1. Strategy
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STRATEG Y
1. Introduction
The word strategy comes from the Greek word ‘Strategos’ which mean general. In military science, strategy means the art and science of directing military forces in a war or battle. In the modern term, strategy is used in business to describe how an organization is going to achieve its overall objectives. Also, most organizations have several alternatives for achieving its objectives. Thus, strategy is concerned with deciding which alternative is to be adopted to accomplish the overall objectives of the organization.
2. Definition
A strategy is a unified, comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organization. Strategy is a plan of action or policy designed to achieve a major or overall aim. Strategy is a broad long term plan designed to achieve the overall objectives of the firm.
2. Definition •
Strategy is the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.
3. Strategic decisions
3. Nature of Strategies
Strategy includes the determination and evaluation of alternative paths to achieve an organization’s objectives & mission and eventually a choice of the alternative that is to be adopted. The nature and characteristics of strategies can be listed out as follows: - Objectives Oriented. - Future Oriented. - Comprehensive and Integrated. - Strategy Alternatives. - Related to environment (Micro & Macro) - Allocation of Resources.
4. Importance of Strategy
Strategy provides a framework within which the members of the organization takes necessary decision. Also, they are useful guidelines for day to day activities. In general, strategies provide following benefits to the organization and they are as follows: - Aids (helps) in decision making. - Aids (helps) in communication. - Ensures better co – ordination. - Facilitates utilization of resources. - Facilitates planning. - Facilitates Control. - Enhances corporate image.
5. Five P’s of Strategy
A strategy is a plan or course of action or a set of decision/rules making a pattern or creating a common thread. There are five P’s of strategy and they are as follows: - Strategy is a PLAN. - Strategy is a PLOY. - Strategy is a PATTERN. - Strategy is a POSITION. - Strategy is a PERSPECTIVE.
6. Strategic Management
“Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.”
Key Attributes of Strategic Management:
Directs the organization toward overall goals and objectives.
Involves the inclusion of multiple stakeholders in decision making.
Needs to incorporate short-term and long-term perspectives.
Recognizes tradeoffs between efficiency and effectiveness.
6. Strategic Management
A continuous, iterative process aimed at keeping an organization as a whole appropriately matched to its environment (Certo and Peter) Keeping the business in tune with management and marketing forces both outside and inside the firm
7. Benefits of strategic management
Establish the mission Formulate philosophy Establish policies Setting objectives Developing strategy Plan the Organizational structure Provide personnel
Establish procedures Provide facilities Provide capital Set standards Establish programs and plans Control information Activate people
8. Elements of strategic management
A) Strategic Position
The Organization's Environment
Political Economic Social Technological Environmental Legal Sources of Competition Opportunities and Threats
Strategic Capability of the Organization
Resources and Competences Strengths and Weaknesses
A) Strategic Position
Expectations and Purposes
Corporate Governance, Stakeholders, Ethics and Culture Sources of Power and Influence Communication of Purpose: Mission and Objectives
B) Strategic Choices
Bases of competitive advantage at business level Scope of activities at corporate level
Portfolio Market spread, e.g. international Value added by corporate parent (parenting)
Directions and methods of development
Directions: Product/Market Methods: Internal/organic, M&A, strategic alliances
C) Strategy into Action
Structuring the organization Marshalling resources (people, information, finance, technology) Managing change
9. Steps to strategic management
Environmental analysis Establish organizational direction Strategy formulation Strategy implementation Strategic control
A) Environmental Analysis
Process of examining the organization’s environment to determine:
Strengths Weaknesses Opportunities Threats
B) Environmental structure
General environment
Operating environment
Social, economic, political, legal, technical International, supplier, labor, competition, customer
Internal environment
Organizational, marketing, financial, personnel, production
C) Methods of Environmental Forecasting
Expert opinion
Trend extrapolation
Trend correlation
Dynamic modeling
Cross-impact analysis
Multiple scenarios
Demand/hazard forecasting
D) Establish Organizational Direction
Establishing an organizational direction for the company involves determining two indicators:
Organizational mission – the reason why the organization exists Objectives – measurable targets to track the growth of the business
10. Role of Strategies in Business
Strategies like policies play an important role in business. The importance of strategies can be briefly stated as follows: -
Helps to attain objectives.
Helps to maximize risks.
Aids Decision making.
Facilitates short term planning.
Facilitates Organizing, Directing & Control.
Facilitates Optimum use of Resources.
1. Introduction
The word strategy comes from the Greek word ‘Strategos’ which mean general. In military science, strategy means the art and science of directing military forces in a war or battle. In the modern term, strategy is used in business to describe how an organization is going to achieve its overall objectives. Also, most organizations have several alternatives for achieving its objectives. Thus, strategy is concerned with deciding which alternative is to be adopted to accomplish the overall objectives of the organization.
2. Definition
A strategy is a unified, comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organization. Strategy is a plan of action or policy designed to achieve a major or overall aim. Strategy is a broad long term plan designed to achieve the overall objectives of the firm.
2. Definition •
Strategy is the direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.
3. Strategic decisions
3. Nature of Strategies
Strategy includes the determination and evaluation of alternative paths to achieve an organization’s objectives & mission and eventually a choice of the alternative that is to be adopted. The nature and characteristics of strategies can be listed out as follows: - Objectives Oriented. - Future Oriented. - Comprehensive and Integrated. - Strategy Alternatives. - Related to environment (Micro & Macro) - Allocation of Resources.
4. Importance of Strategy
Strategy provides a framework within which the members of the organization takes necessary decision. Also, they are useful guidelines for day to day activities. In general, strategies provide following benefits to the organization and they are as follows: - Aids (helps) in decision making. - Aids (helps) in communication. - Ensures better co – ordination. - Facilitates utilization of resources. - Facilitates planning. - Facilitates Control. - Enhances corporate image.
5. Five P’s of Strategy
A strategy is a plan or course of action or a set of decision/rules making a pattern or creating a common thread. There are five P’s of strategy and they are as follows: - Strategy is a PLAN. - Strategy is a PLOY. - Strategy is a PATTERN. - Strategy is a POSITION. - Strategy is a PERSPECTIVE.
6. Strategic Management
“Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.”
Key Attributes of Strategic Management:
Directs the organization toward overall goals and objectives.
Involves the inclusion of multiple stakeholders in decision making.
Needs to incorporate short-term and long-term perspectives.
Recognizes tradeoffs between efficiency and effectiveness.
6. Strategic Management
A continuous, iterative process aimed at keeping an organization as a whole appropriately matched to its environment (Certo and Peter) Keeping the business in tune with management and marketing forces both outside and inside the firm
7. Benefits of strategic management
Establish the mission Formulate philosophy Establish policies Setting objectives Developing strategy Plan the Organizational structure Provide personnel
Establish procedures Provide facilities Provide capital Set standards Establish programs and plans Control information Activate people
8. Elements of strategic management
A) Strategic Position
The Organization's Environment
Political Economic Social Technological Environmental Legal Sources of Competition Opportunities and Threats
Strategic Capability of the Organization
Resources and Competences Strengths and Weaknesses
A) Strategic Position
Expectations and Purposes
Corporate Governance, Stakeholders, Ethics and Culture Sources of Power and Influence Communication of Purpose: Mission and Objectives
B) Strategic Choices
Bases of competitive advantage at business level Scope of activities at corporate level
Portfolio Market spread, e.g. international Value added by corporate parent (parenting)
Directions and methods of development
Directions: Product/Market Methods: Internal/organic, M&A, strategic alliances
C) Strategy into Action
Structuring the organization Marshalling resources (people, information, finance, technology) Managing change
9. Steps to strategic management
Environmental analysis Establish organizational direction Strategy formulation Strategy implementation Strategic control
A) Environmental Analysis
Process of examining the organization’s environment to determine:
Strengths Weaknesses Opportunities Threats
B) Environmental structure
General environment
Operating environment
Social, economic, political, legal, technical International, supplier, labor, competition, customer
Internal environment
Organizational, marketing, financial, personnel, production
C) Methods of Environmental Forecasting
Expert opinion
Trend extrapolation
Trend correlation
Dynamic modeling
Cross-impact analysis
Multiple scenarios
Demand/hazard forecasting
D) Establish Organizational Direction
Establishing an organizational direction for the company involves determining two indicators:
Organizational mission – the reason why the organization exists Objectives – measurable targets to track the growth of the business
10. Role of Strategies in Business
Strategies like policies play an important role in business. The importance of strategies can be briefly stated as follows: -
Helps to attain objectives.
Helps to maximize risks.
Aids Decision making.
Facilitates short term planning.
Facilitates Organizing, Directing & Control.
Facilitates Optimum use of Resources.
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