Assignment

OF STRATEGIC MANAGEMENT

Submitted By

Muskan Chourasia
MBA 4th Sem
C_18
Question 1
Compare and contrast stability, expansion, and retrenchment strategies at the corporate
level. Provide examples of situations in which each strategy might be most appropriate for
a company.

ANSWER
Stability strategy involves maintaining the existing product lines, markets, and
organizational structure. The focus is on maximizing profits while minimizing risks. This
strategy is most appropriate for companies that operate in mature industries with stable
and predictable demand and a low level of competition. Examples include well-established
companies with a strong market presence, such as Coca-Cola and Procter & Gamble.

Expansion strategy involves expanding the company's operations by entering new

markets, developing new products, or acquiring other businesses. The focus is on growth
and increasing market share. This strategy is most appropriate for companies operating in
emerging industries with high growth potential or those that have hit a plateau in their
current markets. Examples include technology companies such as Amazon and Google,
which frequently expand into new markets.

Retrenchment strategy involves reducing the scale or scope of a company's operations. It

may involve divestitures, closures, and layoffs. The focus is on cutting costs and improving
efficiency. This strategy is most appropriate for companies facing declining sales, intense
competition, or excessive debt. Examples include struggling companies such as Sears and
Kodak.

In summary, stability strategy is appropriate for well-established companies in mature

industries, expansion strategy is appropriate for companies with high growth potential,
and retrenchment strategy is appropriate for companies facing financial difficulties or
declining sales.

PAGE 1
Question 2
Discuss the role of strategists in shaping and implementing strategies within an
organization. Provide examples of how effective strategists contribute to the success of
strategic management initiatives.

ANSWER
Strategists play a critical role in shaping and implementing strategies in an organization.
The primary responsibility of a strategist is to analyze the organization's internal and
external environment, identify strategic options, and recommend the most appropriate
course of action for the organization to achieve its goals.

Effective strategists contribute to the success of strategic management initiatives by

facilitating the development and implementation of effective strategies. They ensure that
the strategies developed align with the organization's mission, vision, and values, taking
into account the organization's internal and external factors such as competitors, market
trends, and technology advancements.

Strategists also contribute by providing guidance and direction to the organization on

how to execute the strategies successfully. They work closely with the organization's
leadership team to ensure that the strategies are communicated effectively to all
stakeholders within the organization. Strategists also review progress and provide
feedback to leadership on how to adjust strategies to ensure the goals of the organization
are achieved.

One example of how effective strategists contribute to the success of strategic

management initiatives can be seen in the case of Apple Inc. Steve Jobs was an effective
strategist who was instrumental in creating Apple's core strategy of creating innovative
consumer products such as the iPod, iPhone, and iPad. Jobs played a crucial role in
ensuring that the organization executed on its strategy by maintaining a corporate culture
that embraced innovation. His attention to detail and focus on design were also
instrumental in creating a unique brand identity for Apple, ultimately leading to its
success as a company.

In conclusion, effective strategists play a vital role in shaping and implementing strategies
within an organization. They help align resources to the organization's objectives, provide
guidance and direction to leadership, and ensure that the organization implements
strategies efficiently and effectively. The success of many leading organizations is often
attributed to the quality of their strategists and the execution of their strategic initiatives.

PAGE 2
Question 3
Discuss the role of strategic evaluation in the overall strategic management process. How
can organizations effectively employ techniques of strategic evaluation?

ANSWER
Strategic evaluation is a critical component of the overall strategic management process in
organizations. It involves assessing the results of the organization's strategies, identifying
whether they have achieved desired objectives, and analyzing the effectiveness of strategic
management initiatives. The main goal of strategic evaluation is to ensure that the
organization is on track to achieving its long-term goals and identify the necessary
changes in the strategy in case of deviations.

Effective organizations employ a variety of techniques to ensure effective strategic

evaluation. Some of the techniques commonly used by organizations include:

1. Key Performance Indicators (KPIs): KPIs are commonly used to measure the
effectiveness of an organization's strategic initiatives. For example, if one of the
organization's strategic goals is to increase revenue, then metrics such as sales growth
rate, market share, and customer acquisition rate are critical KPIs to track.

2. Balanced Scorecard: The Balanced Scorecard is a widely used tool for strategic
evaluation that allows companies to measure their performance in different areas via four
perspectives – financial, customer, internal processes, and learning & development. The
Balanced Scorecard helps organizations to assess whether their activities in different areas
align with the organization's strategy.

3. SWOT Analysis: SWOT analysis is a commonly used framework for strategic evaluation.
The analysis identifies the strengths, weaknesses, opportunities, and threats of an
organization's strategy and helps identify areas that require improvement.

4. Benchmarking: Benchmarking is a technique that compares an organization's

performance against another company in the same industry. It helps to identify best
practices and areas for improvement that the organization can use for its strategic
management.

Overall, by employing such strategic evaluation techniques, organizations can identify

areas of their strategies for improvement and assurance that the long-term objectives are
aligned. Strategic evaluation also ensures that organizations remain agile, measurement-
focused which helps to stay competitive in an everchanging and highly competitive
business environment.

PAGE 3
Question 4
Explain the process of strategic decision-making in the context of strategic management.
Highlight all the steps in this process.

ANSWER
The strategic decision-making process is a critical aspect of strategic management. This
process involves a series of steps that organizations undertake to develop and implement
strategies. Below are the different steps in the strategic decision-making process:

1. Situation Analysis: The first step in the process of strategic decision-making is situation
analysis. In this phase, the organization assesses its internal and external environment to
identify the organization's strengths, weaknesses, opportunities, and threats (SWOT
analysis). The analysis provides insights into the organization's current positioning in the
market and the competitive landscape.

2. Strategy Development: Based on the insights gleaned from the situation analysis, the
organization identifies strategic options to address identified gaps. It involves evaluating
which of the identified strengths to build upon, weaknesses to address, opportunities to
explore and threats to mitigate. Ultimately, the organization selects a strategic option that
aligns with its vision, value proposition, and resources.

3. Strategy Implementation: This stage involves developing and implementing an action

plan that operationalizes the selected strategic option. It includes identifying and
allocating the necessary resources, selecting suitable tactics, setting priorities, and
building in accountability.

4. Strategy Monitoring: This stage is all about tracking the execution of the strategy from
start to completion. The organization needs to continuously monitor its progress towards
achieving the objectives outlined in the action plan. Adjustments are made as needed to
ensure the organization stays on track.

5. Strategy Evaluation: In this final phase, the organization evaluates the outcomes of the
implemented strategies to determine whether they have achieved their intended purpose.
Organisations can compare results with the historical performance, compare against
predefined Key Performance Indicators or industry standards for assessing the
effectiveness of the strategy.

The strategic decision-making process is iterative. As the organization progresses through

the different stages, new information may emerge, which necessitates a reevaluation of the
process. The process requires collaboration with several departments within an
organization, including senior management, marketing, finance, and operations. The
organization should clearly communicate the achieved goals and listen to internal and
external stakeholders' feedback to improve future decision-making processes.

PAGE 4
Question 5
Explain the major themes in strategic formulation. Explain all the stages in the themes
appropriately.

ANSWER
Strategic formulation is one of the fundamental elements in strategic management, and it
involves developing a plan or a framework to achieve a set of organizational goals. The
process of strategic formulation can be grouped into three major themes, which are
explained below:

1. Analysis of Business Environment and Internal Capabilities:

a. Environmental Analysis: In this stage, the organization examines the macro and micro
environmental factors that could affect its operations and impact its decision-making
capabilities. These factors include political and legal, economic, social and cultural,
technological, and ecological factors (STEEP analysis).

b. Industry Analysis: This stage is about analyzing the industry where the organization
operates. It helps the organization to understand the competitive landscape, the level of
rivalry, and the barriers to entry. Porter's five forces model and SWOT analysis are
commonly used methods of industry analysis.

c. Internal Analysis: In this stage, the organization assesses its strengths and weaknesses
that could impact its ability to achieve its goals. Internal analysis is focused on reviewing
the organization's structure, culture, resources, core competencies, and capabilities.

2. Developing Strategic Options:

a. Generating Strategic Options: This stage involves brainstorming and generating various
strategic options, taking into consideration the insights generated from the analysis
(SWOT, Industry and Environmental). The organization should align the options
generated with its vision and mission.

PAGE 5
b. Option Evaluation: After generating the options, the organization should critically
assess and evaluate them. The assessment should focus on identifying which options
enable the organization to achieve its goals in the most efficient and effective manner.
Analyzing all costs and benefits, including short-term and long-term impacts, should be
done.

c. Strategy Selection: Based on the evaluation of the various options, the organization then
selects the most suitable strategy that aligns with its overall objectives.

3. Strategy Implementation:

a. Action Planning: This phase requires outlining an action plan that operationalizes the
selected strategy into specific actions to achieve the desired outcomes.

b. Resource Allocation: The action plan is then customized, considering and allocating the
necessary resources to execute the strategy effectively.

c. Implementation: This stage is all about executing the action plan. It requires cross-
functional collaboration and coordination to ensure accountability and execution
according to the plan.

Evaluating and adjusting the action plan throughout the implementation process always
improves the success rate of the strategy.

In summary, the three themes in strategic formulation, Business Environmental,

Developing Strategic Options, and Strategy Implementation are crucial components that
can reshape an organization's future path. Each stage has to be approached methodically
to achieve the desired outcomes.

PAGE 6
Question 6
Give a detailed note on the Organizational systems and techniques of strategic evaluation
and control.

ANSWER
Strategic evaluation and control refers to the process of overseeing the implementation of
strategies and assessing their effectiveness in achieving organizational objectives. It is a
crucial process of strategic management, ensuring that an organization's efforts are
aligned with its mission and vision. Organizational systems and techniques of strategic
evaluation and control are designed to help organizations assess their strategies, identify
gaps, and take corrective measures. Below are some examples of organizational systems
and techniques for strategic evaluation and control:

1. Performance Metrics: Performance metrics are measures used to track progress towards
achieving organizational goals. These metrics include financial measures such as return on
investment (ROI), revenue growth, and market share. Non-financial performance metrics
such as customer satisfaction, employee engagement, and product quality are equally
essential. Performance metrics provide feedback on the effectiveness of the implemented
strategies and help identify areas where adjustments need to be made.

2. Performance Review Meetings: Performance review meetings involve periodic meetings

between managers and team members to review performance and identify areas where
improvements are necessary. Performance review meetings allow the organization to track
progress and address issues that may affect the effectiveness of strategies. These reviews
can also help identify opportunities for organizational learning and development.

3. Strategy review meetings: Strategy review meetings are periodic meetings where
managers review the progress of strategy implementation. They are essential in ensuring
that the organization is moving towards its goals and objectives. Strategy review meetings
help identify where strategy may need adjustments or even change and resolve issues or
challenges that arise during the implementation stage.

4. Benchmarking: Benchmarking is the process of comparing the organization's

performance against that of other organizations in the same industry. It is designed to
identify areas where the company underperforms and seeks to learn from the most
successful organizations in its industry. Benchmarking can be internal (comparing against

PAGE 7
best practices within the organization) or external (comparing against those outside the
organization).

5. Information Systems: Having an effective information system in place provides timely

and accurate information about the organization's performance. Information systems
allow an organization to collect and analyze data, which is critical in identifying areas of
improvement.

Finally, Automation systems can also provide an organization with an overview of the
progress of the implemented strategies, providing it with real-time analytical information.
These systems can assist managers by aggregating data and providing graphical
representations of data. Automated systems generally streamline reporting, allowing
managers to generate real-time reports for strategy implementation progress.

In conclusion, employing organizational systems and techniques in strategic evaluation

and control is a vital element of strategic management. These systems provide managers
with important insights to determine whether a strategy is working or not – allowing for
timely adjustments. By reviewing the organization's performance regularly, it facilitates
keeping organizations on the right track towards achieving their goals.

PAGE 8