Assignment 1

Strategic Management

Strategic Management

 Definition
 Purpose
 importance
Strategic management refers to the art of planning your business at the highest possible
level. it focuses on building a solid underlying structure to your business that will
subsequently be fleshed out through the combined efforts of every individual.

It consist analysis, decision and actions an organization undertakes in order to create

and sustain competitive advantage and one can gain strategic advantage by ahaving
returns higher than the competitor and also to overcome the challenges of the
environment.

Strategic management hinges upon answering three key questions:

What are business’s objectives?

 Assessing the landscape within which the company will operate, and formulating
how the company sees its role within that landscape. This is commonly known as
a mission statement.

 Establishing objectives to answer some of the unmet needs, taking both a long-
and short-term view of what the company can offer. This is commonly known as
a vision statement.

 Stipulating the goals the company has for itself, both in terms of financial and
strategic objectives.

What are the best ways to achieve those objectives?

  To achieve the objectives a chain of command should be put in place, pairing
individuals with the right skills, knowledge, and experience with the business’s
needs and objectives.
 From there, responsibilities for processes and tasks should be distributed across
the full chain of command, delegating work to teams and individuals so that they
company’s goals can be attained through the combined efforts of all employees.
 This includes communicating responsibilities and deliverables (what needs to be
done, and how the results of those tasks will be measured).

What resources are required to make that happen?

 Strategic management bring about allocating the right amount of resources to the
different parts of your business so that those assigned to particular goals have
what they need to meet their objectives.
 This ranges from providing your workers with the right supplies to enacting
systems by which employees receive the necessary training, all work processes
are tested, and all information and data generated is documented.
 To effectively manage your business strategically, every inch of your company
must have its needs met in these ways, so all parts can work together as a
seamless, highly functioning whole.

Effective strategic management is flexible and quick, enabling companies to move

quickly in response to new challenges, and replace outmoded ideas and practices with
processes that can help meet new needs as they present themselves
 Assignment 2

Compare and contrast the three following levels of strategy:

 Corporate – level strategies

 Business – level strategies
 Operational or Functional – level strategies

Strategy is basically a search of a plan tht will create competitive Advantage in a short
term period. Derived from a GREEK word “ STRAGOS”

strategy

 plan / course of action leading to a direction.

 It is related to company’s activities.
 It deals with uncertain future. d. It depends on vision / mission of the company to
reach its current position

Corporate Level Strategies

It’s a broad level strategy and all its plan of actions is at corporate level i.e. what the
company as a whole. It covers the various strategies performed by different SBU’s.
Strategies needs should be in align with the company objective

Resources should be allocated to each SBU and broad level functional strategies. To
ensure things there would need to have co-ordination of different business of the SBU’s.

Business Level strategies or SBU (strategic business units)

When a company performs different business/ has portfolio of products, the company
will organize itself in the form of strategic business units (SBU’s).

In order to segregate different units each performing a common set of activities, many
companies are organized on the basis of operating divisions/decisions. These are
known as strategic business units.

At the business unit level, the strategic issues are about both practical coordination of
operating units and about developing and sustaining a competitive advantage for the
products and services that are produced.
Functional level strategies
The functional level of your organization is the level of the operating divisions and
departments. The strategic issues at the functional level are related to functional
business processes and value chain
.
Functional level strategies in R&D, operations, manufacturing, marketing, finance, and
human resources involve the development and coordination of resources through which
business unit level strategies can be executed effectively and efficiently.

Conclusion:

A unified, comprehensive and integrated plan designed to assure that the basic
objectives of the enterprise are achieved”.

These are the levels at which strategies are formulated. Strategy is a plan or an action
leading to a particular direction. We have corporate level Strategy and Strategic
Business Unit level to fulfill the objectives of the company.

The strategy aims to gain customer loyalty and therefore making the buyer insensitive to
a high price. This again will also make entry into the market more difficult for new
entrants
 Assignment 3

ANSOFF’S MODEL
Represents the different options open to a marketing manager when considering new
opportunities for sales growth

Two variables in Strategic marketing Decisions:

 The market in which the firm was going to operate
 The product intended for sale

In terms of the market managers had two options remaining in their existing market or
Enter new ones

In terms of the product, the two options are selling existing products or developing new
ones

MARKET PENETRATION
Selling more of an existing product to an existing market. This is going deeper into a
market so it is called market penetration (More Promotion
• This is the objective of higher market share in existing markets
– E.g. in 2000, Mitsubishi announced a 10% reduction in prices in the UK in
order to encourage purchases
–
MARKET EXTENSION / development
Selling an existing product to a new market.This could involve selling to an overseas
market, or a new market segment.This is called market development. Achieving higher
sales/market share of existing products in new markets

PRODUCT DEVELOPMENT

Selling a new product to an existing market. This is called product development as it

means making changes to a product, for instance a new flavour like Coca-Cola.

DIVERSIFICATION
A new product to a new market. This is called diversification. Ex. diet coke being
targeted at people who are health conscious.This is the process of selling different,
unrelated goods or services in unrelated markets
• This is the most risky of all four strategies
– E.g. the Virgin group
• Risks involved differ substantially
• The matrix identifies different strategic areas in which a business could expand
• Managers need to then asses the costs, potential gains and risks associated with
the other options
 Assignment 4

PORTER’S GENERIC STRATEGY

Companies can achieve competitive advantages essentially by differentiating their

products and services from those of competitors and through low costs. Firms can
target their products by a broad target, thereby covering most of the marketplace, or
they can focus on a narrow target in the market

Increasing profits by reducing costs, while charging industry-average prices in your

industry or market/

Michael Porter regarded the selection of a defendable position within an industry as the
end result of a competitive strategic analysis. He argued that successful, profitable
companies generally choose to compete on either low costs or by differentiating their
products to meet specific customer needs. Although these two strategic options are
mutually exclusive, he added a third category of firms as niche players that serve a
specific market or product segment. Porter's three generic strategies are

1. COST LEADERSHIP

follow lower costs in a broad target market;

2. DIFFERENTIATION

Deliver differentiated products and services to a broad target market;

3. FOCUS

Pursue lowest cost or deliver differentiated products to a specific niche market.