Strategic Management

Prof. Harish Padmanabhan

 Concept of Strategic Management.

 Phases in Strategic Management Process.

 Elements in Strategic Management Process.

 Working Model of Strategic Management Process.

 Approaches of Strategy.
Concept
 The strategic management process means defining the
organization’s strategy.

 It is also defined as the process by which managers

make a choice of a set of strategies for the organization
that will enable it to achieve better performance.

 Strategic management is a continuous process that

appraises the business and industries in which the
organization is involved; appraises it’s competitors; and
fixes goals to meet all the present and future
competitor’s and then reassesses each strategy.
Definition:

 “ A stream of decisions and actions which leads to the

development of an effective strategy or strategies to help
achieve corporate objectives.”

- Glueck (1984)
Definition:

 “ The process which deals with the fundamental

organizational renewal and growth with the development
of strategies, structures and systems necessary to
achieve such renewal and growth and with the
organizational systems needed to effectively manage the
strategy formulation and implementation process.”

- Hofer and others (1984)

Definition:

 “ A systematic approach to a major and increasingly

important responsibility of general management to
position and relate the firm to its environment in a way
that will assure its continued success and make it secure
from surprises.”
- Ansoff (1984)
Definition

 “ The formulation and implementation of plans and

carrying out of activities relating to the matters which are
of vital, pervasive or continuing important to the total
organization.”

- Sharplin (1985)
Phases in Strategic Management Process.

5) Strategic 1) Establishment of
Control Strategic Intent

4) Strategic 2) Formulation of
Evaluation Strategy

3) Implementation
Of Strategies
Elements in Strategic Management Process

(1) Establishment of Strategic Intent: Strategic Intent is the

process of defining the business, vision, mission and its objective.
It involves assessing the environment so that strategy can be
formulated.

a) Performing Environmental Appraisal.

b)Creating and communicating a Vision.
c) Designing Mission Statement.
d) Defining Business.
e) Setting Objectives.
Elements in Strategic Management Process

(2) Formulation of Strategies: Strategy formulation 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.

a)Performing Organizational Appraisal.

b) Consider Corporate-level Strategies.
c) Consider Business-level Strategies.
d) Exercise Strategic Choices.
e) Formulating Strategies.
f) Preparation of Strategic Plan.
Elements in Strategic Management Process

(3) Implementation of Strategies: Strategy implementation implies

making 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.

a) Activating Strategies.
b) Designing Structures and Systems.
c) Managing Behavioral Implementation.
d) Managing Functional Implementation.
e) Operatinalising Strategies.
Elements in Strategic Management Process

(4) Evaluation of Strategies: 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 performance, and taking remedial /
corrective actions. Evaluation makes sure that the organizational
strategy as well as it’s implementation meets the organizational
objectives.

a) Measuring the performance of Strategies.

b) Adopting various models for evaluation.
Elements in Strategic Management Process

(5) Strategic Control : Strategic control is next to evaluation process. It

helps to reformulate the strategies so that deviation or difference in
actual and defined strategy implemented can be eliminated.

a) Exercise Strategic Control techniques.

b) Reformulation of Strategies.
Model of Strategic Management Process


 Three Approaches to Strategy
Position Resources Simple Rules

Strategic Logic • Establish position • Leverage resources • Pursue opportunities

• Identify an attractive • Establish a vision • Jump into the confusion

market
Strategic Steps • Build resources •Keep moving
• Locate a defensible
position •Leverage across markets •Seize opportunities
• Fortify and defend •Finish strong

Strategic Question • Where should we be? • What should we be? • How should we proceed?

• Unique, valuable position • Unique, valuable, • Key processes and

Source of Advantagewith tightly integrated inimitable resources unique simple rules
activity system
• Slowly changing, well- • Moderately changing, • Rapidly changing,
Works Best In structured markets well structured markets ambiguous markets
Duration of • Sustained • Sustained • Unpredictable
Advantage
• It will be too difficult to • Company will be too slow • Managers will be too
Risk alter position as conditions to build new resources as tentative in executing on
change conditions change promising opportunities
Performance Goal • Profitability • Long-term dominance • Growth
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