Chapter 1

Introduction
Definition of Strategy
1. Von Neumann and Morgenstern: Strategy is a series of
actions by firm that are decided according to the particular
situation.
2. Thompson and Strickland: Strategy is the pattern of
organizational moves and managerial approaches used to
achieve organizational objectives, and to pursue the
organization’s mission.
3. Sharon M. Oster: Strategy as a commitment to undertake
one set of actions rather than another.
Definition of Strategic Management

1. Fred R. David: Strategic Management can be defined

as the art and science of formulating, implementing,
and evaluating cross-functional decisions that enable
on organization to achieve its objectives.
2. Byars, Rue and Zahra: Strategic management is the
process by which top management determines the
long time directions and performance of the
organization by ensuring that careful formulation,
effective implementation and continues evaluation of
the strategy takes place
3. M. A. Rahman: Strategic management may be
defined as a process of analyzing, formulating,
implementing and evaluating some set of actions
taken or to be taken for the achievement of pre
determined goals/ objectives of any organization.
Guidelines for Effective Strategic
Management

1.No bureaucracy
2. No ritualistic, stilted or too formal / rigid
3. Willingness to consider new information
4. Gaining ability for the satisfaction of
strategists.
5. Strategic decisions to eliminate some
courses of action
6. Long vs. short range strategic decisions
Tasks or Functions of Strategic Management
The SM process consists of five following
interrelated managerial tasks:

Developing Setting Crafting Execution Evaluating the

vision & objectives strategy strategy
mission

Revise as Revise as Improve/Change Improve/Change Recycle to

Needed Needed as needed as needed Tasks 1.2.3 or 4
as Needed

1.Developing strategic vision and business

mission
2. Setting objectives: Financial and Strategic
3. Crafting strategy
4. Execution of strategy
5. Evaluation and control of strategy
Objectives of Strategic Management

1. To analyze the strategies

2. To formulate strategies
3. To assess strengths & opportunities
4. To acquaint with weaknesses and threats
5. To identify core competencies
6. To make differentiation program
7. To analyze competitive abilities
8. To obtain cost effectiveness
9. To gain leadership in technology
10. To expand market share
Benefits of Strategic Management
1. Better guidance
2. Alert management
3. Rational evaluation
4. Unifying numerous strategies
5. Proactive management
6. Identification of opportunities
7. Objective view
8. Framework for coordination
9. Change minimization
10. Major decisions
11. Effective time allocation
12. Minimum resource allocation
13. Internal communication
14. Integration behavior
15. Basis for responsibilities
16. Forward thinking
17. Problem solving
18. Favorable attitude
19. Discipline
Strategic Management Process/Model
Strategic management process is composed of
three basic phases as follows:
1. Strategy formulation
a. Defining the purpose and mission
b. Establishing long range objectives
c. Selecting the strategy
2. Strategy execution
a. Developing organizational structure
b. Establishing short range objectives
3. Strategy evaluation
a. Establishing standards of performance
b. Monitoring progress of execution
c. Initiating corrective actions
Hierarchy of Strategies

There are four hierarchies of strategies:

1. Corporate strategy
2. Business unit strategy
3. Functional strategy
4. Operating strategy
Strategic Management : An on going
Process
1. It is essential for the existence of firm
2. It is not an one step process
3. It continues from inception to end
4. Because competitors survive in business
5. For copying with competition strategy is
suppose to be taken always
6. If it is stopped, survival may be at stake