Assignment on Strategic Management

School of Business and Law
Assignment
On

Strategic Decision

Name Md. Kamal Hossain
ID B0687MHMH0411
Semester MBA2
Group International Business (B)
Module Strategic Management
Lecturer Mervin Sookun
Due Date 22nd February 2012

WORD LIMIT: APPROXIMATELY 4000

Table of content: Page Number

1.0. Introduction…………………………………………………………………………………………………………….4
1.01. Why strategic management?............................................................................4
1.02. What is strategic management?.......................................................................4

2.0. Company audit………………………………………………………………………………………………………..5
2.01. Michael Porter’s approach to industry analysis …………………………………………..5
2.02. Strategic positioning…………………………………………………………………………………….6
2.02.01. Positioning process………………………………………………………………………….6

2.03. Strategic planning……………………………………………………………………………………..…6

2.04. The SWOT analysis………………………………………………………………………………………..8
2.05. The PESTLE analysis……………………………………………………………………………………...8

3.0. Literature review…………………………………………………………………………………………………….9

3.01. Characteristics of strategic decisions……………………………………………………………..9

3.02. School of strategy…………………………………………………………………………………………..10

3.02.01. Three schools in prescriptive………………………………………………………….10

3.02.02. Seven schools in descriptive…………………………………………………………..11

4.0. Critical analysis…………………………………………………………………………………………………….….12

4.01. Mintzberg strategic decision-making process…………………………………………………12

4.01.01 Mintzberg Seven path configurations using the general strategic
decision-making model……………………………………………………………………………….13

4.02. The classic decision making process……………………………………………………………...13

4.03. Pricing strategy and approaches…………………………………………………………………….13

4.04. Modes of foreign market entry………………………………………………………………………14

4.04. Benefits of social networking in web base business market……………………………15

4.05. Globalisation…………………………………………………………………………………………15

5.0 Recommendation………………………………………………………………………………………………………15

6.0. Conclusion………………………………………………………………………………………………………………..16

7.0. REFERENCES and BIBLIOGRAPHY……………………………………………………………………………….17

1.0. Introduction:
In every company, they have a management structure and model to build up their business
and for gain the business goal. Vision, mission statement is the important statement for any
organisations. Entrepreneurs and industry managers are often so lost in thought with in
need of attention issues that they lose view of their eventual objectives. That is why a
business re-evaluates or groundwork of a strategic plan is a fundamental necessity. This may
not be a formula for success, but not including it, an industry is to a great extent more likely
to fail. By applying, any type of strategic decision company can full fill their vision and
mission. Either its big or small organisations, they have managed to achieve their
aspirations, or the management set up a decision to achieve that aspiration.

1.01. Why strategic management?

Strategic development and administration are more than a set of administrative
instruments. They represent a approach, an approach to looking at the alterations in the
inner and outer situation that meet the administrator. Using planning and administration
tools tactically, then, engage fundamentally a technique of opinion, a psychological
structure or approach, as well as a set of logical tools. For strategic management to be
successfully used the manager must build up a strategic attitude or viewpoint. The difficulty
for the professional is how to help the manager obtain that attitude

1.02. What is strategic management?

Strategic management: Strategic management process is the pattern or plan of an
organisation by which the organisation can achieve their desired goal. This process is
involved in the top-level management, decision-making management, led by the Chief
Executive officer or the President of the company. If business organisations have the strong
strategic management then the company can get the strong output, what is a main aim of
the business.

Strategic management is defined as the combination of formulating, implementing,
evaluating cross-functional decisions that make possible a company to accomplish its
objective.

Strategy formulation involves:

 Doing a circumstances study.
 Synchronized with this consideration, objectives are set.
 These objectives must, in the light of the circumstances investigation, recommend a
strategic plan. The arrangements supply the elements of how to gain these
objectives.

This three-step strategy formation system leads us to determine that at which stage a
business is now, determined where the business want to go and how they can achieve the
goal point.

Strategy implementation involves:

 Sharing of enough resources
 Build up a sequence of directive or some alternative
 Handing over some liability of precise tasks to precise individuals or grouping.
 It also engage supervision the procedure
 When implementing particular programs, that engage obtaining the necessary
possessions, implementing the method, training, procedure testing, documentation, and
integration legacy processes.

Strategic evaluation: Strategic evaluation is the last stage of strategic management process.
The management need to know in which particular strategies are not performing well. By
evaluating, the business can achieve their success in an easy way.

2.0. Company audit:
DL limited is a structured educational business company, which need to make a strategic
plan to gain their goal and build up a strong structure for long-term life. Their vision and
mission is to get the large amount of student to get involved with their academic sector for
achieving their higher degree. Objective is providing better quality of study and degree.
However to get involved in the competitions of the same business sector. They already
invested £300,000 for overall their business structure likes as web portal, course
development. Company payback period is 2years, which is much easier for this type of
business management.

DL limited intension is increase their business in the market. They providing the distance-
learning program in undergraduate programme, which is university, validated. Another main
intention is to entrance in the new market, from where they can achieve their aspiration.
But for any company they need to consider to do the external and internal analysis, how
they deal with the external and internal environment, how they can achieve their aspiration
from those environment. For external and internal analysis, company should analyse the
strategy positioning and strategic planning. A company should consider the SWOT and
PESTLE analysis.

2.01. Michael Porter’s approach to industry analysis:

Michael Porter, an influence on aggressive strategy, challenges that a business is most
anxious among the strength of contest within its business. Essential aggressive forces decide
the strength level. The stronger every one of these forces is, the more corporations are
restricted in their aptitude to increase values and earned superior returns. Porter specified
five forces for market analysis:

01. Rivalry.
02. Supplier power.
03. Threat of new entrants.
04. Threat of substitute.
05. Buyer power.
2.02. Strategic positioning: Strategic situation is anxious with the collision on strategy of
the outer situation, inner resource and competences, and the prospect and persuade
of stakeholders. Mutually, a deliberation of the situation, strategic ability, the prospect
and the principles within the cultural and political construction of the administration
supply a source for considerate the strategic position of an administration.

Overview:

 Further stylish planning believes in business position, product and icon.
 The position believes in aggressive situation and place prospect.
 Positioning take an advantage on characteristics and assets to go to the further
stage.

There three features of strategic positioning:

• The outer situation

• The organisation’s strategic ability in provisions of its property and capability

• Culture and moral principles of the administration and stakeholder authority.

2.02.01. Positioning process:

In strategic position organisation should consider these process:

Situation analysis: In this analysis, the considerable point is trend, issue, industry growth,
transforms, and institutional landscape.

Prospective component interest and unmet wants: in this analysis, the considerable point is
demographics and psychographics (how people react with a product or service), opportunity
and unmet wants.

Business unique competencies and quality: Underutilized assets, product, power, different
record.

Other process is needs, alternative position, geographic sphere, necessary position, strategic
plan based on position, and the final steps of process is organisational design and
development.

2.03. Strategic planning:

Definition: Strategic planning is a management tool by which management can go forward
with their job. Strategic planning processes ensure that all members of the organization are
working toward the goal of business and they follow the given instructions. It helps to
produce fundamental decisions and actions that focus that what is an organization, what
that dose, why the organization does it. The planning intentionally setting up the business
goal, setting up the peoples job who are involved with the business, what they need to do
and how they need to do their job.

Strategic planning outline:

Circumstances study: Circumstance includes External situation is economical, social and
political. Tendency, relative analysis and internal capacity.

Impact: What dissimilarity are the industries going to make?

Mission: reason, short declarative and straightforward – why you exist?

Vision: evocative, the optical icon of what is look like when you are doing well.

Imperatives: those possessions you should do, to the elimination of all else, to be unbeaten
stirring forward.

Goals: Precise, noticeable, sensible outcome.

Objective: How you achieve the business goal.

The other factors that should consider by the company are SWOT analysis and PESTLE
analysis. . The company do the SWOT and PESTLE analysis to get the useful information has
to carry the business. It is assessing the market:

 What will be the affect for company?
 Who are the company customers?
 How they can attract the customers?
 What happening globally and how that can affect to the company?

SWOT and PESTLE analysis assessing to the company:

 What are their resources?
 What are they doing?
 What they do best?

SWOT and PESTLE analysis assessing about company competitors:

 How the business from the other competitors?
 What are the market conditions of the company?
 What the company need to do to improve their quality?

 How can they solve the customers need and wants?

2.04. The SWOT analysis:

SWOT is a short form used to explain the exacting Strength, Weakness, opportunitie and
threats these strategic issue for a corporation.

Strength: Strength is the intrinsic worth that allow to achieve the organisation missions.

Strength includes:

 Exclusive rights.
 Strong brand name.
 Excellent standing among consumers.
 Cost advantage.
 Exclusive surplus to high category natural assets.
 Favorable right of entry to supply network.

Weaknesses: The absences of strength are as weakness of an organisation. Weakness
includes:

 Lack of outline defence.
 Weak brand name.
 Poor reputation with consumers.
 Costly structure.
 Unable to access to best natural resources.

Opportunity: Opportunity includes:

 An unconvinced consumer needs.
 Entrance of new technologies.
 Loosening of parameter.
 Elimination of international trade obstruction.

Threats: External environmental changes also may present threats to the firm. Example of
threats are:

 `hChange of consumer taste.
 Emergences of alternative of product.
 New regulations.

2.05. The PESTLE analysis: PESTLE analysis stand for political, economical, social,
technological, legal and environmental. PESTLE analysis using from last ten years. This
analysis is used for taking the business organization decision either the company
establishes their business or they should think in another way. It is an important
analysis for taking organizational strategic decisions.

Political factors: This factor characterize the technique and the aim to which a government
power the financial system and a convinced industry. Political factor is characterized by
particular region, such as employment rule, tax rule, trade limitations and even ecological
regulation.

Economical factor: economical factors demote to region exclusive to the financial system
and straight prejudiced by the economy, areas such as increase rate, curiosity rate, and
financial development or replace rates. All these areas can seriously influence a industry or
corporation, which makes them an tremendously significant part of the PESTLE analysis.

Social factors: social factors refer to the demographic factors. This actor considers the social
culture, populations.

Technological factors: this factor refers to the new technology, computerization. Technical
factors consider the cost, productivity, brand level.

Legal factor: legal factors demote to all the law straight linked to a business and its area of
action, together with customer law, antitrust law, favouritism law and health and safety law.

Environmental factors: environmental factor related with all others factors. Its consider the
environmental weather, location, climate changes etc.

3.0. Literature review:

Strategic decision: strategic decision is a plan by which company direction is affected. The
decisions apprehension areas such as new product and market, product development,
strategic alliance, joint venture, find out a new channel of business and others factor.

Strategic decision is the pathway, which concern with the completely organisational
environment, the full resources and the people who work in the company to gain their
company’s goal.

“Strategic decisions are those that determine the overall direction of an enterprise and its
ultimate viability in the light of the predictable changes that may occur in its most important
surroundings environments.” Qinn.

“Strategic management is the process of making and implementing strategic decisions...(It)
is about the process of strategic change.” Bowman and Asch.

3.01. Characteristics of strategic decisions: there are several types of characteristics of
strategic decisions. Strategic decisions include:

01. Strategic decisions are affecting the long time directions of an organisation.
02. Strategic decisions contract with the matching managerial resource capabilities with
the intimidation and opportunities.
03. Strategic decision is multifaceted in scenery.
04. Strategic decision is effectively the operational decision to set off the emission of
minor decisions. It differs from administrative and operational decisions.
05. Strategic decision concerned with the range of organisation actions.
06. The strategy of an organisation not only affected by the ecological sources and
services availability but also affected by the worth and hope of those who have in
and around the organisations.

Finally, from the above discussions we can say that, Strategy is the way and scale of an
organisation over the long term, which achieves benefit for the organisation from
beginning to end its arrangement of resources within an altering environment, to gather
the requirements of markets and fulfil stakeholder prospect.

3.02. School of strategy: There are 10 schools of managerial thinking, and that is divided
into 2 major parts.

01. Prescriptive (based on customs) and
02. Descriptive.

3.02.01. Three schools in prescriptive:

01. The Design School: Strategy formation is achieving the necessary fit among inner
strengths and weaknesses and outer pressure and opportunities. The higher
management defines clear, simple and unique strategies through a planned thinking
process - which is not formal-analytical, nor informal-intuitive – so everyone can
execute the strategy. This was the leading sight of the strategy process at least into
the 1970s given its implicit influence on most teaching and practice.

02. The Planning School: planning is designed parallel with the design school. It was
outweighed middle of seventy’s and started to decline from 80’s. Nowadays it is
again starting implementing by the organisations and getting importance in the
specialized literature. This process be redesigned by the organisations to meet their
new challenges.

03. The Positioning School: in 80’s this school was the dominant outlook of strategy
formulation. It was given impulsion by Professor Michel Porter in 1980. This school
sees as an analytic process. It is placing the business within the context its industry. It
looks forward that how the business can improve its strategic positioning within the
industry. Positioning is useful in early stage of business strategy process

development, when the data are analysed. Positioning does not consider the politics,
power, culture, social elements.

3.02.02. Seven schools in descriptive:

01. The Entrepreneurial School: The entrepreneurial school has seen as visionary
process. This process takes by the business founder or leader of the business. The
entrepreneurial school sets in its core the decision-making management almost as
the design school. However, unlike the design school and at the other pole from the
planning school, the entrepreneurial school ties this process of suspicion. This
direction shifts the strategy from a specific design, from tactics and position to
formless visions or large perspectives that are often seen as metaphorical. In this
vision, the chief has a joint control over the functioning of the formulated vision.

02. The Cognitive School: This school sees as a mental process. This school analyse that
how people are aware about the process and pattern information. It concentrates
that what arranging in the strategic mind. Cognitive school is Psychological basis.
03. The learning school: This school formulation is an emergent process. Try to learn, if
you do not succeed in first time try again and achieve that, do not stop learning. The
management observes very carefully which job does done completely and proper
way and which job dose not done in a proper way or completed. Actually
management look at that, what does work and what does not work. This is a theory
of learning. It is not very useful in stable condition. Learning school offers a solution
in strategy formation. This school powerful in multifarious situation with the
continuous changes. This school could lead to having no strategy or doing some
tactical manoeuvring.

04. The power school: This strategy formulation sees as a process of negotiation. It is
moderately not too big, but quite dissimilar school has determined on strategy
making entrenched in power, in two sanities. Power school lets the strongest people
to survive in the business place. By power, management can control the resistance
when they make the changes. Help to do the stakeholder analysis. Micro power sees
the maturity of strategies within the business as political, a method linking
bargaining, influence, and disagreement between inside the actors. Macro power
takes the business as an entity that uses its power in excess of others and between
its partners in alliances, joint ventures, and other network interaction to settle
"collective" strategies in its interests. Sometimes power schools usages a lot of
energy, causes wastages and distortion and it is costly.

05. The cultural school: Cultural school strategy formulation is as a collective process. It
is focused on self-interest and disintegration. This strategy tries to gather a mixture
of different groups and department within the company. This formation is viewed as
an essentially communal and qualified procedure. It is developed the expression of
the business culture of the administration. The restriction of cultural school is it can

nourish confrontation to change and can be abused to justify the status-quo. Give a
small number of clues how should possessions become. The culture is the big issue in
Japan, United State and Europe.

06. The environmental school: Environmental school strategy process is as a reactive
process. Conceivably not strictly strategic management, if one takes that term as
anxious with how business uses their degrees of autonomy to generate strategy; the
environmental school however deserves awareness for the brightness it throws on
the anxiety of the situation. Along with its most conspicuous theories is the
"contingency theory", that believe what responses are expected of business that
face individual environmental situations, and "population ecology", writings that
claim severe limits to strategic option.

07. The configuration school: Configuration school is as a form of process
transformation. This strategy considers the business to transform the organisation
from one type of decision-making structure to another. The configuration school get
pleasure from the most wide-ranging and integrative fiction as well as training at
present. One side of configuration school, more educational and expressive, sees
business as constitution - rational gather of attributes and actions - and so provides
as single manner to combine the maintain of the other schools. Every construction,
in cause, in its hold situates preparation for example, in machine-type business
below circumstances of comparative constancy, private enterprise beneath
additional energetic constitution of commence with swivel. However, if business can
be explained by such situations, after that alteration should exist explained as
somewhat theatrical alteration - the bound commencing one position to one more.
Therefore, a fiction and exercise of transformation - more narrow and practitioner
oriented urbanized as the other surface of the penny. These two very dissimilar
fiction and training however set off one another and so belong to the similar school.

4.0. Critical analysis:
Many kind of strategic decisions makes the firm to involve the discrete choice. By the
strategic decision firm take the decisions to open a new business in a new place, determine
that where the product should be place or what option to offer in a service contract. These
decisions are typically involved with the consideration of a number of demands, cost, and
competitive factors. The learning of consistent distinct decisions poses several procedural
challenges such as large state spaces, the incidence of various stability and dynamics in firm
decisions.

The interrelation in selection performance staunch from the fact that firm takes into
account the action of their opponents when building their won judgment. For example, firm
are prejudiced of their selection of position by their anticipation of where their competitors
will situate. In the same way, when deciding what kind of pricing strategy to implement
firm’s base their decisions on what they anticipate their competitors will do.

4.01. Mintzberg strategic decision-making process: Mintzberg divided his strategic decision
making process in five stages. Those steps are:

 Recognition: Acknowledge that an incentive or a motivation has generated an
prospect, danger or predicament.
 Diagnosis: inspection of present and future information resources to describe the
issues.
 Search and design: search for convenient solution or plan a convention made one.
 Evaluation: use of judgement, negotiating and investigation to choose a solution.
This is multistage iterative process with a deep examination into the substitute.
 Authorisations: the approval of the chosen explanation by the top-level
management.

4.01.01 Mintzberg Seven path configurations using the general strategic decision-making
model:

 Simple emphases: An explanation is congested in argue.
 Political design: To attain implementation of a explanation, political choreography is
necessary.
 Basic search: Involves discovery the best expedient result.
 Modified search: Ready-made clarifications need to be modified to find an
satisfactory solution.
 Basic design: Design procedure results in often complex and ground-breaking
solutions.
 Blocked design: Indistinguishable to basic design but conflict from outside group’s
grades in a blocked decision procedure.
 Dynamic design: Movement flow becomes extremely difficult due to great venture,
multifaceted design and possibility of disruptions owing to new wants.

4.02. The classic decision making process: there are seven steps of classic decision
making. These are:

 Assess the situation.
 Gather facts and assess unknown.
 Identify alternatives.
 Establish decision criteria.
 Weigh alternatives.
 Select best alternative.
 Review the decision.

4.03. Pricing strategy and approaches: The main approaches to take the pricing decision:

 Cost based pricing: price is adding by calculating the cost and level of profit. This
involves setting a price by adding the percentages to the cost or a fixed amount of
making the products. Cost-plus pricing is widely used in retailing. The advantages of
this process that the company will know that the product cost are covered.
 Customer-based pricing: where prices are strong-minded by what a business believes
consumers will be ready to pay.
Penetration pricing is the pricing system by which the company set a introductory
offer to the customer for their product popularity. This technique is to set a lower
price to attract the new customer.
Price skimming is the technique that set a higher price before any competitor coming
in the market.
 Price leader: An surveillance made of oligopolistic trade performance in which one
company, usually the leading competitor among numerous, leads the way in
determining prices, the others soon subsequent. The circumstance is a state of
limited opposition, in which a small number of manufacturers or trader shares a
market.
 Competitor based pricing: if there is two or more company for one product, the
consumer could be confused for from whom they should buy. The simple choice is
the cheapest one. In this circumstance, the company set up a “going-rate” pricing
process. Going-rate is the setting price that is in line with the price charged by direct
competitors.

4.04. Modes of foreign market entry:

For entry in the new market, the business should follow the entry strategy. There are many
entry modes in the foreign markets:

01. Exporting: exporting is providing the service or goods worldwide by the medium.
Low risk, company can avoid the FDI restriction.
02. International licensing: Licensing is when a firm, called the licensor, leases the right
to use its intellectual property such as technology, work methods, pattern, brand
names, or trade-marks to another firm, called the licensee, in return of a fee.
03. Franchising: A franchising agreement allows independent organisation called
franchisee. For run a business by name of another is called franchisor.
04. Contract manufacturing: contract manufacturing contracts with a firm for
components or products.
05. Management contract: A management contract is an understanding beneath which
functioning manage of an enterprise is vested by agreement in a disconnect venture,
which presents the essential administrative roles in return for a fee.
06. Foreign direct investment: foreign direct investment is that invest in the foreign
market directly.

4.05. Benefits of social networking in web base business market: now a day the social
network is most important network for any kind of business for expand their businesses by
doing the online marketing. Social network is the most valuable and strong way to connect
the people with each other’s. For online communications people mostly choose the social
network such as facebook, twitter, badoo, linkedin etc. so if any business company do their
advertising in the social network most of people can see the advertise every day, people can
know about the company and their activity also they can get all information’s about the
company.

4.06. Globalisation: globalisation is the important things in the business. the process of
connectivity and independence of the world markets and business is called business
globalisation. By globalise the business can expand their business. people can connecting
more often with each others in a single period of time in globally, goods and services
produces in one side of the world and increasingly available in all parts of the world.

5.0. Recommendation:
Now a day there are many developed country in the world. And the developed country
people can survive themselves in general but they are not too strong economically for
getting the higher degree from high class University from outside of their country. For this
type of country they need some types of institute from whom they can get the academic
knowledge as international university also can achieve the international degree, this type of
learning is called distance learning, which one is providing by the DL limited. So as new
market DL limited can choose the Bangladesh and India for expand their business.

Why they should choose these two markets?

India and Bangladesh both is the developing country. In this two country huge amount of
people. Their literacy rate is going up. Many students are able to study in high-class
university in the worldwide but because of financial problem; they cannot get any chance to
get the higher degree from international universities. Because maximum are from the
middle class family for whom it is not possible to go abroad for higher degree. However, if
they got chance for the distance learning that is a big chance for them and they should be
ready for get the chance. As DL limited providing the distance learning, they can help those
students by providing the distance learning opportunity. Students can get the higher degree
from their own country.

As demand of distance learning in India and Bangladesh DL limited can use the FDI entry
mode because of the high profit rate, maintain control over operations, avoid tariff and
NTBs, and acquire knowledge of local market.

6.0. Conclusion:
Any business they should have vision, mission, objective and organisational structure. For
cover the all of Criteria Company need to make or build up a strategic decision by which
they can reach in their main goal point. Company should maintain all major process also the
others factors.

7.0. References and bibliography:

1. R. Whittington – What Is Strategy?- and Does It Matter, 2nd Edition, Thomson

Learning, Londra, 2001, p. 325

2. H. Mintzberg, J. Lampel, J.B. Quinn, S. Goshal, The strategy process, Fourth

Edition, Pearson Education International, 2003, p.22-26

3. T.L.Wheelen, J.D.Hunger, Strategic Management and Bussiness Policy. Concepts

and Cases, Tenth Edition, Pearson Education, Prentice Hall, New Jersey, 2006

4. K. Andrews, The concept of Corporate Strategy, Richard D. Irwin Inc.,

Homewood, Illinois, 1980

5. I.Ansoff, Stratégie et développement de l’entreprise, Paris, L’edition

d’organisation, 199

6. Basi, R.S. (1998). Administrative decision making: a contextual analysis. Management

Decision, 36, 232-240.

7. Butler, R.J., Astley, W.G, Hickson, D.J., Mallory, G., & Wilson, D.C. (1979). Strategic

decision-making: concepts of content and process. International Studies of

Management and Organization, 9, 4, 5-36.

8. Miller, S.J., Hickson, D.J., & Wilson, D.C. (1996). Decision making in organizations. In

S.R. Clegg, C. Hardy, & W.R. Nord (Eds.), Managing Organizations: Current

Issues (pp.43-62). London: Sage Publications.

9. Mintzberg, H., Raisinghani, D., & Theoret, A. (1976). The structure of “unstructured”

decision processes. Administrative Science Quarterly, 21, 246-275.

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XVI. http://www.managementstudyguide.com/strategic-decisions.htm
XVII. http://www1.ximb.ac.in/users/fac/dpdash/dpdash.nsf/pages/BP_Decision
XVIII. http://site.ebrary.com/lib/westminsterintl/docDetail.action?docID=10287990&p00=strategi
c%20decision%20making

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