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Strategic Management
Strategic Management
Strategic Management
It is concerned with the determination of the basic long term goals and objectives of an enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out these goals
William Glueck
It is a stream of decisions and actions, which lead to the deployment of an effective strategies to help achieve corporate objectives, decisions and actions. Which determine whether an enterprise survives or dies
It provides the road map for the firm, it shows the way for achieving targets. It helps the firm utilize the resources in best possible manner. It allows more effective allocation of time and resources for identifying opportunities. The firm can respond to environmental changes in a better way by exploiting opportunities to its advantage and avoiding costly mistakes in investment decisions. It minimizes the chances of mistakes and unpleasant surprises. It seeks to prepare the firm to confront future challenges through certain proactive steps and shapes the future to its advantage. It creates a framework for internal communication among personnel. It helps to integrate the behavior of individuals into a total effort. It provides basic clarification of individual towards changes.
Strategic planning is laborious and time consuming. Very few shortcuts. Immediate results are rarely obtained. Establishing and maintaining a formal system involves many expense. Many executives enthralled by strategic planning, tend to overdue the fact gathering job. Much time and efforts is wasted thus in collecting all sorts of data that is not fully put to fruitful use. It restricts the organization and executives to the more rational and risk free options.
It is not a box of tricks, a bundle of techniques. it is analytical thinks and commitment of resources to action. It is not forecasting. Forecasting merely points to a range of probabilities. Whereas planning helps in tracking the opportunities and developing strategies to achieve them. It does not deal with future decisions. The Q as to what the organization should do tomorrow is not as important as to what it has to do today to be ready for an uncertain tomorrow. It is not am attempt to eliminate and minimize risk. It only helps in choosing rationally among risk taking courses of action rather than moving into uncertainty on basis on hunch, hear say or experience.
Corporate level strategic planning Business level strategic planning Functional level strategic planning
KEY Questions
Future oriented
It is an overall plan of a firm deploying its resources to establish a favorable position and compete successfully against its rivals. It describes a frame work for charting a course of action. It explicates an approach for the company that bills on its strength and is a good fit with a firms external environment. It helps the firm to achieve competitive advantage.
A Chandler The determination of long term goals of an enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out these goals M Porter According to Porter the threat to a firms profit come not only from its competitors but also from its buyers, suppliers, positional new entrants etc. so to earn above average returns, a firm should invariably try to establish a superior competitive position as compare to its rivals through its strategies. T Ansoff Strategic decisions are primarily concerned with external rather than internal problems of the firms and specifically with the selection of the product mix the firm will produce and the markets to which it will sells.
Goals
logic
Scope
Competitive advantage
Master strategies
Program strategies
Sub strategies
Tactics
process of effectively relating the organization's objectives and resources to the opportunities in the environment.
implementing and evaluating cross functional decisions that enable an organisation to achieve its objectives
Period
1950
1960
1970
Late1970s to early 1980s Analysis of Industry & competition Choice of industries, markets & segments & positioning with them Analysis of industry structure, Competitor analysis
Late 1980s to early 1990s The quest for Competitive Advantage Sources of Competitive advantage within the firm
Dominant theme
Corporate planning
Corporate strategy
Main Issues
Planning Growth
Portfolio Planning
Synergy SBUs Portfolio planning matrices Experience curves, Returns to market Share Diversification, Multidivisional structures, Quest for Global Market share
Dynamic sources of competitive advantage, Control of standards, Knowledge & Learning The virtual organisation, the Knowledge based firm, Alliances 7 networks, The quest for critical mass
Organisational Implications
Greater Industry & market selectivity, Industry restructuring, Active asset management
Strategic Analysis
Strategic Implementation
Strategic choices
Strategic Evaluation
The strategy is developed by a CEO who searches for new opportunities and is ready to make bold decisions or shift strategies where ever necessary. This Entrepreneurial mode is successful in organizations that are young and small.
Mode
Adaptive Mode
This approach emphasis on taking small incremental steps rather than seeking opportunities.
This is an approach that involves systematic, comprehensive analysis along with the integration of various decisions and strategies.
Planning Mode
Outcomes
Goal Pattern
Solutions
Problems
Problem Pattern
Solution Pattern
Changes
Forced Actions
Natural Response
Change Pattern