Chapter One: Introduction to Strategic Management

Strategy
A strategy is a long term, future oriented, competitive, comprehensive, unified and integrated
plan that relates the internal advantages or disadvantages to external challenges (opportunities
and threats) for the achievement of organizational goals.
Strategic Management
• Strategic management is the process in which an organization develops and implements the
strategies that managers can carry so as to achieve better performance and a competitive
advantage for their organization.
• Strategic management is the study of
- Why some firms outperform others.
- How to create a competitive advantage in the market place that is unique, valuable, and
difficult to copy
A comprehensive strategic Management Model

Strategic management process of Bata

Top Level Management of Bata involves in decision making, formulation, and implementation
of activities like Managing Director, Head of Accounts, Human Resources Management and
Chief Finance Officer
Analysis:
• Performing a situation analysis (analysis of the internal environment of the
organization), including identification and evaluation of
  Mission, vision, strategic objectives, strategies
 Major strengths and weaknesses
 Analyzing the organization's external and competitive environment,
including major opportunities and threats.
 Assessing firm’s intellectual assets.
• The process includes conducting Porter's Five Forces, SWOT, PESTEL, and value
chain management analyses and combining expertise in each industry.
Formulation: Once the analysis is done, the firm moves to the strategy formulation
stage to compete and outperform their rivals where
• The mission and objectives of the organization is revised as necessary,
• The plan to acquire the required resources is designed,
• Prioritization of the issues facing the business is done and finally
• The strategy is formulated accordingly.
• It is done for maximizing core competence and competitive advantages that use their
strengths, limit weaknesses, exploit opportunities, and defend against threats
simultaneously
Implementation:
• After formulation of the strategy, an implementation plan is set, which addressing
- What has to be done,
- How will it get done,
- Who will do it,
- When will it be done,
- Where will it be done, and
- Why are we doing it this way
• The employees of the organization are clearly made aware of their roles and
responsibilities.
• Designing implementation plan include
 Resources (financial, human, physical, technological)
 Obtaining & maintaining support for changes
 Reward systems
 Timing (especially sequencing & constraints)
 Culture and Organization structure
 Monitoring & control systems
 Leadership, managing change
• Then the implementation begins.

Vision
The vision statement describes the desired future position of the company.

Mission Statement and its Components

• Mission defines why the organization exists and focuses on the means by which the firm will
compete. It does not state an outcome.
• Nine Components:
1. Customers: Who are the firm’s customers?
2. Products or services: What are the firm’s major products or services?
3. Markets: Geographically, where does the firm compete?
4. Technology: Is the firm technologically current?
5. Survival, growth, and profitability—Is the firm committed to growth and financial
soundness?
6. Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the
firm?
7. Self-concept (distinctive competence): What is the firm’s major competitive advantage?
8. Public image: Is the firm responsive to social, community, and environmental concerns?
9. Employees: Are employees a valuable asset of the firm?
Developing Vision & Mission Statements

A widely used approach includes:

• Select several articles about these statements and ask all managers to read these as
background information.
• Ask managers themselves to prepare a vision and mission statement for the organization.
• A facilitator or committee of top managers should then merge these statements into a single
document and distribute the draft statements to all managers.
• A request for modifications, additions, and deletions is needed next, along with a meeting
to revise the document.

Vision and Mission of Bata Shoe Company

Firm Vision Review

Bata Shoe Company “To make great • It does answer the basic question:
shoes accessible to “What do we want to become”
everyone" • It also reveals in what type of
business it is engaged.
• The vision statement is short which
is good.
Firm Mission Review
Bata Shoe Mission: It has 8 components out of
Company
• To help people (1) to look and feel 9 important components of
good by continuously focusing on mission statement.
product quality (6,7) 1. Customers

• To become the customer's destination 2. Products or services

of choice by offering a personal 3. Markets
shopping (5) 4. Technology

• To attract and retain the best people 5. Survival, growth, and

(9) by showing great leadership, a profitability
passion for high standards, respect for 6. Philosophy
diversity and a commitment to create 7. Self-concept
exceptional opportunities for 8. Public image
professional growth (7). 9. Employees:

• To remain the most respected

footwear (2,5) Company by being It must include technology
socially responsible and ethical (8) in components in its mission
everything the does and a credit to statement.
every community in which it operates .
(3,5)