STRATEGIC MANAGEMENT `

-Khushbu Bavishi MBA-HR

Learning Objectives
Topics : 1. Overview about Strategy and Strategic Management 2. Models of Superior Returns - I/O model
- Resource Based model

3. Vision 4. Mission

Without a strategy the organization is like a ship without a rudder!!!

What is Strategy

Strategy is
A large scale , future oriented plan for interacting with the competitive environment to achieve OBJECTIVES.

Thinking Strategically include Three Big Questions..

1. Whats the companys present situation? 2. Where does the company need to go from here? 3. How should it get there? A companys answer to How will we get there? is its strategy.

The Hows That Defines a Firms Strategy

How to grow the business? How to please customer? How to compete rivals? How to manage each functional piece of business? How to achieve the target level performance?

Thus we can say that Strategy is

A Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain competitive advantage.

What is Strategic Management?

Strategic Management is

The set of decisions and actions that results in the formulation and implementation of plans designed to achieve a companys objectives.

Critical Task Of Strategic Management Formulate companys mission. Conduct internal analysis. Conduct firms external analysis. Select long term & short term objectives. Evaluate success of the plan.

Strategic Management Process

Define Mission Analyze External & Internal Environment Identify Goals & Objectives

Implement Strategies

Formulate Strategies

Alternative Models Of Superior Returns

There are two models for gaining superior returns they are: 1) Industrial Organization Model 2) Resource Based Model

I/O Model of Superior Returns

The Industrial Organization model suggests that above average returns for any firm are largely determined by characteristics outside the firm. This model largely focuses on industry structure in which it operates and attractiveness of its external environment rather than internal environment.

Industrial Organization Model

External Environment An Attractive Industry

Strategy Formulation

Assets and Skills

Strategy Implementation

Superior Returns

Resource Based Model

The Resource Based model suggests that above average returns for any firm are largely determined by characteristics inside the firm. The model focuses on developing or obtaining valuable resources and capabilities which are difficult or impossible for rivals to imitate.

Resource Based Model

Resources

Capabilities

Competitive Advantage

Attractive Industry

Strategy Formulation & Implementation

Superior Returns

What is Vision?

Vision is

Vision is a picture of what the firm wants to be and, in broad terms what it wants to ultimately achieve.

Role of Strategic Vision

Gives the organization a sense of direction. Informs companys personnel and other stakeholders what management wants its business to look like. Motivate company personnel to action. Prepares the company for future.

Example of Strategic Vision

McDonalds
Our Vision is to be the worlds best quick service restaurant.

Example of Strategic Vision

Nike
To bring innovation and inspiration to every athlete in the world.

Example of Strategic Vision

eBay
Provide a global trading platform where practically anyone can trade practically anything.

What is Mission?

Mission is
The Mission specifies the business or businesses in which the firm intends to compete and the customers it intends to serve.

Questions addressed by a Mission Statement

Why is the firm is in business? What is our operating philosophy in terms of quality, image, etc? What are our competitive advantage? What customers can we serve?

A companys mission is not to make a profit! Its true mission is its answer to What will we do to make a profit?

Making profit is an objective or intended outcome!

Example of Strategic Mission

McDonalds Be the best employer for our people in each community around the world and deliver operational excellence to our customers in each of our restaurants.

Example of Strategic Mission

Google

To make the worlds

information universally accessible and useful.

Example of Strategic Mission

Johnson & Johnson
We believe our first responsibility is to the doctors, nurses, and patient, to mothers and all who uses our products and services.