STRATEGY

• A Unified, comprehensive and integrated plan designed to assure

that the basic objectives of the enterprise are achieved.
• The common thread among the organizations activities and product
markets that define the essential nature of business that the
organization has or planned to be in future.
• It is consciously considered and flexibly designed scheme of
CORPORATE INTENT & ACTIONS to mobilize resources, to direct
human behavior & efforts, to handle events and problems, to
perceive and utilize opportunities, and to met challenges and
threats for corporate survival and success.
• Strategy is meant to fill in the need of organizations for a sense of
dynamic direction, focus and cohesiveness. It provides integrated
framework for the top management to search for, evaluate and
exploit beneficial opportunities to perceive and meet potential
threats and crises.
 STRATEGY
• In large organizations, strategies are formulated at the corporate,
divisional and functional levels.
• At the corporate level strategies include the determination of the
pans for expansion and growth, vertical & horizontal integration,
diversification, takeover and mergers etc.
• The corporate wide strategies need to be operationalized by
divisional and functional strategies regarding product lines,
production volumes, quality ranges, prices, product promotion,
market penetration etc.
 STRATEGY
• STRATEGY IS PARTLY PROACTIVE AND PARTLY REACTIVE
• Proactive strategy is planned strategy whereas reactive strategy is
adaptive reaction to changing circumstances.
 STRATEGIC MANAGEMENT
• It refers to managerial process of developing a strategic vision,
setting objectives, crafting a strategy, implementing and evaluating
the strategy and initiating corrective adjustments where deemed
appropriate.
• It emphasizes the monitoring and evaluation of external
opportunities and threats in light of a company strength and
weaknesses and designing strategies for the survival and growth of
the company.
• It gives a direction to the company to move ahead, it helps to define
realistic objectives and goals which are in line with the vision of
the company.
• It helps to be proactive instead of reactive in shaping the future.
• It serves as a corporate defense mechanism against mistakes and
pitfalls to avoid costly mistakes in product market choices or
investments.
 STRATEGIC MANAGEMENT
• It helps to enhance the longevity of the business. With the state of
competition and dynamic environment.
• To develop certain core competencies and competitive advantage
that would facilitate assist in its fight for survival & growth.
• It is the process of determining the objectives of the firm, resources
required to attain these objectives and formulation of policies to
govern the acquisition, use and disposition of resources.
STRATEGIC MANAGEMENT MODEL
 STRATEGIC MANAGEMENT PROCESS

1. Developing a strategic vision and formulation

of statement of mission, goals and objectives.
2. Environmental & organizational analysis.
3. Formulation of strategy.
4. Implementation of strategy
5. Strategic evaluation and control.
Developing a strategic vision and formulation of statement of mission,
goals and objectives.
• Company must determine what directional path the company
should take and what changes in the PRODUCT – MARKET –
CUSTOMER – TECHNOLOGY focus would improve its current market
position and its future prospect.
• Concern over here is overall strategic direction.
• Corporate goals & objectives flow from mission – it represents the
quantum of growth the firm seeks to achieve in given time frame.
• Goal is to convert the strategic vision into specific performance
targets.
• Objectives need to be broken down into performance targets for
each separate business, product line, functional department,
individual work unit.
 Environmental & organizational analysis.

• External environment consist of economic, social, technological,

market and other forces which affects its functioning. Its dynamic
and uncertain.
• Organisational analysis involves a review of financial resources,
technological resources, productive capacity, marketing and
distribution effectiveness, R&D, HR skills etc.
 Strategy formulation

• Strategy formulation is developing strategic alternatives in the light

of organisation SWOT in the environment.
A company may be confronted with several alternatives:-
• Should the company continue in the same business carrying on the
same volume of activities?
• It should grow by expanding the existing units or by establishing
new units or by acquiring other units in the industry.
• Should it diversify into related or unrelated areas.
• Should it get out of an existing business fully or partially?
 STRATEGY IMPLEMENATION

• Implementation & Execution is operations-oriented activity aimed

at shaping the performance of core business activities in a strategy-
supportive manner.
• Developing budgets,
• staffing with needed skills and expertise, building competencies and
capabilities
• Creating a company culture and work climate conducive to
successful strategy.
• Good strategy execution involves creating strong FIT between
strategy and organisational capabilities, between strategy and
reward system, between strategy and internal operating systems,
between strategy and the organisations work climate and culture.
 STRATEGY EVALUATION & CONTROL

• Evaluating company's progress, assessing the impact of new

external developments, making corrective adjustments
Strategic Intent:- it refers to purposes of what they want to do and
why they want to do. It gives an idea of what the organization
desires to attain in future.
It indicates the long term position which the organization desires.
 STRATEGIC INTENT
• VISION:- It implies the blue print of the company future position. It
describes where the organization wants to land. It depicts the aspirations
and provides a glimpse of what the organization would like to become in
future. Every sub system of the organization is required to follow its
vision.
• MISSION:- A company's mission statement is typically focused on its
present business scope- “who we are and what we do”. It broadly
describe an organizations present capabilities, customer focus, activities
and business makeup.
• Business definition:- it seeks to explain the business undertaken by the
firm, with respect to the customer needs, target markets, alternate
technologies.
• Business Model:- Strategy for the effective operation of the business,
ascertaining sources of income. Desired customer base, financial details.
Rival firms, operating in the same industry rely on different business
models.
• Goals and objectives:- these are the base of measurement. Goals are
the end result, that an organization attempts to achieve. Objectives are
time-based measureable targets, which help in accomplishment of goals.
 Environmental Scanning
• Environmental scanning can be defined as the process by which
organizations monitor their relevant environment to identify opportunities
and threat affecting their business for the purpose of taking strategic
decisions.
• It is the process of GATHERING information regarding company's
environment, ANALYSING it and FORECASTING the impact of all predictable
environmental changes.

• Macro environment:- it is largely external to the enterprise and thus

beyond the direct influence and control of the organization, but which
exerts powerful influence over its functioning.
• Micro environment:- also known as task environment, which affects the
business in the daily operating level. Organizations have to closely monitor
the elements in order to stay competitive.
 Environmental Analysis

INTERNAL EXTERNAL

MACRO MICRO
•Organizational structure •Demographic
•Policies, procedures, rules •Consumers
•Economic •Competitors
•Corporate culture
•Government •Organization
•Financial resources
•Quality of Human resources
•Legal •Market
•Plant and machinery •Political •Suppliers
•Labour management •Cultural •Intermediaries
relationship •Technological
•Global
 SWOT ANALYSIS
• STRENGTH: - It is an inherent capacity which an organization can use to
gain strategic advantage. (superior R&D skills new product development)

• WEAKNESS:- It is an inherent limitation or constraint which creates

strategic disadvantage. (Overdependence on a single product line)

• OPPORTUNITY :- It is a favorable condition in the organizations

environment which enables it to consolidate and strengthen its position.

• THREATS:- It is an unfavorable condition in the organizations environment

which creates a risk for or causes damage to the organization.
 Strength Weakness
• Strong financial condition • No clear strategic direction
• Strong brand image, company • Obsolete facilities
reputation
• A weak balance sheet, burdened with
• Widely recognized market leader and debt
an attractive customer base
• Plagued with internal operating
• Ability to take advantage of economies problems
of scale
• Underutilized plant capacity.
• Proprietary technology / superior
• Deficiency of intellectual capital
technological skills/ important patents.
• Low technological know how
• Cost advantage
• Strong advertising and promotion
• Product innovation skills
• Superior supply chain management
• Wide geographic coverage
 Opportunity Threats
• Shift in buyers needs and preferences.
• Expanding the product line to meet • Likely entry of potent new
broader range of customer needs. competitors.
• Integrating forward or backward • Mounting competition.
• Acquisition of rival firms or companies • Slowdowns in market growth.
with attractive technological expertise • Growing bargaining power of
• Utilizing existing company skills or customers or suppliers
technical know - how to entre new • Technological changes.
product lines or new business.
• Alliances or joint ventures that expand
the firms market coverage or boost its
competitive capability.