Strategic Management

Organizational Dynamics & Organizational Appraisal

Strategic Management Process

Establish Strategic Intent Formulate Strategies Implement Strategies Strategic Evaluation & Control

Environmental & Resource Analysis

Environmental Analysis

Industry Analysis

Competition Analysis

Organizational Analysis

Environmental Analysis
The environment of the business is the

aggregate of conditions, events and influences that surround and affect it.
Environment literally means the

surroundings, external objects, influences, or circumstances under which someone or something exists.

Characteristics of Environment

Its Complex. Its Dynamic. Multi-Faceted. It has far reaching impact.

It Includes both

Internal as well as External aspects.

Environmental Factors
External Environment
Economic Socio-Cultural Political Legal Technological International

Internal Environment
Organizational Marketing aspect Financial aspects Personnel aspects Production aspects Managerial aspects

Industry & Competitive Analysis

Potential Entrants
Bargaining power of suppliers Threat of New Entrants

Industry Competitors

Suppliers
Rivalry Organizations
Threat of substitute products

Buyers
Bargaining power of buyers

Substitutes

Organizational Dynamics & Strategic Advantage

Strategic Advantage
Organizational Resources

Strengths

&
Weaknesses Organizational Behavior

Synergistic Effects

Competencies

Organizational Capability

Organizational Resources
A firm is a bundle of resources
Tangible & Intangible.

These resources can be classified as -

Physical, Human & Organizational. The cost & availability of resources are the most important aspects on which the success of any organization depends. But its not only the possession, its the utilization that makes an organization capable.

Organizational Behavior
Organizational behavior is the manifestation

of various forces & influences operating within the environment of an organization.

It leads to the development of a special

identity & characteristics of an organization.

management philosophy, values & culture, work environment, politics, use of power and organizational climate as a whole.

The forces includes Quality of Leadership,

Strengths & Weaknesses

Organizational Resources & Behavior

combines to create Strengths & Weaknesses.

Strength is an inherent capability that can be

used to gain Strategic Advantage.

Weakness is an inherent limitation that creates

strategic disadvantage.

Strength & Weaknesses combines across the

functional areas to create synergistic effects.

Synergistic Effects
A situation where attributes do not add

mathematically but combine to produce an enhanced or a reduced effect. greater or lesser than the sum of its parts. [2 + 2 = 5] lead to the development of competencies.

Synergy is the idea that the whole is a

These synergy or dysergy (negative synergy)

Competencies
These are the special qualities possessed by

an organization that make them withstand pressures of competition in the marketplace. and disadvantages that exist for an organization determines its ability to compete with its rivals.
capabilities, embedded knowledge.

The net results of the strategic advantages

These are the Unique resources, core

Competencies
The capability to use the competencies

exceedingly well turns them into Core - Competencies

Any specific ability possessed by a

particular organization exclusively, is called a distinctive competence.

Organizational Capability
It is the inherent capacity or potential of an

organization to use its strengths & overcome its weaknesses in order to exploit opportunities & face the threats in its external environment.
resources, behavior, strengths & Weaknesses, synergistic effects & competencies of an organization.

As an attribute its the sum total of

Strategic Advantage
These are the outcomes of the capabilities.

These are the results of organizational

activities in terms of financial & nonfinancial parameters.

Strategic advantages of an organization are

comparable in terms of performance with respect to its competitors Advantage.

Strategic Advantages leads to competitive

Organizational Capability Factors

Financial capabilities. Marketing capabilities. Operations capabilities. Personnel capabilities. Information Management capabilities. General Management capabilities.

Methods for Organizational Appraisal

Internal Analysis Comparative Analysis Comprehensive Analysis

Value Chain Analysis

Historical Analysis

Balanced Scorecard

Quantitative Analysis

Industry Norms

Key Factor Rating

Qualitative Analysis

Benchmarking