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RITU RANJANBBA Final year
StrategyManagement
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What is Strategy?
A strategy is a comprehensive action plan
that identifies long-term direction andguides resource utilization to accomplish
organizational goals
with sustainable competitive advantage.
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Strategic Management
Process of formulating, implementing, and evaluating,strategies to accomplish long-term goals and sustain
competitive advantage.
The set of managerial decisions and actions that determinesthe long-run performance of a corporation. It includes:
environmental scanning (internal & external)
strategy formulation
strategy implementation
evaluation and control
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Benefits of Strategic
Managemento Improved understanding of rapidly changing
environment
oNonfinancial Benefits
o Enhanced awareness of threats
o Improved understanding of competitors
strategies
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Benefits of Strategic
Management Cntd..o Clearer understanding of performance-reward
relationship
o Enhanced problem-prevention capabilities
o Reduced resistance to change
o Increased employee productivity
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Key Strategic Questions
Where is the organization now?
If no changes are made, where will theorganization be in one, two, five or tenyears? Are the answers acceptable?
If the answers are not acceptable, whatspecific actions should management
undertake? What are the risks and payoffsinvolved?
What are risks and payoffs
involved?
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EnvironmentalScanning
StrategyFormulation
StrategyImplementation
Evaluationand
Control
Basic Model of Strategic
Management
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Environmental Scanning
Monitoring, evaluating and disseminatinginformation from the environment to key
people within the corporation.
Scan via SWOT analysis:
Look for opportunities/threats in the
external environment
Look for strengths/weaknesses in the
internal environment
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Strategy Formulation
The process of developing long-range plans to dealeffectively with environmental opportunities andthreats in light of corporate strengths andweaknesses.
Composed of:
Mission Objectives
Strategies
Policies
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Mission
The purpose or reason for the corporationsexistence. It tells who the company is, what
they do as well as what theyd like to
become.
ObjectivesThe end results of planned activity. They state
WHAT is to be accomplished by WHEN.They should be quantified, if possible.
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Strategies
A method or plan chosen to bring about adesired future, such as achievement of a goalor solution to a problem.
Policies
The set of basic principlesand associated guidelines, formulated and
enforced by the governing body ofan organization, to direct and limit its actions in
pursuit of long-term goals.
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Strategy Implementation
The process of putting strategies and policies intoaction through the development of:
Programs - statements of activities or stepsneeded to accomplish a single-use plan.
Budgets - statements of a corporationsprograms in monetary term.
Procedures - systems of sequential steps ortechniques that describe in detail how toperform particular tasks or jobs.
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Evaluation and Control
The process of monitoring corporate
activities and performance results so that
actual performance can be compared withdesired performance.
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Hierarchy of Strategy
FunctionalStrategy
Business(DivisionLevel)
Strategy
CorporateStrategy
Manufacturing Finance MarketingResearch
andDevelopment
HumanResources
StrategicBusiness
Unit
StrategicBusiness
Unit
StrategicBusiness
Unit
CorporateHeadquarters
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Why Some Firms Do No
Strategic Planning Lack of knowledge of strategic
planning
Waste of time
Too expensive
Laziness
Content with success
Fear of failure
Overconfidence
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Why Some Firms Do No Strategic
Planning Cntd..
Prior bad experience
Self-interest
Fear of the unknown
Honest difference of opinion
Suspicion
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Effective Strategic Planning
is:
A people process more than a paper
process
A learning process
Words supported by numbers
Simple and non-routine
Varying assignments, team
membership, meeting formats, and
planning calendars
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