strategic management

What is strategic
management?

Strategic Management can be

defined as:
the art and science of
formulating, implementing and
evaluating cross-functional
decisions that enable an
organization to achieve its
objective.
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How the strategic management

work?
On-going process:
Strategic management is a on-going process
which is in existence through out the life of
organization.
Shaping broad plans:
An on-going process in which broad plans
are firstly formulated then implemented and
finally controlled.
Strategic goals:
Strategic goals are those which are set by
top management. The broad plans are made
in achieving the goals.
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Internal and external environment:

Stages of Strategic management:

The strategic management

process consists of three
stages:
1. Strategy Formulation
(strategy planning)
2. Strategy Implementations
3. Strategy Evaluation
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Strategic Formulation:
Strategic
formulation
means
a
strategy formulate to execute the
business
activities.
Strategy
formulation includes developing:1. Vision and Mission (The target of the
business)
2. Strength and weakness (Strong points of
business and also weaknesses)
3. Opportunities and threats (These are
related with external environment for the
business)
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Key Terms in Strategic

Management
1.
2.
3.
4.
5.
6.

Strategists
Mission statements
Internal strengths and weaknesses
External opportunities and threats
Long-term objectives
Annual objectives, and policies

Vision Statements
Many organizations today develop a
"vision statement" which answers
the question, what do we want to
become?

Developing a vision statement is

often considered the first step in
strategic planning, preceding even
development of a mission statement.
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Mission Statements
1. Mission
statements
are
enduring
statements of purpose that distinguish
one business from other similar firms.
2. A mission statement identifies the scope
of a firm's operations in product and
market terms.
3. A clear mission statement describes the
values and priorities of an organization
and also a path to achieve organizational
objective .
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Strategic Management

SWOT Analysis
Strengths

Weaknesses

Opportunities

Threats

SWOT Analysis
SWOT analysis is a great technique for
identifying your Strengths and
Weaknesses and study any Opportunities
and Threats you face.
It is also a powerful strategic planning
tool used to evaluate a project or in a
business venture or in any other situation
of an organization or individual requiring
a decision in pursuit of an objective.
It involves monitoring the marketing
environment internal and external to the
organization or individual.

SWOT Analysis Internal and External

Factors
The aim of any SWOT analysis is to
identify the key internal and external
factors that are important to achieving
the objective. SWOT analysis groups key
Strengths
pieces of information into two main
Factors
categories: Internal
Organization
Weaknesses
Opportunities
External Factors
External Environment
Threats

SWOT Analysis Errors to Be Avoided

Conducting a SWOT analysis before
defining and agreeing upon an
objective (a desired end state).
SWOTs should not exist in the
abstract. They can exist only with
reference to an objective.
Opportunities external to the
company are often confused with
strengths internal to the company.
They should be kept separate.
SWOTs are sometimes confused with
possible strategies. SWOTs are
descriptions of conditions, while

Diversification
A business strategy designed to reduce
exposure to risk by combining a variety of
investments, such as stocks, bonds, and
real estate, which are unlikely to all move
in the same direction.
Diversification is the process of spreading
the total investment money available
across different asset classes, countries,
industries, and individual companies.
The goal of diversification is to reduce the
risk in a business. Diversification can only
reduce unsystematic risk.
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Types of Takeovers
Takeover

The transfer of control from one ownership

group to another.

Acquisition

The purchase of one firm by another

Merger

The combination of two firms into a new legal

entity
A new company is created
Both sets of shareholders have to approve the
transaction.

Amalgamation

A genuine merger in which both sets of

shareholders must approve the transaction
Requires a fairness opinion by an independent
expert on the true value of the firms shares
when a public minority exists
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Strategic alliances
Meaning
cooperative
agreements
between two or more organizations
A means to enhance strategic
resources:
self-sufficiency is becoming
increasingly difficult in a complex,
uncertain,
and
discontinuous
external environment.
Strategic
alliances
that
bring
organizations
together
promise
unique opportunities for partners.
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Turnaround strategy
There are three stages of a
turnaround strategy:
I Pre-turnaround
II Period of Crisis
III Period of Recovery

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Steps in turnaround strategy

Changing the leadership
Redefining strategic focus
Selling or divesting unnecessary
assets
Improving Profitability
Making careful acquisitions

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Divest Strategy
Plan whereby a product line (or a
product division of a business) is
liquidated or sold so as to limit either
real or anticipated losses
To redirect the resources behind that
product line or division to other
company products or divisions.

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What Is a Critical Success Factor?

A key area where satisfactory
performance is required for the
organization to achieve its goals
A means of identifying the tasks and
requirements needed for success
At the lowest level, CSFs become
concrete requirements
A means to prioritize requirements

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The CSF Method

Start with a vision: mission
statement
Develop 5-6 high level goals
Develop hierarchy of goals and their
success factors
Leads to concrete requirements at the
lowest level (a single, implementable
idea)
Along the way, identify the problems
being solved and the assumptions
being made

Cross-reference usage scenarios

and problems with requirements

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