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Strategic Management PPTs Unit 1 & 2.ppsx
Strategic Management PPTs Unit 1 & 2.ppsx
Unit I
Business policy- Evolution, meaning, concept and definition.
Concept of Corporate Strategy,
Importance of strategic management, Competitive advantages,
Strategy planning & decisions,
Strategic management process- Model-Vision-Mission,
Business definition- Goals & ObjectivesBalanced Scored card approach to Objectives- setting
key performance indicators,
Strategic Management different perspectives.
The word strategy is derived from the Greek word stratgos; stratus (meaning army)
and ago (meaning leading/moving).
Strategy is an action that managers take to attain one or more of the organizations
goals. Strategy can also be defined as A general direction set for the company and its
various components to achieve a desired state in the future. Strategy results from the
detailed strategic planning process.
A strategy is all about integrating organizational activities and utilizing and allocating
the scarce resources within the organizational environment so as to meet the present
objectives. While planning a strategy it is essential to consider that decisions are not
taken in a vacuum and that any act taken by a firm is likely to be met by a reaction from
those affected, competitors, customers, employees or suppliers.
Strategy can also be defined as knowledge of the goals, the uncertainty of events and
the need to take into consideration the likely or actual behavior of others. Strategy is
the blueprint of decisions in an organization that shows its objectives and goals,
reduces the key policies, and plans for achieving these goals, and defines the business
the company is to carry on, the type of economic and human organization it wants to
be, and the contribution it plans to make to its shareholders, customers and society at
large.
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
Features of Strategy
Strategy is Significant because it is not possible to foresee the future.
Without a perfect foresight, the firms must be ready to deal with the
uncertain events which constitute the business environment.
Strategy deals with long term developments rather than routine
operations, i.e. it deals with probability of innovations or new products,
new methods of productions, or new markets to be developed in future.
Strategy is created to take into account the probable behavior of
customers and competitors. Strategies dealing with employees will predict
the employee behavior.
Strategy is a well defined roadmap of an organization. It defines the
overall mission, vision and direction of an organization. The objective of a
strategy is to maximize an organizations strengths and to minimize the
strengths of the competitors.
Strategy, in short, bridges the gap between where we are and where
we want to be.
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
Plan
5 P of strategy
Perspective
Ploy
Pattern
Position
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
Intended Strategy
Unrealized
Strategy
Emergent
Strategy
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
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Strategic Planning
Once the direction is identified:
Analyse position
Develop and introduce strategy
Evaluate:
Evaluation is constant and the results of the
evaluation feed back
into the vision
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Strategic Planning
First Stage of Strategic Planning
may involve:
Futures Thinking
Thinking about what the
business might need to do 10
20 years ahead
Strategic Intents
Thinking about key strategic
themes
that will inform
decision making
Analysis: SWOT
Strengths identifying existing organisational
strengths
Weaknesses identifying existing
organisational weaknesses
Opportunities what market opportunities
might there be for the organisation to
exploit?
Threats where might the threats to the
future success come from?
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
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Analysis: PEST
Political: local, national and international political
developments how will they affect the organisation
and in what way/s?
Economic: what are the main economic issues both
nationally and internationally that might affect the
organisation?
Social: what are the developing social trends that
may impact on how the organisation operates and
what will they mean for future planning?
Technological: changing technology can impact on
competitive advantage very quickly!
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
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Examples:
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5 Forces
Developed by Michael Porter: forces that shape and influence the
industry or market the organisation operates in.
Strength of Barriers to Entry - how easy is it
for new rivals to enter the industry?
Extent of rivalry between firms how competitive
is the existing market?
Supplier power the greater the power, the less control the
organisation has on the supply of its inputs.
Buyer power how much power do customers
in the industry have?
Threat from substitutes what alternative products
and services are there and what is the extent
of the threat they pose?
Dr.N.C.Dhande SRTM University Nanded,
nishika.dhan@gmail.com
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Assignment
Apply PEST analysis to a business sector in and around your
town
THANKS.
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