Alice in Wonderland

 “Chesire Puss,” she [Alice] began ….

“would you tell me, please, which way I
ought to go from here?”
 “That depends a good deal on where
you want to get to” said the Cat
Peter Drucker
 Strategic management is not a box of
tricks or a bundle of techniques. It is
analytical thinking and commitment of
resources to action
Strategic Management Process
 Unify organisations
 More alert to environment
(opportunities and threats)
 To steer resources to desirable areas
promising growth and profits
Characteristics of Strategy
 Typical strategic moves:
 Alter geographical coverage
 Mergers and acquisitions
 Strategic and/or collaborative alliances
 Managing internal R&D, production, finance and
other key functions
 Strengthen competitive capabilities
 New industries or business entry
 React to external changes
 Turn around a company in crises
 Double digit growth
Characteristics of Strategy
 Typical types:
 Planned strategy– new initiative (proactive)
 Reactive strategy- emerging circumstances
 Abandoned strategy
 Company strategies are partly visible and
partly hidden to outside view
 Strategies develop over time to match
internal and external factors in congruence
with company values
Characteristics of Strategy
 Developing strategy is partly an
exercise in entrepreneurship
 Seeking new opportunities
 Doing existing things in new ways
 Risk taking capabilities
 Strategy making is an ongoing process
Performers of Strategic
Management Tasks
 Ultimate responsibility for leading the tasks of
forming, planning and implementing strategic
plan for the whole organisation rests with
CEO
 Every major organisational unit of a company
– business unit, division, plant, regional
office-has leading/supportive role in evolving
and implementing strategic plan
 Every manager is strategy maker &
implementer for area he/she supervises
Performers of Strategic
Management Tasks
 For diversified companies, usually there are 4
levels of strategy managers
 CEO & senior level officers have primary
responsibility for critical strategic decisions
effecting total enterprise
 Managers who are profit centre heads
 Functional area heads within a given or across
business unit who have direct authority
 Managers of major operating units (plants,
regional centres, country heads) who have on the
scene responsibility
Performers of Strategic
Management Tasks
 Proprietorships, partnerships and owner
managed enterprises, typically have one or
two strategy managers
 Strategy managers are also relevant in non-
profit organisation and Government bodies
 Managers’ approach to strategic management
process depends on different roles:
 Chief architect of strategy for his division
 Team member when it comes to corporate
strategy
Crafting a Strategy
 Corporate Strategy of diversified
companies:
 Establish positions in different businesses
 Boost combined performance of businesses
 Turn cross-business “Strategic Fits” into
competitive advantage
 Identify investment priorities for corporate
resources
Crafting a Strategy
 Business Strategy:
 Match company’s/business’s/division’s internal
resources to external environment so as to
produce sustainable competitive advantage
 Functional Strategy:
 Preparing plans for key functional areas like R&D,
Marketing, HR, Materials, IT etc.
 Operating Strategy:
 Plans for Plants, Distribution Centres, Regions and
sets targets for such key activities as inventory
control, advertising, maintenance etc
Different Approaches to
Strategy Development
 Chief architect approach:
 Generally seen in companies founded by
entrepreneurs, family-owned businesses
with contribution from key employers and
outside advisers
 Weakness - -depends on one person’s
acumen
Different Approaches to
Strategy Development
 Delegation approach:
 CEO delegates to trusted subordinates
 Through a high-level task force of
knowledgeable & talented executives, with
the help of outside consultant, if needed
 Allows for broader participation, useful in
multi-product, multi-business enterprises
 Weakness: Its success depends on
business judgement of junior level Execs
 Lacks breadth of vision or experience
Different Approaches to
Strategy Development
 Collaborative or team approach:
 Middle of the road approach
 Involve peers and subordinates
 Helps win participants’ commitment to
implementation
 Weakness: politics & power are most likely
to play
Different Approaches to
Strategy Development
 Corporate Intrapreneur approach:
 Management encourages individuals and
teams, hand picked, having drive and
entrepreneurship bent of mind
 Suitable where technological changes are
rapid
 Weakness: resistance to get accepted and
implement
Role of BOD
 Critical review of Strategy
 Guide Strategy Team and CEO
 Evaluate strategic leadership of CEO /
key executives
 Take care of interest of share holders
and stakeholders
 Strategic Management Process
 Five Task Process
1 Developing Strategic Vision & Business Mission

2 Setting Objectives

3 Crafting Strategy to achieve Objectives

4 Implementing & Executing Strategy

Feedback Loop
Monitoring, Evaluation
5 And Control
Strategic Management Process
 Vision: Management’s aspiration for
Organisation and its Business – “Where we
are going”
 Mission: is a statement of Company’s present
Business Scope – “who we are and what we
do”
 Objectives: Specific performance targets
 Two important dimensions – measurement value
and time period
 Financial Objectives
 Strategic Objectives
Mission Statement
 Give organisation it’s own identity, business
emphasis and path for development
 Mission statement sets company apart from
other similarly situated company
 Incorporate in mission statement:
 What is being satisfied
 Who is being satisfied (customer groups)
 How the company delivers value to customers
Mission Statement
 Good mission statements are highly
unique to the company for which they
are developed
 Diversified companies have broader
mission statements
 Large organisations (Corporates) have
mission statements for key functional
areas / departments / divisions
Mission Statements
 We are in picture business – Eastman Kodak
 Our business is renting cars. Our business is total
customer satisfaction
 Our mission is to provide any customer a means of
moving people and things up and down, and
sideways over short distances with higher reliability
than any other similar enterprises in the world
 “Our vision: Getting to a billion connected computers
worldwide, millions of servers and trillions of dollars
of e-commerce. Our mission: Being the building block
supplier to the Internet economy and spurring efforts
to make the Internet more useful
Mission Statements
 A computer on every desk and in every home using
great software as an empowering tool changed to:
Empower people through great software, any time,
any place and on any device.
 Vision: Our vision of persuasive networking is of a
world where connections are simpler, more powerful,
more affordable, more global and more available to
all. Mission: To connect more people and
organisations to information in more innovative,
simple and reliable ways than any other networking
company in the world
Developing Strategic Vision
 To take the organisation in the desired
direction
 Defining mission statement
 Deciding on long-term course and action
plan
 Communicating to elicit commitment
Mission to Strategic Vision
 Entrepreneurial ability to force market
growth, development/change, technology
impact and buyer needs
 Develop a vision to help create a roadmap
 Warn about ‘inflection’ points –
threats/opportunities that will come along
needing strategic corrections
 A well articulated vision creates enthusiasm
Establishing Objectives
 Objectives represent managerial commitment
to achieving specific performance targets
within specific time
 Financial Vs Strategic Objectives
 Aim is to have both on the above priority, but
more often trade-off situations are common
 Objectives should aim at building stronger
long term competitive position than having
short term priority
Establishing Objectives
 Establish SMART goal/objectives
 S – Stretched
 M – Measurable
 A – Agreed
 R – Realistic
 T – Time bound
 Top down Vs bottom up objective setting
 Long term & short term objectives
 Corporate objectives are split into
divisional/functional/operational objectives