Stratigic Management 01

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STRATIGIC MANAGEMENT


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UNIT 1

MEANING

NEED


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PROCESS OF ST. MANAGEMENTPHASES IN STRATEGIC MANAGEMENT PROCESS

ESTABLISHMANT

OF STRATEGIC

INTENT

FORMULATIONOF STRATEGIES

IMPLEMENTATION

OF

STRATEGIES

STRATEGICEVALUATION


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ELEMENTS OF STRATEGICMANAGEMENT

PROCESS Establishing the hierarchy of strategic intent:

Creating and communicating a vision Designing a mission statement

Defining the business

Setting objectives

Formulation of strategies Performing env. appraisal

Doing orgz. appraisal

Formulating corporatelevel strategies

Formulating business-level strategies Undertaking strategic analysis

Exercising strategic choice

Preparing strategic plan


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Implementation of strategies:

Activating strategies Designing the structure, systems and process

Managing behavioral implementation

Managing functional implementation

Operational implementation

Operationalising strategies

Performing strategic evaluation and control

Performing strategic evaluation Exercising

Strategic control

Reformulation of strategies


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STRATEGIC MANAGEMENT PROCESSStrategic control

Strategic

Intent

VisionMission

Business

Definition

Business

ModelObjectives

Strategy Formulation

Environmental organizational

appraisal appraisal

SWOT Analysis

Strategy

Implementation

ProjectProcedural

Resource

allocation

Structural

behavioral

Functional

&

operational

Strategic

evaluation


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UNIT - 3Environmental Threat and Opportunity Profile (ETOP)

Environmental Nature ImpactSector of impact of each sector

Socioeconomic

Market

International

Political

Regulatory

Customer Supplier

Technology

Competitor


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nterna strengt s an wea nesses

Marketing and Distribution Factors

includes: market research, identifying market,developing product, testing customer reaction,

R&D & Engineering Factors

1) Can lead to new or improved product2) Can lead to improved manufacturing or material

process

Production and Operation Management Factors

Corporate Resource and Personnel factors

Financial and Accounting Factors


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Strategic Advantage Profile(SAP)

Capability Nature of Competitive str.&

Factor impact weaknesses

1. Finance

2. Marketing

3. Operation

4. Personnel

5. Information6. General management


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Finance- source, usages, management

Marketing-product related, price related,

promotion related,

Operation-product, raw material, system,.

Personnel

Information related General management capabilities


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UNIT-4

Grand strategies and their sub strategies


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Corporate levelstrategies

Stability Expansion Retrenchment Combination


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Stability

strategy

No change /Do

nothing Profit

PAUSE/Proceed

with caution


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Stability

When stability strategy Same product

Same service

Similar sector

Incremental improvement

Defensive mood

Reduce competition

Maintain comfort ability

why stability strategy

Perceives itself as

successful

Less risky

No searching foralternative

No disruption in routine

work

Environment is stable Stop performance gap


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Expansion strategy

Concentration Integration Diversification Internationalization Cooperation Digitalization


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Grandstrategies

Stability

No change Profit

Pause

Expansion

concentration

Marketdevelopme

nt

Productdevelopme

nt

Marketpenetration

Integration

vertical

horizontal

Diversification

Concentric/ related

Marketrelated

Technologyrelated

Both

Conglomerate/

unrelated

internationalization

International

multidomestic

global

Transnational

cooperation

Merger andAcquisition

Horizontal

vertical

Concentric

Conglomerate

Jointventure

StrategicAlliance

Pro-competitive

Non-competitive

competitive

Pre-competitive

Digitalization

retrenchment

Turnaround

divestment liquidation

combintion

simultaneous

Sequential both


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Expansion strategy

When

Additional product

Additional service

Major increase in present

definition

Redefining business

definition

Why

Volatile environment

Expansion with

effectiveness

Social benefit from

expansion

Financial reward

Experience curve

Growth yields monopoly Stock holders and

securities analysts


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Retrenchment strategy

When

Reduction of service Reduction of product

Functional improvement

through reduction of

activity

Why

Not doing well Perceived itself

performing poorly

Not met objectives

Environmental threats Better opportunities are

perceived else were


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Combination strategy

When

Simultaneous

Sequential

Why

Environment

Economy


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Unit 5

Strategy choice making


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Narrowing the choice


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Managerial choice factor

Who is a manager- a MBA a BBA or..

Ex- .

How will they take decisions. By alternatives.

By assumptions and collective wisdom..

Which is the better way of making decision?


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Strategic choice is influenced by 4 Managerial

selection factors:

Perception of external dependence

Attitude towards risk

Awareness of past enterprise strategies

Power relationship


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Perception of external dependence

Example

What r the factors


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Attitude towards risk

Managerial attitudetowards risk

Risk is necessaryfor success.

Optimistic. Risk is a fact of life

& acceptable.

High-risk destroyorganization sominimize.

Probable choicefilter

High risk projectsare acceptable.

Balance high riskchoices with lowrisk one.(bethedging)

Risk aversion: riskyprojects arerejected.

Probable strategy

Expansion

Combination

stability

Awareness of past enterprise


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Awareness of past enterprisestrategies

Present strategies evolves from past strategies

developed by powerful leaders

Then the new strategy become programmed

When the strategy fail due to external or internal

conditions new sub strategies are drafted

They work for new strategies

Example .


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Power relationship


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Contingency strategies

Generation of alternatives

First generation planning

Contingency or second generation planning

Dimensions of to alternative strategies:

Programmed (fixed)

Contingency (flexible, unstable env.)


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Prescription for choice for business

strategy


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Choosing international strategies


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ETOP SAP MATCHING

ETOP

Socioeconomic

Market

InternationalPolitical

Regulatory

Customer

Supplier

Technology

Competitor

SAP

Finance

Marketing and

DistributionOperation and

Production

Personnel

Information

General management


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GE Nine Cell Portfolio Matrix

Components of Industry attractivenessNature of rivalry

number, size & strength of competitors, price wars

Strength of buyers and sellers

Ease of New EntrantsEconomic Factors

market saturation or growth, capital intensity, profitability

Components of Business strength

Cost advantage, quality image, manufacturing flexibility,delivery speed, liquidity, profitability, skillful personnel


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High Medium Low

High Invest andGrow

SelectiveGrowth

Grow orLet Go

Medium

SelectiveGrowth

Grow orLet Go

Harvest

Low

Grow or LetGo

Harvest Divest

Based on the subjective assessments on the levels of market attractiveness and

business strengths, each SBU falls in one of the NINE different cells of strategic option.

GE Nine Cell Matrix


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Portfolio of Strategic Business Units

High Market Share Low

IndustryGrowth Rate

High

Low$$$

1 2

3 4cash cows

stars

dogs

question marks


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Boston Consulting Group Matrix

1. Stars. These are products that are in high growthmarkets with a relatively high share of thatmarket. Stars tend to generate high amounts ofincome. Keep and build your stars.

2. Question Marks (Problem Children). These areproducts with a low share of a high growth

market. They consume resources and generatelittle in return. They absorb most money as youattempt to increase market share.


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3. Cash Cows. These are products with a high share

of a low growth market. Cash Cows generate

more than is invested in them. So keep them in

your portfolio of products for the time being.

4. Dogs. These are products with a low share of a

low growth market. They do not generate cashfor the company, they tend to absorb it. Get rid of

these products.


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Key

Each circlerepresents one ofthe firms business

units

Size of circlerepresents the

relative size of thebusiness unit interms of revenue


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Strategy implementation

Unit VI


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Implementation: to match plans, policies,

resources, structure and administrative style

with the strategy

Mckinsey 7-S framework


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Implementation process


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Determine

strategy andcommunicateEvaluate result

assess gap&providefeedback

Develop

talent andeducate

managers

Reward andreinforceme

nt

MIS for datasupply

Design way tomeasure

performance

Determinekey

managerialtask

Assign task

Delegateauthority

Allocateresources

StatepoliciesClarify goal

for variousmanagers

Determine

Develop talent


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Determinestrategy and

communicate

Determine keymanagerial

task

Assigntask

Delegateauthority

Allocateresources

Statepolicies

Statepolicies

Clarifygoal forvarious

managers

Designway to

measureperforma

nce

Rewardand

reinforcement

Regulatory controlmechanis

m

Evaluateresultassess

gap&providefeedback

pand educate

managers

Documents

Stratigic Management 01