Welcome to Strategic Management

and Corporate Maritime Strategies

(SMCMS)
Course Code: MPSM521

M O H A M M E D M OJA H I D H O S SA I N C H O W D H U R Y
LECTURER
D E P T. O F P O R T A N D S H I P P I N G M A N A G E M E N T
B A N G A B A N D H U S H E I K H M UJ I B U R R A H M A N M A R I T I M E U N I V E RS I T Y,
B A N G L A D ES H
Materials of this course
 Lecture
Case Study
 Seminar
 Experience Sharing of Corporate Executives
 Invited Guest Lecture
 Video Cases
 Report Writing
Marks Allocation
Items Percentage
Final Exam 50%
Midterm 20%
Class Attendance 5%
Class Performance 5%
Assignment, Presentation & Report Writing 10%
Smart Quiz/ Class Test, Case Study 10%
 Read the story……
A sales rep, an assistant and their manager are walking to lunch when they
find an antique oil lamp. They rub it and a Genie comes out. The Genie says,
"I'll give each of you just one wish."
"Me first!" says the assistant. "I want to be in the Bahamas, driving a
speedboat, without a care in the world." Poof! She's gone.
"Me next!" says the sales rep. "I want to be in Hawaii, relaxing on the beach
with my personal masseuse, an endless supply of piña coladas and the love of
my life." Poof! He's gone.
"OK, you're up," the Genie says to the manager. The manager says, "I want
those two back in the office after lunch."
Todays lecture is about…
Management
Strategy
Strategic Management
Intended Strategy
Emergent Strategy
Realized Strategy
Management
Management is the function of planning, organizing, directing and
controlling of an organization
Efficiently
Effectively
 Management
Management in all business and organizational activities is the act of
coordinating the efforts of people to accomplish desired goals and objectives by
using available resources efficiently and effectively
 Functions of management
According to George & Jerry, “There are four fundamental functions of
management i.e. planning, organizing, actuating and controlling”
According to Henry Fayol, “To manage is to forecast and plan, to organize, to
command, and to control”.
Luther Gullick has given a keyword ‘POSDCORB’ where P stands for Planning, O
for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for
reporting & B for Budgeting.
But the most widely accepted are functions of management given by KOONTZ
and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.
 Strategy
The Pitcher and The Crow

There once was a crow who was terribly thirsty. He noticed a bit of water at the bottom of a tall
clay pitcher. Now, his beak was too wide and the pitcher too thin to poke his thirsty tongue
down in.

"What shall I do?" thought the crow. "I'll think and think! I must get myself a drink!"

"Ah HA!" exclaimed crow, as an idea came to him.

He took a pebble in his beak and dropped it over the pitcher's brim. Plop! Plop! He dropped two
more in. On and on he went. One by one the pebbles fell, slowly making the water swell until it
was easily within reach of his thirsty tongue.

"AHHHH!" he said as he took a drink, "No problem's too big when I think and think."
The Management Theory
Modern business strategy emerged as a field of study and practice in
the 1960s; prior to that time, the words "strategy" and "competition"
rarely appeared in the most prominent management literature;
Alfred Chandler wrote in 1962 that: "Strategy is the determination of
the basic long-term goals of an enterprise, and the adoption of courses
of action and the allocation of resources necessary for carrying out
these goals.
Michael Porter defined strategy in 1980 as the "...broad formula for how
a business is going to compete, what its goals should be, and what
policies will be needed to carry out those goals" and the "...combination
of the ends (goals) for which the firm is striving and the means (policies)
by which it is seeking to get there.
The Management Theory
Henry Mintzberg described five definitions of strategy in 1998:
◦ Strategy as plan – a directed course of action to achieve an intended set of
goals; similar to the strategic planning concept;
◦ Strategy as pattern – a consistent pattern of past behavior, with a
strategy realized over time rather than planned or intended. Where the
realized pattern was different from the intent, he referred to the strategy
as emergent;
◦ Strategy as position – locating brands, products, or companies within the
market, based on the conceptual framework of consumers or other
stakeholders; a strategy determined primarily by factors outside the firm;
◦ Strategy as ploy – a specific maneuver intended to outwit a competitor; and
◦ Strategy as perspective – executing strategy based on a "theory of the
business" or natural extension of the mindset or ideological perspective of
the organization.
Different Strategies…
 An intended strategy is the strategy that an organization hopes to
execute. Intended strategies are usually described in detail within an
organization’s strategic plan
 An emergent strategy is an unplanned strategy that arises in response
to unexpected opportunities and challenges
 A realized strategy is the strategy that an organization actually
follows. Realized strategies are a product of a firm’s intended strategy
Intended Strategy Emergent Strategy Realized Strategy
The company
David McConnell The perfumes changed its name to
aspired to be a writer. McConnell gave out Avon in 1939, and its
When his books with his books were direct marketing
weren’t selling he popular, inspiring the system remained
decided to give out foundation of the popular for decades.
perfume as a California Perfume Avon is now available
gimmick. Company. online and in retail
outlets worldwide.
Strategic Management
Strategic management is the process of building capabilities that allow a
firm to create value for customers, shareholders, and society while
operating in competitive markets
 Setting the strategy in conforming with vision, mission, goals and
objectives
 Setting the strategy in conforming with rival competitors
Strategic Management
Strategic Management Defined The set of managerial decisions and
actions that determines the long-run performance of a corporation. It
includes:
◦ environmental scanning (internal & external)
◦ strategy formulation
◦ strategy implementation
◦ evaluation and control

It focuses on integrating management, marketing, finance/accounting,

production/operations, research and development, and computer
information systems to achieve organizational success.
SWOT Analysis
Basic Elements of Strategic Management
Environmental Scanning
The monitoring, evaluating, and disseminating of information from the
external and internal environments to key people within the
corporation;
The external environment is consist of variables (opportunities and
threats) that are outside the organization and not typically within the
short-run control of top management;
External environment covers the general forces and trends within the
natural or societal environment, the industry where it is in operation;
The internal environment of a corporation consists of variables
(strengths and weaknesses) that are within the organization itself and
are not usually within the short run control of top-management;
Internal environment covers the corporation’s structure, culture, and
resources.
Environmental Scanning
 Collecting Information
 How to collect information?
 External Environment
Industry Environment
General Environment
 Strategy Formulation
The development of long range plans for the effective management of
environmental opportunities and threats, in light of corporate strengths
and weaknesses.
It includes defining the corporate mission, specifying achievable
objectives, developing strategies, and setting policy guidelines.
Four fundamental background for strategic formulation:
 Vision
 Mission
 Goals
 Objectives
Mission Statement
Example: Google
◦ To organize the world’s information and make it universally accessible and
useful;

Mission (Maersk Supply Service)

"To be the customers’ first choice as a supplier of safe, high quality and
reliable offshore vessel services"
Vision (Maersk Supply Service)
"By working with passion and focus on safety and sustainability to
create competitive advantages for our customers, and in doing so
always live up to our company values"
 Areas where goals and objectives
established
Profitability; Contribution to employees;
Efficiency; Contribution to society;
Growth; Market leadership;
Shareholder wealth; Technological leadership;
Utilization of resources; Survival;
Reputation; Personal needs of top
management.
Process of Strategy Formulation
 Setting Organizations’ objectives
 Setting Quantitative Targets
 Aiming in context with the divisional plans
 Performance Analysis
 Choice of Strategy
 Strategy Implementation
Strategy implementation is the translation of chosen strategy into
organizational action so as to achieve strategic goals and objectives

Following are the main steps in implementing a strategy:

Disbursement of abundant resources to strategy-essential activities.
Creating strategy-encouraging policies.
Employing best policies and programs for constant improvement.
Linking reward structure to accomplishment of results.
Making use of strategic leadership
Strategy Evaluation & Control
The significance of strategy evaluation lies in its capacity to
co-ordinate the task performed by managers, groups,
departments etc. through control of performance
The process of Strategy Evaluation consists of following
steps-
 Fixing benchmark of performance
 Measurement of performance
 Analyzing Variance
 Taking Corrective Action
Strategy
 Historically refers to “Deployment of Troops”
 Broadly means “maneuvering of troops into position before the
enemy is actually engaged”
 According to Thompson and Strickland “Strategy is the means used to
achieve the ends”
 According to Michael Porter “ Strategy is about competitive position,
about differentiating yourself in the eyes of customer, about adding
value through a mix of activities different from those used by
competitors”
 Levels of Strategy
Corporate strategy
◦ Defines the markets and businesses in which a company will operate
◦ Formulated by top level management
◦ Overall direction in terms of general attitude towards growth
◦ Strategies that firms use to diversify their operations from a single business competing in a
single market into several product market and several businesses
◦ By way of Merging, Acquisition, Joint Venture, Consolidation or by other means
◦ Case: Foster’s Group, Interpublic Group, Robi-Airtel Merging
Levels of Strategy
Business Strategy
◦ At business unit or product level;
◦ Emphasis on the strengthening of company’s competitive position of
products or services
◦ Composed of competitive and cooperative strategies
◦ Main emphasis on product development, innovation, market development,
diversification and the like
◦ Case: Pran-RFL Group
Levels of Strategy
Functional Strategy
◦ Formulated to achieve some objectives of business unit
◦ To maximize resource productivity
◦ Approach taken by the functional areas
◦ Production Strategy, Marketing Strategy, Human Resource Strategy, Financial
Strategy etc.
◦ Functional strategy is concerned with developing distinctive competence to
provide a business unit with a competitive advantage.
Maersk Supply Service
Strategy
"To primarily focus on deepwater and to work worldwide in partnership
with our customers to meet their requirements by creating innovative,
reliable and cost-efficient solutions on time and on budget"
Targets
"In compliance with our policy of continued improvements we have a
long term target of zero accidents and zero environmental incidents. We
will remain a major factor in the harsh environment and deepwater
segments. We will remain profitable and generate industry top quartile
financial performance. Our aspiration is to deliver minimum 50 per cent
of APM Shipping Services in 2016."
Policy
A broad guideline for decision making that links the formulation of
strategy with its implementation;
Policies are used to make sure that the employees throughout the firm
make decisions and take actions that support corporation’s mission,
objectives and strategies.
Maersk Supply Service-Group
Policies
Business Approach: We pursue profitable business and responsible
leadership within our industries
Our Brand: We engage with customers, other stakeholders and
colleagues to promote and protect our brand
Health and Safety :We conduct our business in a safe manner
Legal Compliance: We Are committed to comply with applicable laws
and regulations
Our Working Culture: We provide our employees with opportunities to
develop and succeed
Strategy Implementation
It is the process by which strategies and policies are put into action
through the development of programmes, budgets and procedures;
This could include changes in organizational overall culture, structure,
or management system of the entire organization, or in all of these
areas.
Programme
A programme is a statement of the activities or steps needed to
accomplish a single-use plan.
It may involve restructuring the organization, changing the internal
culture, or beginning new research effort.
Boeing’s Strategy
They set strategy to regain industry leadership with its new 787
Dreamliner meant that the company had to increase its manufacturing
efficiency if it were keep the price low. To significantly cut the costs,
management decided to implement a series of Programmes:
◦ Outsourcing approximately 70 percent of manufacturing;
◦ Reduce final assembly time to three days compare to 20 days for its 737 by
having suppliers build completed plan sections;
◦ Use, new lightweight composite materials in place of aluminum to reduce
inspection time;
◦ Resolve poor relations with labour unions caused by downsizing and
outsourcing.
Budget
A statement of a corporation's programme in monetary;
It is used in planning and control, where detail of each cost of each
programme is listed;
Moreover, it might include detailed financial analysis where a certain
percentage of RoI is set by the management.
Procedures
Procedures, sometimes termed standard operating procedures (SOP),
are system of sequential steps or techniques that describe in detail how
a particular task or job is to be done;
That typically detail the various activities that must be carried out for
completion of a corporation's programmes
Evaluation and Control
The process by which corporate activities and performance results are
monitored;
So that the actual performance can be compared with the desired one;
Pinpoint the weaknesses in previously implemented strategies and thus
simulate the entire process to begin again;
Strategic Decision Making
Strategic decision dealing with the long run future of the entire
organization and have three characteristics:
◦ Rare: Strategic decision are unusual and typically have no precedent to
follow;
◦ Consequential: Strategic decisions commit substantial resources and
demand a great deal of commitment from people at all levels;
◦ Directive: Strategic decisions set precedents for lesser decisions and future
actions throughout the organization.
Mintzberg's Modes of
Strategic Decision Making
Entrepreneurial Mode:
◦ Strategies developed by one powerful person;
◦ The focus is on opportunities, the problems are secondary;
◦ Strategies are guided by founder's own vision of direction and is exemplified
by large, bold decisions. The dominant goal is growth;
◦ Amazon.com , founded by Jeff Bezos, is an example of this mode

Adaptive Mode:
◦ Reactive solution to existing problem, rather than proactive to new
opportunities;
◦ Strategies are fragmented and is develop to move in incremental steps;
◦ Encyclopeadia Britannica, Inc. operated successfully for many years in this
mode by continuing rellying on door-to-door selling of its books
Mintzberg's Mode
Planning Mode:
◦ Systematic gathering of appropriate information for solution analysis, the
generation of feasible alternative strategies, and the rational selection of the
most appropriate strategy;
◦ This include both the proactive search of new opportunities and the reactive
solution of existing problem;
◦ IBM under CEO Louis Gerstner is an example of this model

Logical Incrementalism Mode:

◦ Synthesis of the planning, adaptive, and to a lesser extent, the
entrepreneurial modes, proposed by Quinn;
◦ Top management has a clear idea of the corporation mission and objectives,
but the strategies are developed through an interactive process.
Strategic Decision Process
Evaluation of Current Performance Result;
Review Corporate Governance;
Scan the External Environment;
Scan the Internal Environment;
Analyze Strategic Factor;
Generate, Evaluate and Select the Best Alternative Strategy;
Implement Selected Strategies;
Evaluate the Implemented Strategies.