Professional Documents
Culture Documents
TEXT BOOKS
Thomas L. Wheelen, J.David Hunger and Krish Rangarajan, Strategic Management and Business policy,
Pearson Education., 2006
Charles W.L.Hill & Gareth R.Jones, Strategic Management Theory, An Integrated approach, Biztantra,
Wiley India, 2007.
Azhar Kazmi, Strategic Management & Business Policy, Tata McGraw Hill, Third Edition, 2008.
REFERENCES
Conceptual framework for strategic management, the Concept of Strategy and the Strategy Formation
Process Stakeholders in business Vision, Mission and Purpose Business definition, Objectives and
Goals - Corporate Governance and Social responsibility-case study.
Strategic management is not a box of tricks or a bundle of techniques. It is analytical thinking and commitment of
resources to action.
Peter Drucker
Definition:
The on-going process of formulating, implementing and controlling broad plans guide the
organizational in achieving the strategic goods given its internal and external environment.
1. On-going process:
Strategic management is a on-going process which is in existence through out the life of organization.
3. Strategic goals:
Strategic goals are those which are set by top management. The broad plans are made in achieving the goals.
Phase 1 - Basic financial planning: Seek better operational control by trying to meet budgets.
Phase 2 - Fore-cast based planning: Seeking more effective planning for growth by trying to predict the future
beyond next year.
Phase 3. Externally oriented planning (strategic planning): Seeking increasing responsiveness to markets and
competition by trying to think strategically.
Phase 4. Strategic management: Seeking a competitive advantage and a successful future by managing all
resources.
Phase 4 in the evolution of the strategic management includes a consideration of strategy implementation and
evaluation and control, in addition to the emphasis on the strategic planning in Phase 3.
General Electric, one of the pioneers of the strategic planning, led the transition from the strategic planning to
strategic management during the 1980s. By the 1990s, most corporations around the world had also begun the
conversion to strategic management.
It is generally long-range in nature, though it is valid for short-range situations also and has short-range
implications.
It is formulated at the top management level, though middle and lower level managers are associated in their
formulation and in designing sub-strategies.
It flows out of the goals and objectives of the enterprise and is meant to translate them into realities.
It is concerned with perceiving opportunities and threats and seizing initiatives to cope with them. It is also
concerned with deployment of limited organizational resources in the best possible manner.
It gives importance to combination, sequence, timing, direction and depth of various moves and action
initiatives taken by managers to handle environmental uncertainties and complexities.
It provides unified criteria for managers in function of decision making. BA9110 STRATEGIC
MANAGEMENT LT P C
3 0 0 3
External Environment - Porters Five Forces Model-Strategic Groups Competitive Changes during Industry
Evolution-Globalisation and Industry Structure - National Context and Competitive advantage Resources-
Capabilities and competenciescore competencies-Low cost and differentiation Generic Building Blocks
of Competitive Advantage- Distinctive Competencies-Resources and Capabilities durability of
competitive Advantage- Avoiding failures and sustaining competitive advantage-Case study.
The generic strategic alternatives Stability, Expansion, Retrenchment and Combination strategies -
Business level strategy- Strategy in the Global Environment-Corporate Strategy-Vertical
Integration-Diversification and Strategic Alliances- Building and Restructuring the corporation- Strategic
analysis and choice - Environmental Threat and Opportunity Profile (ETOP) - Organizational Capability
Profile - Strategic Advantage Profile - Corporate Portfolio Analysis - SWOT Analysis - GAP Analysis - Mc
Kinsey's 7s Framework - GE 9 Cell Model - Distinctive competitiveness - Selection of matrix - Balance
Score Card-case study.
Managing Technology and Innovation- Strategic issues for Non Profit organisations. New Business Models
and strategies for Internet Economy-case study
Framework
The basic framework of strategic process can be described in a sequence of five stages as shown in the figure
Stage two: This is a process of goal setting for the organization after it has finalised its vision and mission. A
strategic vision is a roadmap of the companys future providing specifics about technology and customer
focus, the geographic and product markets to be pursued, the capabilities it plans to develop, and the kind of
company that management is trying to create. An organizations Mission states what customers it serves, what
need it satisfies, and what type of product it offers.
Stage three: Here the organization deals with the various strategic alternatives it has.
Stage four: Out of all the alternatives generated in the earlier stage the organization selects the best suitable
alternative in line with its SWOT analysis.
Stage five: This is a implementation and control stage of a suitable strategy. Here again the organization
continuously does situational analysis and repeats the stages again.
Strategic management provides the framework for all the major business decisions of an enterprise such as
decisions on businesses, products and markets, manufacturing facilities, investments and organizational
structure.
In a successful corporation, strategic planning works as the pathfinder to various business opportunities;
simultaneously, it also serves as a corporate defence mechanism, helping the firm avoid costly mistakes in
product market choices or investments. S
trategic management has the ultimate burden of providing a business organization with certain core
competencies and competitive advantages in its fight for survival and growth.
It seeks to prepare the corporation to face the future and even shape the future in its favour. Its ultimate
burden is influencing the environmental forces in its favour, working into the environs and shaping it, instead
of getting carried away by its turbulence or uncertainties.
The strategy-making/strategy-implementing process consists of five interrelated managerial tasks. These are
Setting vision and mission: Forming a strategic vision of where the organization is headed, so as to provide
long-term direction, delineate what kind of enterprise the company is trying to become and infuse the
organization with a sense of purposeful action.
Setting objectives: Converting the strategic vision into specific performance outcomes for the company to
achieve.
Evaluating performance and initiating corrective adjustments in vision, long-term direction, objectives,
strategy, or execution in light of actual experience, changing conditions, new ideas, and new opportunities.
Simple model
Since organizations are deliberate and purposive creations, they have some objectives; the end results
for which they strive. These end results are referred to as mission, purpose, objective, goal, target,
This contextual difference among various terms is important in understanding their nature relevant for
managerial actions.From planning point of view, an organization must define why it exists, how. it justifies
that existence, and when it justifies the reasons for that existence. The answers of these questions lie in the
organizations:
A Strategic vision is a road map of a companys future providing specifics about technology and customer
focus, the geographic and product markets to be pursued, the capabilities it plans to develop, and the kind of
company that management is trying to create
1. Coming up with a mission statement that defines what business the company is presently in and
conveys the essence of Who we are and where we are now?
2. Using the mission statement as basis for deciding on a long-term course making choices about Where
we are going?
3. Communicating the strategic vision in clear, exciting terms that arouse organization wide commitment.
The entrepreneurial challenge in developing a strategic vision is to think creatively about how to prepare a
company for the future.
Many successful organizations need to change direction not in order to survive but in order to maintain their
success.
A well-articulated strategic vision creates enthusiasm for the course management has charted and engages
members of the organization.
The best-worded vision statement clearly and crisply illuminate the direction in which organization is head
Mission
According to Glueck & Jauch mission is answer to the question what business are we in that is faced by
corporate-level strategist
A companys Mission statement is typically focused on its present business scope who we are and what we
do; mission statements broadly describe an organizations present capabilities, customer focus, activities,
and business makeup.
To establish a general tone or organizational climate, for example, to suggest a businesslike operation.
To serve as a focal point for those who can identify with the organizations purpose and direction, and to
deter those who cannot form participating further in the organizations activities.
To facilitate the translation of objective and goals into a work structure involving the assignment of tasks to
responsible elements within the organization.
To specify organizational purposes and the translation of these purposes into goals in such a way that cost,
time, and performance parameters can be assessed and controlled.
Mission of Unilever: The mission of our company, as William Hasketh Lever saw it, is to make cleanliness
commonplace, to lessen work for women, to foster health, and to contribute to personal attractiveness that life
may be more enjoyable for the people who use our products.
Mission of Mckinsey & Co: To help business corporation and governments to be more successful.
Mission of Cadbury India: To attain leadership position in the confectionary market and achieve a strong
presence in the food drinks sector.
Mission of Reliance Industries: To become a major player in the global chemicals business and
simultaneously grow in other growth industries like infrastructure.
Mission of Ranbaxy: To become a $1 billion research-based global pharmaceuticals company.
Objectives are organizations performance targets the results and outcomes it wants to achieve. They
function as yardstick for tracking an organizations performance and progress.
Objectives are open-ended attributes that denote the future states or outcomes. Goals are close-ended
attributes which are precise and expressed in specific terms.
Objectives with strategic focus relate to outcomes that strengthen an organizations overall business position
and competitive vitality. Objective to be meaningful to serve the intended role must possess following
characteristics:
Social Responsibility towards different Interest groups: 1. Responsibility towards owners: Owners are the persons
who own the business. They contribute capital and bear the business.
Responsibility towards Investors: Investors are those who provide finance by way of investment in shares, bonds, etc. Banks,
financial institutions and investing public are all included in this category Ensuring safety of their investment Regular payment
of interest. Responsibility towards employees: Business needs employees or workers to work for it. If the employees
are satisfied and efficient, then the business can be successful.
Responsibility towards customers: No business can survive without the support of customers.
Products and services must be able to take care of the needs of the customers.
Responsibility towards competitors: Competitors are the other businessmen or organization involved in a similar type
of business.
Responsibility towards suppliers: Suppliers are businessmen who supply raw materials and other items required by
manufacturers and traders.
8. Responsibility towards Government: Business activities are governed by the rules and regulations framed by the
government. Payment of fees, duties and taxes regularly as well as honestly Conforming to pollution control norms set
up by government Not to indulge in restrictive trade practices. 9. Responsibility towards society: A society consists of
individuals, groups, organizations, families etc. They all are the members of the society.
To generate employment.
. To provide assistance in the field of research on education, medical science, technology etc.
9. Responsibility towards society: A society consists of individuals, groups, organizations, families etc. They all are
the members of the society.
To generate employment.
. To provide assistance in the field of research on education, medical science, technology etc