1 Strategic Management

Strategic Management

“Without a strategy the organization is like a ship without a rudder.” - Joel Ross and Michael Kami

Thinking Strategically: The Three Big Strategic Questions 1. What’s the company’s present situation? 2. Where does the company need to go from here? 3. How should it get there?  A company’s answer to “how will we get there?” is its strategy

What is a strategy? ►

The word strategy comes from the Greek word -“Strategia” ; which means a General or Military Commander.

►

Strategy is the overall plan of a firm deploying its resources to establish a favorable position and compete successfully against its rivals.

What is Strategic Management? ►

Strategic Management is the process by which an organization formulates its objectives and manages to achieve them.

►

It includes an analysis of internal and external environment with a view to explore opportunities and avoid threats

Evolution of Strategic Management ► Ansoff’’s ► Henry ► Peter

Strategic Success Model

Mintzberg Technique

Drucker’s Contribution

► Michael

Porter: Strategy & Competitive

Advantage

Ansoff Strategic Success Model ► The

systematic study was pioneered by Igor

Ansoff - between 1948-68

► Acquisations

Strategy

- Rational or Opportunistic

Following are the elements of Ansoff Model: ► No

universal success formula

► Strategy

► Success

depends on level of turbulence depends jointly depends on different

capabilities of the firm

Henry Mintzberg Technique ►

He brought the personal side of the manager into the picture. (1973)

►

A humane approach to strategy formulation was advocated by him.

►

He considered strategy Formulation as a deliberate, delicate and dangerous process

Peter Drucker ► He

introduced the concept of MBO

► According

to Drucker, “MBO is more than a

technique of management, it is an attitude of managing”

Michael Porter: Strategy and Competitive Advantage ► He

introduced Generic Strategies like Focus,

cost leadership & product differentiation ► Five

force model of competitive Advantage

and value chain was introduced

Process of Strategic Management

Strategy Formulatio n Objective Setting process

Establishin g

Competi

organizatio

tive

Establis

nal Policy

Analysis

hing

Strategy Implement ation Strategy Selection Process Identifyi

long

ng

and leadership

c

Developing

Alternat

Budget,

ives

functional

range

Define

ment

and

Organizatio

Scannin

short

n mission

g Internal

range

Strategy

objectiv

Evaluati

organiza

es

on and

Strategies

tion

selectio

analysis

n

Feed back

Strategy

Strategi

Environ

Feed back

Structure,

Feed back

Strategic Control System

Feed back

Need for Strategic Management