STRATEGIC

MANAGEMENT
 Strategic Management
 The term ‘strategy’ has its origin in the Greek
word strategos. Stategos means ‘the art of war’
as a noun and ‘to commend an army’ as a verb.

 Strategos is to plan the destruction of one’s

enemies through the effective use of sources.
 The concept of strategy
– Strategy is the great work of organisation. In
situations of life or death it is the Tao of
survival or extinction. Its study cannot be
neglected.----SUN TZU, The Art of War.2500
B.C
– Strategy is about winning.
– Strategy is not a detailed plan or program of
instructions, it is a unifying theme that gives
coherence and direction to the actions and
decisions of an individual or an organisation.
 Strategic management
 Management Tasks concerned with growth
and future of a business enterprise

 It ensures that the enterprise keeps moving

in the right direction.
 strategy
 Strategy is about achieving competitive
advantage through being different-
delivering a unique value added to the
customer, having a clear and enact able
view of how to position yourself uniquely
in the industry.
Michael Porter
 Strategic management
 Understanding where the business is at
present
 A clear view about where it wants to be in
future
 A wide scale debate about how it will
reach its future destination
Jack Welch
 Definitions
– The art of war, especially the planning of
movements of troops and ships etc, into
favourable positions ; plan of action or policy
in business or politics etc.( oxford dic.)
– The determination of the long-run goals and
objectives of an enterprise, and the adoption of
courses of action and the allocation of
resources necessary for carrying out these
goals.( Alfred Chandler )
 Definitions
“… the patterns of objectives, purposes or
goals, and the major policies or plans for
achieving these goals, stated in such a way
as to define what business the company is
in or should be in and the kind of company
it is or should be.”
Kenneth Andrews, The Concept
of Corporate Strategy, 1971
 Evolution of SM
1950s. Budgetry planning & control.Financial control through
operational and capital budgeting.Investment planning through
project appraisal ,ROI, Financial planning was the key.
1960s. Corporate planning. Preparation of short medium and long
term plans.business forecasting and investment planning
models. Rise of corporate planning departments.
1970s. Corporate strategy, diversification, and portfolio planning
matrices. multidivisional structure.Quest for global market
share.
Late 70s & early 80s.Analysis of industry and competition.
Choice of industries, markets, and segments and positioning
with in them. Competitor analysis and PIMS( profit impact of
market stategy ).market selectivity , industry restructuring
.active asset management.
 Evolution of SM
Late 80s & early 90s. The quest for competitive advantage
.Sources of competitive advantage with in the firm.
Resource analysis of core competencies. corporate
restructuring and business process reengineering. Re
focusing and outsourcing
Late 90s & early 2000. Strategic innovation and the new
economy. Competitive advantage through strategic
innovation. Competing on knowledge adopting to the new
digital networked economy. Organisational flexibility and
speed of response. Knowledge management and
organisational learning. Competing for standards .Early
mover advantage. The virtual organisation. The knowledge
based firm. Alliances and networks. The quest for critical
mass.
 Igor Ansoff (1965)
 Research on American’s acquisitions
 Concepts- environmental turbulences,
OTP, CAP,Synergy
 Books – Corporate Strategy
 Mintzberg (1987)
 Human side of enterprise
 Cointed the term “Crafting the strategy”
 Book- The Nature of Managerial Work.
 Peter Drucker
 “No business can do everything. Even if it has
the money, it will never have enough good
people. It has to set priorities. The worst thing to
do is a little bit of everything. This makes sure
that nothing is being accomplished. It is better to
pick the wrong priority than none at all.”
(Peter Drucker)
MBO
 Michael Porter (1996)
 Concepts- focus, cost leadership,
differentiation
 Models- ?
 Books- Competitive Strategy
- Competitive Advantage of Nations
Characteristic of a winning
strategy
Goals that are simple, consistent, and long term.
Profound understanding of the competitive
environment.
Objective appraisal of resources.
Effective implementation.
 Examples
 Kochouseph & V Guard
 Viswanathan Anand
 Rathan Tata
 Dheerubhai Ambani
 Sun Tzu says
If you know the enemy and yourself, you need not
fear the result of a hundred battles.
If you know yourself but not the enemy, for every
victory gained you will also suffer a defeat.
If you know neither the enemy nor yourself , you
will succumb in every battle
 SUN TZU says ,
– Know the other and know yourself
– Triumph without peril
– Know nature and know the situation
– Triumph completely.
 Environmental Changes
 Changes in technology
 Proliferation of new products
 Faster commercialization
 Business boundaries getting blurred
 Socio-political changes
 Governments becoming bargainers in the conduct of business
 Emergence of Global firms
 Emergence of Global markets
 Emergence of Global brands
 Change in tastes and preferences of consumers
 New Demands on the Firm
 To be strategically alert
 To be future oriented
 To be able to take risk in tapping opportunities
 To be insulated against environmental threats
 To develop the competence for assimilating changes faster.
 To respond effectively and more economically
 To grow big
 To be able to generate large resources
 To gain expertise in technology, marketing and decision
support systems.
 SM deals with . . .
 Purposes and missions
 Corporate objectives
 Choice of businesses
 Course of activities for achieving the
objectives
 Nature and Scope
 Serves as a route map
 Lends a frame work for systematic handling of
corporate decisions
 Lays down growth objectives and strategies
 Ensures the firm remains prepared
 Ensures best utilization of recourses
 Serves as a hedge against uncertainty
 Helps to understand trends in advance
 Nature and Scope
 Helps to avoid haphazard response
 Provides the best possible fit
 Helps build competitive advantage and core
competencies
 Draws from both intuition and logic
 Prepares the firm to not only face the future, but
even shape the future in its favour
 Seeks to influence the firm’s mega environs in its
favour
 Concerns of Strategic Planning
 Future
 Growth
 Environment
 Portfolios of businesses
 Strategy
 Integration
 Creating core competencies/ competitive
advantage
 In a nutshell, corporate strategy is its concern.