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Why do some
organization
succeed while
others fail?
 Dell Computers, performing better when it compares with
other player...
Actions /
Decisions ?
 Low-cost Production
 Increasing quality
 Increase their distribution
 Wider product line
 Enha...
What do we
call these
Actions as?
Strategy ….
Prof. Vijay K S, MBA Programme`-BIET, Davangere
Strategy….
Preserve the Core
Stimulate Progress
Prof. Vijay K S, MBA Programme`-BIET, Davangere
Think
Strategically
means
There are three Big Strategic Questions
- Where are we now?
- Where do we want to go?
- How will...
The strategy
is how to ….
 How to please customer?
 How to respond to changing market conditions
 How to out compete ri...
Strategy?
………the Action that managers take
 To attain one or more of the organizational goals
 To achieve superior perfo...
Strategic
Management?
“…is about identifying and describing the strategies that
managers can pursue to attain superior per...
“…is about identifying and describing the strategies that
managers can pursue to attain superior performance and a
competi...
Competitiveness
Competitive
Advantage – The
Focal Point of
Strategy
Differentiation
Cost Leadership
Quick Response
Competi...
At the basic
level….
Strategy is concerned with understanding the relationship
between Prices, Customer demand and Cost st...
Meaning of
Strategic
Management
Strategic Management is a set of managerial decisions and actions
that determines the long...
Nature of
Strategic
Management
 Strategic management is
 Strategic management is both an of
 SM allows to take that fac...
Nature of
Strategic
Management
 SM offers
 a strategic direction endorsed by the team and stakeholders
 a clear busines...
Importance of
Strategic
Management
 Identification, prioritization, and exploitation of opportunities.
 Objective view o...
Importance of
Strategic
Management
 It creates a framework for internal communication among
personnel.
 It helps to inte...
Characteristic
s ofStrategic
Management
 Has support of organization’s executive officer.
 Long Term Process
 Is fresh ...
Relevance of
Strategic
Management
Companies are operating in age of discontinuing change - an age of creative &
construct...
Strategic
Management
Process?
“…is the process by which managers choose a set of strategies
for a company that will allow ...
Feedback and Control
Strategic Management Process / Model
Environmental Scanning
Or Analysis
Strategy Formulations Impleme...
Relationship
between
Companies
Strategy and
Its Business
Model
 Business Model is usually composed of five elements
 Who...
Relationship
between
Companies
Strategy and
Its Business
Model
 Business Model in context of Stretegy
 A Company’s busin...
Relationship
between
Companies
Strategy and
Its Business
Model
 Business Model is a outcome or result of your strategy, b...
Relationship
between
Companies
Strategy and
Its Business
Model
Prof. Vijay K S, MBA Programme`-BIET, Davangere
Feedback and Control
Strategic Management Process / Model
Environmental
Scanning
Or Analysis
Strategy Formulations
Impleme...
Strategic
Management
Model /
Process
Scanning
 Where are we now?
Strategy Formulation
 Where do we want to be?
Strate...
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Introduction to strategic management

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This provide introductory information about strategic management.

Published in: Business

Introduction to strategic management

  1. 1. Why do some organization succeed while others fail?  Dell Computers, performing better when it compares with other players in personal computer industry  South West Airline Manages to get profits in good and bad times  In Retail Industry Kmart is out performed by Wal-Mart  In Software market, Microsoft still maintains strong market position These organizations have taken ”Actions” to achieve superior Performance relative to rivals Prof. Vijay K S, MBA Programme`-BIET, Davangere
  2. 2. Actions / Decisions ?  Low-cost Production  Increasing quality  Increase their distribution  Wider product line  Enhance performance of their product / service  Through value added services  Styling their product / service to increase their attraction  Offers value for money  Focusing on narrow market niche  …….Many more Prof. Vijay K S, MBA Programme`-BIET, Davangere
  3. 3. What do we call these Actions as? Strategy …. Prof. Vijay K S, MBA Programme`-BIET, Davangere
  4. 4. Strategy…. Preserve the Core Stimulate Progress Prof. Vijay K S, MBA Programme`-BIET, Davangere
  5. 5. Think Strategically means There are three Big Strategic Questions - Where are we now? - Where do we want to go? - How will we get there? A Company’s answer to “How will we get there?” - Is its strategy Prof. Vijay K S, MBA Programme`-BIET, Davangere
  6. 6. The strategy is how to ….  How to please customer?  How to respond to changing market conditions  How to out compete rivals  How to grow the business  How to manage each functional piece of the business and develop needed organizational capabilities  How to achieve strategic and financial objectives Prof. Vijay K S, MBA Programme`-BIET, Davangere
  7. 7. Strategy? ………the Action that managers take  To attain one or more of the organizational goals  To achieve superior performance relative to rivals  By having superior performance, said to have Competitive position It is Unified, Comprehensive, and Integrated long term plan that relates to the strategic advantages of the firm to the challenges of the environment. In essence, the strategic plan is a company’s game plan Prof. Vijay K S, MBA Programme`-BIET, Davangere
  8. 8. Strategic Management? “…is about identifying and describing the strategies that managers can pursue to attain superior performance and a competitive advantage for their organizations” Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives Prof. Vijay K S, MBA Programme`-BIET, Davangere
  9. 9. “…is about identifying and describing the strategies that managers can pursue to attain superior performance and a competitive advantage for their organizations” - Profitability - return that it makes on the capital invested. The more efficient a company is, higher are its profitability. - profitability is greater than the average profitability of all firms in its industry. – When the firm maintains above-average profitability for a number of years. Superior Performance Competitive Advantage Sustained Competitive Advantage Strategic Management? Prof. Vijay K S, MBA Programme`-BIET, Davangere
  10. 10. Competitiveness Competitive Advantage – The Focal Point of Strategy Differentiation Cost Leadership Quick Response Competitive Advantage Economic Value Added Market Value Added Value Created for Customers Financial Performance Value Captured for Investors Prof. Vijay K S, MBA Programme`-BIET, Davangere
  11. 11. At the basic level…. Strategy is concerned with understanding the relationship between Prices, Customer demand and Cost structure and manipulating these variables in a way that lead to higher profitability Cost Structure Customer Demand Price Prof. Vijay K S, MBA Programme`-BIET, Davangere
  12. 12. Meaning of Strategic Management Strategic Management is a set of managerial decisions and actions that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (Strategic and long-range planning), strategy implementation and evaluation and control. It emphasizes the monitoring and evaluating of external opportunities and threats in light of a corporation’s strengths and weaknesses Prof. Vijay K S, MBA Programme`-BIET, Davangere
  13. 13. Nature of Strategic Management  Strategic management is  Strategic management is both an of  SM allows to take that facilitate an organization to accomplish its objectives.  it demands awareness to the "big picture" and a rational assessment of the future options. well-organized approach Art and Science formulating, implementing, and evaluating cross-functional decisions Prof. Vijay K S, MBA Programme`-BIET, Davangere
  14. 14. Nature of Strategic Management  SM offers  a strategic direction endorsed by the team and stakeholders  a clear business strategy and vision for the future  a structure for governance at the different levels  a logical framework to handle risk in order to guarantee business continuity  the capability to exploit opportunities  react to external change by taking ongoing strategic decisions. Prof. Vijay K S, MBA Programme`-BIET, Davangere
  15. 15. Importance of Strategic Management  Identification, prioritization, and exploitation of opportunities.  Objective view of management problems.  It represents a framework for improved coordination and control of activities.  It minimizes the effects of adverse conditions and changes.  It allows major decisions to better support established objectives.  It allows more effective allocation of time and resources to identified opportunities.  It allows fewer resources and less time to be devoted to correcting erroneous or ad hoc decisions. Prof. Vijay K S, MBA Programme`-BIET, Davangere
  16. 16. Importance of Strategic Management  It creates a framework for internal communication among personnel.  It helps to integrate the behavior of individuals into a total effort.  It provides a basic for the clarification of individual responsibilities.  It gives encouragement to forward thinking.  It provides a cooperative, integrated, and enthusiastic approach to tackling problems and opportunities.  It encourages a favourable attitude towards change.  It gives a degree of discipline and formality to the management of a business. Prof. Vijay K S, MBA Programme`-BIET, Davangere
  17. 17. Characteristic s ofStrategic Management  Has support of organization’s executive officer.  Long Term Process  Is fresh and continuous, not static and stale.  Is participatory, not left to planners.  Is flexible.  Leads to resources decisions. Resource Mobilization and Application  Integrated System  Hierarchical Strategy  Proactive and not a quick fix  Management by Process  Analytical tools are used every time  BCG, Five Force Model Prof. Vijay K S, MBA Programme`-BIET, Davangere
  18. 18. Relevance of Strategic Management Companies are operating in age of discontinuing change - an age of creative & constructive destruction. Business, technology and product life is shrinking. Demographic shift in terms of consumer preference and requirements. A direct promotion from Agricultural economy to service or Hi-tech economy in the new growth economy. Shift from controlled economy to market driven economy. Rich countries adopt deindustrialization. Emergence of new Global Socio – economic system and world orders. Knowledge is replacing Infrastructure Self-leadership is in, command and control out Networks are replacing hierarchies Wanted - employees with Emotional Intelligence. Prof. Vijay K S, MBA Programme`-BIET, Davangere
  19. 19. Strategic Management Process? “…is the process by which managers choose a set of strategies for a company that will allow it to achieve Superior performance and to have Competitive Advantage” Prof. Vijay K S, MBA Programme`-BIET, Davangere
  20. 20. Feedback and Control Strategic Management Process / Model Environmental Scanning Or Analysis Strategy Formulations Implementation of Strategy Evaluate & Control External Opportunities and Threats Natural Environment Resources and Climate Social Environment General force Task Environment Industry Analysis Internal Strengths & Weaknesses Structure: Chain of Command Culture: Belief, expectations, values Resources: Assets, Skills, Competencies, knowledge Mission Objectives Strategies Policies Programs Performance Procedures Budgets Reason for existence What results to accomplish by when Plan to achieve mission and Objectives Broad guidelines for decision making Activities Needed to accomplish a plan Cost of the programs Sequence of steps needed to do the job Actual Results Prof. Vijay K S, MBA Programme`-BIET, Davangere
  21. 21. Relationship between Companies Strategy and Its Business Model  Business Model is usually composed of five elements  Who it serves?  What it provides?  How it makes money?  How it differentiates and sustains competitive advantage?  How it provides its product/service? Prof. Vijay K S, MBA Programme`-BIET, Davangere
  22. 22. Relationship between Companies Strategy and Its Business Model  Business Model in context of Stretegy  A Company’s business model is management’s story line for how the strategy will be a Money Maker  Is strategy is capable of earning profit?  How will business generates revenue?  Is revenue enough to cover cost?  Value to customer @ Profitable price? The Business Model is more narrowly focused than the concept of Strategy Companies Strategy is relates broadly to its competitive initiatives and action plans The bottom Line result of Strategy is “Business Model” i.e. Making Profit Prof. Vijay K S, MBA Programme`-BIET, Davangere
  23. 23. Relationship between Companies Strategy and Its Business Model  Business Model is a outcome or result of your strategy, but not itself, a strategy.  Strategy is a firm’s contingent plan as to the business model it will use Prof. Vijay K S, MBA Programme`-BIET, Davangere
  24. 24. Relationship between Companies Strategy and Its Business Model Prof. Vijay K S, MBA Programme`-BIET, Davangere
  25. 25. Feedback and Control Strategic Management Process / Model Environmental Scanning Or Analysis Strategy Formulations Implementation of Strategy Evaluate & Control External Opportunities and Threats Natural Environment Resources and Climate Social Environment General force Task Environment Industry Analysis Internal Strengths & Weaknesses Structure: Chain of Command Culture: Belief, expectations, values Resources: Assets, Skills, Competencies, knowledge Mission Objectives Strategies Policies Programs Performance Procedures Budgets Reason for existence What results to accomplish by when Plan to achieve mission and Objectives Broad guidelines for decision making Activities Needed to accomplish a plan Cost of the programs Sequence of steps needed to do the job Actual Results Prof. Vijay K S, MBA Programme`-BIET, Davangere
  26. 26. Strategic Management Model / Process Scanning  Where are we now? Strategy Formulation  Where do we want to be? Strategy Implementation  How do we get there? Evaluation / Control  How do we measure our progress? Prof. Vijay K S, MBA Programme`-BIET, Davangere

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