Learning Take Away

• What is Strategic Management?

• Why is Strategic Management important?

• Who is involved with Strategic Management?

• Strategic Management today.t

• Goal directed decisions and actions in which
capabilities and resources are matched with the
opportunities and threats in the environment.

• Military influences in strategy

“Strategos” referred to a general in command of an
army
• Gives everyone a role

• Makes a difference in performance levels

• Provides systematic approach to uncertainties

• Coordinates and focuses employees

Strategy
A series of goal – directed decisions
and actions matching an organization’s
skills and resources with the
opportunities and threats in its
environment
Strategy involves:
• Organization’s goals
• Goal – oriented action
• Related decisions and actions
• Internal strengths
• External opportunities & threats
Strategic Management
• Analyze current situation
• Develop appropriate strategies
• Put strategies into action
• Evaluate, modify, or change strategy
Strategic Management involves:
• Planning
• Organizing
• Implementing
• Controlling
Four aspects that set Strategic Management apart

• Interdisciplinary
o Capstone of the Management Degree

• External Focus
o Competition

• Internal Focus

• Future Direction
 • Corporate: (What direction are we going and what business are we
in or do we want to be in this business?)
• Competitive – (How are we going to compete in our chose
business?)
• Functional - (What resources and capabilities do we have to support
the corporate and competitive strategies?)
• Strategy implementation
o Process of putting strategies into action
o Consider implementation at each level

• Strategy evaluation
o Was the strategy effective, if not what next?
o Feedback and corrective action
• Board of Directors
o Elected representative of the company’s stockholders
o Legally obligated to represent and protect stockholders
• Top Management
o Responsible for decisions and actions of every employee
o Providing effective leadership
• Employees
o Implement – put the strategies into action and monitor
performance
o Evaluate – do the actual evaluations and take necessary
actions
• Effective strategy – making begins with a Vision of
where the organization needs to head!
• Define current business activities

• Highlights boundaries of current business

• Conveys
o Who we are?
o What we do?
o Where we are now?
• Company specific, not generic – so as to give a
company its own identity

• A company’s mission is not to make a profit!

• The real mission is always – “What will we do to

make a profit?”
• Microsoft Corporation – Empower people through
great software anytime, anyplace and on any
device.

• Otis Elevator – Our mission is to provide any

customer a means of moving people and things
up, down and sideways over short distances with
higher reliability than any similar enterprise in the
world.
• American Red Cross – The mission of the
American Red Cross is to improve the quality of
human life; to enhance self – reliance and concern
for others; and to help people avoid, prepare for
and cope with emergencies.
• Charts a company’s future strategic course

• Defines the business makeup for 5 years or more

• Specifies future technology – product – customer

focus
• Challenges and motivates workforce

• Provokes strong sense of organizational purpose

• Induces employee buy –in

• Galvanizes people to live the business

• Crystallizes long term direction

• Reduces risk of rudderless decision making

• Conveys organizational purpose and identity

• Keeps direction related actions of lower level

managers on common path

• Helps organization prepare for the future

• In today’s world, it take less and less time for one
product or technology to replace another,
companies are finding that there is no such thing
as a permanent competitive advantage.

• So, every company needs to make sure that it

keeps evolving as per the environment it operates
in & achieve success by correctly implementing
the business strategy.
Learning Take Away
• What is Environmental Scanning ?
• What external environment variables should be
scanned?
• How to identify External Strategic Factors?

• How to measure external strategic factors?

• What is Michael Poter’s Five Force Driving Model
for Industry Analysis?
• Environmental Scanning is the monitoring,
evaluating and disseminating of information from
the external and internal environment to key
people within the corporation.

• Every corporation must be aware about the

different variable within a corporation’s internal and
external environment in order to manage, lead and
foresee changes to ensure long term health.
• Societal Environment: Forces that do not directly
affect the short run activities of an organization but
that can influence its long run decisions.
• Economic Factors –regulate the exchanges of
money, materials, energy & information
• Technological Factors –generate problem solving
inventions
• Political & Legal Factors – allocate power &
provide constraining & protecting laws &
regulations.
• Sociocultural Factors – regulate the values, morals
& customs of society
• Task Environment (Industry): Forces that directly
affect the corporations & in turn are affected by it.
A corporation’s task environment can be thought of
as the industry within which it operates.

• Task Environment includes factors like

Governments, Local Communities, Suppliers,
Trade Associations, Competitors, Customers,
Creditors, Employees, Labor Union etc.
 Companies respond differently to the same
environmental changes because of
differences in the ability of managers to
recognize & understand external strategic
issues & factors.
 Strategic Myopia: Management decide
which external factors are tracked, missed
or ignored depending upon the personal
values, success of current strategies &
perception of what is important.
One way to identify & analyze development is to
use the issues priority matrix as follows:

• Identify a number of likely trends emerging in the

societal & task environments affecting various
companies in a particular industry.
• Assess the probability (from Low to High) of
these trends or events actually occurring.
• Attempt to ascertain the likely impact (from Low
to High) of each of these trends on the company.
 The collective strength of these forces
determine the ultimate profit potential in
an industry.
 The stronger force can be regarded as

threat because it limits company’s ability

to raise prices or earn greater profits.
 On the contrary, weaker force can be

regarded as opportunity because it may

allow the company to earn greater profits.
 It may be possible, in the long run a

company can convert stronger forces into

an advantage through its choice of
strategy.
Threat of New Entrants – New entrants are
newcomers to an existing industry. The
threat of entry depends on the presence of
entry barriers. High entry barriers create
obstructions for a new company to enter
an industry whereas low barriers make the
entry easy for newcomers.
Some possible entry barriers
 Economics of Scale
 Product Differentiation
 Capital Requirement
 Switching Cost
 Access to Distribution Channels
 Govt. Policy
Rivalry Among Existing Firms – A
competitive move by one firm can be
expected to have a noticeable effect on its
competitors & thus may cause retaliation
or counter efforts.
Intense rivalry happens due to following
factors
 Number of Competitors
 Rate on Industry Growth
 Product or Service Characteristics
 Amount of Fix Cost or Capacity
 High exit barriers
 Diversity of Rivals (different ideas to
compete)
Threat of Substitute Products or Services –
Substitute products are those products
that appear to be different but can satisfy
the same need as another products. (e.g.
Tea & Coffee)
Substitutes limits the potential return of an
industry by placing a ceiling on the prices
firms in the industry can charge to
customers as switching cost is very low.
If the price of coffee goes up high enough,
slowly coffee drinker will start switching to
tea, as the price of tea puts a price ceiling
on the prices of coffee.
Bargaining Power of Buyers – Buyers affect
an industry through their ability to force
down prices, bargain for better quality or
high standard of services.
A buyer become powerful if the following
factors are present
 Purchase a large proportion of Seller’s

goods or services
 Buyers can integrate backwards
 Suppliers are many, buyers are few
 Switching suppliers cost very little
 Purchase product is unimportant to final

product
Bargaining Power of Suppliers – Suppliers
can affect an industry through their ability
to raise prices or reduce quality of goods
or services.
A suppliers become powerful if the following
factors are present
 Buyers are many, Suppliers are few
 Provide unique product or service
 Switching cost is very high & substitutes
are not available
 Supplier can integrate forward
 Buyer only buys a small portion of the
Suppliers goods or services (e.g. sale of
lawn mover tiers to tire industry)
Bargaining Power of Stakeholders –
Stakeholders like government, local
communities, creditors, shareholders,
trade association, unions etc. can affect
the entire industry. Stakeholders can force
to company to absorb additional cost or
reduce profit, sales etc.
What is a Strategic group?
A strategic group is a set of business firms
that pursue similar strategies with similar
resources. Categorizing firms in any one
industry into a set of strategic groups is
very needed in order to understand the
competitive environment.

The business units belonging to a particular

strategic groups within the same industry
tend to be strong rivals & more similar to
each other than to competitors in other
strategic groups within the same industry.
Different Strategic Types
According to Miles & Snow, competing firms
within a single industry can be categorized on
the basis of their general strategic orientation
into one of four basic types defenders,
prospectors, analyzers & reactors. This
distinction among firms operating with a
single industry will explain us why companies
facing similar situations behave differently.
Defenders – are companies with a limited
products line that focus on improving the
efficiency of their existing operations. Being
cost oriented these firms are unlikely to
innovate in new areas.
Prospectors – are companies with fairly broad
product lines that focus on products
innovation & market opportunities. Being sales
oriented these firms are somewhat inefficient
as they give more emphasize on creativity
over efficiency.
Analyzers – are companies that operate in at
least two different product-market area, one
stable & one variable. In the stable area,
efficiency is emphasized whereas in the
variable area, innovation is emphasized.
Reactors – are companies that lack a consistent
strategy – structure – culture relationship. Due
to their passive approach their responses are
often ineffective to environmental pressures
Learning Take Away

 Define internal environment?

 What determines competitive advantages?
 Resource based approach to strategy

analysis?
 What factors determine competitive

advantage?
 What is Value chain Analysis?
Scanning & Analyzing the external environment
for opportunities & threats is not enough to
provide an organization a competitive
advantage. Managers must also look within
the corporation itself to identify internal
strategic factors: those critical strengths &
weaknesses that are likely to determine if the
firm will be able to take advantage of
opportunities while avoiding threats.
Any company’s competitive advantage is primarily
determined by the firm’s resource endowments.
According to R.M. Grant resource based approach
to strategy analysis contains five steps:
 Identify & classify the firm‘s resources in terms

of strengths & weaknesses

 Combine the firm’s strengths into specific

capabilities. These are core competencies: the

things that a corporation can do exceedingly
well.
 Evaluate the profit potential of these resources
& competencies in terms of their potential for
sustainable competitive advantage & the ability
to produce the profit form the use of these
resources & capabilities.
 Select the strategy that best exploits the firm's

resources & competencies relative to external

opportunities.
 Identify resource gap & invest in upgrading

weaknesses.
When an organization’s resources are combined
into capabilities they form a number of core
competencies.
An organization can develop the core
competencies by using its resources &
capabilities, but there are two basic
characteristics determine the sustainability of
these competencies.
Durability - is the rate at which a firm’s
underlying resources & capabilities (core
competencies) depreciate or become obsolete.
E.g. New technology can make a company’s
core competency old-fashioned or irrelevant.
Imitability – is the rate at which a firm’s
underlying resources & capabilities (core
competencies) can be duplicated by others.
A core competency can be easily imitated to the
extent that it is transparent, transferable &
replicable.
 Transparency – the speed at which the
competitors can understand the relationship
between the firm’s resources & capabilities
supporting a firm’s strategy successfully.
 Transferability – competitors ability to gather
resources & capabilities necessary to create
their own competitive advantage. E.g. Its not
easy for any wine maker to replicate a French
Wine.
 Replicability – competitors ability to duplicate
resources & capabilities to imitate the other
firm’s success.

Level of Resource Sustainability

High Low

Slow CycleStandard Cycle Fast Cycle

Resources Resources Resources
Strongly Shielded Standardized mass Easily duplicated
Patents, Brand Name production Idea driven
Economics of Scale
A value chain is a liked set of value creating activities
beginning with basic raw materials coming from
suppliers, moving on to a series of value adding
activities involved in producing & marketing a
product or services and ending with distributors
getting the final goods into the hands of the
ultimate consumers.
Industry Value Chain – The value chain can to
divided into two segments upstream &
downstream. In the petroleum industry upstream
refers to oil exploration, drilling & moving the
crude oil to refinery whereas downstream refers to
refining the oil, transporting & marketing of
gasoline & refined oil to distributors & gas station
Raw Material Primary Manufacturing
Fabrication Product Producer Distributor
Retailer
Corporate Value Chain – every firm has its own
value chain of activities, because most
corporations make several different products &
services an internal analysis of the firms
involves analyzing a series of different value
chain.
 Examine each product’s vale chain & determine
which activities can be considered as strength &
weaknesses?
 Examine linkages between different value activities
are performed within a product line.
 Explore potential synergies among the value chain
of different product lines or business units.
 Strategy formulation is often referred to as
Strategic Planning or long range planning & is
concerned with developing corporation’s
mission, objective, strategies & policies.
 It begins with situation analysis, the process of
finding a strategic fit between external
opportunities & internal strengths while
working around external threats & internal
weaknesses.
 SWOT Analysis assist not only in identifying
company’s distinctive competencies, but also
in identification of opportunities that the firm
is unable to take advantage of due to lack of
required skills & resources
Corporate Strategy deals with three key issues
facing the company as a whole:
 The firm’s overall orientation towards growth,
stability or retrenchment (directional strategy).
 The industries or markets in which the firms
competes through its products & services
(portfolio strategy).
 The manner in which management coordinates
activities, utilizes resources & cultivates
capabilities (Corporate Parenting)
Refers to choice of direction the firm should take,
be it SSI or MNC.
Eg. Consider a situation where a firm is facing
intense competition in the markets it serves.
What do you think the organization should do?
 Reduce Price – Cost Advantage
 Improve Quality – Differentiation Advantage
 A mix of both the above factors
 Improve Distribution Network
 New Promotional & Marketing Activities.
 Merger, Acquisition, Joint Venture,

Disinvestment, etc.
Growth can be via Vertical Integration by taking
over a function previously provided by suppliers
(backward integration) or by distributor
(forward integration).

Backward Integration can help the business to

produce critical inputs for the main product. Eg.
RELIANCE

Forward Integration can help the business to take

advantage of closer contact with the customers
and ensure a control over retail price of their
product. Eg. FUTURE GROUP.
Horizontal Integration refer to the degree to which
a firm operates in multiple geographic locations
at the same point in an industry’s value chain.

Growth can be achieved by expanding the firm’s

products & services into other geographic
locations or by increasing the firm’s products or
services offered to current markets.

A company can acquire market share, production

facilities or distribution outlets through internal
development or externally through acquisition,
merger or joint venture.
If a company’s current product does not have
potential to grow, management can decide to
diversify. There are two basic diversification
strategy:
Concentric Diversification – Growing the company by
expanding into related industry.
 This is a appropriate strategy when a firm has
strong competitive position in the industry it
operates in.
 By concentrating on its distinctive competence firm
uses the strength, as its means of diversification.
 The products are related and the idea is to take
advantage of synergies (common thread between
different products).
Conglomerate Diversification – Diversifying into
an industry unrelated to its current one.
Management realizes its current industry is
unattractive & the company has no distinctive
competence or the skills developed by the firm
can be easily be transferred into related
products or services in other industries.

Eg. A cash rich company with few opportunities

for growth on its industry might move into
another industry where opportunities are great
but cash is hard to find.
A corporation may choose stability over growth by
continuing its current activities without any significant
changes. The following are stability strategies:

Proceed with Caution - Sometimes its appropriate as a

temporary strategy to enable a company to consolidate its
resources after prolonged rapid growth in an industry that
faces an uncertain future. In effect, it means timeout take
by the company to rest before continuing a growth or
retrenchment strategy.
• This strategy was adopted by Dell Computer Corp in
1993 after their growth strategy result in so much
business that company was unable to hand it.
• Michael Dell says “We grew 285% in 2 years, and
we’re having some growing pains”. Dell was not giving
up on its growth strategy but merely putting temporary
brakes so that company can hire human resource and
improve infrastructure & facilities.
• No Change - Decision to do nothing new, just continue
with current operation & policies. The relative stability
created by the firm’s competitive position in an industry
facing little or no growth, encourages the company to
continue doing business just making small adjustment for
inflation in sales & profit.

• In US, most small business player follow this strategy

before Wal - Mart enter into their territory.
• A firm may pursue retrenchment strategies when the
company has a weak competitive position in some or all
its product lines resulting in poor performance, when
sales are down & profit are becoming losses.

• In an attempt to eliminate the weaknesses which are

dragging the company down, management may follow
one of several retrenchment strategies.
• Turnaround - Focuses on improving operational
efficiency of the firm & is appropriate when a
corporation’s problem are pervasive but not yet critical.

• Turnaround strategy include two phases Contraction &

Consolidation.

• Contraction - is the initial effort to quickly “stop the

bleeding” with a overall across the board cutback in
size & cost.
• Consolidation - implement improvement program to
stabilize the new leaner corporation. To streamline the
company, management develops plans to reduce overhead
& unnecessary functional cost.

• This is a very crucial time for the firm, if the consolidation

is not done properly the key people will leave the
organization, on the other hand if the employees are
motivated to participate in the consolidation program. The
firm will emerge as a much stronger player with an
improved competitive position which will help the
company to once again expand the business.
• Captive Strategy - means becoming another company’s
sole supplier or distributor in exchange for a long term
commitment form the other company. In other words the
firm gives up independence in exchange for security.

• A company with a weak competitive position may offer to

be captive company to one of its larger customers in order
to guarantee the company’s continued existence with a
long term contract. This way the firm is able to reduce
some of it functional cost like marketing, advertising,
promotional, etc. expenses.
• Eg: In order to become the sole supplier to General
Motors, Simpson Industries from Michigan agreed to
have its engine part factory & financial books inspected
by the GM employees. In return, 80 % company’s
production was sold to GM.
Disinvestment Strategy - If the firm with a weak
competitive position in the industry is unable either to
pull itself up from the problem or to find a customer to
which it can become a captive company. The only other
choice it has now is to sell out or leave the industry
completely.
• The sell out or disinvestment strategy make sense when

the company can still obtain a good price by selling the

entire company to another firm. Sometimes if the firm
has multiple business lines, it may choose to
disinvestment strategy by selling a business line.
• Bankruptcy or Liquidation Strategy - If a firm finds
itself in the worst possible situation with poor
competitive position then it has limited alternative at
disposal. Because no one is interested in buying a weak
business in an unattractive industry, the firm pursues a
bankruptcy or liquidation strategy.

• Bankruptcy involves giving up management of the firm

to the court in return for some settlement of the
corporation’s obligation. Top management thinks that
after the court decides & settles the claims of the
company, the remaining new firm will be stronger & in
a better position to compete in a more attractive
industry.
• Bankruptcy gives perpetuate to the firm whereas
Liquidation Strategy means selling the firm assets in
parts. As the industry is unattractive & company is
weak, the top management decides to convert as many
saleable assets into cash as possible, which is then
distributed to stock holder after settling all the
obligations of the firm.

• The benefit of liquidation over bankruptcy is that Board

of Directors as representative of stock holder along
with the top management make the decisions instead of
turning them over to the court, which may choose to
ignore the stockholder completely.
Functional strategy is the approach a functional area
takes in order to achieve business objectives.

It is concerned with developing & nurturing a

distinctive competence to provide a company with
a competitive advantage.

A multidivisional corporation has many business

units with its own strategy, each unit will have its
own departments, each with its own functional
strategy.
Key Strength v\s Distinctive Competencies
Key strength is something that a corporation can do
exceedingly well, where as distinctive competencies is
something that is unique to the corporation or superior
from competition.

To be considered a distinctive competencies three criteria

should be fulfilled: Customer Value, Competitor Unique
& Extendibility.

A distinctive competency is certainly a key strength,

however key strengths are not always considered as
distinctive competencies. As competition tries to imitate
another company’s strength, what was once considered
as a key strength becomes a minimum level entry
requirement in the industry.
MARKETING STRATEGIES
It deals with pricing, selling &distribution of
company’s products.

 Market Development
 Capture a larger share of an existing market
 Develop new markets for current products
 P&G, Colgate – Palmolive, Unilever – increase product life
cycle through new & improved variations of products &
packaging that appeal to market niches.

 Product Development
 Development new products for existing markets
 Develop new products for new markets
 Pull & Push Method
 Push Products by spending larger amount of money on
trade promotions in order to gain self space in retail
stores or push products through distribution system.
 Trade discounts, in store special offers, etc.

 Pricing Strategy:
 Skim Pricing – offers opportunity to skim the top of
the demand curve with high curve especially when the
product is new & competitors are less.
 Penetration – introduce products with low price to gain
market share.
 Depending on the corporate strategy either pricing strategy
is desirable. However, penetration strategy is more
profitable in the long run.
FINANCIAL STRATEGIES

It examines financial implications and identifies the best

financial course of action.
It can provide competitive advantage, by keeping the cost
of capital low or by raising capital to support a business
strategy.
 Debt v\s Equity – manage desired level of debt equity to

keep the overall cost of capital low.

 Leverage Buy Out – company is acquired by debts take

from third party. Debt servicing is debt through the

profits generated by the business.
 Dividend Policy – analyze whether to distribute to excess

funds or keeps them for future growth activities.

Human Resource Management Strategy

It tries to find a best fit between people &

organizations.
 Recruitment, Training & Development – hire a large

number of low skill people with low pay scale to

perform repetitive jobs (McDonald’s) or employ
skilled people with high scale pay & cross trained to
participate in self managed teams (Google). Reduce
cost by using temporary, part time or contractual
employees.
 Team & Workforce Diversity – hire diverse
workforce (age, race, nationality, etc) can provide
competitive advantage. DuPont – African American
employees, create new market by focusing on black
farmers.
Selecting best Strategy

After assessing the pros & cons of different

strategy, one alternatives must be chosen.

Most important criterion in selecting a strategic

alternative should be its ability to achieve
predetermined corporate objective with least
use of resources & with no or few side effects.

A tentative execution plans should be made to

address the difficulties that management is
likely to face while actually implementing the
strategy, using situation based scenarios
simulation models.
Construct Corporate Scenarios

For every alternative strategic program sample pro forma

balance sheet & income statement should be create to
calculate the return on investment.

For every alternative, set of assumption should be made and

three scenarios must be constructed Optimistic,
Pessimistic & Most Likely.

Construct detailed pro forma financial statement using

current year financial figures and record the optimistic,
pessimistic & most likely financial figures over a extended
time frame. The ideal is to get detailed figures of Net
Profit, Cash Flow, Working Capital, etc. for each strategic
alternative. In order to choose the right alternative “what
if” analysis should be used for reasoning.
Regardless of the quantifiable pro & cons, actual decision
will be influenced by several other factors.
Management’s attitude towards RISK

The attractiveness of a particular strategic

alternative depends not only, upon the
probability that it will be effective but also on
the amount of resources allocated to that
alternative & for what time duration.

The greater the amount of asset involved & the

longer they are committed, then top
management wants a higher probability of
success.
Pressure from External Environment - The attractiveness of a
strategic alternative is affected by its compatibility with the
key stakeholders like creditors, employee union,
stockholders, etc. Management must consider the
following while deciding upon the strategic alternative –
identify most crucial stakeholder, assess their needs &
chances of meeting those needs, actions stakeholder will
take if needs are not met & the probability of stakeholder
taking these actions.

Pressure from Corporate Culture – If a strategy is

incompatible wit the corporate culture, it will probably not
succeed. Management must assess the compatibility of the
available strategic alternatives wit the corporate culture. If
there is little fit, management must decide what actions
should be taken – ignore the culture, manage around &
modify the implementation, try to change the culture,
change the strategy to fit the culture, etc.
Needs & Desire of Key Employees – Even the most
attractive strategic alternative will not get selected if it
does not fulfill the needs & desire of the key managers
in the corporations. They key managers can influence
the management decision in the favor of a particular
alternative or to ignore disadvantages of a particular
alternative.

Managers may ignore a negative information about a

particular decision, as they want to show that they are
committed & consistent in their performance.
Sometimes it take a unlikely event or some form of
crisis in order to attract attention from the strategic
decision makers towards the ignored facts. Eg. ConAgra
– Healthy Foods Products.
Strategic Choice – is the evaluation of alternatives
strategies & selection of the best alternative after
debating all the aspects of that alternative. GM –
CEO Alfred E. Sloan, use to call for the meeting
with top managers to propose a controversial
decision. When asked for comment, each
executive responded in agreement to support
the decision taken. After getting the agreement
with all the executives, CEO decided not to
proceed with the decision. Either the executives
are agreeing to avoid upsetting the boss or they
have not assessed the pro & cons of the
alternative completely.
Strategy Formulation & Implementation are two
sides of the same coin. Although implementation
is usually considered after strategy has been
formulated, but it is the key part of strategic
management.
To begin the implementation of the chosen
strategic alternative management must look into
the following matter:
 Identify people who will implement the strategy
 Develop Program, Budget & Procedure
 Organize for action – how to implement the

strategy.
Challenges faced by the corporation when they attempt to
implement a strategic choice:
 Slower implementation than originally planned

 Unanticipated major problem

 Ineffective coordination of activities

 Competing activities & & crises that distract attention

away from implementation

 Insufficient capabilities of the involved employees

 Inadequate training & instruction of lower level

employees
 Uncontrollable external factors

 Inadequate leader ship & direction by department

managers
 Poor definition of key implementation tasks & activities

 Inadequate monitoring of activities by the information

system
Identify people who will implement the strategy –
Depending upon the size of the corporation, people
involved in implementing a strategic choice will
probably be much more diverse group as compared to
those who formulated the strategic plans.
Implementers consists of everyone from top management
to first line managers as well as all the employees in
some way or the other for implementing the corporate,
business & functional strategies.
Most of the people vital for making the strategy
successful probably had little to do with the
development of the corporate & even business strategy.
Therefore they might be completely ignorant about the
formulation process like analyzing the larger amount of
data. It is necessary to make sure that middle level
managers are involved in the strategy formulation.
Develop Programs, Budgets & Procedures –

A program is a statement of activities or steps needed to

accomplish a single –use plan.

A budget is a statement of corporation’s program in

money terms. After programs are developed, the
budgets process begins. Planning a budget is the last
real check a corporation has on the feasibility of its
selected strategy.

Procedures or SOP are system of sequential steps that

describe in detail how a particular task should be
completed.

Achieve synergy between function & business units,

especially after mergers or acquisition.