Introduction to Strategic Management

Introduction to Strategic ManagementModule 1 MG University

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Manu Melwin JoyAssistant ProfessorIlahia School of Management StudiesKerala, India.Phone 9744551114Mail manu_melwinjoy@yahoo.com

ContentsIntroduction to Strategic Management.Concept of Strategy.Process of Strategy.Strategic Framework.Vision, Mission, Objectives and Goals. Strategic Analysis. Environmental Analysis.Competitive forces.Internal analysis.SWOT Analysis.

Definition of strategy

According to Norman (1993), Strategy is the art of creating value.According to Porter (1996), Strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.

Characteristics of strategyThe decision is concerned with or effects the long term direction of an organization.Strategic decisions are normally about trying to achieve some advantage for the organization. Decision is likely to be concerned about the scope of an organizations activities. Decisions can be seen as matching of the activities of an organization to the environment in which it operates.

Characteristics of strategyDecisions have major financial or other resource implications. Decision will have a major impact outside the organization.Strategic decisions are likely to affect operations decisions.Decisions entail significant risks to the business.

5 Ps of strategyProfessor Henry Mintzberg of McGill University in Montreal, Canada, articulated what he labeled as the 5 Ps of strategy. According to Mintzberg, understanding how strategy can be viewed as a plan, as a ploy, as a position, as a pattern, and as a perspective is important.

Process of strategyStrategic management is a process that involves building a careful understanding of how the world is changing, as well as knowledge of how those changes might affect a particular firm.

Strategic FrameworkVision, mission, objectives and goals

Vision - DefinitionVision statement answers the question What will success look like?.

Characteristics of visionA basis of performance. Reflects core values. Way to communicate.

Examples of vision statementHindustan Lever Ltd Our vision is to meet the everyday needs of people everywhere.

Mission - DefinitionMission statement is a statement of purpose and function. It answers the following questions.Why the organization does exist?What is its value addition?What is its function?How does it want to be positioned in the market and minds of customer?What business is it in?

Characteristics of missionIt draws on the belief systems.It must be future oriented and portray your organization as it will be, as if it already existsIt must focus on one common purpose.It must be specific to the organization, not generic.

Example of Mission StatementRanbaxy Laboratories Ltd Our mission is to become a research based international pharmaceutical company.

Strategic GoalsStrategic goals address the key question Where do we wish to arrive and when?.

SMART Goals

Nikes strategic goalsProtect Nikes position as the number one athletic brand in America. Build a strong momentum in the growing fitness market.Intensify the companys efforts to develop products that women need and want.

Environmental analysisWhy Does the Environment Matter?First, the environment provides resources that an organization needs in order to create goods and services.Second, the environment is a source of opportunities and threats for an organization. Third, the environment shapes the various strategic decisions that executives make as they attempt to lead their organizations to success.

PESTEL AnalysisP Is for Political.E Is for Economic.S Is for Social.T Is for Technological.E Is for Environmental.L Is for Legal.

Competitive Analysis Porters five force model

SWOT Analysis

The SWOT Matrix