PES Institute of Technology

Strategic Management Assignment-1

Submitted to: Prof Murali Murthy By: Pooja H Shah (Roll no 3)

7. What are the different levels of strategy?

Strategy may operate at different levels of an organization Corporate level Business level Functional level

Corporate Level: Corporate level strategy occupies the highest level of strategic decision-making and covers actions dealing with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various SBUs for optimal performance. Top management of the organization makes such decisions. The nature of strategic decisions tends to be value-oriented, conceptual and less concrete than decisions at the business or functional level. Business level: Business-level strategy is applicable in those organizations, which have different businesses-and each business is treated as strategic business unit (SBU). The fundamental concept in SBU is to identify the discrete independent product/market segments served by an organization. Since each product/market segment has a distinct environment, a SBU is created for each such segment. For example, Reliance Industries Limited operates in textile fabrics, yarns, fibers, and a variety of petrochemical products. For each product group, the nature of market in terms of customers, competition, and marketing channel differs. Corporate strategy is not the sum total of business strategies of the corporation but it deals with different subject matter. While the corporation is concerned with and has impact on business strategy, the former is concerned with the shape and balancing of growth and renewal rather than in market execution

Functional Level: Functional strategy, as is suggested by the title, relates to a single functional operation and the activities involved therein. Decisions at this level within the organization are often described as tactical. Such decisions are guided and constrained by some overall strategic considerations. Functional strategy deals with relatively restricted plan providing objectives for specific function, allocation of resources among different operations within that functional area.

8. Bring out the relationship between a companys strategy and its business model.
Business Strategy The term "business strategy" describes the methods a business uses achieve its mission and objectives. A business' mission encompasses its overall purpose, core values and long-term goals. A grocery store might have the mission of making profit while providing the best food to customers, minimizing its impact on the environment and promoting strength in the local economy. The company's strategy might involve buying products from local food producers, encouraging customers to bring their own grocery bags, advertising in local newspapers and buying recycled product packaging materials. A business strategy includes how it deals with the opportunities and threats it faces.

Business Model A company's business model describes the basic means by which it creates value, delivers value to consumers and collects revenue from customers to make a profit. Business models can vary greatly from one company to another. A local grocery store's business model might involve buying food at wholesale prices and selling it to end consumers at a higher price to make profit. A website might have a business model based on providing video content to customers and generating revenue through advertisements placed on the site. How They Are Related A company's business model is a part of its business' overall strategy: It is the nuts and bolts behind how the company plans to achieve its goals, such as making a profit. A company can change its business model over time as a part of its profit-making strategy. For example, if website does not make enough revenue from advertisements to make profit, managers might decide implement a new business model, such as selling T-shirts and other goods though an online store, as a strategy to boost profit. A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, or other forms of value). The process of business model construction is part of business strategy.

9. Explain the strategic management process.

The strategic management process means defining the organizations strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises its competitors; and fixes goals to meet all the present and future competitors and then reassesses each strategy. Strategic management process has following four steps: 1. Environmental Scanning- Environmental scanning refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it. Strategy Formulation- Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies. Strategy Implementation- Strategy implementation implies making the strategy work as intended or putting the organizations chosen strategy into action. Strategy implementation includes designing the organizations structure, distributing resources, developing decision making process, and managing human resources. Strategy Evaluation- Strategy evaluation is the final step of strategy management process. The

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key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions. Evaluation makes sure that the organizational strategy as well as its implementation meets the organizational objectives.

Components of Strategic Management Process