What is

Strategy..???
Why Strategy..???
 Strategy is a set of key decisions made to meet
objectives. It refers to a complex web of
thoughts , ideas, insights, experiences, goals,
expertise, memories, perception s and
expectations that provide general guidance for
specific actions in pursuit of particular ends.

Every firm competing in an industry has a

strategy, because strategy refers to how a
given objective will be achieved.
Strategy defines what it is we want to
achieve and charts our course in the
market place.
It is basis for the establishment of a
business firm. It is a basic requirement
for a firm to survive and sustain itself
in todays changing environment.
What business we are in ? What products and
services will we offer?
To whom?
At what price? On what terms?
Who are the competitors?
On what basis will we compete?
..Then there is strategy
in place.
 Definition of Strategy

As per Glueck,
Strategy is unified, comprehensive and integrated plan
relating the strategic advantages of the firm to the
challenges of the environment. It is designed to ensure
that the basic objectives of the enterprise are achieved.

As per Alfred D. Chandler,

Strategy is The determination of basic long-term goals
and objectives of an enterprise and the adoption of the
courses of action and the allocation of resources
necessary for carrying out these goals.
 Characteristics of strategy
The decision is concerned with
or effects the long term
direction of an organization.
Strategic decisions are normally
about trying to achieve some
advantage for the organization.
Decision is likely to be
concerned about the scope
of an organisations activities.
Decisionscan be seen as
matching of the activities of an
organization to the
environment in which it
operates.
 Characteristics of
strategy
Decision have
s major
financial
resource implications.
or other
Decision will have a
major impact outside
the organization.
Strategi decisions
likely
c to affect
are
operations
decisions.
Decisions entail
 5 Ps of strategy
Professor Henry Mintzberg
of McGill University in
Montreal, Canada,
articulated what he labeled
as the 5 Ps of strategy..
According to Mintzberg,
understanding how strategy
can be viewed as a plan, as
a ploy, as a position, as
a pattern, and as
a perspective is important.
 It tells about 5Ps for strategy- These are:-
oPlan consciously intended course of action. (Strategy is developed in

advance and with purpose)

oPloy A way to outsmart the competitor.

(e.g.:- buy patents so that competitor cannot launch a rival product.)

oPattern consistency in behavior. (what was successful in past can lead

to
successful in the future)
oPosition location in environment. (how the organisation relates to its

competitive environment and what it can do to make its product unique

in the marketplace.)
oPerspective way of perceiving the world. (environment is dynamic)
 As per Fred R. David, strategic management
is an art and science of formulating,
implementing and evaluating cross
functional decisions that enable an
organization to achieve its objectives.

As per Channon, strategic management is

defined as that set of decisions and actions
that result in formulating of strategy an its
implementation to achieve the objectives of
the corporation.
 It is pervasive, integrated and coordinated management
process.
It is basically a top management function.

It is mostly related to external environment.

It is long term in nature.

It provides overall frame work for guiding enterprise

thinking and action.
It is complex process.

It is a continuous process.

It involves both conceptual and analytical thought process.

 Difference between Planning & Strategy

What is Planning: Action Steps, as answers to

What, How, Who, When, Where .
While Strategy is
An answer to Why
Strategy is bigger than planning Strategy Comes
before Planning Strategy decides and shapes up
Planning
Tactics are ways or process of implementing
plans
 Difference between Planning & Strategy

Examples:
Vision: Winning of Battle / War and takeover enemy
Strategy: Winning a battle, in less than a week,
without much loss to human life by December end.
Planning: Planning where to send the troops to win
the war.
Tactics: How soldiers should run in a zig-zag pattern
to decrease the chance of being shot.
 Why Strategy??
The ultimate goal of the organizations
is to be successful SUCCESS is:
Survival (long-term success)
Achievement of Goals
Above average returns/Profitability (probably
most important, because it determines the
ability to achieve the above two)
To provide ROI to the investors.
To create a favorable environment for capital
raise
 Need of Strategy..!!
Market has become Global
Market has become Dynamic
Ever Changing Technology
Growing Competition in domestic as well as in
global market
Information based Market
Customer dominated markets
 Origin of Strategy..!!!
Strategy comes from the Greek word STRATEGOS, which
is formed from stratos, meaning army, and ag, meaning
to lead
Strategy Dfinition
Strategies- Systematically planned course of actions
for achievement of organizational Objectives or
Goals Glueck: An Unified, Comprehensive &
integrated plan,
designed to assure that the basic objectives of the
enterprise are achieved
HOW STRATEGY IS MADE
 Emergent strategy
Emergent strategy is the process of identifying
unforeseen outcomes from the execution of
strategy and then learning to incorporate those
unexpected outcomes into future corporate plans.
 Intended & Deliberate
Planned strategies start with intentions, mostly
from the chief strategists of the firm. In this
regard intentions define the purpose in
performing strategic actions. Planning, however,
also involves deliberation, which would mean
analyzing the purpose for action and evaluating
systematically different courses of action. In this
sense, intention and deliberation is not the same.
To put it simple: intention is purpose, deliberation
stands for conscious analysis.
Deliberate strategy is a top down approach to strategic
planning that emphasize intention. This is built based on
the vision and mission of the organization and is focused
on achieving the purpose of doing business

Deliberate strategy attempts to minimize outside

influence acting on business operations
 Forms of Strategy
Intended strategy
Decisions are determined only by analysis
Realized strategy
Decisions are determined by both analysis and
unforeseen environmental developments,
unanticipated resource constraints, and/or
changes in managerial preferences
 The Three Big
Strategic Analysis
Questions
1. Where are we now? What is our situation?
2. Where do we want to go?
Business(es) we want to be in and market positions
we want to obtain.
Buyer needs and groups we want to serve
Outcomes we want to achieve
3. How will we get there?
 Let us understand some terms
Visions- What Company wants to achieve in future
Mission- The reason for companys existence
Goals- What Company wanted to achieve in general
in constraint to VISION
Objectives- are specific goals to be achieved in future
Vision - big picture idea of what you want to achieve.
Mission - general statement of how you will achieve
your vision
 The Strategy
Concept
Levels of Analysis
Corporate
Where to Strategy Grand Strategies
Compete?

How to Business Generic

Strategy
Compete? Strategies

Functional
How to Strategy Functional Strategies
Contribute? (Mktg. Mix,
Choice of Products Choice Operational, Financial
of Markets Choice of etc.)
Competitors

Dr. Prashant Kalaskar

 Levels of Analysis..!!
Decisions and actions where organizations

Analyze current situation

Develop appropriate strategies
Put strategies into action
Evaluate, modify, or change
strategies
 Strategic Management Levels I ..!!

Greater risk,cost, and

profit potential

Corporate-level Greater need for

decisions flexibility

Longer time horizons

 Corporate-level Strategy

At this level, strategic decisions relate to organization-

wide policies and are taken care by top-level
management (BOD) with a vision of determining
Where the company wants to be?
It has two main aspects- Formulation of Strategy
(strategic planning) and Strategy Implementation
The nature of strategy at this level tend to be value-
oriented, conceptual and than other levels.
There is also greater risk, cost and profit potential as
well as greater need of flexibility associated with this
level.
Major financial policy decisions involving acquisition,
diversification and structural redesigning belong to
this level.
 Strategic Management Levels II..!!

Bridge decisions at
corporate and functional
levels

Are less costly, risky, and

Business-level potentially profitable than
decisions corporate-level decisions

Are more costly, risky,

and potentially profitable
than functional-level
decisions
 Business-Level Strategy

Business-level strategy is more likely related to a unit

within the whole. It is concerned with competition in a
market.
The concerns are about what products or services
should be developed and offered to which markets in
order to meet customer needs and organizational
objectives.
At this level, multifunctional strategies developed at
corporate level are formulated and implemented for
specific product market in which the business operates.
Thus, managers at this level translate general directions
and intent into concrete functional objectives.
Decisions at this level include policies involving new
product development, marketing mix, research &
development, personnel, etc.
 Strategic Management Levels III..!!

Implement overall strategy

Involve action-oriented
Functional- operational issues
level
Are relatively short range
decisions
and low risk
Incur only modest costs
 Functional/Operational-Level
Strategy
Functional strategy involves decision-making with respect
to specific functional areas- production, marketing,
personnel, finance etc.
While corporate and business level strategies are
concerned with Doing the right things, functional
strategies stress on Doing things right.
Operating level strategy is concerned with strategic
approaches for managing frontline operating units(like
plants, sales, etc) and for handling day to day tasks of
strategic significance(like advertising campaign,
purchasing materials, inventory control, maintenance,
etc.). Thus, it focuses on how the different functions of
the enterprise contribute to the other levels of strategy.
Thus, functional level strategic management is the
management of relatively narrow areas of activity, which
are of vital, pervasive or continuing importance to the
total organization.
Strategy is how an organization
intends to create value for its
Private Sector Organizations
stakeholders.
The Strategy

Financial Perspective

"If we succeed, how will

we look to our Introducing
shareholders? Strategy Maps

Customer Perspective
"To achieve our vision,
how must we look to A simple model
our customers? of the value
Internal Perspective "To
creation process
satisfy our customers, at
which processes we
must
excel?
Learning & Growth "To
achieve our vision, how
must our organization
learn and improve
 Strategic Management
Strategic Management is the field that deals with
major intended & emergent initiatives, taken up by
the Top Managers on behalf of company.
It involves utilization of resources to enhance
performance of the firm, in their external competitive
environment.
It involves organizations Vision, Mission & Objectives
& then,
Developing Plans (Strategies) & Policies, so as to
achieve set objectives, then,
Allocation of resources
 Strategic Management
Strategic Management provides overall directions to
the organization.
Strategic Management involves not only the Top
Management Team but can also includes Board of
Directors, Stakeholders, depending upon
organizational Structure [size].
Strategic Management is an ongoing process that
evaluates & controls the business.
It allows companies to assess their competitors &
helps to set goals & plan strategies to outwit
existing
& potential competitors.
 Strategic Management Process
There are two dimensions of every action
substantive and procedural.
Substantive dimension involves
determination of what to do (Strategy) and
Procedural dimension is concerned with
determination of how to do (Strategic
Management Process).
 Strategic Management Process
The Term Strategic Management refers to the
set of managerial process of forming-
-a strategic vision,
-setting objectives,
-crafting strategy (Strategy Formulation),
-implementing & executing the strategy,
& then overtimes initiating whatever corrective
adjustments in the vision, objectives, strategies,
& executions are deemed to be appropriate
 Strategic Management Process

The process of Strategic Management

involves 4 steps:
Strategic Intent
Environmental Analysis & Strategy
Formulation
Strategy Implementation
Strategy Evaluation and Control
 Strategic Management Process

Strategic Intent Strategy Formulation Strategy

Vision, Mission, Internal & External Implem-
Business Appraisal entation
Definition, SWOT Analysis Corporate Project &
Objectives & Business Level Strategies Procedural
Strategic Analysis & choice Implemen
tation

Control
 STRATEGIC INTENT
Strategic Intent is the leveraging a firms internal
resources, capabilities and core competencies to
accomplish the firms vision, mission and objectives in
a competitive environment. (Reason behind
formulation of strategy)

It is all about winning competitive battles and gaining

leadership position by putting organizational
resources to best use.
 STRATEGIC INTENT
When established effectively- a strategic
intent can cause people turn out excellent
performance.

Strategic intent tries to establish the

parameters that shapes the-Values, Motives
and Actions of people throughout their
organization.
 The Hierarchy of strategic Intent
1) A broad Vision of what
the organizations should be.
Vision
2)The organizations Mission. 1
3)The strategic Objectives Mission
2
and specific Goals to be
pursued relentlessly Goals & Objectives
3
4)The Plans that are
developed to accomplish the
intentions of management in
a concrete way.
 Examples of Vision Statements
There will be a personal computer on every desk running
:Microsoft software.

Our vision is every book ever printed in any language all

available in 60 seconds: Amazon Kindle

To be the number one athletic company in the world:

Nike

Make people happy

Walt Disney vision Statement
 Mission
Mission is a statement which defines the role that an
organization plays in society.
Ex.- Cadburry India- To attain leadership position in the
confectionary market & achieve a strong presence in the food
& drinks sector
To organize the worlds information and make it universally
accessible and useful Google
To give ordinary folk the chance to buy the same thing as rich
people do Wal-Mart
To contribute to society through the pursuit of education,
learning, and research at the highest international levels of
excellence. - University of Cambridge
 Objectives & Goals
Organizations Translate their Vision & Mission in to
Objectives
Objectives & Goals are Synonymous to each other.
Objectives are Open ended attributes that denotes
future states & outcomes. (Specific)
Goals are Closed ended attributes which are precise
& expressed in specific terms (Generic)

Dr. Prashant Kalaskar

 STRATEGY FORMULATION

It involves organizational appraisal and

environmental appraisal to identify
strengths, weakness, opportunity and
threat of the organization.
Formulation of strategy takes place at 4
levels.
Strategy alternatives and choice
 STRATEGY FORMULATION
It involves 3 main processes..
- Performing situation analysis, self evaluation &
competitors analysis (Internal & External Analysis)
- Simultaneously, the objectives are set, some
objectives are short term & some are long term.
- These objectives set (must be in the light of situation
analysis) suggest strategic plans. The plan provides
the details of how to achieve those objectives
 STRATEGIC IMPLEMENTATION
A strategic plan is put to action:
Project implementation setting up plant
Procedural implementation diff aspect of regulatory
frameworks within which org operate.
Resource allocation procurement and commitment
Structural implementation- design of org stuct, system
Functional implementation policies formulated
Operational implementation plans reg. PPPP
Behavioral implementation leadership style for imple
strategy, corporate culture, policies, CSR, use power,
ethics
 STRATEGIC EVALUTION AND CONTROL
It involves measurement of organization performance .
A feedback system is setup.
Key performance indicators are determined.
Feedback from this SE helps in control over the strategy
and reformulated when required.
 STRATEGIC EVALUTION & CONTROL
Johnson, Schulez & Whittington presented a model to
evaluate strategic decisions-
- Suitability (will it work)
- Feasibility (can it be made to work)
- Acceptability (will they (employees) work on it,
stakeholders acceptable)
ELEMENTS IN STRATEGIC MGMT PROCESS
A. STRATETGIC INTENT:

Creating and communication a vision

Designing a mission statement
Defining the business
Adopting the business model
Setting objectives
ELEMENTS IN STRATEGIC MGMT PROCESS
B. FORMULATING OF STRATEGIES:

Performing environmental appraisal

Doing organizational appraisal
Formulating corporate level and business level strategies
Undertaking strategic analysis
Exercising strategic choice
Preparing a strategic plan
ELEMENTS IN STRATEGIC MGMT PROCESS
C. IMPLEMENTION OF STRATEGIES:

Activating strategies
Designing the structure, system and process
Managing behavioral implementation
Managing functional implementation
Operationalizing strategies
D. PERFORMING STRATEGIC EVALUTION & CONTROL

Performing strategic evaluation

Exercising strategic control
Reformulating strategies
 Importance of Strategic Management
Strategic Management is must for all those
organizations, who dreams to grow.
Survival of Fittest, does not mean a Strong or
Large company will survive.
Business has to follow war rule- Win or Lose
Companies need to have Competitive Advantage
These all characteristics of a successful business
organizations is possible to have if it follows-
Strategic Management- Strategic Analysis, Strategy
Formulation & Strategy Implementation.
Dr. Prashant Kalaskar
 Importance of Strategic Management
Strategic Management has following benefits-
a) It helps organization to be proactive than being
reactive (ex: Apple, Sony)
b)Strategic Management provides a framework for all
different decisions of business like- Product, Markets,
Manufacturing, resources & investment
a) Strategic Management performs a role of Path Finder
by making organizations able to identify opportunities
in the market & process how to reach them.
b)Strategic Management serves as a corporate defense
mechanism against mistakes & pitfalls
c) Strategic Management helps to develop core
competency & competitive advantage for survival &
Growth
Dr. Prashant
Kalaskar
Referred books

Strategic Management- A book on business policy / Corporate

planning
Francis Cherunilam Strategic Management
J. David Hunger & Thomas L Wheelen

Strategic Management
Garth Salonee , Andrea Shepard & Joel Podolny

Article

Vision, Mission and Objectives of Business - Shanmuga Rao.

Pandala
Dr. N. V.S. Suryanarayana