Introduction:

Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations. Strategic management analyzes the major initiatives taken by a company s top management on behalf of owners, involving resources and performance in external environments. !t entails specifying the organization s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. " balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. #ecent studies and leading management theorists have advocated that strategy needs to start with stakeholders expectations and use a modified balanced scorecard which includes all stakeholders. Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved$ assesses its competitors and sets goals and strategies to meet all existing and potential competitors$ and then reassesses each strategy annually or %uarterly &i.e. regularly' to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment. (Strategic )anagement can also be defined as (the identification of the purpose of the organization and the plans and actions to achieve the purpose. !t is that set of managerial decisions and actions that determine the long term performance of a business enterprise. !t involves formulating and implementing strategies that will help in aligning the organization and its environment to achieve organizational goals. )ost corporations have multiple levels of management. Strategic management can occur at corporate, business, functional and operational levels.

Corporate Strategy:
*orporate strategy is the overall managerial game plan for a diversified company$ it extends companywide- an umbrella over all a diversified company+s businesses. *orporate strategy consists of the moves made to establish business position in different industries and approaches used to manage the company+s group of businesses. *rafting corporate strategy for a diversified company involved four kinds of initiatives: ,. )aking the moves to establish positions in different businesses and achieve diversification - !n a diversified company, a key piece of corporate strategy is how many and what kind of business the company should be in specifiiically what industries to enter and whether to industries by starting a new business or ac%uiring an other company. .his piece of corporate strategy establishes whether diversification is based narrowly in a few industries or broadly in many industries and whether the different businesses will be related or unrelated. /. !nitiating actions to boost the combined performance to the businesses the firm has diversified into -"s positions are created in the chosen industries , corporate strategies making concentrates on ways to strengthen the long term competitive position and the profitibilities of the businesses the firm has invested in. *orporate parents can help their business subsidiaries be more successful by financing additional capacity and efficiency improvements, by ac%uiring another company in the same industry and merging the two operations into a stronger business, or by ac%uiring new businesses that strongly complement existing business . )anagement+s overall strategy for improving companywide performance usually involves pursuing rapid growth strategies in the most promising businesses, keeping the other core business healthy , initiating turnaround efforts in week-performing businesses with potential , and divesting businesses that are no longer attractive or that don+t fit into the organization+s long-range plans.

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2igure: !dentifying the overall corporate strategy of a 3iversified *ompany "pproach to allocating investment capital and resources across business units 5hether diversification is based narrowly in a few industries or broadly in many industries

5hether the businesses the company are diversified into related, unrelated, or a mixture of both 5hether the scope of company operation is mostly domestic, increasingly multinational, or global )oves to strengthen positions in existing businesses via new ac%uisitions

7ffects to capture cross-business strategic fits

CORPORATE STRATEGY 8.he action plan for managing diversified company9

)oves to divest weak or unattractive businesses

)oves to build positions in new industries via ac%uisition, merger, internal start-up, or alliances

4. 1ursuing ways to capture valuable cross business strategic fits and turn them into competitive advantages-5hen a company diversifies into businesses with related technologies , similar operating characteristics, common distribution channels or customers , or some other strategic factor , it gains competitive advantage potential not open to a company that diversifffies into totally unrelated business. 6. 7stablishing investment priorities ands steering corporate resources into the most attractive business units-" diversified company+s different businesses are usually not e%ually attractive from the standpoint of investing additional funds. .his fact of corporate strategy making involves channeling resource into areas where 401age

earning potentials are higher and away from areas where areas are lower. *orporate strategy may include divesting business units are chronically poor performers or those in an increasingly unattractive industry.

Business Strategy:
.he term business strategy refers to the managerial game plan for a single business. !t is mirrored in the pattern of approaches and moves crafted by management to produce successful performance in one specific line of business. .he core elements of business strategy are illustrated in figure / .2or a single business company corporate strategy and business strategy are one and the same. 2igure /: !dentifying strategy for a single business 7ffort to build competitive advantage <ower cost relative to rivals " different or better product offering compared to rivals Superior ability to serve a market niche or specific group of buyers 1lanned, proactive moves to outcompete rivals 8better product design, added features, improved %uality or service, better e commerce capabilities, super technologies, wider product lines and so on9 )oves to respond and react to changing conditions in the microenvironment and in the industry and competitive conditions

#: 3 technology, engineering strategy

BUSINESS STRATEGY 8the action plan for managing a single line of business9

Scope of geographic coverage 8local, regional, national, multinational or global9

Supply *hain )anagement strategy Sales, marketing, promotion and distribution strategy ;uman #esource Strategy

*ollaborative partnerships and strategic alliances with others

)anufacturing strategy

2inancial strategy

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.he central thrust of business strategy is how to build and strengthen the company+s longterm competitive position in the market place. .oward this end, business strategy is concerned principally with ,9 2orming responses to changes under way in the industry, the economy at large, the regulator and political arena and other relevant areas. /9 *rafting competitive moves and market approaches that can lead to sustainable competitive advantages. 49 =uilding competitively valuable competencies and capabilities. 69 >niting the strategic initiatives of functional departments. ?9 "ddressing specific strategic issues facing the company+s business.

Functiona strategy:
.he tem functional strategy refers to the managerial game plan for a particular functional activity, business process, or key department with in a business. " company+s marketing strategy, for example, represents the managerial game plan for running the marketing part of the business. " company+s new product development strategy represents the managerial game plan for keeping the company+s product lineup fresh and in tune with what buyers are looking for. " company needs a functional strategy for every major business activity and organization unit. 2unctional strategy while narrower, in scope than business strategy, adds detail to the overall business game plan. !t aims at establishing or strengthening specific competencies calculated to enhance the company+s market position. <ike business strategy, functional strategy must support the company+s overall business strategy and competitive approach. " related role is to create a managerial road map for achieving the functional areas objective and mission. .hus functional strategy in the production@manufacturing area represents the game plan for how manufacturing activities will be managed to support business strategy and achieve the manufacturing department+s objectives and mission. 2unctional strategy in the finance area consists of how financial activities will be managed to support business strategy and achieving the finance department+s objectives and mission.

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Operating Strategy:
Aperating strategy concerns the even narrower strategic initiatives and approaches for managing key operating units8plants, sales districts, distribution centers9and for handling daily operating tasks with strategic significance 8advertising campaigns, materials purchasing, inventory control, maintenance, shipping9. " plant manager needs a strategy for accomplishing the plants objectives carrying out the plants part of the company+s overall manufacturing game plan, and dealing with any strategy related problems that exist at the plant. " district sales manager needs a sales strategy customized to the district+s particular situation and sales objective. " company+s advertising manager needs a strategy for getting maximum audience exposure and sales impact for the ad budget. Aperating strategies, while of limited scope, add further detail and completeness to functional strategies and to the overall business plan. <ead responsibility for operating strategies is usually delegated to front-line managers, subject to review and approval by higher ranking managers. 7ven though operating strategy is at the bottom of the strategy making pyramid, its importance should not be downplayed. Aperating level strategies provide valuable support to higher level strategies. *onsider the case of a distributor of plumbing e%uipment whose business strategy emphasizes fast delivery and accurate order filling in an effort to deliver better customer service than rivals.

O!!ensi"e Strategy:
Affensive marketing warfare strategies are a type of marketing warfare strategy designed to obtain an objective, usually market share, from a target competitor. !n addition to market share, an offensive strategy could be designed to obtain key customers, high margin market segments, or high loyalty market segments. .he main types of offensive marketing warfare strategies are:

Fronta Attac# - .his is a direct head-on assault. !t usually involves marshaling all your resources including a substantial financial commitment. "ll parts of your B01age

company must be geared up for the assault from marketing to production. !t usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors+ line where it is strong. !t often involves an attempt to CliberateD a sizable portion of the target+s customer base. !n actuality, frontal attacks are rare. .here are two reasons for this. 2irstly, they are expensive. )any valuable resources will be used and lost in the assault. Secondly, frontal attacks are often unsuccessful. !f defenders are able to re-deploy their resources in time, the attacker+s strategic advantage is lost. Eou will be confronting strength rather than weakness. "lso, there are many examples 8in both business and warfare9 of a dedicated defender being able to hold-off a larger attacker. .he strategy is suitable when
o o o o o o

the market is relatively homogeneous brand e%uity is low customer loyalty is low products are poorly differentiated the target competitor has relatively limited resources the attacker has relatively strong resources

En"e op$ent Strategy 8also called encirclement strategy9 - .his is a much broader but subtle offensive strategy. !t involves encircling the target competitor. .his can be done in two ways. Eou could introduce a range of products that are similar to the target product. 7ach product will liberate some market share from the target competitor+s product, leaving it weakened, demoralized, and in a state of siege. !f it is done stealthily, a full scale confrontation can be avoided. "lternatively, the encirclement can be based on market niches rather than products. .he attacker expands the market niches that surround and encroach on the target competitor+s market. .his encroachment liberates market share from the target. .he envelopment strategy is suitable when:
o o o

the market is loosely segmented some segments are relatively free of well endowed competitors the attacker has strong product development resources

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the attacker has enough resources to operate in multiple segments simultaneously the attacker has a decentralized organizational structure

%eap!rog strategy -.his strategy involves bypassing the enemy+s forces altogether. !n the business arena, this involves either developing new technologies, or creating new business models. .his is a revolutionary strategy that re-writes the rules of the game. .he introduction of compact disc technology bypassed the established magnetic tape based defenders. .he attackers won the war without a single costly battle. .his strategy is very effective when it can be realized.

F an#ing attac# - .his strategy is designed to pressure the flank of the enemy line so the flank turns inward. Eou make gains while the enemy line is in chaos. !n doing so, you avoid a head-on confrontation with the main force.

&e!ensi"e Strategy:
3efensive marketing warfare strategies are a type of marketing warfare strategy designed to protect a company s market share, profitability, product positioning, or mind share. .he main types of defensive marketing warfare strategies are:

Position de!ense - .his involves the defense of a fortified position. .his tends to be a weak defense because you become a Csitting duckD. !t can lead to a siege situation in which time is on the side of the attacker, that is, as time goes by the defender gets weaker, while the attacker gets stronger. !n a business context, this involves setting up fortifications such as barriers to market entry around a product, brand, product line, market, or market segment. .his could include increasing brand e%uity, customer satisfaction, customer loyalty, or repeat purchase rate. !t could also include exclusive distribution contracts, patent protection, market monopoly, or government protected monopoly status. !t is best used in homogeneous markets where the defender has dominant market position and potential attackers have very limited resources.

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'o(i e de!ense - .his involves constantly shifting resources and developing new strategies and tactics. " mobile defense is intended to create a moving target that is hard to successfully attack, while simultaneously, e%uipping the defender with a flexible response mechanism should an attack occur. !n business, this would entail introducing new products, introducing replacement products, modifying existing products, changing market segments, changing target markets, repositioning products, or changing promotional focus. .his defense re%uires a very flexible organization with strong marketing, entrepreneurial, product development, and marketing research skills.

F an# position - .his involves the re-deployment of your resources to deter a flanking attack. Eou protect against potential loss of market share in a segment, by strengthening your competitive position in this segment with new products and other tactics. 8see flanking marketing warfare strategies9

Counter o!!ensi"e - .his involves countering an attack with an offense of your own. !f you are attacked, retaliate with an attack on the aggressor+s weakest point.

.here are three types of defensive strategies: retrenchment strategies, divestiture and li%uidation a) Retrenc*$ent strategy #etrenchment strategies involved cutting costs of its operations and or assets owned, thereby making a turnaround of the organization. #etrenchment may involve selling off assets to raise the needed cash, cut product lines, closing unprofitable or low margin businesses, institute costs control system, and possibly reducing the number of employees in the organization. !n the year /HH, and /HH/ when the financial industry in )alaysia exercised its restructuring in the banking sector, many employees were retrenched or laid off. Similarly, when the demand for electronic chips declined, many production workers in the electronics organizations were retrenched. .his strategy is adopted by organizations when an organization realizes that it is in a weaker position in the industry. .his strategy is also adopted when an organization is plagued by inefficiencies, low productivity, low morale and low profitability or losses. .hus, to improve the situation, the organization may resort to several cost cutting measures before I01age

the situation worsen. !n other words, the organization will use all the available strengths it could gain to improve the weaknesses and take any potential opportunities available in the market. () &i"estiture strategy 2or example, if a large organization has many businesses like food, chemical, and beverages industry, the organization might want to sell of the chemical business in an effort to gain cash reserves for the food and beverages businesses. .his strategy is adopted when an organization realizes that the retrenchment strategy is not sufficient to save the organization from difficulties. .his strategy is adopted as the business or division is found to have contributed little profit or losses to the entire organizational performance. 2urthermore, when a lot of cash is needed to save the other businesses, this strategic option is important. c) %i+uidation strategy .his strategy is adopted when the entire possible avenue to raise or salvage the business isn+t possible. .hus, shareholders may prefer to this than to pay the large amount of liabilities to be incurred by the organization. !n )alaysia, many organizations resorted to the section ,FB of the *ompanies "ct, ,IB4 to prevent being li%uidated temporarily in the year /HHH and /HH,. .hus the organization remains solvent until they failed all avenues to pay up their debts.

BUSINESS STRATEGIES:
.he business strategy focuses on the specific business activities of an organization. !t is also known as Jcompetitive strategy+ which emphasizes improving the competitive position of an organization+s products or services within an industry or market segment that the business unit serves 8;unger : 5heelen, ,IIB9. .he business strategy helps the organization to determine how it could effectively compete in its businesses.

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Cost %eaders*ip Strategy:

.his strategy re%uired good efficient scale facilities, rigorous pursuit of cost reductions from the experience curve, tight cost and overheads control, and costs minimizations selected functional areas like marketing, service, research : development, and advertising. "n organization which can control its operational costs can charge lower prices as the costs of production are lower than its competitors. "s such the organization can make reasonable profits in its business activities. Arganizations that have successfully adopted this strategy include 5al-)art 8retailing9, .imes 8watches9, and Kateway /HHH8personal computers9 8;unger : 5heelen, ,IIB9. !n )alaysia, Kiant 8hypermarket9, and "ir "sia 8airline9 evidently are successful in their adoption of this strategy. .his strategy+s suitable to these organizations because with its low costs operations it could charge consumers at lower prices, and therefore gain a larger market share than its competitors. .he low price strategy also serves as a barrier of entry to other new entrants and organizations are therefore able to sustain the leadership cost position. .his strategy is also suitable for organizations producing products on a large scale operation and gain economies of scale like producing computer chips in millions of units. .his strategy, however, is not suitable for businesses or products that are not perceived as a Jcommodity+ item and does not re%uire a large scale of production. !t is also possible to adopt this strategy when the consumers are price sensitive over the products. !n this strategy, the fundamental idea is to compete on price and costs in its operations, and to gain a larger market share with lower prices, and thereby gain a large profit in the long run or on a large scale. .hus, volume in the sales is important in this strategy.

&i!!erentiation Strategy
.he differentiation strategy is pursued when the organization observed that the business activities can be differentiated in many ways. .he differentiation can be in terms of product or service characteristics like brand, product design, technology features, network dealership or customer service. .his is a reasonable strategy to pursue in businesses where the profits are above average because of brand loyalty or insensitivity on price by customers. *ustomers Jloyalty can be a barrier to entry for new entrants as the new businesses or products need to do extensive marketing to show its distinctive ,, 0 1 a g e

competence to the potential customers. =usiness organizations pursuing this strategy are like 5alt 3isney 1roductions 8entertainment9, )aytag 8appliances9 and )ercedes =enz 8automobile98;unger : 5heelen, ,IIB9. )any fast-food outlets and fast moving consumer products use their brand name as the key differentiating strategy in attracting new clients. ;owever, this strategy would not be viable when consumers find that the uni%ue product characteristics are not convincing to justify for a higher price, and thus a low cost price leadership strategy can defeat the differentiation strategy. "s such, the differentiation strategy works as long as the organization or business can show the major uni%ue or differentiated characteristics of its products or services. .hus, understanding consumer+s buying behavior, trends, tastes and preferences are critical in the differentiating strategy.

Focus Strategy
.his can be due to costs effectiveness or differentiated in terms of its products or services. 5hen the focus strategy emphases on the buyer behavior, product line segments, or geographical location, then, the strength in adopting such strategy lies on the extent to which the organization can serve its target market segments more effectively based on its key distinctive features as perceived by the consumers. 2or example, in selling the =)5 4,G series cars in )alaysia, one strategy is to focus on the younger age group with high income as opposed to )ercedes =enz which attracts an older age group. !n the retail market, *arrefour focuses on costs differentiation. .he consumers in *arrefour hypermarket can different from those in the Kiant hypermarkets. !n the >nited States, Lohnson 1roducts, for example, successfully used the differentiated focus strategy by manufacturing and selling hair care and cosmetics products to ethnic "frican "merican consumers. .heir products like >ltra 5ave and >ltra Sheen gave "frican "merican more flexibility in hair styling 8;unger : 5heelen,,IIB9.!n using the cost focus strategy, the business unit seeks to achieve cost advantage in its market segments. .his is adopted when an organization believes that it could focus its efforts on specific target market segments more efficiently than its competitors due to its lower costs in product design and superior product performance. Ane example is the 2adal 7ngineering in the >nited States that focuses on cost focus strategy 8;unger : 5heelen, ,IIB9. 2adal ,/ 0 1 a g e

7ngineering made machine tools that were functional, durable and far cheaper than its competitors by producing machine tools that had fewer parts and simpler electronic controls compared to the large manufacturers of machine tools. "nother example is the >nited Services "utomobile "ssociation 8>S""9 which offers low cost insurance to active and retired military personnel 8;unger : 5heelen,,IIB9.!n pursuing the business strategies, it should be noted that there are also risks involved due to imitation strategies of the competing firms. .his could only be done when competing firms have the technological know-how or customers are less loyal due to price-cost sensitivities. .his could also be attributed to changing social structure like lower income or high rate of temporary unemployment 8due to retrenchment of employees or voluntary retirement by employees9 which force consumers to change their lifestyles and buying behavior. Selecting an appropriate business strategy would depend on the current business situation and its relevance to the selected product or services in the organization.

Conc usion:
Strategic management analyzes the major initiatives taken by a company s top management on behalf of owners, involving resources and performance in external environments. !t entails specifying the organization s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.

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