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STRATEGIC MANAGEMENT

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The document provides an introduction to strategic management. It defines strategy and strategic management. Strategic management involves formulation, implementation, and evaluation of long-term plans and initiatives taken by top management to achieve organizational goals considering internal and external environments. It discusses the need for strategic management due to changing business conditions and its benefits such as improved decision making, coordination, and performance.

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INTRODUCTION TO STRATEGIC MANAGEMENT IIMS - MANASA N
Strategy – What is Strategy?  The term strategy is derived from the Greek word ‘strategos’ which means ‘art of general’. IIMS - MANASA N
Definition  According to Johnson and Scholes, “strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations”. IIMS - MANASA N
 Strategic management is the formulation and implementation of the major goals and initiatives taken by a company's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes IIMS - MANASA N
 “The on-going process of formulating, implementing and controlling broad plans guide the organization in achieving the strategic goods given its internal and external environment”. IIMS - MANASA N
Initially business operated in environments which had little or no competition. Industry was limited to a few firms. The geographical distribution of most organization was limited & changes in technology were slow. The need for SM was felt in 1960’s due to changing world conditions that lead to diversification & spreading out of activities in other countries. So the need was:  Due to change  To provide guide lines  Research & Development  Probability for business performance  Systemized decision  Improves Communication  Allocation of Resources  Improves co-ordination  Helps Managers to have Holistic Approach IIMS - MANASA N
“Process of formulation, implementation, evaluation and control of strategies to realize the organization's strategic intent.” The strategic management process encompasses three phases, which together involve a number of systematic steps.  1.Strategy formulation  2.Implementation  3.Evaluation & control. IIMS - MANASA N
IIMS - MANASA N
IIMS - MANASA N
IIMS - MANASA N
 Creating a better future  Identifying strategic directions  Make Better business decisions  Business Longevity  Increasing market share and profitability  Avoiding competitive convergence  Financial benefits  Non-financial benefits IIMS - MANASA N
 Complex process  Time consuming process  Tough implementation  Proper planning  Costly exercise  It may fail due to resistance to change  If SWOT analysis is not right, the strategy based on it will be wrong. IIMS - MANASA N
 Corporate Strategy – is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a “mission statement”.  For eg. Coco cola, Inc., has followed the growth strategy by acquisition. It has acquired local bottling units to emerge as the market leader IIMS - MANASA N
 Business Unit Strategy – is concerned with how a business competes successfully in a particular market. It concern strategic decisions about  Choice of products,  Meeting needs of customers,  Gaining advantage over competitors,  Exploiting or creating new opportunities. For eg. Apple Computers uses a differentiation competitive strategy that emphasizes innovative product with creative design. IIMS - MANASA N
 Operational Strategy – is concerned with how each part of the business is organized to deliver the corporate and business unit level strategic direction. Operational strategy therefore focuses on issues of  resources,  processes,  people etc.  Functional Strategy – it is the approach taken by a functional area to achieve corporate and business unit objectives and strategies by maximizing resource productivity. It is concerned with developing and nurturing a distinctive competence to provide the firm with a competitive advantage.  For eg. P & G spends huge amounts on advertising to create customer demand. IIMS - MANASA N
IIMS - MANASA N
Social responsibility contends that management is responsible to the organization itself and to all the interest interest groups with which it interacts. Other groups such as workers, customers, society in creditors, suppliers, government and general placed essentially equal with shareholders IIMS - MANASA N
IIMS - MANASA N
The responsibility of business towards the society IIMS - MANASA N
2.Workers 3.Customers 4.creditors,suppliers STAKEHOLDERS 5.Government 6.Society/Environment IIMS - MANASA N
IIMS - MANASA N
1. Return on their investment 2. Providing relevant information 3. Increasing their assets 4. Request suggestions 5. Improving public image of company IIMS - MANASA N
1. Fair wages and salaries. 2. Good & safe working condition. 3. Opportunities for education training & promotion. 4. Workers participation in decision making 5. Reasonable and proper chance for promotion 6. Proper recognition, appreciation and encouragement of skills. 7. The installation of efficient grievance handling system. IIMS - MANASA N
1. True and fair information through advertisement. 2. Regular supply of good. 3. Charge reasonable price. 4. Avoid black marketing 5. To understand needs and wants of the customers. 6. To provide required after sale services. 7. To ensure product has no adverse effects on consumers IIMS - MANASA N
1. Maintaining a healthy and cooperative in-ter business relationship between different business. 2. Mgt. Should provide accurate and relevant information to. creditors and suppliers. 3. Payment of price of materials, interest on borrowings, other charges should be prompt IIMS - MANASA N
1. To abide the laws of the land. 2. To pay taxes honestly. 3. To avoid corrupting. 4. To encourage fair trade. 5. To avoid monopoly. IIMS - MANASA N
1. to help the weaker and backward sections of the society 2. to preserve and promote social and cultural values 3. to generate employment 4. to protect the environment to conserve natural resources and wildlife 5. to promote sports and culture 6. to provide assistance in the field of developmental research on education, medical science, technology . IIMS - MANASA N
IIMS - MANASA N
CANON Environmental Project Canon India has supported an eco-drive – Project "Vriksha“ .Canon India has also adopted green belts near its corporate office where thousands of plants and trees have been planted by the employee volunteers. IIMS - MANASA N
IIMS - MANASA N
 The term Ethics is derived from the word ‘Ethos’ which means ‘Character’.  Ethics is a social science which deals with concepts such as right and wrong, moral and immoral, good and bad etc.  Behaviour of dealing with one another. IIMS - MANASA N
 Meaning ✓Business Ethics deals with morality in the business. ✓It is a system of moral principles and values applied to business activities. ✓This means the business activities should be conducted according to ethics or moral standards. IIMS - MANASA N
 Code of conduct  Provide protection to social group  Provide basic framework  Need willing acceptance  Education and guidance  Not against fair profit making IIMS - MANASA N
 Avoid exploitation of consumers  Avoid unfair trade practices  Fair treatment to employees  Regular payment of taxes  Avoid injustice and discrimination  Respect consumer rights IIMS - MANASA N
 Improving consumer confidence  Protect consumer rights  Create good image of business  Smooth functioning  Healthy competition IIMS - MANASA N
 Having moral values  Fair prices  Fair wages  No values no morals  Short weights and measures  Supply inferior quality IIMS - MANASA N
 Advantage to business  Advantage to consumer and society  Advantage to employees  Advantage to government IIMS - MANASA N

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STRATEGIC MANAGEMENT

  • 1. INTRODUCTION TO STRATEGIC MANAGEMENT IIMS - MANASA N
  • 2. Strategy – What is Strategy?  The term strategy is derived from the Greek word ‘strategos’ which means ‘art of general’. IIMS - MANASA N
  • 3. Definition  According to Johnson and Scholes, “strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations”. IIMS - MANASA N
  • 4.  Strategic management is the formulation and implementation of the major goals and initiatives taken by a company's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes IIMS - MANASA N
  • 5.  “The on-going process of formulating, implementing and controlling broad plans guide the organization in achieving the strategic goods given its internal and external environment”. IIMS - MANASA N
  • 6. Initially business operated in environments which had little or no competition. Industry was limited to a few firms. The geographical distribution of most organization was limited & changes in technology were slow. The need for SM was felt in 1960’s due to changing world conditions that lead to diversification & spreading out of activities in other countries. So the need was:  Due to change  To provide guide lines  Research & Development  Probability for business performance  Systemized decision  Improves Communication  Allocation of Resources  Improves co-ordination  Helps Managers to have Holistic Approach IIMS - MANASA N
  • 7. “Process of formulation, implementation, evaluation and control of strategies to realize the organization's strategic intent.” The strategic management process encompasses three phases, which together involve a number of systematic steps.  1.Strategy formulation  2.Implementation  3.Evaluation & control. IIMS - MANASA N
  • 11.  Creating a better future  Identifying strategic directions  Make Better business decisions  Business Longevity  Increasing market share and profitability  Avoiding competitive convergence  Financial benefits  Non-financial benefits IIMS - MANASA N
  • 12.  Complex process  Time consuming process  Tough implementation  Proper planning  Costly exercise  It may fail due to resistance to change  If SWOT analysis is not right, the strategy based on it will be wrong. IIMS - MANASA N
  • 13.  Corporate Strategy – is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a “mission statement”.  For eg. Coco cola, Inc., has followed the growth strategy by acquisition. It has acquired local bottling units to emerge as the market leader IIMS - MANASA N
  • 14.  Business Unit Strategy – is concerned with how a business competes successfully in a particular market. It concern strategic decisions about  Choice of products,  Meeting needs of customers,  Gaining advantage over competitors,  Exploiting or creating new opportunities. For eg. Apple Computers uses a differentiation competitive strategy that emphasizes innovative product with creative design. IIMS - MANASA N
  • 15.  Operational Strategy – is concerned with how each part of the business is organized to deliver the corporate and business unit level strategic direction. Operational strategy therefore focuses on issues of  resources,  processes,  people etc.  Functional Strategy – it is the approach taken by a functional area to achieve corporate and business unit objectives and strategies by maximizing resource productivity. It is concerned with developing and nurturing a distinctive competence to provide the firm with a competitive advantage.  For eg. P & G spends huge amounts on advertising to create customer demand. IIMS - MANASA N
  • 17. Social responsibility contends that management is responsible to the organization itself and to all the interest interest groups with which it interacts. Other groups such as workers, customers, society in creditors, suppliers, government and general placed essentially equal with shareholders IIMS - MANASA N
  • 19. The responsibility of business towards the society IIMS - MANASA N
  • 22. 1. Return on their investment 2. Providing relevant information 3. Increasing their assets 4. Request suggestions 5. Improving public image of company IIMS - MANASA N
  • 23. 1. Fair wages and salaries. 2. Good & safe working condition. 3. Opportunities for education training & promotion. 4. Workers participation in decision making 5. Reasonable and proper chance for promotion 6. Proper recognition, appreciation and encouragement of skills. 7. The installation of efficient grievance handling system. IIMS - MANASA N
  • 24. 1. True and fair information through advertisement. 2. Regular supply of good. 3. Charge reasonable price. 4. Avoid black marketing 5. To understand needs and wants of the customers. 6. To provide required after sale services. 7. To ensure product has no adverse effects on consumers IIMS - MANASA N
  • 25. 1. Maintaining a healthy and cooperative in-ter business relationship between different business. 2. Mgt. Should provide accurate and relevant information to. creditors and suppliers. 3. Payment of price of materials, interest on borrowings, other charges should be prompt IIMS - MANASA N
  • 26. 1. To abide the laws of the land. 2. To pay taxes honestly. 3. To avoid corrupting. 4. To encourage fair trade. 5. To avoid monopoly. IIMS - MANASA N
  • 27. 1. to help the weaker and backward sections of the society 2. to preserve and promote social and cultural values 3. to generate employment 4. to protect the environment to conserve natural resources and wildlife 5. to promote sports and culture 6. to provide assistance in the field of developmental research on education, medical science, technology . IIMS - MANASA N
  • 29. CANON Environmental Project Canon India has supported an eco-drive – Project "Vriksha“ .Canon India has also adopted green belts near its corporate office where thousands of plants and trees have been planted by the employee volunteers. IIMS - MANASA N
  • 31.  The term Ethics is derived from the word ‘Ethos’ which means ‘Character’.  Ethics is a social science which deals with concepts such as right and wrong, moral and immoral, good and bad etc.  Behaviour of dealing with one another. IIMS - MANASA N
  • 32.  Meaning ✓Business Ethics deals with morality in the business. ✓It is a system of moral principles and values applied to business activities. ✓This means the business activities should be conducted according to ethics or moral standards. IIMS - MANASA N
  • 33.  Code of conduct  Provide protection to social group  Provide basic framework  Need willing acceptance  Education and guidance  Not against fair profit making IIMS - MANASA N
  • 34.  Avoid exploitation of consumers  Avoid unfair trade practices  Fair treatment to employees  Regular payment of taxes  Avoid injustice and discrimination  Respect consumer rights IIMS - MANASA N
  • 35.  Improving consumer confidence  Protect consumer rights  Create good image of business  Smooth functioning  Healthy competition IIMS - MANASA N
  • 36.  Having moral values  Fair prices  Fair wages  No values no morals  Short weights and measures  Supply inferior quality IIMS - MANASA N
  • 37.  Advantage to business  Advantage to consumer and society  Advantage to employees  Advantage to government IIMS - MANASA N