Strategic Management

BBM(8th Semester)
 Why Strategy? A short background
 In ancient Greek, ‘Stratos’ was the term for the army and so in military terms,
‘strategy’ referred to the ‘act of the general’.
 So the origins of ‘strategy’-the ‘art of the general’-comes from the military arena-
from China came ‘The art of War’ by Sun Tzu.
 From Prussia came ‘On War’ by Carl Von Clausewitz.
 Strategy nowadays is ‘big stuff’ – the top levels of the organization are generally
involved in preparing plans for the future-for finance, and growth by
acquisitions, innovation in products, developing new markets and increasing
internal efficiency. The recent rise of Apple is due to ta combination of these
factors.
Meaning of Strategy
"Strategy is the direction and scope of an organization
over the long-term: which achieves advantage for the
organization through its configuration of resources within
a challenging environment, to meet the needs
of markets and to fulfill stakeholder expectations".
Strategy can be defined as
* Where is the business trying to get to in the long-term
(direction)

* Which markets should a business compete in and what

kind of activities are involved in such markets?
(markets; scope)

* How can the business perform better than the competition

in those markets? (advantage)?
 * What resources (skills, assets, finance, relationships,
technical competence, facilities) are required in order to be
able to compete? (resources)?
 * What external, environmental factors affect the
businesses' ability to compete? (environment)?
 * What are the values and expectations of those who have
power in and around the business? (stakeholders)

Strategic management is about taking "strategic decisions" -

decisions that answer the questions above