C o n f i d e n t i a l

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Program : MBA
Semester : II
Subject Code : MB0052
Subject Name : Strategic Management
and Business Policy
Unit Number : 1
Unit Title : Understanding Corporate Strategy
Lecture Number : 1
Lecture Title : Understanding Corporate Strategy
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Understanding Corporate Strategy
Objectives :
Explain strategy, its nature and levels of strategy.
Discuss the concept of strategic window.
Describe corporate strategy in different types of organizations.
Explain why some organizations do not undertake strategic
management
List ten principles of strategy.
In this unit, we will discuss corporate strategy, its
definition and nature, as well as its levels in an organization.
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Unit-1 Understanding Corporate Strategy
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Lecture Outline
Introduction
What is Strategy?
Strategic Window
Corporate Strategy in Different Types of Organizations
Lack of Strategic Management in Some Companies
Ten Principles of Strategy
Summary
Check Your Learning
Activity
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Unit-1 Understanding Corporate Strategy
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Introduction
Any discussion on business and management today is incomplete
without discussing two major forces: one is competition, and
the other is strategy.
Strategy is a concept that is used universally but understood
differently, and, therefore, defined differently. In fact, strategy as
a concept is better described and more easily put into practice
than defined.
Most companies recognize that strategy is central to business and
management. It is also recognized that it is strategy that makes
the difference between success and failure of many companies
and businesses.
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Unit-1 Understanding Corporate Strategy
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What is Strategy?
The concept and practice of strategy and planning started in the military,
and, over time, it entered business and management.
The determination of the basic long-term goals and objectives of an
enterprise and the adoption of the courses of action and the allocation of
resources necessary for carrying out these goals -Chandler (1962)
The common thread among the organizations activities and product-
markets ... that defines the essential nature of business that the
organization was or planned to be in future - Ansoff (1965)
Developing and communicating the companys unique position, making
trade-offs, and, forging fit among activities - Porter (1996)
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Strategic Window
A strategic window focuses attention on the fact that there are only limited
periods during which the Fit between the key requirements of a market
and the particular competencies of a firm competing in the market is at an
optimum Disinvestment should be contemplated also .
Here, we are referring to strategic windows, the concept which was
introduced by Abell (1978).
There are only limited periods during which the fit or the match between
the key requirements of a market and the particular competencies of the
firm are at the optimum.
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Unit-1 Understanding Corporate Strategy
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Corporate Strategy in Different
Types of Organizations
Different types of organizations will be different, primarily because of the
nature of their operations and organizational objectives and priorities.
In large businesses or companieswhether in the private sector, public
sector or multinationalsthe situation is entirely different. Both the internal
and the external environment and the organizational objectives and
priorities are different.
Multinationals have a greater focus on growth and development, and also
diversification in terms of both products and markets. This is necessary to
remain internationally competitive and sustain their global presence.
In public sector companies, objectives and priorities can be quite different
from those in the private sector. Generation of employment and maximizing
output may be more important objectives than maximizing profit.
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Lack of Strategic Management in
Some Companies
David (2003) has mentioned various reasons for poor or no strategic
planning and management by companies. These are :
Poor reward structure Evasive
Content with success
Overconfidence
Fire-fighting
Waste of time
Too expensive
Previous bad experience
Honest difference of opinion
Self-interest
Fear of the unknown
Fear of failure
Suspicion

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Ten Principles of Strategy
Duro and Standstrom3 have mentioned about 10 principles of
strategy. These are given in the following:
Set a goal and stick to it
Maintain good morale (good leadership is aprecondition for this).
Accumulate forces
Act aggressively.
Aim for surprise.
Make sure your own forces are secure.
Use your forces economically.
Coordination (either through chain of command or through cooperation).
Try to be adaptable.
Simplicity (clear and simple plans and concise orders/instructions)




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Summary
Strategy, as mostly used or understood, is an action plan or, a
scheme of action or design of execution of a plan.
Business strategy is formulated based on the assumption of
competition, military strategy is based on the assumption of
conflict.
In single business companies, corporate-level strategies and
business unit-level strategies may not be much different. But, for
multi-business companies (like Unilever or ITC), strategies at two
levels would be quite distinct. Functional-level strategies,
however, would be common to both types of companies.
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Check Your Learning
1. What is strategy? Mention the different definitions of strategy.
Ans: A plan, method, or series of manoeuvres or stratagems for
obtaining a specific goal or result.
The determination of the basic long-term goals and objectives of an
enterprise and the adoption of the courses of action and the allocation of
resources necessary for carrying out these goals -Chandler (1962)
The common thread among the organizations activities and product-
markets ... that defines the essential nature of business that the
organization was or planned to be in future - Ansoff (1965)

2. What is Strategic window?
Ans: Short time period between specific events during
which there is an opportunity to capitalize on a market

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Activity
Modi Xeroxs innovative thinking has given birth to the companys
new micro marketing plan. Explain.
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