TOUR 216 – StraMa
Uncertainties in business and why we need to
adopt Strategic Management
Uncertainties – lack of sureness in an event.
- We need StraMa to fight uncertainties.
Fighting Uncertainties
1. Forecasting is essential
- Forecasting regularly is important
- Looking to the future in order to make the
right decision
2. Shifting to Automation
- The labor would change with technology
3. Efficient reporting of finances
- Attached with automation
4. Self-service is key
- To reduce manpower cost, operating cost.
Two Strategies involving competitive advantage
1. Industry-based Model
- External analysis,
- PEST analysis, management method whereby
an org can assess major external factors that
influences its operation in order to become
more competitive in the market.
2. Resource-based Model
- Internal analysis
Strama Challenges
1. Earning above the average ROI (return of
investments)
- How much will your income be
2. Achieving the desired competencies
- Branding of the business (the business
that looks forward)
Elements of a strategy
1. The determination of the basic long-term
goals and objectives
2. The adoption of courses of action
3. The allocation of resources
Practice of Strategy
Professor Henry Mintzberg’s 5P’s of Strategy
(2002):
A strategy can be a:
1. Plan
- Most people associate strategy to a PLAN
- Means something that is intentionally put
in place and its progress is monitored
from beginning to end.
- Planners tend to produce internal
documents that details what the company
will do for a period of time in the future
2. Ploy
- Refers to short-term strategy.
- Detailed tactical actions
- Limited objectives
- Subject to change at very short period of
time
‘a manoeuvre intended to outwit an opponent or
competitor’ Minzberg et al,. 2002:3
- Ploy strategies were often use as threats to
competitors. They may threaten to, say,
decrease the price of their products simply
to destabilize competitors
3. Pattern of Behavior
- A ‘pattern of behavior’ strategy is one in
which progress is made by adopting a
consistent form of behavior. Unlike plans
and ploys, patters ‘just happen’ as a
result of the consistent behavior. Such
patterns are sometimes unconscious,
meaning that they do not even realize
that they are following a consistent
pattern. Nevertheless, if it proves
successful, it is said that the consistent
behavior has emerged into a success.
This is in direct contrast to planning
behavior.
- May also be referred as ‘a spur of a
moment’ strategy.
4. Position in respect to others
- A position strategy is appropriate when
the most important issue to an
organization is perceived to be how it
relates in respect to its competitors or its
markets.
- The organization wishes to achieve or
defend a certain position.
5. Perspective
- All about changing the culture of a
certain group of people – usually the
members of the org. itself.
- Some companies want to make their
employees think in a certain way,
believing this to be an important way of
achieving success. They may, for
example, try to get all employees to think
and act courteously, professionally or
helpfully.
- Changing the notion
Levels of Strategic Decision
Strategic Level
- Decisions made by top management
Tactical Level
- Decisions made by managers
- Long-medium term complex
Operational Level
- Decisions made by supervisor junior
manager
Strategic, tactical, and operational decisions within
an organization differ from each other terms of
their:
 Focus
 Level in the organization at which they are
made
 Scope
 Time horizon
 Degree of certainty or uncertainty
 Complexity