INTRODUCTION TO

STRATEGIC MANAGEMENT
What is strategy?
Strategy is the direction and scope of an
organization over the long term: ideally, which
matches its resources to its changing
environment, and particular its markets,
consumers or clients so as to meet stakeholder
expectations.
A strategy is a comprehensive action plan that
identifies long-term direction and guides
resource utilization to accomplish organizational
goals with sustainable competitive advantage.
more thorough
environmental data
top managers
throughout the year
five-year plans
STRATEGIC
MANAGEMENT
The art and science of formulating,
implementing and evaluating cross-functional
decisions that enable an organization to
achieve its objectives.
STRATEGIC FORMULATION

Strategic formation involves four important

steps which are,
1. Determination of mission and objectives
2. Analysis of strengths and weakness of the
firm
3. Environmental opportunities and threats
4. Generation of alternatives strategies and
5. choosing the most appropriate strategies
STRATEGIC MANAGEMENT PROCESS
Process of formulation, implementation,
evaluation and control of strategies to realize
the organization's strategic intent.
The strategic management process
encompasses three phases, which together
involve a number of systematic steps.
1.Strategy formulation 2.Implementation
3.Evaluation & control.
BENEFITS AND RELEVANCE OF
STRATEGIC MANAGEMENT
Clear sense of strategic vision of the firm
Sharper focus on what is strategically important
Improved understanding of a rapidly changing
environment
Strategic management helps to envision an
organizations future, formulate mission and
make objectives clear.
Strategic management makes the management
dynamic, appropriate to the environment and
future oriented.
It make people realize what are they working
for, what is expected of each SBU, division,
functional department and, to some extend,
individuals.
Strategic management facilitates better
delegation, organization monitoring,
performance evaluation and control.
Strategic management would enable a
company to meet compensation more
effectively.
Vision
description of something in the future
mental perception of the kind of environment
an individual, or an organization, aspires to
create within a broad time horizon and the
underlying conditions for the actualization of
this perception
EXAMPLES: To be the happiest place on
earth. To be the worlds best quick service
restaurant.
Mission Statement
Example
We should build good ships here at a profit if
we can at a loss if we must but always
good ships
DETERMINATION OF MISSION AND
OBJECTIVES
Strategic management can be defined as the
art and science of formulating, implementing
and evaluating cross-functional decisions that
enables an organization to achieve its
objectives.
In short, strategy is a means to achieve the
objectives. It is, therefore, quite obvious that
determine the mission and objectives, is the
first step in the strategic formation.
MISSION
Essential purpose of the organization,
concerning particularly why it is in existence,
the nature of the business it is in, and the
customers it seeks to serve and satisfy.
purpose or reason for the organizations
existence.
mission is an enduring statement of purpose
that distinguishes one firm from other similar
firm.
Mission
The mission defines the board social
purpose and scope of the organization
whereas objectives more specifically define
the direction to achieve the mission.
Objectives help translate the organization
mission into results while objectives may be
general in their expression, goals sets specific
targets to be achieved with in a time frame.
Objectives
Objectives represent a managerial
commitment to achieve specified results in a
specified period, of time.
They clearly spell out the quantity and quality
of performance to be achieved, the time
period, the process and the person who is
responsible for the achievement of the
objective.
 Goal
Goal is defined as an intermediate result to
be achieved by a certain time as part of the
grand plan .
A plan can, there for have many goals
 SWOT ANALYSIS
In strategic management, the term strategy is
used to mean pertaining to the relation
between the firm and its environment this
indicates the role of SWOT in strategic
management.
In strategic management the strength and
weakness of the firm and opportunities and
threats in the environment will indicate the
portfolio strategy and other strategies it
should pursue.
STRATEGIC
ALTERNATIVES
Given the mission and objectives and having
analyzed the strength and weakness of the
firm and environmental opportunities and
threats.
This strategies should proceed to generate
possible alternatives strategies. There may be
different strategies options for accomplishing
a particular objectives.
EVALUATION AND CHOICE
The purpose of considering different strategic
options is to adopt the most appropriate
strategy.
This necessitates the evaluation of strategic
alternatives with reference to certain criteria.
Criteria such as suitability, feasibility and
acceptability are commonly employed to
evaluate the strategic options
IMPLEMENTATION
Implementation of strategy involves a number
of administrative and operational decisions.
Operationalizing the strategy requires
transcending the various components of
strategy to different levels, mobilization and
allocation of resource, structuring authority,
responsibility, task and information follows,
and establishing polices.
Evaluation and control
Evaluation and control is the last phase of the
strategic management process.
The objective is to examine whether the
strategy as implemented is meeting its
objectives and if not to take corrective
measures.
Continuous monitoring of the environment
and implementation of the strategy is
essential.