STRATEGIC

MANAGEMENT

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SESSION PLAN
Session
Content (Assignment announcement and Submission/ Presentation)
No.
1 Strategic Management- Overview, Strategy, Mission
2 Internal Assessment and External Assessment

3 External Assessment: Porter's Five Forces Model

4 Generic Competitive Strategies: Differentiation, Overall Cost Leadership

5 Value chain analysis

6 The Ansoff matrix
7 Types of Strategies: Integration, Intensive; Diversification and Defensive
8 Strategy analysis and choice
9 Assignment 1 presentation
10 Strategy Implementation and control
11 Introduction to Design Thinking- Design Thinking -1
12 Design Thinking -2
13 Design Thinking – 3
14 Assignment II presentation
END TERM JURY

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CHAKRAVYUHA

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 ASSIGNMENT DETAILS
Details/ description Evaluation Type of Weigh
of assignment parameter assignment tage
Assignment 1 Brief1 : Application of Evaluation of Document 30
IFE, EFE, CPM/ Porter's understanding submission &
5 forces/ generic of the case
strategies to a real-life
presentation
and ability to
case focus the key
Brief: PPT on a case parameters
study (10 Marks)
Assignment 2 Brief 1: Critical analysis ● Evaluation of 30
of 3 competitive brands application of
in the fashion and strategic
lifestyle sector using all tools/matrices
applicable strategic . (10 Marks)
concepts and matrices. ● Evaluation of
Brief 2: PPT on a case creative
study solutions
presented.
(10 Marks)

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#1. THE NATURE OF STRATEGIC MANAGEMENT

Introduction

Ch - 7
STRATEGY

• Design of a desired future

and effective ways of bringing it about

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Strategic Management…

Art & science of formulating, implementing, and

evaluating, cross-functional decisions that enable
an organization to achieve its objectives

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 SHIFTING FOCUS
Internal External
Past focus Focus
performance

current
operating
performance

Expected
performance
in a forecast
environment
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1.Strategy Formulation

Vision & Mission

External Opportunities & Threats

Internal Strengths & Weaknesses

Long-Term Objectives

Alternative Strategies

Strategy Selection

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• American Airlines famously saved US$40,000 a year by
removing one olive from each salad in first class. How
much money did Northwest Airlines reportedly save in 1987
by cutting limes into 16 pieces instead of 10 for its drinks
service?

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2. Strategy Implementation/
Action stage

Annual Objectives

Policies

Employee Motivation

Resource Allocation

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3. Strategy Evaluation

Internal and External Review

Performance Metrics

Corrective Actions

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PETER DRUCKER SAYS…..

• “What is our business?” this leads to the setting of

objectives, the development of strategies, and the
making of today’s decisions for tomorrow’s results.

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INTEGRATING INTUITION
AND ANALYSIS
• Based on past experience, judgment and feelings, most
of the people recognize that intuition is essential to
making good strategic decision.
• Ex: Albert Einstein
• Analytical thinking and intuitive thinking complement
each other

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ADAPTING TO CHANGE

• For the survival of any organisation they should identify

and adapt themselves for any change.
• E-commers, laser treatment, nanotechnology etc…

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KEY TERMS IN STRATEGIC
MANAGEMENT
• Competitive Advantage
• Strategists
• Vision and Mission
• External opportunities and threats
• Internal strengths and weaknesses
• Long-term objectives
• Strategies
• Annual objectives
• Policies

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A. COMPETITIVE ADVANTAGE

• “anything that a firm does especially well compared to rival firms”

Adapting to change in external trends, internal capabilities and

resources for sustainable competitive advantage

• Effectively formulating, implementing and evaluating strategies

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B. STRATEGISTS

• Most responsible for the success or failure of an organisation-

usually found in the higher level- CEO, Chief Strategy Officer
– They help the organisation gather, analyse, and organise information.
– Track industry and competitive trends
– They differ from organisation to organisation, differ in their attitudes,
values, ethics, willingness to take risks, concern for social
responsibility etc
– Evaluate corporate and divisional performance

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Adapting to Change – Key Strategic
Management Questions

• What kind of business should we become?

• Are we in the right fields?

• Are there new competitors?

• What strategies should we pursue?

• How are our customers changing?

Ch - 24
C .Vision and Mission statement

Vision Statement:
What do we want to become?
"We will be a globally respected corporation” - Infosys

Mission Statement:
What is our business?
(statement of purpose that distinguish one business from other
similar business)
To achieve our objectives in an environment of fairness,
honesty, and courtesy towards our clients, employees,
vendors and society at large.“ - Infosys

Ch - 25
d. Opportunities & Threats (External)

Beyond the control of the firm,

Analysis of Trends:
• Economic
• Social
• Cultural
• Demographic/Environmental
• Political, Legal, Governmental
• Technological
• Competitors
Ch - 26
e. Strengths & Weaknesses (Internal)

Typically located in functional areas of the firm

• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research & Development
• Computer Information Systems

Ch - 27
F. LONG –TERM OBJECTIVES

• Objectives – specific results that an organisation seeks to achieve in

pursuing its basic vision.
• Objectives should be challenging , measureable, reasonable, and clear
• Objectives should be SMART
• State direction
• Aid in evaluation
• Create synergy
• Reveal priorities
• Focus coordination
• Provide basis for effective management

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g. Strategies

❑Potential actions that require top management decisions

and large amounts of firm’s resources Mechanisms by
which long-term objectives are achieved
❑Eg: diversification, merger , product development
❑Future oriented

Ch - 29
H. ANNUAL OBJECTIVES

• Short-term milestones necessary to achieve long-

term objectives
• They should be stated in terms of management,
marketing, financing/accounting, production/
operations, R & D, MIS.

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I. POLICIES

• These are the means by which objectives are achieved.

• Guide to decision making and address repetitive situations
• Established at corporate, divisional, or functional levels
• Allow consistency & coordination within and between organizational
departments

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 A COMPREHENSIVE STRATEGIC
MANAGEMENT MODEL
3.
Perform
external
Audit

2. Develop 6.Generate, 7.Implement 8.Implement

5. Establish 9.Measure and
vision & evaluate and strategies- strategies – F,
long term Acc, R&D,
evaluate
mission select management
objectives performance
Statements strategies issues MIS issues

4.
Perform
internal
Audit

Strategy Formulation Strategy Strategy

Evaluation
implementation 32
 BENEFITS OF STRATEGIC
MANAGEMENT
•Helps the organisation to be More proactive than
reactive
•Helps to formulate better strategies through the use of
a more systematic, logical and rational approach to
strategic choice
•Communication: key to successful SM
•Empowerment of the employees
•Create the “owners” of the strategies
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• Focus is placed on the important things. Resources (time, talent, money) are properly
allocated to those activities that provide the most benefit.

• Prove an awareness of the changing environment as a foundation for needed change.

• Analyze the internal business culture and evaluate its impact on the company's performance.

• Recognize the impact the changing business environment is having on the company and affect
the needed changes in direction.

• Become aware of the company's potentials in light of its strengths and weaknesses.

• Identify and analyze available opportunities and potential threats.

• May bring about a needed change of direction of the company.

• Strategic issues can be brought up for top management review.

• Able to set more realistic objectives that are demanding, yet attainable.
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• A need for better information for decisions making may be recognized.

• Growth can be accelerated and improved.

• Poor performing areas can be identified and eliminated.

• Gain control of operational problems.

• Develop better communications with those both inside and outside the company.

• Provides a road map to show where the company is going and how to get there.

• Develop better internal coordination of activities.

• Develop a frame of reference for budgets and short-range operating plans.

• Gain a sense of security among employees that comes from better understanding of the
changing environment and the company's ability to adapt.
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PITFALLS IN STRATEGIC
PLANNING
• Jumping from mission formulation to strategy development without sufficient time to determine the
critical success indicators embodied in the mission statement.

• Top management fails to communicate the plan to the other employees, who continue working in
the dark.

• Management rejecting the formal planning mechanism and making intuitive decisions that may
conflict with the formal plan. This also creates confusion for other employees on how the plan is to
be employed in their work activities.

• Failing to use the plans as a standard for measuring performance.

• Top management believing that it can create a plan by delegating the planning function to a
"planner." While the planner may facilitate the planning management must still take ownership of the
plan itself.

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• Failure to involve key employees in all phases of the planning process (preparation,
strategy development, evaluation, and implementation).

• Failure to create a climate which is collaborative and not resistant to change.

• Treating planning as something quite different and not an integral part of the entire
management process.

• Becoming so engrossed in current problems that insufficient time is spent on long-

range planning.

• Becoming so formal that the process lacks the flexibility and creativity needed to
address the uniqueness of each company.

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Benefits of Strategic Management

Financial Benefits

• Improvement in sales
• Improvement in profitability
• Productivity improvement

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Benefits of Strategic Management

Non-Financial Benefits
• Improved understanding of competitors strategies
• Enhanced awareness of threats
• Reduced resistance to change
• Enhanced problem-prevention capabilities
• Clear performance-reward relationships
• Order and discipline to the firm
• View change as opportunity
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REASONS FOR NOT DOING
STRATEGIC PLANNING
• Poor reward structure
• Firefighting
• Waste of time
• Too expensive
• Laziness
• Content with structure
• Fear of failure
• Overconfidence
• Previous bad experience
• Self-interest
• Fear of the unknown
• Difference of opinion
• Suspicion

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BUSINESS ETHICS AND
STRATEGIC MANAGEMENT
• It can be defined as principles of conduct within organisations that
guide decision making and behaviour.
• Good business ethics is a prerequisite for good strategic management;
good ethics is just good business!

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• Strategists responsible for high ethical principles
• All strategic processes have ethical ramifications
• Formal codes of ethics are in place for many businesses
• Internet privacy emerging as ethical issue of immense proportions

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• Business actions always unethical include:
– Misleading advertising
– Misleading labeling
– Environmental harm
– Poor product or service safety
– Padding expense accounts
– Insider trading
– Dumping flawed products on foreign markets

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