goals. Strategy used to establish and
communicate the image of the organisation with the help of its various goals and objectives.
13. • 4. Future Oriented -
• Strategy can be said that it is future oriented. Strategies are formulated to solve problems that are
new and have not been previously handled by the organisation.
• 5. Integrated Approach -
• Strategy directs and support the enterprise in taking necessary decision for maximizing the strength
and facing the environmental threats with confidence. A good strategy follows and interactive
approach for allocating internal resources and using them for the benefit of the entire organisation.
• 6. Involves Contradictory Actions -
• Strategic actions are influenced by environment factors at times certain decisions taken on the
basis of the strategy may be contradictory in nature. These actions may occur simultaneously or
consecutively.
• 7. Combination of Internal and External Factors -
• Strategy tries to match the internal strength and meet external opportunity and threats. Therefore
it is a combination of internal and external factors of the environment.
