STRATEGIC MANAGEMENT

MEANING OF STRATEGY
• The word strategy comes from the Latin word
“strategia” and Greek word “strategos”. which
means Art of General.

• Strategy is a unified and integrated long term

action plan of an organization that helps an
organization in achieving competitive
advantage.
 Business Policy Versus Strategy

• Policy are the rules and • Strategy is a long term

regulations that act as action plan of the
guidelines for decision organization.
making.
• Unidimensional Concept • Multidimensional concept.
• Operates in internal • Operates in external
environment
environment.
• Stable and Traditional
• Dynamic and Practical
Concept Concept
 Policy versus Strategy

• Theoretical concept • Practical Concept

• Thought Oriented • Action Oriented
• Policy are generally formal • Strategies may be informal ,
and written in nature. Not necessarily written and
confidential
Importance of Strategic Management

Proactive in Maintaining Achieving

Shaping Co’s Discipline and Competitive
Future harmony Advantage

Optimum Improves
Resource Coordination
Allocation & Control
 Importance of SM Contd…

Identification of Better Employer- Increase in

Risks Employee Relations Productivity

Increased
Gives Direction to
Awareness of
the Company like a
Threats &
rudder
improved Goodwill
 PROCESS OF STRATEGIC
MANAGEMENT
Identification of
Vision, Mission &
Objectives

Internal &
Strategy
External
Implementation,
Evaluation & Control Environment
Appraisal

Strategy Analysis &

Strategy
Choosing Best
Formulation
Strategy
 HIERARCHY OF STRATEGIC INTENT
• VISION
• MISSION
• BUSINESS DEFINITION
• OBJECTIVES
• GOALS
• STRATEGY
• TACTICS
 VISION
• What a company wants to create in the
future.
• Where a company wants to find itself after
20 years?
• Vision statement must be shared across all
organizational members.
 MISSION
• An enduring statement of company purpose
that distinguishes itself from similar other
organizations.
• It is related to society.
• Mission is the way to achieve the vision.
• It is the reason for an organization’s existence.
 CHARACTERISTICS OF AN IDEAL
MISSION STATEMENT

SPECIFIC MOTIVATIONAL REALISTIC

MARKET
DISTINCTIVE
ORIENTED
 CONTENTS OF MISSION STATEMENT
• Market
• Product or Service
• Technology
• Co’s Self Image
 DEVELOPING MISSION STATEMENT
• History of The Organization
• Distinctive Competencies
• Organization’s Environment
 BUSINESS DEFINITION
• CUSTOMER NEEDS

• CUSTOMER GROUPS

• TECHNOLOGY
 EXAMPLES OF BUSINESS DEFINITION

Narrow Definition Broad Definition

• We sell soft drinks • We sell beverages
• Luxury buses in Goa • Travel & Tourism in Goa
• We sell cameras • We help people save
memories
• We sell pastries • We sell confectionaries
MACRO EXTERNAL ENVIRONMENT

SOCIO-
ECONOMIC POLITICAL CULTURAL

TECHNOLOGICAL
LEGAL &
REGULATORY
 MICRO EXTERNAL ENVIRONMENT

CUSTOMERS SUPPLIERS CREDITORS

BANKS &
GOVT. FINANCIAL COMPETITORS
INSTITUTIONS
 INTERNAL ENVIRONMENT

CORE
RESOURCES CAPABILITIES
COMPETENCE

LEADERSHIP
ORG.
STYLE & VALUES
STRUCTURE
& BELIEFS
• CORE COMPETENCE =
RESOURCES +CAPABILITIES

• COMPETITIVE ADVANTAGE =
RESOURCES +CAPABILITIES +CORE
COPETENCE
AROMA OF BRU COFFEE
ICE BEER OF SP BREWERY LTD,
GILLETTE BRAND IMAGE
STARBUCK COFFEE FLAVOUR
DESIGN OF TOYOTA
WIDE EXPERIENCE OF WALMART IN
RETAIL
VOICE CLARITY OF AIRTEL
CRM AT SINGAPORE AIRLINES
BODY SHOP- MOTIVATING AND
EMPOWERING EMPLOYEES
SONY’S COMPACT TECHNOLOGY
CHOTA COLA DRINK FOR LOW INCOME
GROUPS
VODAFONE EXTENSIVE COVERAGE
ENVIRONMENTAL APPRAISAL TOOLS

• SWOT ANALYSIS
• PESTEL ANALYSIS
• STRATEGIC ADVANTAGE PROFILE /
ORGANIZATION CAPABILITY PROFILE
(SAP/OCP)
• ENVIRONMENTAL THREAT AND
OPPORTUNITY PROFILE (ETOP)
 STRATEGY ANALYSIS AND CHOICE
• Three Criteria must be considered before
selecting the strategy
• Acceptability
• Suitability
• Feasibility
Comprehensive Strategy-Formulation
Framework

Stage 1:
The Input Stage

Stage 2: Stage 3:
The Matching Stage The Decision Stage
 INPUT STAGE
• INTERNAL FACTOR EVALUATION MATRIX

• EXTERNAL FACTOR EVALUATION MATRIX

• COMPETITIVE PROFILE MATRIX

 MATCHING STAGE
• TOWS MATRIX
• BCG MATRIX
• ANSOFF MATRIX
• SPACE MATRIX
• GE 9 CELL MATRIX
 DECISION STAGE

• QUANTITATIVE STRATEGIC
POSITIONING MATRIX (QSPM)