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Benefits of Strategic
Management
External Environment
Optimal Usage of Resources
Benefits of Strategic
Management
Understanding Market
Dynamics
10
Understanding Customer
Amity Business School
Needs
Present Customer Needs
Demand-Supply Gap
Hidden/Unexposed/Untapped Customer
Needs
11
Industry
Attractiveness
Understanding of Customer Needs
Unexposed or Untapped
Industry Attractiveness
Analyze Companys
Resources
Analyze Companys
Competitive Position
Identifying
Competitive Position
Strategic
Management
Strategy Formulation
Strategy
Implementation
Strategy Evaluation
and Control
13
What is Strategy?
14
Strategy
Where We Are?
Where Do We Want to Reach?
By When Do We Want to Reach There?
How Will We Reach There?
15
What is Strategy
Organizational Analysis
or Internal Scanning
Industry Attractiveness
Identifying
Competitive Position
Strategic
Management
Strategy Formulation
Strategy
Implementation
Strategy Evaluation
and Control
17
Strategic ManagementAmity
Defined
Business School
The set of managerial decisions and actions that determines
the long-run performance of a corporation. It includes:
environmental scanning (internal & external)
strategy formulation
strategy implementation
evaluation and control
It focuses on integrating management, marketing,
finance/accounting, production/operations, research and
development, and computer information systems to achieve
organizational success.
Benefits of Strategic
Management
1-20
Benefits of Strategic
Management
1-21
Financial Benefits
1-22
Nonfinancial Benefits
Nonfinancial Benefits
Internal
Structure
Chain of Command
Culture
Beliefs, Expectations,
Values
Strategy
Formulation
Strategy
Implementation
Evaluation
and Control
Mission
Reason for
existence
Objectives
What results
to
accomplish
by when
Strategies
Plan to
achieve the
mission &
objectives
Policies
Broad
guidelines for
decision
making
Programs
Activities
needed to
accomplish
a plan
Resources
Assets, Skills
Competencies,
Knowledge
Budgets
Cost of the
programs
Procedures
Sequence
of steps
needed to
do the job
Feedback/Learning
Process
to monitor
performance
and take
corrective
action
Performance
Environmental Scanning
Strategy Formulation
Amity Business School
Mission
Customers
Products and/or services
Location
Underlying philosophy
Management - Chapter 9
29
Objectives
Strategies
Corporate
Headquarters
Strategic
Business
Unit
Manufacturing
Finance
Strategic
Business
Unit
Marketing
Corporate
Strategy
Business
(Division
Level)
Strategy
Strategic
Business
Unit
Research
and
Development
Human
Resources
Functional
Strategy
Business strategy
How are we going to compete for customers in this
industry and market?
Functional strategy
How can we best utilize resources to implement
our business strategy?
Policies
Strategy Implementation
Amity Business School
Amity
Business School
Strategic Decision-Making
Process
3(b)
3(a)
Scan and
Assess
External
Environment:
Societal
Task
1(a)
Evaluate
Current
Performance
Results
1(b)
Examine and
Evaluate the
Current:
Mission
Objectives
Strategies
Policies
Analyze
External
Factors:
Opportunities
Threats
5(a)
Select
Strategic
Factors
(SWOT)
in Light of
Current
Situation
Review
Corporate
Governance:
Board of
Directors
Top Management
4(a)
5(b)
Review and
Revise as
Necessary:
Mission
Objectives
6(a)
Generate
and
Evaluate
Strategic
Alternatives
6(b)
Select
and
Recommend
Best
Alternative
8
Implement
Strategies:
Programs
Budgets
Procedures
Evaluate
and
Control
4(b)
Scan and
Assess
Internal
Environment:
Structure
Culture
Resources
Analyze
Internal
Factors:
Strengths
Weaknesses
Strategy
Formulation:
Steps 1 6
Evaluation
Strategy
and
Implementation
Control:
Step 7
Step 8
38
Strategic Intent
Strategic Intent
Strategic intent:
1. Is an expression of pragmatic, realistic, and beneficial goals
and objectives.
2. Provides a clear and sturdy framework upon which precise
strategic and tactical plans can be crafted.
3. Should be in harmony with the firm's vision and mission.
4. Should be appropriate to the realities of:
a) Environmental conditions
b) The firms specific set of corporate capabilities.
5. They may be expressed in terms of hierarchy of Strategic
Intent
Stretch, Leverage
and Fit
Strategic Mindsets
STRATEGIC FIT
MODEL
STRATEGIC INTENT
MODEL
Vision
Defining Vision
description of something in the future
mental perception of the kind of
environment
an
individual,
or
an
organization, aspires to create within a
broad time horizon and the underlying
conditions for the actualization of this
perception
Vision
Examples
vision
foster
risk-taking
and
experimentation.
Good vision help in the creation of a common
identity and a shared sense of purpose.
Good visions are competitive, original and unique.
Good visions represent integrity, they are truly
genuine and can be used for the benefit of people.
Vision Statement
A vision statement answers the question,
What will success look like?
The pursuit of this image of success is what
motivates people to work together.
Infosys
Vision To be a globally respected
corporation that provides best-ofbreed business solutions, leveraging
technology, delivered by best-inclass people."
VISION
Missio
n
Mission
Defining Mission
Characteristics
1. Feasible
2. Precise
3. Clear
4. Motivating
5. Distinctive
6. Indicates major components of strategy
with
the
organizations
purpose
and
Mission Statement
BSNL mission
To provide world class state of art technology
telecom services to its customers on demand
at competitive prices.
To provide world class telecom infrastructure
in its area of operation and to contribute to the
growth of countrys economy.
Formulating mission
1.
What
is
the
basic
purpose
of
your
organization?
2.What is unique about your organization?
3.What is in your company that will make it
stand out in a crowd?
4.Who are, and who should be, your principal
customers?
5.What are the basic beliefs, values and
philosophical priorities of your firm?
MISSION
Infosys
Mission
"To achieve our
objectives in an environment of
fairness, honesty, and courtesy
towards our clients, employees,
vendors and society at large."
Objectives
Objectives
Objectives represent a managerial commitment to
achieve specified results in a specified period, of
time. They clearly spell out the quantity and quality
of performance to be achieved, the time period,
the process and the person who is responsible for
the achievement of the objective.
Example Objectives
Characteristics
1.Objectives form a hierarchy
2.Objectives form a network
3.Multiplicity of objectives
4.Long and short range objectives
Areas of objectives
1.Markets
2.Productivity
3.Innovation
4.Product
5.Profitability
6.Financial resources
7.Physical facilities
8.Organization structure and activities
9.Manager performance and
development
10. Employee performance and attitude
11. Customer service
12. Social responsibility
Importance of objectives
Objectives of BSNL
National Plan Target of 500 million subscriber base
for the country by December 2010.
Broadband customers base of 20 million in the
country by 2010 as per Broadband policy 2004.
Balanced Scorecard
for Goal Setting
Financial
Customer
Internal Business
Learning and Growth
Goals
Goal
should
be
measurable,
quantitative,
Strategic Management
Process
85
Strategic Management
Process
Environment
Environmental
Scanning
Organizational Analysis
or Internal Scanning
Industry Attractiveness
Strategic
Management
Strategy Formulation
Strategy
Implementation
Strategy Evaluation
and Control
89
Factors to be Considered
Events
Trends
Issues
Expectations
90
External Environment
Analysis Methods
SWOT Analysis
PESTEL Analysis
Environmental Threat and Opportunity Profile
(ETOP)
Porters Five Forces Model
David Aakers Model of Market Analysis
Scenario Analysis
External Environment
Analysis
Economic Features
External Environment
Analysis
5-Forces Model
Competitive Forces
Threat of substitute
of products
Bargaining power of
suppliers
Rivalry among
current competitors
Bargaining power of
buyers
Threat of new
entrants
98
Threat of Substitutes
Powerful Suppliers
Powerful Buyers
Rivalry Intensity
Structure of Competition
Will be more if there are many small or equal sized
competitors
Rivalry is less if there is a clear market leader
103
Rivalry Intensity
Switching Cost
Less rivalry with increased switching cost
Strategic objectives
If competitors have aggressive growth strategies rivalry
is more intense
If competitors are merely milking profits in a mature
industry, rivalry is less
Exit Barriers
With high exit barriers from an industry, rivalry
increases.
104
External Environment
Analysis
External Environment
Analysis
Market Positions of
Competitors
Strategic Moves of
Competitors
External Environment
Analysis
112
Hospital
treatment
Treatment is carried out in the correct
manner
Patients are consulted and kept informed
114
Hospital
Auto Manufacturer
Auto Manufacturer
Product/service flexibility
Volume flexibility
Delivery flexibility
Hospital
Product/service flexibility
Volume flexibility
Delivery flexibility
117
Importance of
KSFs
Competitive Drivers
and PLC
Intro
Growth
Maturity
Decline
Customer
Innovators
Early
Adopters
Bulk of
market
Laggards
Competitors
None/Few
Increasing
Stable
Declining
Dominant
Drivers
Flexibility
Speed
Flexibility
Quality
Cost
Dependability
Cost
Qualifiers
Range
Quality
Quality
Range
Price
Quality
Dependable
Supply
Specifications
Specifications
Availability
Low Price
Dependable
Supply
Low Price
Order Winners
119
Industry Attractiveness
Economic Features
Competitive Forces
Industry
Attractiveness