Chapter-1 Strategic

Strategic Management
Introducing Strategy
Slide 1.1
Exploring Corporate Strategy, Seventh Edition, © Pearson Education Ltd 2005
LEARNING OUTCOMES
• Understand the characteristics of strategic decisions
and what is meant by strategy and strategic
management, distinguishing them from operational
management.
• Understand how strategic priorities vary by level:

corporate, business and operational.
• Understand the basic vocabulary of strategy, as used

in different contexts.
• Understand the three key elements of the Exploring

Corporate Strategy strategic management model. Slide 1.2
The characteristics of strategic decisions
Exhibit 1.1 Slide 1.3

Definition of Strategy
Strategy is the direction and scope of an
organization over the long term, which
achieves advantage in a changing
environment through its configuration of
resources and competences with the aim of
fulfilling stakeholder expectations.
Slide 1.4
LEVELS OF STRATEGY
• Corporate-level strategy
• Business-level strategy
• Operational strategies
Slide 1.5
Corporate level
It is concerned with overall purpose and scope of

organization and how values will be added to
different parts of the business in organization
Slide 1.6
Business level (competitive strategy)
It is about to complete successfully in particular

market
•How competitive advantage over the customers can be achieved
•whereas corporate-level strategy involves decisions about the
organization as a whole, Strategic decisions here are related with
strategic business units (SBUs).
SBU is a part of an organization for which

there is a distinct external market for goods or
services that is different from another SBU
Slide 1.7
Operational Strategies
It is concerned with how the component parts of the
organization deliver effectively the corporate and
business level strategies in terms of resources,
processes and people.
Slide 1.8
The vocabulary of strategy
• Mission
• Vision
• Goal
• Objective
Slide 1.9
The vocabulary of strategy

STRATEGIC MANAGEMENT
• The term strategic management underlines the
importance of managers with regard to strategy.
• Strategies do not happen just by themselves.
• Strategy involves people, especially the managers

who decide and implement strategy.
Slide 1.11
Strategic and Operational
Management
•An operational manager deals with problems of

operational control, such as the efficient production
of goods, the management of a sales force, or the
monitoring of financial performance.
Slide 1.12
Strategic and Operational
Management
• Strategic management involves a greater scope
than that of any one area of operational
management.
• Strategic manager has the capability to take an
overview, to conceive of the whole rather than just
the parts of the situation facing an organization.
• This is often referred to as the ‘helicopter view’.
Slide 1.13
Elements of Strategic Management
• Understanding the strategic position of an

organization, Strategic Choices for the future and
turning strategy into action.
Slide 1.14
A model of the elements of strategic management

Strategic Position (1)
The strategic position is concerned with the impact on
strategy from the external environment and
organization`s strategic capabilities, and expectation
and influence from the stake holders.
• The Organization's Environment
– Political Economic Social Technological Legal
Environmental (PESTEL)
– Sources of Competition
– Opportunities and Threats
Slide 1.16
Microenvironment – PESTEL

Strategic Position (2)
• Strategic Capability of the Organization
– Resources and Competences
– Strengths and Weaknesses
• Expectations and Purposes
– Corporate Governance,
– Stakeholders,
– Ethics and Culture
– Sources of Power and Influence
– Communication of Purpose: Mission and Objectives
Slide 1.18
Strategic Choices
Strategic choices involve the options for strategy

in terms of both the directions in which
strategy might move and the methods by
which strategy might be pursued.
Slide 1.19
Strategic Choices
Bases of competitive advantage at business level
• Competitive advantage (pricing and differentiation strategies) from
customers and market
Scope of activities at corporate level

– Portfolio (diversification)
– Market spread, e.g. international
– Corporate parenting (how the center’ adds value to its various parts
Directions and methods of development
– Directions: Product/Market
– Methods: Internal/organic, M&A(Merger/Acquisition), strategic
alliances
Slide 1.20
Strategy into Action
Strategy into action is concerned with ensuring that

strategies are working in practice
Slide 1.21
Strategy into Action
• Strategy development processes (intended and
emergent).
• Structuring an organization to support successful
performance.
• Enabling success through the way in which
separate resource areas of the organization support
the strategies.
• Managing strategy very often involves strategic
change.
Slide 1.22

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Strategic Management

• Understand how strategic priorities vary by level:

• Understand the basic vocabulary of strategy, as used

• Understand the three key elements of the Exploring

Exhibit 1.1 Slide 1.3

It is concerned with overall purpose and scope of

It is about to complete successfully in particular

SBU is a part of an organization for which

Exhibit 1.2 Slide 1.10

• Strategies do not happen just by themselves.

• Strategy involves people, especially the managers

•An operational manager deals with problems of

• Understanding the strategic position of an

Exhibit 1.3 Slide 1.15

Exhibit 2.2 Slide 1.17

Strategic choices involve the options for strategy

Scope of activities at corporate level

Strategy into action is concerned with ensuring that

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