Strategic Management Part 1

by Anjan Mohapatro
If you dont invest for the long term ,there is no short term

Strategy
The word Strategy is deduced from Armed forces (The art of war) Is an Operational tool to achieve the goals

Strategy Provides to face adverse condition and gives a competitive edge Strategies are made to win over a complex situation
Optimum resource utilisation

Sun Tze on Strategy

Know your enemy, know yourself, and your victory will not be threatened. Know the terrain, know the weather, and your victory will be complete.

Strategy

Strategy is the direction and scope of an organisation over the longterm: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations

Transforms ugly caterpillar to a beautiful butterfly

Swimming along with Shark

Strategic Management
The set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve
organizational goals
Org Objectives Strategic Fit Changing Environment Resources

Decisions & Actions

Formulate & Implement Strategies

Competitive edge

Organisation goals

Tasks of Strategic Management

TASK 1 TASK -2 TASK3 TASK-4 TASK-5

DEVELOPING STRATEGIC VISION AND MISSION And OBJECTIVES

ENVIRONMENT STRATEGIC SCANNING ALTERNATIVES

STRATEGIC VARIATIONS

STRATEGIC CHOICE

TASK-6

TASK-7

TASK-8 EVALUATION AND CONTROL

Allocation of Resources And Organization structure formulation

Formulation Of Plan Policies Programmes Administration

Basic Definitions
Strategic managementrefers to the managerial process of forming a strategic vision, setting objectives, crafting a strategy; implementing and executing the strategy, and then over time initiating whatever corrective adjustments in the vision, objective, strategy, and execution are deemed appropriate Strategic visionis a road map of a companys futureproviding specifics about technology and customer focus,the geographic and the product markets to be pursued, the capabilities it plans to develop and the kind of company that management is trying to create Mission statement is typically focused on its present business scope who we are and what we do;mission statement broadly describe an organizations present capabilities, customer focus, activities, and business makeup Objectivesare an organization's performance targetsthe results and outcomes it want to achieve. They function as yardsticks for tracking an organizations performance and progress.

Strategic objectivesrelate to outcomes that strengthen an organizations overall business position and competitive vitality

Business Planning Hierarchy

Vision

Mission Goals Objectives Strategies Programmes

Business Planning Hierarchy

To succeed in the long term, our business needs a vision of how we will change and improve in the future. without a vision, the people perish The vision of the business gives its energy.

VISION
Consistently followed and measured Provides future direction

It helps motivate us. It helps set the direction of corporate and marketing strategy.

Must be fully communicated

Expresses a consumer benefit

Is motivating

Is realistic

Mission

The Business Mission is important to our sales & marketing planning It provides an outline of how the marketing plan should seek to fulfil the mission It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission? It provides an incentive to implement the marketing plan

PURPOSE why the business exists

STRATEGY & SCOPE what business are we in and how?

VALUES & CULTURE what management believes in

STANDARDS & BEHAVIOUR the rules that guide how we operate

Strategic Management Process

Scan External Environment: National Global Identify Strategic Factors: Opportunities Threat Implement Strategy via Changes in: Leadership / Culture Structure Human Resources Information and Control System

Evaluate Current: Mission Goals Strategies

SWOT

Define New: Mission Goals Grand Strategy

Formulate Strategy: Corporate Business Functional

Scan Internal Environment: Core Competence Synergy Value Creation

Identify Strategic Factors: Strengths Weaknesses

Porters 5 Forces of Competitive Position Diagram

New Market Entrants

Supplier Power

Competitive Rivalry

Buyer Power

Product & Technology Developmen t

Porters 5 Forces
Threat of New Entrants

Bargaining Power of Suppliers

Rivalry Among existing Competitors

Bargaining Power of Buyers

Threat of substitute Products or services

Porters 5 Forces of Competitive Position Diagram

New Market Entrants
Entry Ease & Barriers Geographical Factors Incumbents resistance New Entrant Strategy Routes to Market

Competitive Rivalry Supplier Power

Brand reputation Geographical Coverage Product/service quality Relationships with Customers Bidding Process/Capabilities Number & Size of firms Industry size and trends Fixed and variable cost bases Product/service range Differentiation, strategy

Buyer Power
Buyer Choice Buyers size /Number Change Cost/Frequency Volume/JIT Scheduling

Product & Technology Development

Alternative Price/Quality Market distribution charges Fashion and trends Legislative Effects

Porters 5 Forces of Competitive Position Diagram

Entry Barriers Economies of Scale Brand Identity Capital Requirements

Determinants of Supplier Power

New Entrants

Switching Costs Supplier Volume Impact Forward Integration

Rivalry Determinants Industry Growth Fixed Costs Product Differences Brand Identity Exit Barriers

Industry Competitors Intensity of Rivalry Buyers

Determinants of Buyer Power

Suppliers

Determinants of Substitution Threat

Relative Price Performance Switching Costs

Buyer Concentration Buyer Volume Backward Integration

Substitutes

Ninety ways to measure demand (6 x 5 x 3)

Geographical Level

World Region Country Territory Client Total sales Sector sales

Product Level

Companys sales

Product lines
Product config Product items

Short term

Medium term

Long term

Timing Level

SWOT ANALYSIS

STRENGTH
Positive internal characteristics that the organization can exploit to achieve its strategic performance goals

WEAKNESS
Internal characteristics that might inhibit or restrict the organizations performance

Opportunity
Characteristics of the external environment that have the potential to help the organization achieve or exceed its strategic goals

THREAT
Characteristics of the external environment that may prevent the organization from achieving its strategic goals.

SWOT ANALYSIS FORMULATE STRATEGY

Organizational strengths Skills and abilities

enabling an organization to conceive of and implement strategies

Evaluating Organisatio nal Strength

Distinctive competencies Strengths possessed

by a small number of competitors Useful for competitive advantage and superior performance.

Sustained competitive advantage Occurs when a distinctive competence cannot be easily duplicated and is what remains after all attempts at strategic imitations have ceased

Alternative sources of information:

www.corpwatch.org

www.naomiklein.org

THANK YOU