1) - Introduction

MGT 4124 Strategic Management
01
Introduction
Strategic Management Process
2020
Department of Business Management
Faculty of Management Studies
Rajarata University of Sri Lanka
Department of Business Management- FMS, RUSL

ILOs
After completing the session you would be able to;
Understand term “strategy”, “Organizational

Strategy” and “Competitive Advantage”
Understand origin and role of Strategic

Management Process in management discipline
Application of Strategic Management on current

competitive business environment

Outlines
 Introduction, definitions
 Features of a Successful Strategy
 Organizational Strategy ILO 1
 Origins of Strategy
 Strategic Management
 Basic model of Strategic Management
 How SM Differs from other functional areas of
Management ILO 2
 Role of Strategic Management

 Evolution of SM in Business Organizations
 Article Reading
ILO 3


“Strategy”
Strategy is performing different activities from rival
or performing same activity differently from rival
-Michel Porter-
Dell – computers to home

appliance
Cargill's- Supermarket to finance
Corporative

Introduction
Strategy is a “pattern of stream of decision”
-Henry Mintzberg-
A strategy is an integrated and coordinated set of

commitments and actions designed to exploit
core competencies and gain a competitive
advantage over other (Hitt)
Strategy is distinctive array of interdependent

choices that address certain questions (Nicolaj,2019)

Elements of strategy
Objective to achieve
Where to compete
Product
Customer
Geography
Value proportion
Source of completive advantage

Introduction
02
Decision
Action
Deliberate or quick
decision winning over Collective
competition action
01
03
Art
Way of winning What is Plan
with limited
resources Strategy Made in advance
Purposefully
06
Perspective
Game 04
Intangible &
done out of
invisible hand sight of an
05 enemy
All are Strategies depend on situation
Smart way of determining and achieving ones goals and objectives


Competitive Advantage
Above-average returns are returns in excess of what an
investor expects to earn from other investments with a
similar amount of risk.
A firm has competitive advantages when if it

outperforms its industry peers
CA = P-C
Higher price Lower cost


Introduction
• Achieving and extending best
practices
Operational
• Leads to absolute improvements but
Efficiency
not relative to competitors
• Necessary but not sufficient
Lead strategic convergence
FAIL
Effectively
Distinguish
Strategy Doing something different or same thing

differently than rivals
Delivering greater value to customer or comparable value at lower cost

Introduction
Not being
It is Best
BUT
Differentiate


A Strategy includes
How to attract and please customers
How to compete against rivals (Keels, Cargill's)
How to position the company in the market place
(Keels super lowest price)
How best to respond to changing economic and
market condition (Sager free)/ TATA Nano
How to capitalize on attractive opportunities to grow
the business (Invite entrepreneurs to assemble the
cars at their own plant)
How to achieve the company’s performance target
(250000 vehicles per year)
(Thompson et al, 2018)

Origin of Strategy
The word strategy has military origins: it comes from
the Greek, meaning ‘the ordering of formations on
the battlefield’.
Related to this is the word ‘stratagem’, which means
a plan or scheme. Sun Tzu (500 B.C), a Chinese
military strategist and philosopher, wrote in his very
influential military strategy book The Art of War:
‘The general who wins the battle makes many
calculations in his temple before the battle is fought.
The general who loses makes but few calculations
beforehand.’

Origin of Strategy
Two thousand years later, Carl von Clausewitz

(1832), a Prussian general and military theorist,
made a similar statement by saying in his principal
book On War:
‘[Strategy is] concerned with drafting the plan of war
and shaping the individual campaigns, and within these,
deciding on the individual engagements.’
Strategy commenced as an art and developed later as a science


Perspectives of Strategies
Intendant Strategy Realized
Unrealized Emergent Strategy

Perspectives of Strategies
Normative Perspectives Descriptive Perspectives

 Strategy is a Science  Strategy is an Art
 Strategies are developed  It emerges situational and
purposefully and step by not develop purposefully
step
 No universal accepted
InItmodern
is a linear process method
environment we use emergent strategies because we
 Every step can can’t predict anything correctly
be planned  More use creativity and
 Universal accepted imagination
 On the spot, Class
method is used
Intended strategy Emergent strategy





Features of a Successful Strategy
A successful strategy should be
Clear Creative
Futuristic Cost effective
Rational/ Deceptive
Lucid
Sustain advantages
Unique
(Lynch, 2002)

Organizational Strategy
The determination of the basic long term goals and
objectives of an organization, and the adoption of
courses of action and the allocation of resources
necessary for carrying out these goals.
(Alferd Chandler)
“Competitive strategy is about being different. It
means deliberately choosing a different set of
activities to deliver unique mix of value”
(Michael Porter)

Strategy is Long term direction of organization

-Exploring Strategy, 10th Edition-
Long term: Strategies are typically measured over years, for
some organizations a decade or more.(Three horizon
framework)
Direction: strategies follow some kind of long-term direction

Organization: organizations are not treated as discrete,
unified entities it involves complex relationships, both internally
and externally
Levels of strategy
Concerned with the overall scope of an

Corporate organization
Concerned with how the individual

businesses should compete in their
Business particular markets.
Concerned with how the

components of an organization
Operational deliver effectively the corporate-
and business-level strategies

Strategic Management
Strategic Management as “art and science of
formulating, implementing, and evaluating
cross-functional decisions that enable an
organization to achieve its objectives”
Primarily it involves;
Understanding the strategic position of an organization
Strategic choices
Strategic Implementation

Dimensions of strategic Management

Model
Strategic Management is fundamentally concerned
with
Strategic Analysis
Strategic Choice
Strategic Implementation
Strategic position, choices and action should be seen
as closely related, and in practice none has priority
over another.
The three circles are overlapping and interdependent
strategic analysis, strategic choices and strategic
implementation are considered as main dimension of
strategic management

Basic model of Strategic Management
Strategic
Analysis
Strategic
Strategic
Implement
Choice
ation
Johnson
Department of Business Management- FMS, RUSLand Scholes
Strategic Analysis
Strategic analysis is concerned with understanding
the strategic position of the organization
Understanding the strategic position is concerned;

Identifying impact of external environment
Strategic capability of organization (resources and
competences)
Organizational goals, stakeholders, CSR
Organizational culture

Strategic Choices
Strategic choices involve the options for strategy in

terms of both the directions in which strategy might
move and the methods by which strategy might be
pursued.
Corporate strategy
Business strategy
International strategy
Innovation and entrepreneurship
Acquisitions and alliances

Strategy in action
Managing strategy in action is about how

strategies are formed and how they are
implemented.
It covers;
Strategy performance and evaluation
Strategy development processes
Organizing
Leadership and strategic change
Strategy practice

Evolution of SM in Business Organizations
Business Policy
Era
(Up to 1960)
?
.
Strategic .
Planning Era Strategic
1960-1980 Strategic Thinking Era
Management Era From 2000
1980-2000

Thank You

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MGT 4124 Strategic Management

Department of Business Management- FMS, RUSL

Understand term “strategy”, “Organizational

Understand origin and role of Strategic

Application of Strategic Management on current

Department of Business Management- FMS, RUSL

 Role of Strategic Management

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Dell – computers to home

Department of Business Management- FMS, RUSL

A strategy is an integrated and coordinated set of

Strategy is distinctive array of interdependent

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

All are Strategies depend on situation

Smart way of determining and achieving ones goals and objectives

Department of Business Management- FMS, RUSL

A firm has competitive advantages when if it

Higher price Lower cost

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Strategy Doing something different or same thing

Delivering greater value to customer or comparable value at lower cost

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Two thousand years later, Carl von Clausewitz

Strategy commenced as an art and developed later as a science

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Intendant Strategy Realized

Unrealized Emergent Strategy

Department of Business Management- FMS, RUSL

Normative Perspectives Descriptive Perspectives

Intended strategy Emergent strategy

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Features of a Successful Strategy

A successful strategy should be

Futuristic Cost effective

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Strategy is Long term direction of organization

Direction: strategies follow some kind of long-term direction

Concerned with the overall scope of an

Concerned with how the individual

Concerned with how the

Department of Business Management- FMS, RUSL

Department of Business Management- FMS, RUSL

Dimensions of strategic Management

Department of Business Management- FMS, RUSL

Basic model of Strategic Management

Understanding the strategic position is concerned;