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Course Code MMPC-012

Course Title Strategic Management
Assignment Code MMPC-012{fMA/J AN/2023
Coverage All Blocks

Note: Attempt all the questions and submit this assignment to the coordinator of your
1h
study centre. Last date of submission for January 2023 session is 30 April, 2023
st
and for July 2023 session is 31 October, 2023.

l. What is the process of strategic management? Explain.

2. Describe the process for analyzing the external environment.
3. Explain the Resource Based View Model in Light of the resources being the key to
support the organizational performances.
4. Describe the various factors involved in formulating the competitive strategy.
5. Discuss different types of strategic controls with respect to the strategy of an
organization.

1. What is the process of strategic management? Explain.

ANS: Strategic management in a business refers to the plam1ing, management, utilization of
resources to define and achieve objectives efficiently. It also includes a review of internal
processes and external factors impacting the business. Fommlating and implementing
strategies allow a company to proceed with its action plan.
An organization must follow a set of processes for str ategic planning to be effective and frnitful.
The following are the steps in the strategic management process:
#1- Identifying Direction
TI1e first step requires the organization to have a clear vision and direction. Before developing
plans, a business should detennine its sh01t- and long-te1m objectives. The company will not
have any clarity on processes and procedures unless it sets its goals beforehand.
#2 - Analyzing Resources
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An organization must first anange its resources to carry out specific tasks to reap the strategic
management benefits. For example, someone who excels at marketing may st:mggle to manage
the organization's public relations. Hence, the management should assess its resources and
select the best one for respective processes.
#3 - Framing Strategies
After selecting the best resource for every process, the organization frames its action plan for
accomplishing the goal. This strategic planning consists of elements needed to achieve the set
objectives effectively. The analysis, assessment, and supervision of processes at every stage
help the business resolve issues, whether internal or external.
#4 - Implementing Strategies
Following the strategy development based on the organization's objectives, the next stage is to
execute them. Every business must train its human resources, from entJ.y-level employees to
managers, to ensure they fully understand the process. It will bring core competencies into
action within the organization for the best possible output.
#5 - Evaluating Effectiveness
The review of strategies is the final step in the process. Looking into each aspect of the business
during the strategy fo1mulation and implementation help the management identify the effo1ts
of every individual. The organization can recognize these eff01ts through perfonnance
appraisal schemes, which are essential aspects of the business.
Examples
Let us understand the concept better with the below-mentioned strategic management
examples:
Example #1
Dave intends to extend his constrained furniture business by introducing a new product
category, i.e., all home decor goods. However, he is unsure how his brand would pe1fo1m as it
took years for him to establish his furniture business due to a delay in identifying negative
factors. Thus, to avoid any risk this time, Dave conducts SWOT (StJ.·engths, Weaknesses,
Oppmtunities, and Threats) analysis as part of the stJ.·ategic management.
He identifies the strong and weak points of business. He also analyzes potential oppmtunities
and threats based on the cunent market trend. Accordingly, Dave strategizes and plans the
processes, staiting from manufactming to aove1tising, ensming that he allocates the right
resources at the 1ight places.
Example #2
The old strategy calendai· is a strategic management approach that signifies the process
execution in isolation without guidance, coordination, or collaboration. As a result of the
disconnect behveen enterprise �trategy and strategic groups ai1d units, many businesses failed
to achieve their goals.
Due to performance concerns, the economic slump, rising expenses, and invading impmts,
Chrysler Group expe1ienced massive losses in 2000. It was when the automotive manufactmer
decided to combine all strategy-related activities into a single functional unit. As a pait of this,
it set up the Office of StJ.·ategy Management. It aided in the management of compai1y stJ.·ategies.
Furthermore, it helped in the development of new products by business units.
The collaboration of employees and management resulted in core competencies required to
achieve business goals. In 2004, the automobile brand successfully launched a series of new
sedans and made a profit of $1.2 billion despite stJ.uggling domestic market.
2. Describe the process for analyzing the external environment.
ANS: External analysis means examining the industJ.y environment of a company, including
factors such as competitive structure, competitive position, dynainics, and histmy. On a macro
scale, external analysis includes macroeconomic, global, political, social, demographic, and
technological analysis. TI1e primai·y purpose of external analysis is to detennine the
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opportunities and threats in an industry or any segment that will drive profitability, growth,
and volatility.
Environmental Scanning- Environmental scanning refers to a process of collecting,
scmtinizing and providing infonnation for strategic purposes. It helps in analyzing the internal
and external factors influencing an organization. After executing the environmental analysis
process, management should evaluate it on a continuous basis and strive to improve it.
Strategy Fo1mulation- Strategy fo1mulation is the process of deciding best course of action for
accomplishing organizational objectives and hence achieving organizational purpose. After
conducting environment scanning, managers formulate corporate, business and functional
strategies.
Strategy Implementation- Strategy implementation implies malting the strategy work as
intended or putting the organization's chosen strategy into action. Strategy implementation
includes designing the organization's structure, distributing resources, developing decision
making process, and managing human resources.
Strategy Evaluation- Strategy evaluation is the final step of strategy management process. The
key strategy evaluation activities are: appraising internal and external factors that are the root
of present strategies, measuring perfonnance, and taking remediaVconective actions.
Evaluation makes sure that the organizational strategy as well as it's implementation meets the
organizational objectives.
TI1ese components are steps that are canied, in chronological order, when creating a new
strategic management plan. Present businesses that have ah-eady created a strategic
management plan will reve1t to these steps as per the situation's requirement, so as to make
essential changes.
ENVIRONMENT STRATEGY STRATEGY STRATEGY
f-----+ f---+

..
SCANNING FORMULATION IMPLEMENTATION EVALUATION
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' •
Components of Strategic Management Process
Strategic management is an ongoing process. Therefore, it must be realized that each
component interacts with the other components and that this interaction often happens in
choms.
There are six key factors that determine the level of competition in an industry:
1. Intensity of industry rivalry
It measures the levels of concentration of 1ivals. Factors to detennine the intensity of industry
1ivah-y include product homogeneity, brand loyalty, and consumer switching costs.
2. Threat of potential entrants (Barriers to entry)
It measures the difficulty for newcomers to enter the industry. Factors to dete1mine barriers to
entiy include brand loyalty, excess production capacity, and govermnent regulation.
3. Bargaining power of buyers
This measures how much power consumers have in determining the prevailing ptice in a
market. Buyers' bargaining power is high when buyers are large and concentrated, and buyers'
p1ice sensitivity is high when there are many industi·y competitors and substitutes.
4. Bargaining power of suppliers
This measures how much a supplier of materials is able to restrict the company's business
sti·ategy. The bargaining power of suppliers is high when suppliers are large or concenti·ated.
Purchasers' price inelasticity is high when there are few alternative suppliers and when there
are few substitute inputs.
5. Threat of substitute goods/services
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This measures the chances that competing goods of a similar nature will threaten a company's
offerings. It is more likely to occur when switching costs are low or when substitutes offer
superior p1ice to perfo1mance characte1istics.
6. Power of complementary good/service p1·oviders
It measures the level of impact of companies that produce complementaiy products.
Complements add value to products in an indushy. If complements ai·e weak and unatti·active,
they can become a threat that slows industi·y growth and limits profitability.
3. Explain the Resource Based View Model in light of the resources being the key to
support the organizational performances.
ANS: l11e resource-based view (RBV) is a model that sees resources as key to supe1ior film
perfonnance. If a resource exhibits VRIO atti·ibutes, the resource enables the film to gain and
sustain competitive advantage. RBV is ai1 approach to achieving competitive advantage that
emerged in 1980s ai1d 1990s, after the major works published by Wemerfelt, B. ("The
Resource-Based View of the Film"), Prahalad and Hainel ("The Core Competence of The
Corporation"), Barney, J. ("Film resources and sustained competitive advantage") ai1d others.
The supp011ers of this view ai·gue that organizations should look inside the company to find
the sources of competitive advantage instead of looking at competitive environment for it.
The following model explains RBV and emphasizes the key points of it.

Resource-based view

relies on resources

Tangible Intangible

that must be

Heterogeneous Immobile �
[ ]....--.....
and have VRIO attributes to become

L J
'¥
VRIO resources
T
that provide

Competitive advantage
According to RBV proponents, it is much more feasible to exploit external opp011unities using
existing resources in a new way rather than trying to acquire new skills for each different
opp011unity. In RBV model, resources ai·e given the major role in helping compai1ies to achieve
higher organizational perfonnance. l11ere ai·e two types of resources: tangible and intangible.
what makes your business special?
According to the RBV, not all resources have the potential to drive competitive advai1tage. In
order to do so, they must be valuable, rai·e, inimitable and nonsubstitutable. The VRIO
framework, an integral component of this theory, emphasizes the saine qualities except for
"nonsubstitutable," which is replaced with "organization-wide supp011ed".
Resources that enable a company to identify ai1d leverage opportunities while protecting itself
against threats ai·e considered valuable. Those resources also need to be rare and inimitable,
meaning that other companies don't have access to them or cannot easily imitate them. If your
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competitors use the same resources as you, your business cannot achieve superior perfonnance.
For example, resources derived from a company's histmy or culture may be difficult to imitate.
Organizations also need to focus on using resources that cannot be substituted. If other
companies can develop software programs that are similar to yours, then you no longer hold a
competitive advantage. According to the VRIO framework, a firm's resources must be
suppo1ted by its organizational culture, structure and process. Without these elements, your
business would not be able to leverage its assets and exploit the competitive advantage.
4. Describe the various factors involved in formulating the competitive strategy.
ANS: A competitive strategy is a set of policies and procedures that a business uses to gain a
competitive advantage in the market. It's the process of identifying and executing actions that
allow a business to improve its competitive position. Businesses may use va1ious competitive
stI·ategies to raise the value of their products and se1vices for consumers, investors and
employees. They also implement these strategies to gain sustainable revenue streams.
Competitive strategy is important because it affects the overall strategies of a business. If a
business doesn't have a competitive strategy, it may not find a unique advantage against its
competitors. A competitive strategy is cmcial in finding and developing new ideas for products
and se1vices that the company can offer. Other advanta&es of implementing a competitive
strategy include:
• The exploration of new oppmtunities
• The retainment of customer loyalty with better products and se1vices
• Innovation to stay current on technological changes in the market
Deciding on which competitive strategy for a company to implement may require
experimentation and careful thought. Here are some fa<i:tors to consider when choosing a
competitive strategy:
• The business' size: A smaller business may prefer one of the differentiation strategies
to appeal to more localized niches.
• The resources a company has available· You can consider recommending one of the
cost strategies to a business that has ample resources to produce large quantities of
products.
• The existing reputation of a company: A company with a long-established
reputation may consider implementing one of the differentiation strategies as it
attempts to expand into different markets.
OIBER FACTORS:
Changing Customer Needs
Though you can focus your strategy on delive1ing more value to customers than your
competitors, what your customers value may change. You have to continually smvey your
market environment to see if new customers are replacing existing ones in your target markets,
customer expectations are changing or customers want different levels of se1vice than they did
before. Changes in the composition of your target markets and changes in customer needs are
factors that require adjustinents to your strategy to respond to the new customer requirements.
Finding New Suppliers
You may have based parts of your competitive stI·ategy on using a particular supplier if the
goods you buy from the business have unique characteristics. If such a supplier goes out of
business or paitners with one of your competitors, you have to adjust your strategy to
emphasize different competitive advantages.
For example, if the supplier in question had the lowest prices and you were competing on price,
you may have to raise your p1ices ai1d promote your products as the least-expensive ones that
can fulfill certain advanced functions.
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More Advanced Products

Products become obsolete as they are ove1taken by technological developments, replaced by
improved products or displaced by products that introduce new functions and features. If your
products are older, you can adjust your competitive strategy to reduce the prices of the existing
products and introduce newer versions at higher prices. You can promote the older versions as
tried-and-true product lines while taking advantage of markets for the latest technology as well.
Behavior of Competitors
The behavior of your competitors is a major factor affecting your strategy. In addition to
evaluating the actions of your existing competitors, you have to check for new entrants into
your market. At the same time you are adjusting your strategy, your competitors are reacting
to your actions.
To get the most advantage from your strategy changes, you have to think ahead to how each
competitor is likely to react to your adjustments. You can then proceed with those elements
that result in an overall more favorable competitive environment.
5. Discuss different types of strategic controls with respect to the strategy of an
organization.
ANS: Strategic control is a method to manage and execute a strategic plan. It's a unique process
in strategy management that can handle unknown and ambiguous elements or factors related
to a strategy's implementation, premise, outcome or surveillance. The different types of
strategic control show how to control and manage a strategy's implementation and outcome by
adapting to internally and externally changing factors.
Knowing the different types of strategic control can allow us to better analyze a business'
capability to maximize its strength and open up opportunities in an industry. Each type of
strategic contI"ol offers a different perspective and way of analysis to boost the effectiveness of
a business strategy. Let's look at the four types of str·ategic control in management:
Premise Control
A stI"ategy is based on an assumption of how ce1tain events will take place in the future. Premise
contr·ol allows us to examine whether or not that assumption holds hue after the str·ategy has
been implemented and adapt to changes accordingly. Environmental factors like inflation,
interest rates, or industr·y factors like competition or supply affect this type of str·ategic control.
Implementation Control
Out of the four types of su-ategic control, this one focuses on the most imp01tant pa1t of a
str·ategy - its implementation. It assesses implementation activities, events, and results step­
by-step and ensures that no changes are needed. There are two types of implementation control:
Monito1ing StI"ategic Thmsts To Analyze And Assess Thrnsts Or Projects That Are Meant To
D1ive The Larger Str·ategy And Gain Market Share
Milestone Reviews To Assess A Business At Designated Points Or Different Milestones In A
Str·ategy
Special Alert Control
Special alert conu-ol allows assessing a business in paiticular circumstances such as natural
disasters or a mai·ket crash. This type of stI"ategic contr·ol helps us analyze a stI"ategy under new
circumstances and handle them with appropriate tools, procedures and p1iorities.
Strategic Surveillance Control
Su-ategic smveillance contr·ol identifies overlooked factors, inside and outside an organization,
that can affect its stI"ategy. Smaller businesses mainly use it as a broader infonnation scan for
awareness of an indusu-y and its tI"ends.
The implementation pe1iod is riddled with evolution and changes. Managers must know
the different types of str·ategic control to prevent shategies from going awry and yielding
undesired outcomes.
Types Of Strategic Control With Examples
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Here are the different types of strategic control with examples:

Premise Control
A bicycle brand staited manufacturing and selling skateboai·ds with millennials as the tai·get
consumers. After a quaiterly sales review, premise control revealed that the fastest-growing
skateboai·d consumers are a generation younger.
Implementation Control
Setting perfo1mance standai·ds, measming real perfo1mance and analyzing the root cause
behind failure to meet these stai1dards are common fo1ms of implementation control.
Schedules, budgets and milestones are also considered implementation control.
Special Alert Control
After 9/11, US commercial airlines were compelled to adopt safety protocols that were tighter
and stiicter to address the intense fear of flying on commercial planes seen in passengers.
Strategic Surveillance Control
Info1mation sources such as trade magazines, newspapers, financial jomnals, conferences and
economic fo1ums ai·e all sti·ategic surveillance controls that can identify potential changes in
an industry and offer possible responses.
No business can look away just by putting a well-thou&lit-out strategy in place. They have to
evolve with the changes and react to them, if and when necessaiy TI1e va1ious types of strategic
control are crncial to offe1ing solutions related to strategies that an organization plans to
implement.
Managers must be familiar with all the conti·ol techniques and other methods of problem­
solving associated with strategic management. Harappa's pathway is a significant step for
individuals to develop a holistic approach to finding solutions. Learn how to have a bi-focal
approach to analyze eve1y situation from all angles. The Balcony and Dance Floor framework
will help you reflect and act at the same time. The Hypothesis Trees will teach you to analyze
problems in depth.