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Management
Strategic Management
Strategic management is a process that
Types of Strategies
A Large
Company
Corp
Level
Division Level
Functional Level
Operational Level
Develop
Develop
vision
vision and
and
mission
mission
statement
statement I
s
s
n
t
e
r
n
a
l
A
u
d
i
t
Establish
Establish
long
long term
term
objectives
objectives
Generate
Generate ,,
Evaluate
Evaluate
and
and select
select
strategies
strategies
Implement
Implement
StrategiesStrategiesManagem
Managem
ent
ent issues
issues
Implement
Implement
StrategiesStrategiesMarketing
Marketing
,Finance
,Finance
,Accountin
,Accountin
g
g ,R&D
,R&D
Measure
Measure
and
and
Evaluate
Evaluate
Strategic Management
Model
Scanning
Where are we now?
Strategy Formulation
Where do we want to be?
Strategy Implementation
How do we get there?
Measurement/Performance
How do we measure our progress?
1-14
Environment
al Variables
1-15
Strategic
DecisionMaking Process
1-16
Strategic Management
Model
Strategy Formulation
Where do we want to be?
Vision
Mission
Values
Goals
Objectives
External Assessment
External strategic management audit is sometimes referred to the
External Environment(I/O)
Economic Forces
Social ,cultural ,demographic and natural
environment forces
Technological forces
Competitive forces
Competitive Analysis: Porter Five forces Model
Economic Forces
Economic factors have direct impact on the potential
attractiveness of various strategies. They include factors like:
Inflation rates,
Interest rates,
Availability of credit ,
Government policies including the monetary and fiscal
policies
GDP of the economy
Propensity of people to spend
Budgets
Consumption patterns
stock market trends
Global Forces
Have huge impact on the existence and growth
trajectory for the organization
Eg
OPEC
EU
PACIFIC RIM
NAFTA
Emerging Economies China-India -Brazil
Technological forces
Technological forces represent the major
Vision Statement
Any statement which answers the question what
is our business?
It is an enduring statement of purpose that
distinguishes one organization from the other
similar enterprise while the mission statement is
the declaration of an organization reasons of being
The main purpose of the vision statement is to
outline the :dream state of the business.
Sometimes it is called a creed statement ,a
statement of purpose, beliefs business principles
or a statement defining the business
Vision statement
examples:
A car in every garage(Ford)
To be happiest place on earth(Disneyland)
To be worlds best quick service restaurant(Mc
Donald)
We save people money so they can live
better (Walmart)
Apple Stay foolish ,stay hungry
Marriott Hotel "To be the #1 hospitality
company in the world
Benefits of a Vision:
It creates a common identity and shared sence of
purpose.
They symbolize competitiveness, originality and
uniqueness.
They foster risk taking and experimentation and
long term thinking .
It clarifies and crystallizes the senior views about
the company long term decisions
Helps the organization to prepare for the future
It represents organization integrity and unity.
Process of vision
statement
Well
conceived
vision
Core
Ideology
Envisioned
Future
Core
values/purpo
se
Long term
audacious
goal
Mission Statement
A Mission Statement describes how your business is going to
Examples
Microsoft : Mission
At Microsoft, our mission is to enable people and
businesses throughout the world to realize their full
potential.
Nike:The mission statement of Nike is: To bring
inspiration and innovation to every athlete* in the world.
*If you have a body, you are an athlete.
KFC :To sell food in a fast, friendly environment that
appeals to price conscious, health-minded consumers.
Walt Disney Walt Disney's vision, or mission
statement, is "to be one of the world's leading producers
and providers of entertainment and information
8.Mc Donalds:
To provide the fast food customer food prepared in
the same high-quality manner world-wide that is
tasty, reasonably-priced & delivered consistently
in a low-key dcor and friendly atmosphere.
9.Pfizer Pharmaceuticals mission statement:
"We dedicate ourselves to humanity's quest for
longer, healthier, happier lives through innovation
in pharmaceutical, consumer and animal health
products".
Mintzberg s 5Ps of
Strategy
Management expert, Henry Mintzberg, argued that it is difficult to get
strategy right. To help us think about it in more depth, he developed
his 5 Ps of Strategy five different definitions of (or approaches to)
developing strategy. Each of the 5 Ps is a different approach to
strategy. They are:
Plan.
Ploy.
Pattern.
Position.
Perspective.
By understanding each P, we can develop a robust business
strategy that takes full advantage of your organization's strengths and
capabilities.
Both Mintzberg &Whittington s Ps are excellent tools for analysing and
evaluating strategies.
Strategy as Ploy
Mintzberg says that getting the better of competitors,
Strategy as Pattern
Strategic plans and ploys are both deliberate exercises. Sometimes,
Strategy as Position
"Position" is another way to define strategy that is, how you
Strategy as Perspective
The Strategy is a perspective - its content consisting not just of a chosen position, but of
an ingrained way of perceiving the world. Strategy in this respect is to the organisation
what personality is to the individual. What is of key importance is that strategy is a
perspective shared by members of an organisation, through their intentions and / or by
their actions. In effect, when we talk of strategy in this context, we are entering the realm
of the collective mind - individuals united by common thinking and / or behaviour.
This is the view that often a strategy can be a way that an organisation views the
world.
Choices an organization makes about its strategy rely heavily on its culture just as
patterns of behavior can emerge as strategy, patterns of thinking will shape an
organization's perspective, and the things that it is able to do well.
For instance, an organization that encourages risk-taking and innovation from employees
might focus on coming up with innovative products as the main thrust behind its strategy.
By contrast, an organization that emphasizes the reliable processing of data may follow a
strategy of offering these services to other organizations under outsourcing arrangements.
To get an insight into organization's perspective, use cultural analysis tools like
theCultural Web , Deal and kennedy Cultural Web and the Congruence model
Actions to take /
Dos
Use this model
where there are at
least three
competitors in the
market
Consider the
impact that
government has or
may have on the
industry
Consider the
industry lifecycle
stage earlier
stages will be more
turbulent
Consider the
dynamic/changing
characteristics of
the industry
Actions to Avoid /
Don'ts
In practice:
Porter's Five Forces of Competitive Position
Analysis
http://
www.slideshare.net/paragchaubey/enron-scanda
l
Apple case and analysis:
http://
strategicplanning13.weebly.com/mission-and-obj
ectives.html