The concept of strategy

The term strategy is derived from a Greek word

strategos, which means generalship- the actual
direction of military force.
Strategy refers to means by which long-term
objectives are realized. It also refers to plan of
action.
They are potential actions that require top
management decisions and large amounts of firm’s
resources
LEVELS OF STRATEGIES

Corporate
level

Business
level/
Divisional
level
Functional level

Operational level
Environmental scanning

Organizations do not exist in a vacuum. Many factors

enter into the forming of a company's strategy. Each
exists within a complex network of environmental
forces.
Environment scanning refers to scanning/ monitoring
the environment so that the company identify the
opportunities, threats, strengths and weaknesses.
In general terms, environment can be broken down into the
following areas:
External environment:
 the macro environment, or general environment - that is,
economic, social, political and legal, technological systems
in the country;
 operating environment - that is, competitors, markets,
customers, suppliers. etc;
Internal environment - that is, employees, managers,
union, board directors, functional areas of business, etc
Macro environment forces
1. Economic forces
2. Social, cultural, demographic,
& environmental forces
3. Political, governmental, and
legal forces
4. Technological factors
 Economic Forces
 Inflation rates
 Level of disposable income
 Value of the rupee
 Availability of credit & interest rates
 Budget deficits
 Gross domestic product trend
 Consumption patterns

Ch.
3-6
Key Economic Variables – cont’d:

 Price fluctuations
 Monetary policies
 Fiscal policies
 Unemployment trends
 Foreign countries’ economic conditions