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Chapter
What
is strategy
Large Scale future oriented plans for interacting with the competitive environment to achieve co; objectives. Simply a game plan. Like Cricket Plan or Education Plan I.e: SSC to M.COM.
A strategy is a plan of action designed to achieve a specific goal. Strategy is all about gaining a position of advantage over competitors by best exploiting emerging possibilities. As there is always an element of uncertainty about future, strategy is more about a set of options ("strategic choices") than a fixed plan.
Managers job not only to manage internal activities but also to meet the external environment challenges/factors. External Factors? Explained as following:-
Competitors How to win and compete with our competitors in terms of technology, human & financial resources etc.
Suppliers the suppliers who supply the same product as our org; supply compete them by advancing technologies and producing goods in cost effective manner..
Scare Resources Loans from different financial Institutes. Commercial Banks, IDBP, ADB, Financial Intermediaries, Portfolios cost benefit analysis.
Government Agencies.
Regulations.
Customers.
Economic & Social Conditions. Seasonal Business What the society likes. Political Priorities different political parties favor different businesses/industries. Technological Development
Difference between Plan & Strategy. Already define on slide#3. Plan does not precisely detail all future deployment (people,financial,material etc)
A Strategy is bigger than Plan. A plan is very concrete in nature and doesnt allow for deviation. If Plan A doesnt work, you dont alter Plan A and try again. Rather, you move to Plan B;
A strategy is very flexible and open for adaptation and change when needed. Plan is short term arrangement for something we do. strategy is long term set of plans.
Plan- the way you are going to do one thing. Strategy- the overall way you will do multiple things. there are many plans that fall under a strategy
Basic Framework
Internal External
External Environment
The firm Goals & Values Resources & Capabilities Structures & Systems Strategy
Competitors
Customers Suppliers
etc
Definition:"The set of managerial decisions and actions that determines the long-run performance of a corporation"
Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives
Strategy Formulation
Vision & Mission External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies
Strategy Selection
Businesses to enter Businesses to abandon Allocation of resources Expansion or diversification International markets Mergers or joint ventures Avoidance of hostile takeover
Strategy Implementation
Strategy Evaluation
2:- Conduct Analysis what are the capabilities and situation or condition of Co; 8:- Implement the strategic choice with best match of all kind of 3:- Assess External Environment resources.
4:- Analyze those options in terms of its available resources and external environment.
5:- Identify most desirable options with resources and Co; mission.
6:- select a set of long term objectives and grand strategies.
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Major dimensions of strategic decisions The major dimensions of strategic decisions are as follows:
3. Strategic issues are likely to have a significant impact on the long term prosperity of the firm:
Generally the results of strategic implementation are seen on a long term basis and not on immediate terms.
Ch 126
Ch 127
C) Functional Level
Ch 128
B) They are responsible for the firm financial performance and for achieving nonfinancial goals, such as enhancing firm image and to fulfill CSR. C) Any activity/step/decision at the Corporate Level have great influence on stock and stake holders (society). D)They formulate company mission and long term goals and make the strategies to achieve them.
Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 129
Business Level
A) B)
Include Business Managers Their main responsibility is to translate the directions, plans, strategies into concrete objectives for individual business division which has generated by corporate level. They determine how the firm will compete in the selected product-market area(piece of total market).
Copyright 2005 Prentice Hall 30
C)
Functional Level
A)
Include Managers of Product, or of an particular functional area such as HR, Finance, Procurement, Production, R&D, Marketing, Quality Assurance etc.
B)
C)
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Functional level decisions include to implement the strategy formulated at corporate and business level. They involve action-oriented operational issues and are relatively short range and low risk.
Their activities are mostly ongoing and can be implemented with minimum cooperation and cost because its based on available resources.
Ch 133
The number of forces determined how much formality is needed in strategic management.
Copyright 2005 Prentice Hall 34
In particular formality is associated with the size of firm and its stage of development. In general the organizational predominant management styles, environment and its complexity, process of production, its problems all play a part in determining the appropriate degree of formality.
Ch 135
Modes of formality
Entrepreneurial Mode
Adaptive Planning
Mode Mode
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