BSM 1 Overview
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Transcript of BSM 1 Overview
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8/2/2019 BSM 1 Overview
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Strategic Management
An Overview
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StrategicManagement
Most of the time themanagement is concerned withmanaging current operations.
There is a need for looking
beyond the current operationsand think about future course ofdirections in which enterprisewill move.
Strategic Managementaddresses this need.
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Need for StrategicManagement
Business environment-economic, technological,political etc go on changing.
Changes in environment can
throw opportunities and threats.
Business has to meet thesechanges effectively.
The pace of change isaccelerating.
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Increasing Relevance
Acceleration of technologicalchange
Intensification of intra-industryand inter-industry competition
Globalisation
Increasing share ofdiscretionary spending by
consumers Multiple demands on industry
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Essence?
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Essence
Essence of Strategic
Management exercise is to
secure and maintaincompetitive edge over the
close competitor/s.
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Three Basic Questions
Where are we now?
Where do we want to
go?
How will we get there?
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Six tasks of strategic
management
Describing business, stating missionand developing vision statement
Scouting for opportunities and
threats
Setting measurable objectives
Crafting strategy
Implementing and executing
strategy Evaluating performance,
assessing new developments and
initiating required changes.
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Importance
Empirical evidence confirmsof a positive correlationbetween corporateperformance and quality of
its strategic management. Choice not between having
or not having strategicmanagement, but betweengood explicit and badexplicit/implicit strategicmanagement.
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SM Concept
Strategic management/planning is essentially a blue
print of whole gamut of broad
actions to get from here tothere.
The focus is to get as efficiently
as possible and gain a
sustainable edge overcompetitors.
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An illustration
A single unit,leading hotelstrong in operating skills butweak on funds.
Perceived need/opportunity for
growing into a chain of hotels.
Strategyacquire, merge, buildalliances, with people who
have properties/funds. Decided on alliances.
Identified possible partners
Entered into alliances
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Illustration Contd..
Built up people resources inadvance taking hit on profits
Developed pool of people,architects, contractors, interior
decorators, who understoodhotel needs and were adept atmodifying existing properties.
Put in place technology ofmanaging chain.
Blossomed into a largecountrywide chain in 5 years.
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The Broad Frame
Vision and Mission provide thebroad frame.
Vision is what we would like tobecome- a dream an ambition.
Mission is what we would bedoing.
Many times these are implicit.
They need to be articulated andcommunicated.
Objective , target are moreproximate in time.
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Strategic Management
Process
Understanding the current status(Where are we?)
Analysing environment foridentifying opportunities and threats
(what is going out there?) Deciding objectives (Where Do we
want to go?)
Analysis of internal Organisation
(What do we have?) Formulation of possible strategies
(What can be done?)
Selection (what shall we do?)
Implement (what? when? Who?how?)
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SM Process contd..
Selection of strategies (Whatwill we do?)
Implementation of strategies
(What actions, who will dowhat, when, how and with what
resources?)
Monitoring (What is
happening?
Making midcourse changes
(What will be done,by whom
when how?)
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Revisiting Illustration
The story was of Taj group
of hotels.
Their vision was to establisha world class hotel.
Their mission was to render
unmatched level of service.
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SM process contd..
Strategic management
process is broadly but
necessarily not strictlysequential.
It is interactive
It is collaborative
A group process
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Environmental Analysis
Environment is the sum total factorsimpacting enterprise.
Some of these are-
Technology
Demography Economy
Government policy
Essentially understanding what isgoing on out there
Relating them to the business
Working out implications-opportunities (O)/threats(T).
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Teasers
What do increasinglongevity,and greatersocial security mean to
pharma industry?What opportunities are
created by increasing
number of workingcouples and greatercommuting?
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EA - Illustrations
Demographics
Increased longevity
Extension of social security
Technology
Stem-cell research
Bt drugs
Economic
Improvement in living
conditions
Drug Price control
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Enterprise Analysis
Understanding what is thebusiness and what are the
critical factors for that business.
Comparing the enterprise withcompetitors to understand the
strengths (S) and weaknesses
(W) of the enterprise
These may relate to the areas of
marketing, finance, production,
human skills etc.
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Strategy Formulation
Strategic planning is a blue printof broad actions of how(strategy)to get there (mission/objectives)
from here (current state).
Answers the question how dowe go from where we are to
where we want to?
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Some strategies
Expansion
Contraction/exit
Vertical integration
Forward
Backward
Diversification
Related
Unrelated.
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Monitoring
Monitoring meansoverseeing the direction andthe progress of the events to
check whether they arebroadly in line with what wasplanned.
If not, the significant
deviations be analysed andcorrective actions may betaken.
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Implementation
Having decided objectives, andstrategy the management has todevelop specific structure,systems, programmes andpolicies.
It is useful to spell out majorassumptions.
Working out details in advancesaves from many futureproblems/ hiccups.
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An illustration
A leading hotel perceived opportunityfor growing into a chain of hotel.
Strong in operating skills but weak onfunds.
Strategy -build alliances with people
who have properties. Developed pool of people, architects,
contractors, interior decorators, whounderstood hotel needs.
Blossomed into a large countrywidechain in 5 years.
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SM ? Not For Me
Corporate strategy Understanding
communicating
Implementing
Providing feedback Scanning competitive environment
Personal Making self swot/ client swot
Developing personal strategy
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Strategic Management
An Overview
-
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29/42
Need for StrategicManagement
Business environment-economic, technological,political,etc go on changing.
The pace of change is
accelerating. Changes in environment can
throw opportunities and threats.
Business has to meet these
changes effectively.
-
8/2/2019 BSM 1 Overview
30/42
Strategic Management
Most of the time themanagement is concerned withmanaging current operations.
There is a need for looking
beyond the current operationsand think about future course of
directions in which enterprise will
move.this is what strategic
management does.
-
8/2/2019 BSM 1 Overview
31/42
Increasing Relevance
Acceleration of technologicalchange
Intensification of intra-industryand inter-industry competition
Globalisation Increasing share of discretionary
spending by consumers
Multiple demands on industry
-
8/2/2019 BSM 1 Overview
32/42
Importance
Empirical evidence suggestspositive correlation betweencorporate performance andquality of strategic management.
Choice not between having ornot having strategicmanagement, but between goodexplicit and bad implicit strategicmanagement.
-
8/2/2019 BSM 1 Overview
33/42
SM Concept
Strategic management/ planning isessentially a blue print of whole gamut
of broad actions to get from here to
there.
Answers the question how do we getfrom where we are to where we wantto go.
The focus is to get as efficiently aspossible a sustainable edge over
competitors
-
8/2/2019 BSM 1 Overview
34/42
Strategic Management
Process
Deciding objectives (Where Dowe want to go?)
Analysis of environment (What isgoing out there?)
Analysis of internal Organisation(What do we have?)
Formulation of possiblestrategies (What can be done?)
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SM Process contd..
Selection of strategies (What will wedo?)
Implementation of strategies (Whatactions, who will do what, when, howand with what resources?)
Monitoring (What is happening?)
Making midcourse changes (What willbe done, by whom, when, how?)
-
8/2/2019 BSM 1 Overview
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Environmental Analysis
Environment is the sum total factorsimpacting enterprise.
Some of these are- Technology
Demography
Economy Government policy
Essentially understanding what isgoing on out there
Relating them to the business
Working out implications- opportunities(O)/threats(T).
-
8/2/2019 BSM 1 Overview
37/42
Teasers
What do increasinglongevity,and greater socialsecurity mean to pharma
industry?
What opportunities are createdby increasing number of working
couples and greater commuting?
-
8/2/2019 BSM 1 Overview
38/42
Enterprise Analysis
Understanding what is the businessand what are the critical factors for
that business.
Comparing the enterprise withcompetitors to understand thestrengths (S) and weaknesses (W) ofthe enterprise
These may relate to the areas ofmarketing, finance, production, human
skills etc.
-
8/2/2019 BSM 1 Overview
39/42
Strategy Formulation
Strategic planning is a blue printof broad actions of how(strategy)to get there (mission/objectives)
from here (current state).
Answers the question how dowe go from where we are to
where we want to?
-
8/2/2019 BSM 1 Overview
40/42
Some strategies
Expansion Contraction/exit
Vertical integration
Forward
Backward
Diversification
Related
Unrelated.
-
8/2/2019 BSM 1 Overview
41/42
Monitoring
Monitoring means overseeingthe direction and the progress ofthe events to check whether they
are broadly in line with what was
planned. If not, the significant deviations
be analysed and corrective
actions may be taken.
-
8/2/2019 BSM 1 Overview
42/42
Implementation
Having decided objectives, andstrategy the management has todevelop specific structure,systems, programmes andpolicies.
It is useful to spell out majorassumptions.
Working out details in advancesaves from many futureproblems/ hiccups.