POST GRADUATE STUDIES

DEPARTMENT OF BUSINESS ADMINISTRATION

MASTER’S OF BUSINESS ADMINISTRATION (MBA)

FOR THE 2nd YEAR STUDENT, first SEMESTER

Assignment I

On

Strategic Management

COURSE TITLE: Strategic Management

Prepared by: Million Abuye

Submitted to: Bizuye (Assistant Professor)

Department of Business Administration CPU College

Submitted Data Nov 15,2022

1 Vision or Mission which comes first? Illustrate your justification with possible practical example

Vision first order

  What do we want to be come? First step in strategic planning
 Vision of stoke eyes clinic ; our vision is to take care of your vision
 Is quite literally a mental image of the successful accomplishment of the mission
 How the organization wants to be perceived in the future what success looks like
 An expression of the desired end state
 Provides a long –term focus for the entries organization
Mission and Mission statement

 Enduring statement of purpose that distinguish one firm from similar firms
 Identify firm scope , products and value
 All organizations must have an explicitly stated or implicit mission generally consisting
 a statement that identifies in broad terms the purposes for which the organization exists
 The mission specifies the unique aim of the organization and what differentiate it from other.
 Who are we?
 What are we?
 Why do we exist?
 Who is our constituency
2 Discuss the difference between red ocean strategy and blue ocean strategy. Which one
you basically recommend for the companies to considered. Support your illustration with
the possible practical example

Answer

Blue ocean strategy illustrated is defined as the approach to achieve low cost a differentiation
simultaneously. the strategy helps in creating a new market space and new demand. This creation of a
market space without any competition is based on the belief that the structure of the industry and
market boundaries are not hard bound but can be expanded or reconstructed.

The business world comprises of two different types of categories, which are known as red and blue
oceans. Red oceans embody all the organizations that exist nowadays i.e. the market area that is known

In red oceans , the limitation of the industries are well defined and being accepted as well as there is set
rule s for the competition . in this strategy , , organizations try to perform way better than their rivals
and over take them to grab a larger share of current demand (Blue ocean strategy ) . The drawback of
Red Ocean is space gets more and more packed and the opportunity for growth and profit of the
companies get reduced. this leads to cut-throat competition .
 Blue oceans signify all the industries that do not exist today . the market area which is unknown
and lacks any competition . in blue oceans instead of fighting over demand , the demand being
created .there is plenty of chance for development that is both rapid and profitable two distinct
ways are present to create blue oceans . in some cases organization s can develop an entirely
new industry like eBay which is an online sales platform but in majorly blue ocean is formed
from the red oceans space itself . when the set boundaries of the present industry are being
changed by the companies
  As per the analysis of the growth strategy of many companies , strategic thinking can be
observed in a consistent pattern behind the formation of new organizations and markets which
is known as the blue ocean strategy
 Blue ocean approach both low cost differentiation together

 Blue ocean strategy does not depend on technological innovations .the use of the latest
technology might be useful in the formation of a blue ocean , but it is not a necessary factor .

 Blue ocean are often created via incumbents : from the cases of GM and Chrysler , it can be that
established players of an industry can end up creating blue oceans through their incumbents .
the blue ocean thus created are generally in their own core area

Streaming Service

Red ocean strategy

 This strategy involves coming up with ideas and plans to sustain a business in a market that is
full competitors companies need to look for factors that differentiation and this can includes
unique selling point , target audience and customer experience
 Why do they call it the red ocean strategy well think about it what would happen in a ocean
where there are a lot of big and small fish fighting each other for space
 In short red ocean includes all market and industries
 Did it fall within an existing market space
 Does it pursue differentiation or afford ability creating the value cost trade off?
 Did they beat the competition
 Full of competitors including a unique selling point , target audience, customer experience ,
branding and price for example commodities like sugar , cotton , fruits , etc can be sold under
brand name
 Exploit existing demand
 Make the value cost trade off
 Align the whole system of a firm activities with its strategic choice of differentiation or low cost

Blue Ocean Strategy

 Let first understand why this strategy is called the blue ocean strategy what would be color of
the ocean in which there are only a couple of fish and they don’t fight
 Did it create a market where none previously existing
 Does it pursue differentiation and affordability by breaking the value cost trade off?
  Is the competition non existing or irrelevant
 Creating uncontested market space
 Create and capture new demand
 Break the value cost trade off
 Align the whole system of a firm activities in pursuit of differentiation and low cost

RED VS BLUE OCEAN

1 Market

The red ocean strategy focuses on existing markets, whereas the whole concept of the blue ocean
strategy is to break the status

2 Competitors

As explained above the red ocean strategy involves fierce competition blue ocean strategy idea of
competition is irrelevant

3 Demand

The red ocean companies compete with each other in order to fulfill the current demand in market but
blue ocean companies with their innovation

Which one you basically recommend for the companies to considered

In red ocean strategy a company must choose between providing greater value to consumers and
lowering

Red ocean strategy refers to the traditional marketing strategy to compete with the competitors it is
demonstrated when many companies compete to achieves a competitive it advantage in the existing
market

Red ocean strategy influence the company to provide better service

Conclusion

Red ocean strategy is more or better strategies than blue

3 do you believe or feel strategic management should be more visible or hidden as a process in a
firm ? explain

Yes visible

Answer : today almost every successful company has a strategy be it operational or functional strategy
but the question arises if the customers are aware of the company s strategy in terms of what are its
goals and how a company works to achieve them a firm especially a customer focused should be very
careful about who should and who should not know about its strategy

For example the firms employees and workforce should be end familiar with the company strategic

 Whether strategic themselves should be secret or open within firms

 The chinese warrior sun tzu and military leaders today strive to keep strategies secrete because
war is based on deception
 But for business organization secrecy may not be best
 Keeping strategies secret from employees and stokeholds at large could severely cause miss-
communication and miss-understanding

4, Strategic management should be more a top-down or bottom –up process in a firm? Explain

Top-down is more or better

 That flows from low level to a higher on in the organization.

 Top executives are responsible for key strategic decision
 It is non-directive in nature from below, to give feedback, to inform about progress/problems,
seeking approvals
 It is used as a mean for motivating and satisfying personnel by sharing them in decision making
process (democratic management).
 Examples: face to face discussion, staff meetings, written reports, suggestion boxes, and so on.
 Taken the whole problem and split it into two or more parts
 Find solution to these parts
 If these parts turn out to be too big to be solved as a whole , split them further and find
solutions to those sub-part
 Merge solutions according to the sub-problem hierarchy thus created after all parts have been
successful solved
 Strategic management should be a top-down process so that the strategies that the manager
apply in achieving result should come down and manager instill those strategies to their
workers so that they can achieve the results expected by them from their leaders
 Top-bottom approach. The complex module is divided into sub modules

Bottom –up When To Use

 That flow from one level of organization to a lower one (manager ...... Subordinates).
 Highly Directive, from Senior to subordinates, to assign duties, give instructions, to inform to
offer feedback, approval to highlight problems etc
 It is primarily directive and telling the subordinate what to do and providing them with
information that are helpful in clarifying the organization policy and how to achieve its goals.
 Examples: job description sheets, performance appraisal discussions, operating manuals,
pointing out problems that need attention, and so on.
 Breaking the problem into smallest possible (and practical ) parts
 Finding solutions to these small sub-problem
 Merging the solutions you get iteratively ( again and again ) till you have merged all of them to
get the final solution to the big problem the main difference in approach is splitting versus
merging . you either start big and split down as required or start with the smallest and merge
your way up to the final solution.
 In contrast bottom-up argue that lower and middle-level managers and employees need to be
actively involved in strategic decision
 Ideally when you already have a grounding of knowledge and resources related to your topic
you can move right into the nitty-gritty of new details new viewpoint , conflicting evidence or
extension of precious research
 Bottom –up approach begins with elementary modules and then combine them further
 strategists must decide about strategy limitation and exploitation risk
 Using a firm strategies is worth the benefit of improved employee and stakeholder motivation
and input
 Executive some strategic information should remain confidential to top managers and prohibit
dissemination beyond the inner circle
 There are certainly good reason to keep the strategy process and strategies themselves visible
and open rather than hidden and secrete

1 Strategic Management is more an Science or Art explain

 Science is first a process for obtaining objective knowledge ( the scientific method) and
secondarily the knowledge gain by this process more accurately described as scientific
knowledge if you cannot test ideas of strategic management either by experimentation or
observation ( although subjectively here may be difficult to eliminate )then it cannot be
called a science

 It is considered as a science because it has an organized body of knowledge which

contains certain universal truth. it is called an art because managing require certain skill
which are personal possessions of managers . Science provides the knowledge and art
deals with the application of knowledge and skills.
For example
A a manager is not born but gradually learns or develop formal training, experiences and idols
or example that puts into practice
B no manager can be born as no person can’t have all the qualities by birth

 Science is characterized by making conclusions based on actual facts and verifies

knowledge through cause-effect relationship. It can be generally learnt, thought, and
researched to know the universal truth. Managers can work better by using the organized
knowledge about management, and it is this knowledge that constitutes a science.

 Art is characterized by using common sense, personal feeling, beliefs, impulses, etc.
Management or Managing, like all other practices-music composition, engineering,
accountancy or baseball- is an art. It is know-how, skill or how to accomplish the desired
objectives with insufficient data and information or when there is limited use of
secondary sources of information. It is doing things in the light of realities of a situation.
Thus, management as a practice is an art; the organized knowledge underlying the
practice may be referred to as a science. In this sense or context science and art are not
mutually exclusive but are complementary.
 Therefore, management in actual sense is neither an art nor science, but it requires both to
be successful, i.e., it is not pure art because it uses scientific methods e.g. computer and it
is not pure science because it uses intuition, judgment, and creativity. Management is one
of the most creative arts as it requires a vast knowledge and the innovative skills to apply.
Managers should develop new ideas, techniques and strategies and be able to
communicate them effectively in the work environment. They should be able to make
decisions even when there is shortage of data. This leads us to the conclusion that the art
of management begins where the science of management stops. This underlines the
importance of making managerial decisions in the absence of sufficient data and
information by using the decision maker’s common sense.