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Understanding basic

concepts
Conceptual foundations of
strategic management
involving formulation,
Fortune magazine has declared
“ The most valuable product on
this planet is not the micro
chip, not the automobile, not
the television set. What has
produced more wealth than
any other thing dreamed of by
the mind of a man is sugar
How was it made
possible?
One
word!
Strate
gy
It is process of playing with
your strengths and covering
your weakness to capitalize
the opportunities ward off
the threats which are
available in external
environment.
In a more simple
language!
“Creating a superior
customer value.”
In other
words
“ Creating
competitive
advantage and
making sure that it
Financial
performance

Competitive
advantage

Structural Process
Position Execution

Enterprise Synergies

Organizational
Capacity

The Architecture of
Owners/Stakeholders
Local community
Trade
Associations
Suppli Managers Custome
ers rs

Governme Employe The Public at


nt es large

Constituents of Strategic
Building
Process of Strategic
Management
Environment Strategic Strategic Evaluation
al Formulation Implementat &
Scanning ion Control

External
Vision
Societal Environment Program Performance
General forces Mission
s
Task Environment Objectiv
es Budgets
Industry Analysis Procedur
Strategi
es
Internal
Structure----Chain of command
Culture--- Beliefs, Expectation, values
Resources----Assets, Skills, Competencies,
Knowledge
Differentiation

Competitiv Economic Market


Cost leadership e Value Value
Advantage added added

Quick Response

Competitive Advantage: The focal Point of


Strategy
Levels of Strategy
3.Corporate Level
Strategy
4.Business Level Strategy
5.Functional Level
1
1 4 12
8

2 5 1
7 9 1

1
3 6 0

A typical Formal Strategic


Planning Process
Phases of Process
2. Evaluate performance in light of goals and identify gap
3. Relate gaps to environmental conditions.
4. Relate gaps to organizational capabilities.
5. Identify future goals, given understanding of gaps.
6. Describe broad action plans aimed at meeting goals.
7. Identify resources required by each functions to implem
plans.
8. Aggregate needs by function into overall needs of
business.
9. Allocate resources across multiple business units.
10.Reallocate resources across multiple functions.
11.Deploy resources within functions
12.Monitor use of resources within functions
13.Monitor use of resources across businesses.
The Different Forms of
Strategy
Inten Deliberate Realiz
d Strategy ed
Strat Strate

Unreali
zed
Strateg
Emerg
ent
Strate
Necessar Stability
y
Simplici
condition
ty

Industry Maturity Use of Strategic


Programming
Capital approach to
Motivating intensity implementation
conditions Tightly Coupled
Operations
External
Control

Conditions that encourage a strategic programming


approach to implementation
A comparison of Mechanistic and Organic
Organizations
an
egy
r at
t
n ts
Relativ rge ing
e rn
ely em lea
on nal
unstabl s
i io
has at
p niz
m
E rgnad
Oy a ng
g i
t e m
ra m
st gra
e o
Dynamism r
e c
at pr
l ib egi
e
D trat
o n s
s is and
a
ph egy
Em trat
S

Relatively
stable

Relativ Complex Relativ


ely ity ely
simple comple
A Continuum of Approaches to strategy
implementation