Concept of Strategy,Concept of Strategic Management and Type

8/9/2019 Concept of Strategy,Concept of Strategic Management and Type

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Concept of Strategy,

Concept of Strategic Managementand types of Strategy


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Meaning of Strategy

The term ‘strategy’ is derived from the Greekword ‘strategos’, which means, generalship-theactual direction of military force ‘ as distinct fromthe policy governing its development. Therefore,the word ‘strategy’ literally means the art of thegeneral. In business parlance, there is no definitemeaning assigned to strategy. It is often usedloosely to mean a number of things.


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STRATEGY !trategy is the determination of thelong-term goals and ob"ectives of an enterprise andthe adoption of the courses of action and the

allocation of resources necessary for carrying outthese goals.

!trategy isn’t themission#it’s the

plan that allowsthe company toaccomplish themission

!trategy is management’s game plan for strengtheningthe organi$ation’s position, pleasing customers, and

achieving performance targets.


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De nition %handler defined strategy as &The determination of the

basic long term goals and ob"ectives of an enterprise andthe adoption of the courses of action and the allocation ofresources necessary for carrying out this goals&.

'ndrews defined strategy as &The pattern of ob"ectives, purposes, goals and the ma"or policies and plans forachieving these goals stated in such a way so as to definewhat business the company is in or is to be and the kindof the company it is or it is to be&.


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Glueck define the strategy as &' unified,comprehensive, and integrated plan designed to assumethat the basic ob"ectives of the enterprise are achieved&


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Nature of Strategy

Grand plan %ompetitive

(ong term goal )ro-active *a"or course of action

+uture riented ependent on system


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Element of Strategy

Goals !cope

%ompetitive 'dvantage (ogic


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!T 'T/GI% *'0'G/*/0T

!trategic management is defined as the art and science offormulating, implementing, and evaluating cross-functional decisions that enable the organi$ation to

achieve its ob"ectives.& Generally, strategic managementis not only related to a single speciali$ation but coverscross-functional or overall organi$ation.


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!trategic management is a comprehensive area thatcovers almost all the functional areas of the

organi$ation. It is an umbrella concept managementthat comprises all such functional areas as marketing,finance 1 account, human resource, and production1 operation into a top level management discipline.

Therefore, strategic management has an importancein the organi$ational success and failure than anyspecific functional areas.!trategic management deals with organi$ational leveland top level issues whereas functional or operationallevel management deals with the specific areas of the

business.


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Top-level managers such as %hairman, *anagingirector, and corporate level planners involve more in

strategic management process.

!trategic management relates to setting vision,mission, ob"ectives, and strategies that can be the

guideline to design functional strategies in otherfunctional areas

Therefore, it is top-level management that paves theway for other functional or operational managementin an organi$ation


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Defnition

Glueck 2 !trategic *anagement can be defined as aset of decisions, actions resulting in formulations 1implementation of strategies designed to achieve the

ob"ectives of enterprise.%handler - 3The determination of the basic long-termgoals 1 ob"ectives of an enterprise and the adoption ofthe course of action and the allocation of resourcesnecessary for carrying out these goals.4


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Nature of SM

Long term Issues Competitive Advantage

E ect on perations !ncertain Comple"

rgani#ation$%ide Long term Implication


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Types Of Strategy5 %orporate !trategy5 6usiness !trategy +unctional !trategy


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Corporate strategy:

%orporate strategy is one, which decides what businessthe organi$ation should be in, and how the overall groupof activities should be structured and managed. )orter has

described it as the overall plan for a diversified business.The strategies are then evolved for each strategic businessunit and strategic business area.


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&usiness Strategic

's the number and diversity of products increases thestructure is likely to be centered upon division called!trategic 6usiness 7nit 8!679. !67 are responsible

individually for developing, manufacturing andmarketing their own product or group of products.


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Strategic &usiness Area 'S&A()

!6' is a distinctive segment of the environment inwhich the firm does want to do business. ' companyinstead of trying to compete in all the area, it selects the

area of its competitive advantage and invest its moneyand strategies in that area. This helps the company toconcentrate its strategies in a particular area and toreduce the unnecessary e:penses in non-profitable area.


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*unctional Strategy)

!trategy that is related to each functional area of businesssuch as production, marketing and personnel is calledfunctional strategy. It is designed and managed in a

coordinated way so that they interrelate with each otherand at the same time collectively allow the competitivestrategy to be implemented properly.


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Concept of Strategy,Concept of Strategic Management and Type

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