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Strategic Management

Evolution of strategic management

Till the 1930s organisations were managed by ad hoc policy making. These organisations had a limited product portfolio and operated in a limited market space. As firms began to grow, there was a need to integrate functional areas. Hence functional integration replaced adhoc policy making Increasing complexity in the environment meant that firms could no longer manage by functional integration alone, there was a need to fundamentally relook at a business and its relation to the environment The concept of strategy arose in response to this need around the 1960s

Strategy-what is it?
Hambrick and Fredrickson in a paper in HBR (2001) define strategy as an integrated, overarching concept of how the business will achieve its objectives Strategy outlines the means by which a firm will create unique value for its customers and stakeholders It is the central, integrated, externally oriented concept of how a firm will achieve its objectives

Hambrick and Fredricksons model

Internal and external analysis

Arenas Vehicles Vision and Mission Goals and Objectives

Differentiators Staging Economic Logic Implementation

Kenichi Ohmae
Kenichi Ohmae (born February 21, 1943) is one of the world's leading business and corporate strategists. He is known as Mr. Strategy and has developed the 3C's Model. Successful business strategies, he says in "The Mind of the Strategist", do not come from rigorous analysis but from a thought process which is basically creative and intuitive rather than rational. The 3Cs model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account: A. The Corporation B. The Customer C. The Competitors Only by integrating these three Cs (Corporation, Customer, Competitors) in a strategic triangle, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three Cs or strategic triangle.

Igor Ansoff
Igor Ansoff (1918-July 14, 2002) born in Russia was an applied mathematician and business manager. He is known as the father of Strategic management. Ansoff felt that, in developing strategy, it was essential to systematically anticipate future environmental challenges to an organisation, and draw up appropriate strategic plans for responding to these challenges. Ansoff's decision classification became known as Strategy-Structure-Systems, or the 3S model.

What is strategy?- Michael Porter

Operational effectiveness is not strategy Strategy rests on unique activities- the essence of strategy is choosing to perform activities differently than rivals do A sustainable strategic position requires tradeoffs Fit drives both competitive advantage ans sustainability The core of managements role is strategy: defining a companys position, making trade offs, and forging fit amongst activities
What is strategy, Michael Porter, HBR- Nov-Dec 1996

Levels of strategy
Corporate Business unit level Functional level

Strategic management- a model

Establish strategic intent

Formulate strategy


Strategic evaluation

A. Establishing a strategic intent

Create and communicate a vision Design a mission statement Define the business Define the business model Set objectives

B.Formulate strategy
Perform environment appraisal Organisational appraisal Formulate corporate level strategies Formulate business level strategies Exercising strategic choice Prepare strategic plan

C. Implement
Activate strategies Design structure, systems and processes Manage behavioral implementation Manage functional implementation Operationalise

D. Evaluation and control

Evaluate performance Exercise strategic control Reformulate/ course correct