Session Objectives:

• Define strategic management

• Identify the nature of Strategic Management
• Enumerate the stages of Strategic Management
• Discuss the importance and benefits of strategic
management
• Discuss the role of competitive analysis in
strategy formulation
• Identify the stages of strategic management
• Define and elaborate the following:
➢ Corporate Level Strategy
➢ Business Level Strategy
➢ Functional Level Strategy
 What is Strategy?
A strategy is considered as a long-term
plan that relates the strategic advantages of an
organization to the challenges of the
environment.
It involves the determination of the long-
term objectives of the organization and the
adoption of courses of action. It also involves
the allocation of resources necessary to achieve
the objectives. When defined this way,
objectives are considered as part of strategy
formulation.
 What is Strategy?
According to Michael Porter, the
undisputed guru of competitive
strategy, “strategy is about the
competitive position, about
differentiating yourself in the eyes of
the customer, about adding value
through a mix of activities different
from those used by competitors.”
What is Strategic Management?
“Strategic management consists of
•the analysis, decisions and actions
organization undertakes in order to
create and sustain competitive
advantages”
- Dess, Lumpkin &Taylor , 2005
What is Strategic Management?
Strategic management is the
process of decision making
and planning which leads to
the development of an
effective strategy to help
achieve organizational
objectives.
 What is Strategic Management?
Strategic Management can be defined
as a decision-making process that leads
to the development of the strategic
position i.e. which helps to determine
the future sustainability and the
profitability of the organization,
simultaneous with the integration of
managerial capabilities,
responsibilities, motivation and reward
system.
What is Strategic Management?
“Strategic management is the
set of decisions and actions
resulting in the formulation and
implementation of plans designed
to achieve a company’s objectives”
- Pearce and Robinson, 1988
 What is Strategic Management?
“Strategic management is concerned with the
determination of the basic long-term goals and the
objectives of an enterprise and the adoption of
courses of action and allocation of resources
necessary for carrying out these goals” – Alfred
Chandler, 1962

❑ Determination of long-term goals

❑ Adoption of courses of action
❑ Allocation of resources to achieve these goals
 Nature of
strategic
management
Nature of strategic management can be described in
following points:
•strategic management is based on quantitative
and qualitative data
•uncertainty about the future and quality of data
acquires is relatively high
•selecting management strategy is based on various
methods, processes, rules and theories
•there is not one best way to develop a strategy
•management strategy should take into
account deductive or empirical methods and
techniques
•resources of organization is one of most
important strategic issues
•people and knowledge is key success factor of
business
Basic elements of
strategic
management
Basic Elements of Strategic
Management:
 Basic Elements of Strategic
Management:
1. Strategic Analysis: re-examining the position
in the marketplace or competition in-terms
of its products, services, strategies etc.
2. Strategic Choice: formulation of suitable
courses of action, their evaluation and the
choices between them.
3. Strategy Implementation: mobilizing
employees to translates formulated
strategies into concrete actions
4. Strategy evaluation and control:
measure performance and take
corrective actions.
 Basic Elements of Strategic
Management:
1. Environmental scanning

It includes the comparison of the threats and

opportunities of the organization in the external
business environment. Environmental scanning can
be affected by factors like government rules and
regulations, the economy, social changes, changes in
customer preferences, technological advancement,
competition and other environmental factors. At this
stage, a SWOT (Strengths, Weaknesses,
Opportunities, and Threats) analysis is performed to
contrast the internal assets and flaws of the trade
with the external prospects and dangers.
 Basic Elements of Strategic
Management:
1. Environmental scanning

• Establishing vision
•Designing mission
•Setting objectives
 Basic Elements of Strategic
Management:
2. Strategy formulation

It is the generation of long-term plans

for the proper management of
environmental openings and fears
considering the fortes and faintness of the
business or the company. It consists of
defining the mission, attainable
objectives, forming strategies and setting
policies.
 Basic Elements of Strategic
Management:
STRATEGY FORMULATION:

Mission: An organization’s purpose or the

reason for its survival is called mission. It
mentions how it is serving the society. An
ideal mission statement specifies the unique
purpose that differs the company from other
similar companies and defines the scope of
its functions in the form of the products and
services served to the market.
 Basic Elements of Strategic
Management:
STRATEGY FORMULATION:

Objectives: The outcomes of the planned

functions are called objectives. Objectives
mention what is to be attained by when. The
attainment of the objectives should lead to
the fulfillment of the company’s mission.
 Basic Elements of Strategic
Management:
STRATEGY FORMULATION:

Strategies: A strategy is a broad master plan

expressing how a company will accomplish its
mission and objectives, maximizing
competitive advantages and minimizing
competitive disadvantages. Generally, a
company or business takes into consideration
three kinds of strategy: corporate, business
and functional.
 Basic Elements of Strategic
Management:
STRATEGY FORMULATION:

Policies: A policy is a comprehensive

guideline for making decisions linking
the formation and implementation of a
strategy. Companies set policies to
ensure that its employees’ decisions and
actions support the company’s mission,
its objectives, and strategies.
 Basic Elements of Strategic
Management:
3. Strategy Implementation

It is taking action in order to attain the goals of

the organization. It requires organizing all the available
and necessary resources to put the strategy into action.
The higher management will pass the strategy to the
managers and they will communicate the roles and
responsibilities of their team members to implement the
strategy. There are contributions of different members
of different departments in the implementation of a
strategy. A perfect coordination and cooperation
between the management and other departments are
absolutely necessary to implement a strategy
successfully.
 Basic Elements of Strategic
Management:
Evaluation and control:

It requires an evaluation of the strategy to

ascertain whether the actual outcome matches the
expected outcome of the organizational goals. At this
stage, the organization decides which area of planning
should be evaluated and the method of evaluation to be
used and after the evaluation makes a comparison
between the expected result and the existing result.
Through this evaluation, the company can decide to
take different corrective actions to control the
shortcomings (if any) and help the strategy to meet the
desired organizational goals and objectives.
IMPORTANCE of
strategic
management
Importance of Strategic Management
• It guides the company to move in a specific direction. It
defines organization’s goals and fixes realistic objectives, which
are in alignment with the company’s vision.
•It assists the firm in becoming proactive, rather than reactive,
to make it analyze the actions of the competitors and take
necessary steps to compete in the market, instead of becoming
spectators.
•It acts as a foundation for all key decisions of the firm.
•It attempts to prepare the organization for future challenges
and play the role of pioneer in exploring opportunities and
helps in identifying ways to reach those opportunities.
•It ensures the long-term survival of the firm while coping with
competition and surviving the dynamic environment.
•It assists in the development of core competencies and
competitive advantage, that helps in the business survival and
growth.
 Benefits of Strategic Management
1. It helps to envision an organization’s future,
formulate mission and make objectives clear.

2. It process helps to understand each and every

people of an organization what the present stands
and what could be the development path charted
out, what are the planned results over a period.

3. It makes people realize what are they working for,

what is expected of each unit, division, functional
department even the individuals.
 Benefits of Strategic Management
4. It helps to facilitates the better delegation,
coordination monitoring, performance evaluation
and control

5. The identification of Strengths and weaknesses may

help an organization to take measures to overcome
/minimize the weaknesses and reinforce the
strength.

6. The SWOT analysis, which is a part of the SM,

helps a company to adopt suitable strategies for
exploiting opportunities and combating threats. It
will also help the company to drop that business
 Benefits of Strategic Management
7. It helps company to develop Realistic and long-term
plan by constant monitoring its objectives.

8. It makes the management dynamic, appropriate to

the environment and result oriented.

9. It enables a company to meet competition more

effectively.

10.It leads the company in a Standard and

competitive.
QUESTIONS?
 Keep safe
healthy and
happy
always!