Chap1 Introduction to Strategic Management

Chap1 Introduction to Strategic Management

1. Module 01: Introduction to Strategic Management

2. ➢Definition, framework and evolution of strategy
➢The need and benefit of strategic management
➢Dimensions of strategic decisions and different types of strategies
➢Levels of strategy
➢Strategic management process
➢Strategic vision, mission and strategic objectives
Concepts Covered
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3. Strategic Management: Introduction & Concept
•Genesis and evolution of strategic management
‒Strategtia, Strategos
‒HBSA, Chandler study, Ansoff
‒Business policy →Corporate Planning (LRP) →Strategic
Management
•What is Strategy?
•What is Strategic Management and its elements?
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4. Strategic Management: Introduction & Concept
•Need for Strategic Management
‒Complexity, uncertainty, competition, rules, risk
•Benefits of Strategic Management
‒Convergence of common goals and objectives
‒Proactive, better prepared
‒Reduces conflict, resistance
•Stimulus for strategy
‒New CEO
‒Outside intervention
‒Imminent ownership change
‒Declining performance
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5. Strategic Management: Introduction & Concept
•What are the differences between Policy, Strategy and Tactics?
•What are the tests to determine a winning strategy?
‒The Fit test
‒Competitive advantage test
‒Performance test
•Mintzberg’s model
‒Entrepreneurial
‒Adaptive
‒Planning
‒Logical incrementalization mode
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6. Strategic Management: Introduction & Concept
•Comparison between Operating and Strategic decisions
•Difference between LRP and strategic planning
‒Focus: present business, annual profit, less risk
‒Focus: growth, future profit, high risk
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7. Comparison of Operating and Strategic Decisions
Source: Tragoe B. & Zimmerman J. (1980), Top Management Strategy, John Martin, London
Operating Decisions
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8. Comprehensive strategic management model
External
Analysis
Internal
Analysis
Long-Term
Objectives
Generate,
Strategic
Alternatives
Evaluate,
Select
Strategy
Implement
Strategy:
Resource
Allocation
&Structure
Evaluate
Performance
& feedback
Vision
&
Mission
Implement
Strategy:
Leadership
Functional
Policies
Strategic Management
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9. Strategic Decision-Making Process
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10. Hierarchy of Strategy
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11. Characteristics of different levels of Planning
•Corporate level
•Business level
•Functional level
‒Conceptual, Operational
‒Measurable, non-measurable
‒Time horizon, periodic, annual
‒Innovative, action-oriented
‒Risk, profitability, cost
‒Cooperation
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12. Kinds of Strategies
•Stability strategy
•Growth strategy
‒Mergers & Acquisition
‒Joint Ventures
‒Expansion –Greenfield and Brownfield
‒Outsourcing, Franchising
‒Vertical Integration
•Retrenchment strategy
‒Turnaround strategies
‒Divesture, Liquidation
•Generic strategies
•Dependency reduction strategy
•Blue ocean strategy, red ocean strategy
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13. Strategic Management: Introduction & Concept
•What is Vision ?
•What is Mission ?
‒What are its purposes and features?
•What is Strategic Objective?
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14. Vision and Mission (e.g., a major oil Co.)
VISION
•To be a world class Oil & Gas Company integrated in energy business with dominant Indian leadershipand global presence
MISSION
World Class
•Dedicated to excellence by leveraging competitive advantages in R&D and technology with involved people.
•Imbibe high standards of business ethics and organisational values
•Abiding commitment to health, safety and environment to enrich quality of community life.
•Foster a culture of trust, openness and mutual concern to make working a stimulating and challenging experience for our people.
•Strive for customer delight through quality products and services
Integrated in Energy` Business
•Focus on domestic and international oil & gas E&P business opportunities
•Provide value linkages in other sectors of energy business.
•Create growth opportunities and maximise shareholder value
•Dominant Indian Leadership
•Retain dominant position in Indian Petroleum sector and enhance India’s energy availability
Illustrative
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15. Tesla
Vision
•To accelerate the world’s transition to sustainable energy
Mission
•To create the most compelling car company of the 21st century by driving the world’s transition
to electric vehicles
Vision and Mission statements
Johnson & Johnson
Vision
•To help people see better, connect better, live better
Mission
•Bringing science and sense of sight to life through world-class innovation and customer experience
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16. Conclusions
•Thischapterexplainsthegenesis,evolutionandconceptofstrategy,strategicplanning
process,theneedandbenefitsofstrategicmanagementinthepresentdaybusiness.
•Italsodiscussesthestimulusforstrategy,variouskindsofstrategy,andcharacteristicsof
differentlevelofstrategiessuchascorporate-,business-,functional-andoperational
levels.
•Theimportanceofvision,missionandstrategicobjectivesofanorganizationforfuture
growthhasalsobeenelicited.
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17. References
1.CraftingandExecutingStrategy–TheQuestforCompetitiveAdvantage,Conceptsand
Cases,Thomson&Strickland,McGraw-HillEducation.
2.StrategicManagement–PlanningforDomesticandGlobalCompetition,JohnPearce,
R.RobinsonandAmitaMital,McGraw-HillEducation,14
th
edition.
3.StrategicManagement–TextandCases,Dess,McNamaraandEisenerMcGraw-Hill
Education,8
th
edition.
4.TragoeB.&ZimmermanJ.(1980),TopManagementStrategy,JohnMartin,London
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