Strategic Management

1. STRATEGIC
MANAGEMENT:
INDIAN GLOBAL
CONTEXT

2. INTRODUCTION TO STRATEGIC
PLANNING

3.  Corporate Strategic Planning- Mission &
Vision of a Firm – Development,
maintananace & Role of the leader-
Hierarchial Levels of Planning- Strategic
Planning Process- Strategic Management
Practice in India- Competitive advantage of
nations & its implications on Indian
Business.

4.  The term ‘strategy’ comes from the greek word ‘strategos’ which
means ‘military general’(generalship) that combines ‘stratus’(the
army) & ‘ago’(to lead).
 The word ‘strategy’literally means the ‘art of the general’.
 Strategy is a general plan to achieve one or more long term or
overall goals under conditions of uncertainity.
 Strategy is an action that managers take to attain one or more of
the organization’s goals.
 According to Alfred D Chandler, “Strategy is the determination of
the basic long term purpose and objectives of an enterprise and
the adoption of courses of action and allocation of resources
necessary for carryingout these goals.”
 According to William F Glueck “Strategy is a unified,
comprehensiveand integrated plan designed to assure that the
basic objectives of the enterprise are achieved”

5.  GOALS
Long term goals.
 SCOPE
Kind of products, markers & areas of activity.
.COMPETITIVE ADVANTAGE
A firm performs an activity that is different from its
rivals.
.LOGIC
Tool to distinguish between true & false,
logic is considered as science as well as the art of
reasoning.

6.  Provide Direction & Action plans.
 Identify Trends & Opportunities.
 Define Accountabilities.
 Improve Communication.
 Allocation of Resources.
 Framework for Decision Making.
 Competitive Advantage.

7.  S.M involves the analysis of internal
capabilities and external environment of a firm
inorder to use the resources efficiently and
effectively to meet organisational objectives.
 According to Lloyd L Byars ,”Strategic
Management is concerned with making
decisions about organization’s future direction
and implementing those decisions.”

8.  Strategic Issues warrant Top Management
Decisions.
 Strategic issues involve the allocation of large
amount of resources.
 Strategic issues are likely to have impinging
impact on the long term prosperity of the firm.
 Strategic issues are future oriented.
 Strategic issues have consequences of multi
business.
 Strategic issues warrant due weightage to firm’s
external environment.
 Strategic Management is a process.
 Strategic management stresses both Efficiency
& Effectiveness.

9.  Rapidly changing business
environment.
 Establishes Guidelines.
 Systematize decision.
 Research & Development.
 Resource Allocation.
 Severe competition among market
players.
 Enhanced Technologies.
 Profit Motive.

10.  SM process consists of 4 phases.
 1.Strategic Intent.
 2.Strategy Formulation.
 3. Strategy Implementation.
 4. Strategic Evaluation.

11.  Vision – states what the organization wishes to
achieve in the long run.
 Mission – relates the organization to the society.
 Business Definition – explains the businesses of the
organization in terms of customer needs, customer
groups and alternative technologies.
 Business Model – clarifies how the organization
creates revenue.
 Objectives – states what is to be achieved in a given
time period. Objectives serves as yardsticks &
benchmarks for measuring organisational performance.

12.  Environmental & Organisational Appraisal –
Deals with identifying the opportunities & Threats
and Strenghts & Weaknesses of the
organization.(SWOT Analysis).
 Corporate level Strategies – relate to the strategic
decisions regarding the management of portfolio
of business.
 Business level Strategies – aim at developing a
competitive advantage in the individual business
that the company has in its portfolio.
 Strategic Analysis & choice strategic plan- the
end result of this set of elements is a strategic plan
to be implemented.

13.  Project Implementation.
 Procedural Implementation.
 Resource Allocation Implementation.
 Structural Implementation.
 Behavioural Implementation.
 Functional & Procedural Implementation.

14.  The last phase of SM appraises the
implementation of strategies & measures
organisational performance.
 The feedback from SE is meant to exercise
strategic control over the SM Process.

15.  Strategic decisions are Futurustic.
 Strategies have multi-functional & multi business
effect.
 Strategies are defined based on study of
environment.
 Allocation of resources & improve co-ordination.
 Framework for operational planning.
 Clarity in direction of activities.
 Increase organisational effectiveness.
 Personnel Satisfaction.

16.  Lack of Accuracy
 Danger to Rigidity
 Internal Resistance
 Difficult Exercise
 Costly Exercise
 Ineffective to overcome Current Crises
 Complex & Dynamic Environment
 Inadequate Appreciation of Strategic
Management.
 Limitations in Implementation

17.  SM Practices in India is a way of guiding the long term
future of enterprises.
 The essential component of SM is Process Evaluation,
is itself a sophisticated re-statement of Problem
solving.
 After the economic liberalisation announced in India in
1991, SM has gained greater relevance.
 The companies owned by domestic promoters
,investors, institutions & govt have shared the Indian
context in the past & will do so in the future.
 The Economic & Regulatory framework & the socio-
cultural environment had a considerable impact on the
path of evolution of Indian Companies till now.

18. The environmental changes that have increased the relevance
of Strategic Management:
 The abolition of public sector monopoly or dominanace in a
number of industries enourmously increased business
opportunities.
 The delicensing has removed not only an important entry &
growth barrier but also a consumption barrier.
 The liberalisation of policy towards foreign capital &
technology ,imports & accessing foreign capital markets
provides companies opportunities for enhancing their
strength to exploit the opportunities.
 The liberalisation in other countries , the expanding foreign
markets, the growing competition in India , the new policy
environment etc increase the importance of foreign markets
& SM.

19. MEANING & DEFINITION OF CSP
 CSP is a systematic process of determining the goals to be achieved in the
forseeable future .
 CSP is the managerial process of developing & monitoring & maintaining viable
fit between the organisation’s objectives,skills & resources & its changing
opportunities.
 The aim of strategic planning is to shape the company’s businesses, products,
services & messages so that they achieve targeted profits & growth.
 A good SP Process shares the “vision” of the organization with the employees &
creates a strong organisational culture.
 The strategic plan gives shape to the philosophy & culture of the organization.
 According to Peter Drucker “CSP is the continuous process of making risk
taking decisions systematically and with the greatest knowledge of their
futurity-organizing efforts needed to carry out these decisions & measuring the

20.  Management’s fundamental assumptions about
the future economic, technological & competitive
environments.
 Setting of goals to be achieved within a specified
time frame.
 Performance of SWOT Analysis.
 Selecting main & alternative strategies to achieve
the goals.
 Formulating, implementing & monitoring the
operational or tactical plans to achieve interim
objectives.

21.  Serves as a route map for the organization.
 Lends a framework for systematic handling of
corporate decisions.
 Lays down growth objectives of the firm & also
provides strategies needed to achieve them.
 Ensures that the firm’s businesses, products &
markets are chosen wisely.
 Ensures the best utilisation of the firm’s resources
among the product-market opportunities.
 Provides the best possible fit between the firm &
the external environment.

22.  Increasing Rate of Technological Change.
 Long – term business plan orientation.
 Increasing complexity of external environment.
 Uncertainity & Change.
 Focus attention on objectives .
 Increase organisational Effectiveness.
 Meet the challenges.
 Provides better basis for making judgements.
 Continuous process.

23.  Corporate Level Strategy
 Business Level Strategy
 Functional Level Strategy

24.  Strategy at the corporate level is designated as
Corporate Strategy.
 CLS is the top management’s plan to direct &
run the organization as a whole.
 CLS represents the pattern of entrepreneurial
actions & intents underlying the organization’s
strategic interests in different businesses,
divisions, product lines, technologies, customer
groups & customer needs.

25.  Ensures Right Environmental Fit.
 Helps to fill the firm’s strategic planning gap,
& selecting the appropriate strategic route.
 Helps to build competitive advantages.

26.  Product-Market Posture.
 Competitive Advantage
 Corporate strategy of a firm can be stated in
concrete & precise terms.
 Actual Task of formulating the Strategy.

27.  Business strategy is the managerial plan for
directing & running a particular business unit.
 The fundamental concept in BLS is to identify the
discrete independent product/market segments
served by an organization.
eg; Reliance Industries
 BLS deals with the issues of organization’s intend
to compete in a specific business, key functional
areas which contributes to the success of the
business & the allocation of resources within the
business unit.

28.  Functional strategy is the plan to manage a
principal subordinate activity within a business.
 There is a functional area support strategy for the
production of business, marketing, finance, human
resources, R & D etc for every major support of the
whole business.
 Responsibility for formulating functional strategy
lies with those , who are charged with managing
the functional area.
 The functional managers establish performance
objectives& strategies that will promote
accomplishment of business level objective &
strategy.

29. CHARACTERISTI
C / BASIS
CORPORATE
LEVEL
BUSINESS UNIT
LEVEL
FUNCTIONAL
LEVEL
NATURE Conceptual Conceptual but
related to
business
Totally
operational
MEASURABILIT
Y
Non-measurable Measurable to
some extent
Quantifiable
FREQUENCY Large spans 5-10
yrs
Periodic Annually
ADAPTABILITY
CHARACTER
Poor
Innovative &
Creative
Average
Action- oriented
High
Totally Action -
oriented
RISK High Moderate Low
PROFIT Large Moderate Low

30.  The Strategic Planning process
consists of developing the
company’s mission, objectives &
goals, business portfolio &
functional plans.
 It consists of developing a sound
mission statement, market-
oriented, feasible, motivating &
specific in the direction of the firm
& its best opportunities.

31.  Establishing Verifiable Goals or Set of goals to be achieved.
 Establishing Planning Premises.
1. Internal & External Premises.
Internal premises include sales forecasts, policies & programs of the organization , capital
investment, managerial competency, HR Skills & other organisational resources.
External premises include general business & economic environment , technological changes,
govt policies & regulations, population growth, political stability & social factors.
2. Tangible & Intangible Premises.
The premises which are quantifiable are called Tangible premises. Eg: population growth,
product demand, past sales, capital invested etc.
The premises which cannot be measured quantitatively are called Intangible premises. Eg:
political factors, social factors, technological factors, natural factors etc.
3. Controllable & Non-controllable Premises
Contrallable premises include company’s labour policy, investment policy, advertising
policy, level of technology, availability of financial resources, quality of human resouces etc.
Uncontrollable Premises include strikes, lockouts, Wars, Natural calamities, emergency
situations etc.

32.  Deciding the Planning period.
The plan of the period should be based on the nature
of the business & the vision & mission of the company.
 Finding Alternative Courses of Action.
eg: availability of altrnative technologies,
alternative sources of capital, highly skilled employees
board etc.
 Evaluating the alternative plans& selecting a course of
action.(SWOT Analysis)
 Developing Derivative Plans.
 Implementation of the Business Plans.
 Measuring & Controlling.

33.  Framework for developing the operating
Budget.
 Management Development Tool.
 Mechanism to Force Managers to think Long
Term.
 Help in alligning managers with Corporate
Strategies.
 Framework for Short run Actions.

34.  Managements fail to Monitor.
 Reluctant to Formulate Objectives.
 Afraid of Failure.
 Fail to Integrate plans.
 Unskilled Managers.
 Mislead Forecast.
 Inefficient Planning.
 Inter-group Conflicts.

35. SM CSP
1. It is the process which deals with
the fundamental organisational
renewal & growth.
1. It is the process of long range
planning that focuses on the
organization as a whole.
2. It is about Strategy. 2. It is not about Strategy. It is about
planning after the strategies are made.
3. It is a substitute for the exercise of
judgement by leadership.
3. It is not a substitute for the exercise
of judgement by leadership.
4. It is about Strategic thinking. 4. It is about System thinking.
5. It is a management Process. 5. It is a Planning Process.
6. It is disciplined & flexible. 6. It is disciplined & rigid.
7. It focuses on the people. 7. It focuses on the Plan.
8. It involves in present environment,
& the decisions are made in the
present.
8. It involves anticipating the future
environment, but the decisions are
made in present.

36.  The concept of Strategic Intent was popularised by
Gary Hamel & C.K. Prahalad.
 The Strategic Intent of the firm represents the
organization’s beliefs about its state of future.
 Strategic Intent is the guiding principle of a
business’s long –term strategy.
 S.I defines the company’s objectives & how it plans
to achieve them.
 It is important to realize that achieving the narrow
intentions is a necessary condition towards
achieving the broader intentions , and therefore
there needs to be a careful alignment between
these various levels of intentions.

37. VISION
MISSIO
N
BUSINE
SS
DEFINIT
ION
GOALS
OBJECT
IVES

38.  Vision is what the firm or a person would
ultimately like to become.
 The vision of the firm is the formulation of where
the firm wants to be ultimately & what it wants to
achieve.
 According to Kotter , “ Vision is a description of
something (an organization, corporate culture , a
business , a technology or an activity) in the future.
 According to Miller & Dess “ Vision is the category
of intentions that are broad , all inclusive , and
forward thinking.”

39.  Mental Exercise.
 Selects the Target Market.
 Constitutes Organization’s Objectives & Focus.
 Reflects Future Plans.
 Dynamic & Flexible.
 Comprehensive.
 Time–Bound.
 Anticipates Future.
 Simple & Concise.
 Effective.
 Pervasive.
 Objective.
 Well – Defined.
 Orientation.

40.  1. Understand the Organization
 2.Conduct a Vision Audit.
 3.Target the Vision.
 4.Set the Vision Context.
 5.Develop Future Scenarios.
 6.Generate Alternative Visions.
 7. Choose the Final Vision.

41.  Learn everything about organisation.
 Bring the organisation’s major Constituencies
into the visioning process.
 Keep an open mind as to explore the options
for a new vision.
 Encourage Input from Colleagues &
Subordinates.
 Understand & Appreciate the existing Vision.

42.  Defining Vision.
 Formulating the Vision.
a. Gather Information.
b. Process the Information.
c. Conceptualise the vision.
d. Evaluate the Vision.
 Promoting Commitment to the Vision.
 Implementation of the Vision.
a. Structuring
b. Selecting, training & acculturating employees.
c. Motivating Employees.
d.Managing Information.
e. Team Building .
f. Promoting Change.

43.  Good visions are inspiring & exhilarating.
 Good visions help in the creation of a common
identity and a shared sense of purpose.
 Good visions are competitive, original &
unique.
 Good visions foster risk-taking &
experimentation.
 Good visions foster long-term thinking.
 Good visions represents integrity.

44.  Mission is what an organization is & why it exists.
 Mission is “a statement which defines the role that
an organization plays in a society.”
 According to Thompson , Mission is the essential
purpose of the organization, concerni ng
particularly why it is in existence , the nature of the
business it is in, and the customers it seeks to serve
& satisfy.”
 According to Hunger & Wheelen ,”Mission is the
purpose or reason for the organization’s
existence.”

45.  Feasibility.
 Precision.
 Clarity.
 Motivation.
 Distinctiveness.
 Reflection of major strategy.
 Formulating a Business Mission Statement.

46.  Gives a unified direction to the company’s growth.
 Allocation of resources is based on the mission
statement.
 Tends to buildup a professional climate for
maintananace & improvement of the company’s
status in any desired area.
 Outlines a framework for organisational planning ,
assigning definite tasks & responsibilities to each
business unit.
 Helps to set-up & develops a control mechanism
for achievement of Objectives.
 Helps to prevent people falling into an Activity
trap.

47.  Customers.
 Products /Services.
 Markets.
 Technology.
 Concern for Survival , Growth, & Profitability.
 Philosophy.
 Self-Concept.
 Concern for Public Image.
 Concern for Employees.

48. Key
decision-
maker’s
policy(Ph
ilosophy)
Visionary
long-term
concept
Organisa
tional
Mission

49.  Making a commitment to the people & to the
mission they lead.
 Taking responsibility for the accomplishment
of the mission .
 Creating a vision & a strategy for the company.
 Communicating the Vision/Strategy.
 Effective leadership makes a business
organization successful.

50.  A Business Definition is a clear statement of the
business the firm is engaged in or is planning to
enter.
 B.D prescribes the boundaries of firm’s business,
products & markets.
 Clarifying the mission and defining the business
are the starting point of strategic planning.
 B.D provides the blueprint for choice of product
market & changes thereof
 B.D Serves as the reference point for product
market choices & corporate strategy of the firm.

51.  Goals are the short-term objectives whose
attainment is desired within a specified time
period covered by the plan.
 Goals provide the fundamental standard for
measuring performance to attain the end
objective.
 Goals are the quantified objectives expressed in
a specific dimension.

52.  Goal Addresses.
 Realistic & Challenging.
 Specific Time Period.

53.  Official Goals.
 Operative Goals.
 Operational Goals.

54.  Objectives refer to the ultimate end results which are to
be accomplished by the overeall plan over a specified
period of time.
 Objectives represents the desired results the
organization wishes to attain through its operations.
 Organisational objectives are defined as ends which the
organization seeks to achieve by its existence and
operation.
 Objectives indicate specific sphere of aims ,activities
and accomplishments.
 According to H.Igor Ansoff, “Objectives are decision
rules which enable management to guide & measure
the firm’s performance towards its purpose.”

55.  Objectives should be understandable.
 Objectives should be concrete & specific.
 Objectives should be related to a time frame.
 Objectives should be measurable & controllable.
 Objectives should be challenging.
 Different Objectives should correlate with each
other.
 Objectives should be set within constraints.
 Objectives have Hierarchy.
 Social sanction.
 Organisational Objectives can be changed.

56. Basis of
Difference
Goals Objectives
Nature/ Purpose Goals establish the
overall desired
outcome/vision.
Objectives outline the
actions or steps that are
necessary to achieve the
goal.
Time Frame Goals are timeless,
enduring & unending.
Objectives are temporal,
time phased, and
intended by subsequent
objectives.
Specificity Goals are stated in broad
general terms dealing
with matters of image,
style & perception.
Objectives are much
more specific.
Focus Goals focus on external
environment of the
organization.
Objectives focus on
internal environment of
the organization.

57.  Primary objectives
 Secondary objectives
 Short-Term objectives
 Long-Term objectives
 Equilibrium objectives
 Improvement objectives
 Individual objectives
 Social objectives
 Performance objectives
a.Routine objectives
b.Innovative objectives
c. Problem-Solving objectives.
 Official goals.

58.  Defining an organization
 Directions for decision making
 Performance standards
 Basis for Decentralisation
 Integrating organization, Group & Individual.

59.  Serve the process of revival
 Ensure growth
 Act as base for business decisions
 Provide base for decentralisation
 Defines the organization’s relationship with its
environment.
 Helps an organization to pursue its vision & mission.
 Provide the standards for Performance Appraisal
 Legitimacy
 Direction
 Co-ordination
 Benchmarks for success
 Motivation

60.  Vision & Value system of Top management
 Objectives of the past
 External environment & the power relations.
 Internal resources & power relations.

61.  Specificity
 Multiplicity
 Periodicity
 Verifiability
 Reality
 Quality

62.  Forces in the Environment
 Realities of enterprise’s resources & internal
power relationships.
 Value system of the top executive
 Awareness by Top management.

63.  S.L is the ability to influence others to
voluntarily make decisions that enhance
prospects for the organization’s long term
success.
 S.L establishes the firm’s direction by
developing & communicating a vision of the
future and inspires organization members to
move in that direction.
 S.L is the process of transforming an
organization with the help of its people so as to
put it in a unique position.

64.  Deals with vision-keeping , the mission insight
& with effectiveness & results.
 Emphasizes transformational aspect .
 Inspires & motivates people to work together
with a commom vision & purpose.
 Has external focus rather than internal focus.

65.  Strategic Vision
 Pragmatism
 Structure & policies
 Communication network
 Culture
 Managing change
a. Recognize the need for change
b. Create a shared Vision
c. Institutionalize the Change.
 Governance & Management.

66.  Share Privilege Information
 Deal consciously with superficiality
 Sharing the job.
 See the comprehensive picture in terms of its
details.
 Recognizing the influence inherent in general
manager positions & using it effectively.
 Dealing with coalitions
 Using technical help effectively.

67.  The home nation influences the ability of its
firms to succeed in particular industries, with
the success or failure of thousands of struggles
in many industries determining the state of a
nation’s economy & its ability to progress.
 Nations do not compete in the market place –
business firms do, and the performance of
individual companies in particular industries
in where C.A is either won or lost.

68.  It is also called Porter’s Diamond Model.
 Michael Porter proposed the theory of Competitive
Advantage in 1985.
 The Porter Diamond Theory of Advantage , is a theory
that describes the competitive advantage that nations
or groups possess based on factors available to them.
 The theory explains how governments can act to
improve a country’s position in a globally competitive
economic environment.
 The C.A Theory suggests that states & businesses
should pursue policies that create high-quality goods
to sell at high prices in the market.
 Porter emphasizes ‘productivity growth’as the focus of
national strategies.

69. NATIONAL
COMPETITI
VE
ADVANTAG
E
Firm
strategy
structur
e &
Rivalry
Demand
Conditio
ns
Related &
Supportin
g
Industries
Factor
conditi
ons

70.  1. Factor Conditions : Skilled labour,
infrastructure, factors of production ,location etc..
 2. Demand Conditions: The nature of home
demand for the industry’s product/services.
 3. Related & Supporting Industries: The presence
of international competitiveness in
supplier/related industries.
 4. Firm strategy structure & Rivalry: The
conditions how companies are created, organized ,
managed , and the nature of domestic rivalry in
the nation.

71. DRIVER OF
DEVELOPMENT
SOURCE OF
COMPETITIVE
ADVANTAGE
EXAMPLES
Factor Conditions Basic Factors of
Production(natural
resources, geographical
location, unskilled
labour etc..)
Canada, Australia,
Singapore, South Korea
before 1980.
Investment Investment in capital
equipment & transfer of
technology from
overseas.
Japan during 1960’s ,
South Korea during
1980’s.
Innovation All four determinants of
national advantage
interact to drive the
creation of new
technology.
Japan since late 1980’s,
Italy since early 1970’s,
Sweden & Germany
during the post war
period.

72.  There is no analysis of business. It’s purely external.
 There are no actions out of this framework.
 It’s a short term analysis where the information can
rapidly change.
 It’s a high level view on the market place.
 This model/theory doesn’t provide any quantitative
analysis of the impact of each force.
 It does not account for technological change.
 It doesnot consider Cultural Factors.
 It does not consider Social Media.
 It does not consider Customer Loyalty.
 It does not consider Rivalries between companies.

73.  1. Moving toward Comparative to
Competitiveness.
 2. Approaching towards Global Market.
 3. Adopting different Strategies for Overseas
Market.
 4. Realization of customer to customer needs.
 5. Requirements are enlarged.
 6. Needed more focused Leadership.
 7. Address multiple issues in order to sustain.
 8.Dealing with rising Competition.