Strategic Management Introduction.ppt
- 1. Strategicmanagement - introduction DR. M. JULIASCEASAR Asst. Professor / Commerce School of Management Studies St Joseph’s College (Autonomous) Tiruchirappalli – 620 002. julius.sxc@gmail.com 9443110877 1
- 2. Topics covered 1. Meaning of Strategy 2. Corporate strategy – why? 3. Levels of strategy 4. Crafting a strategy 5. Strategy: an ongoing process 6. Strategy of a diversified company 7. Strategic Management Process 8. Role of a Strategist 9. Mintzberg’s Model of Strategic Decision 10. Strategic management in India
- 3. Strategy • Comprehensive master plan • How organisation achieve its mission and objectives • Plan – how do I get there • Pattern in consistent action over time • Vision and direction
- 4. Corporate Strategy - Why? • Meaning – need of every organisation leads to several benefits. 1. Universal – • complex web of thoughts, ideas, insights, experience, goals, expertise, memories, perceptions, and expectations. • Provides general guidelines for specific action. 2. Keeping pace with general environment – • present day environment is dynamic, fast changing. • Uncertainties, threats, constraints great pressure – trying to find ways for healthy survival.
- 5. Corporate Strategy - Why? • CS help the corporate management to explore opportunities and minimize threats. • Achieve optimum level efficiency 3. Minimises Competitive advantage: • repositioning and reengineering products and brands. 4. Clear sense of strategic vision and sharper focus on goals and objectives: • what we want to achieve and chart our course in the market place, basis for establishment of business firm, • Basic requirement for a firm to survive and sustain.
- 6. Corporate Strategy - Why? 5. Motivating employees • labour efficiency loyalty towards management • Plan objectives as to what, when and how to do??? • Make them to feel confident to perform without hesitation • Labour efficiency and loyalty will result ends up in industrial peace and good results. 6. Strengthening decision making: • Identify the objectives of the business concern • Smooth sailing and effective decision making 7. Efficient and effective way of implementing actions for results: • Strategy provides clear understanding of purpose, objectives and standards of performance of employees at all levels and in all functional areas. • Implementation is easy and smooth.. Efficient and economic results
- 7. Levels of Strategy Three types of strategies: 1. Business strategy – business and product emphasises the improvement of competitive position 2. Functional strategy – develop and nurture distinctive competence to provide competitive advantage 3. Operating strategy – deliver effectively the corporate, business and functional level strategies in terms of resources, process and people.
- 8. Crafting a strategy Four approaches to crafting strategy: 1. Architect approach:Owner and CEO assumes the role of chief strategist –single hand decision – need to have brainstorming with subordinates. 2. Delegation approach: delegate to trusted subordinates, talented, knowledgeable etc., 3. Collaborative / Team approach: consults, discusses, seek assistance and advice of key peers 4. Corporate entrepreneur approach: encourage team and individual to develop and champion proposals for new product line or new business ventures. Executives are judges for proposals.
- 9. Strategy: On going process 1. CS continuous and ongoing 2. Explore and determine vision 3. Develop mission statement 4. Define company – internal analysis – culture, strength and capability 5. External environmental analysis 6. Match company profile with environment 7. Decide the most desirable course of action 8. Select a set of long term objectives 9. Evolve short term annual objectives 10. Implement the strategy in a planned way based on budget and resources 11. Review for continuous improvement
- 10. Strategy of a diversified company 1. Corporate strategy 1. Efforts to capture cross culture business 2. Move to build position in new industries 3. Plan for diversification 4. Domestic or overseas venture 1. Capital allocation 2. Diversification related or unrelated 3. Strengthen position through new ideas or acquisition 4. Move to invest in weak or unarrtactive business
- 11. Strategic management process Four basic elements: 1. Environmental scanning 2. Strategy formulation - 3. Strategy implementation 4. Evaluation and control Monitor, evaluate and discrimination of information from internal and external environment, Identify strategic factors. SWOT Analysis
- 12. Role of strategist 1. Consultant 2. Entrepreneur 3. Board of director 4. CEO 5. Senior management 6. Corporate planning staff 7. Strategic business unit executive 8. Middle level managers 9. Executive assistant
- 13. Mintzberg’s model of strategic decision making Three typical approach of strategic decision making 1. Entrepreneurial mode – strategy by powerful individual who has entrepreneurial competencies – innovative and risk taking. Focus on opportunities 2. Adaptive mode – reactive solution to existing problems, don’t search new opportunities 3. Planning mode – planning mode systematic gathering of required information includes proactive search and reactive solutions 4. Logical incrementalism – change in environment, need to build consensus, develop the required resources
- 14. Strategic management in India 1991 – after major thrust in India after WTO in 2005, change in business environment, increased the relevance of strategic management. New initiatives 1. Abolition of public sector monopoly, high tech and heavy investment sectors – needed strategic management. 2. Relicensing – removed restriction of import barriers, changed consumption pattern. Limited availability of goods 3. Liberalisation towards foreign technology and capital leading to foreign markets 4. More autonomy to public enterprises