Strategy and the quest for competitive advantage

Unit 1

Without a Strategy organisation is like a ship without rudder -Joel Ross And Michael Kami Business Authors and Consultants

After studying this chapter, you should have a good understanding of: The definition of strategic management and its four key attributes Evolution of Concept Strategic Management The strategic management process and its three interrelated and principal activities

 $1 in Coca Cola in 1919 now worth $200,000 Why do some firms do spectacularly well, whilst others fail or achieve only modest growth?

What Is Strategy

Strategos

Strategy

Generalship

Evolution of strategy
There are 4 paradigm shifts 1930- Need of ad hoc policy making arose due to the nature of American Business firms of that period. (framing policies for managerial action) 1940- Due to increasing environmental changes planned policy formulation is replaced ad hoc policy making. (integration of functional area) 1960- Strategy paradigm due to increasing complexity and accelerating changes) 1980 Strategic management

 The initial focus of strategic management was on the intersection of two fieldsStrategic process of business firm and responsibilities of general management

 Thompson and Strickland say the approaches and methods of analysis of strategic management have not yet coalesced into a theory of how to manage a enterprise but they very definitely do represent a powerful way of thinking to resolve strategic issues.

Three questions that every manager think about-- Where are we now? Where do we want to go? How will we get there?

A companys strategy consist of the competitive moves and business approaches that managers employ to attract and please customers, compete successfully , grow the business, conduct operations and achieve targeted objectives.

 Singer India which has been associated with sewing machines , is entering the white goods market as part of its diversification strategy Birla TransAsia carpets is sick unit of Yash Birla Group> As it is faces with excessive manpower and high interest cost it is attempting a turnaround strategy by retrenching its employees , importing synthetic carpets and tiles and exporting to US market Winning strategies of McDonalds is its effective supply chain management

The main thrust of Wal-Marts strategy is what we call as win, play, or show.

Definition
A pattern in stream of decision and action- Henry Mintzberg.

The common thread among the organisations activities and product markets. that defines the essential nature of business that the organisation was or planned to be in future- Igor Ansoff

Key Attributes of Strategic Management:

Directs the organization toward overall goals and objectives.

Involves the inclusion of multiple stakeholders in decision making.

Needs to incorporate short-term and long-term perspectives.

Recognizes tradeoffs between efficiency and effectiveness.

Mintzerbgs 5-Ps of strategy

Plan Position Pattern Perspective Ploy

Levels of Strategies
Corporate office Corporate level Strategy

SBU 1

SBU 2

SBU 3

Business level Strategy

Finance

Marketing

Operations

HR

Information

Functional level Strategy

Strategic Decision Making

1. 2. 3. 4. 5. 6. Issues in Strategic Decision Making Criteria for decision Making Rationality in decision making Creativity in decision making Variability in decision making Person related factors in decision making Individual Versus group decision making

Definition- Strategic Management

A systematic approach to a major and increasingly important responsibility of general management to position and relate the firm to its environment in a way that will assure its continued success and make it secure from surprises. -Ansoff(1984)

Analyzing Goals and Objectives

Analyzing the External Environment Assessing Intellectual Capital

Analyzing the Internal Environment

Strategy Analysis

Formulating BusinessLevel Strategies

Implementation: Strategic Controls

Formulating Corporate-Level Strategies

Formulating International Strategies

Implementation: Organization Design

Strategic Leadership: Excellence, Ethics, and Change

Formulating Internet Strategies

Strategic Leadership: Fostering Entrepreneurship

Strategy Formulation

Strategy Implementation

Case Analysis

Comprehensive model of Strategic management process

Establising Strategic Intent
Vision, mission, Business definition and objective

Formulation of strategies
Environmental And organisational Appraisal

Evaluation
Project Procedural Resource Allocation Structural Behavioral Functional Operational

Implementation

Strategic Control

Working model of Strategic Management Process

Strategic intent SWOT Analysis Strategic Alternatives Strategic Analysis and choice Strategy Impleme -ntation

Strategic Evaluation

Strategic Control