Process of strategic choice

1. Process of Strategic Choice

2. ContentContent
Introduction
Strategic Choice- A Definition
Process of Strategic Choice
Subjective Factors in Strategic Choice
Contingency Strategies
Strategic Plan

3. IntroductionIntroduction
Organizations continually face the challenge
of exercising choice among alternatives.
Strategic choice is an inalienable part of the
decision making process. The process of
strategic choice is essentially a
decision making process.

4. STRATEGIC CHOICESTRATEGIC CHOICE
“The decision to select from among the grand
strategies considered, the strategy which will
best meet the enterprise’s objective. The
decision involves focusing on a few
alternatives considering the selection
factors, evaluating the alternatives against
these criteria and making the actual choice.”
- Prof. Azhar Kazmi

5. Process of strategic choiceProcess of strategic choice

6. Focusing on strategic alternativesFocusing on strategic alternatives
Focusing on alternative could be done by
visualizing the future state and working
backwards. This done through gap analysis.

7. GAP AnalysisGAP Analysis
GAP ANALYSIS = Projected Performance – Desired
Performance

8. Gap Analysis For Focusing on
Strategic Alternatives
Performance Performance
Present Present


performanceperformance
Desired Desired
performanceperformance
Performance Performance
gapgap
TIME TIME
T1 T2T1 T2

9. Strategic AlternativeStrategic Alternative
At the corporate level:
2.Expansion Strategy
3.Stability Strategy
4.Retrenchment Strategy
5.Combination Strategy

10. Expansion StrategyExpansion Strategy
If the performance GAP is large due to
expected environmental opportunity,
Expansion Strategy would be seem to be a
feasible alternative.

11. Stability StrategyStability Strategy
If the “Performance Gap” is narrow then
Stability Strategy would be seem to be a
feasible alternative.

12. Retrenchment StrategyRetrenchment Strategy
If the performance GAP is large due to Past
and expected bad performance then
Retrenchment Strategy would be seem to be a
feasible alternative.

13. Combination StrategyCombination Strategy
In the complex scenario, where the multiple
reason for the performance GAP then
Combination Strategy would be seem to be a
feasible alternative.

14. Strategic AlternativesStrategic Alternatives
At the business level:
Organization need to think alternative ways of
competing.
Choice is essentially between positioning the
business as being low-cost, differentiated or
focused.

15. Strategic AlternativesStrategic Alternatives
At the business level:
It needs to understand the conditions of the
industry’s risk and benefit of each competitive
positioning before making a choice.
By reverting business definition (Page 40-44),
(3 dimensions)
–Customer group
–Customer functions and
–Alternative technologies.

16. Analyzing the strategies AlternativesAnalyzing the strategies Alternatives
An analysis has to rely on certain factors.
These factors are termed as selection factors.
The Objective Factors- Based on analytical
techniques and hard facts or data.
The Subjective Factors- Based on one’s
personal judgment, collective or descriptive
factors.

17. Evaluating the strategic Evaluating the strategic
AlternativesAlternatives
Evaluation of strategic alternatives basically
involves bringing together the analysis done
on the basis of the objective and subjective
factors.
To observe what is important, both the factors
have to be consider together.

18. Choosing From Among the Strategic AlternativeChoosing From Among the Strategic Alternative
This is the final step of making the strategic
choice. One or more strategies have to be
chosen for implementation. Also a blue print
has to be made that will describe the strategy
and the condition under which they operates.

19. Subjective Factors in Strategic ChoiceSubjective Factors in Strategic Choice
Subjective factors are essentially intuitive and
descriptive in nature. Here no “cut and dried”
analytical models can be used. It consider
many of the issues that can not probably
should not be dealt within the application of
analytical models.

20. Subjective Factors in Strategic ChoiceSubjective Factors in Strategic Choice
Consideration for Government Policies.
Perception of critical success factors (CSFs) and distinctive competencies
.
Commitment to past strategic actions.
Strategist’s decision styles and attitude to risk.
Internal Political Considerations.
Timing and Competitor Considerations.

21. Consideration for Government PoliciesConsideration for Government Policies
Strategies within organizations are aware of
the crucial role the Government plays in
setting down politics and priorities. In fact
Government policies are the deciding factor
which impact on the future prospects of
companies.

22. Perception of critical success factors and Perception of critical success factors and
distinctive competenciesdistinctive competencies
For consider several strategic alternatives, strategist
could be guided by the distinctive competencies
that the organization possesses and the CSFs that
ensure success in any industry.
2–22

23. Commitment to past strategic actionsCommitment to past strategic actions
Past strategic action shows that they move in an
incremental fashion. By this strategist are more
likely to start from where the organization is, and
work up in the way that had been adopted by it to
reach where it was.

24. Strategist’s decision styles and attitude to Strategist’s decision styles and attitude to
riskrisk
The decision style adopted by strategist,
particularly by CEO and their attitude to risk is a
determining subjective factors in strategic choice.

25. Internal Political ConsiderationsInternal Political Considerations..
When strategy formulation is viewed as a political
process, strategist are viewed as a coalition of
interest. A dominant CEO is able to affect strategic
choice a decisively.

26. Timing and Competitor ConsiderationsTiming and Competitor Considerations
When to exercise a strategic choice?
When a particular strategic choice is to be
made?
For what time period is a strategic choice to
be made?
What are the competitor action?

27. Webster Dictionary Webster Dictionary
Inalienable: you are
emphasizing that they have a
right to it which can not be
changed or taken away.

28. Internal Political ConsiderationInternal Political Consideration
Here it means, Inter-relationship and power
structure and balance.
The political behavioral in organisation is
perfectly naturally legitimate… politics and
power are neither good nor bad. They are
natural.

29. Critical success factor (CSF)Critical success factor (CSF)
This is the term for an element that is necessary
for an organization or project to achieve
its mission. CSF are those few things that must go
well to ensure success for a manager or an
organization, and, therefore, they represent those
managerial or enterprise area, that must be given
special and continual attention to bring about high
performance. CSFs include issues vital to an
organization's current operating activities and to
its future success.“
Source- Wikipedia

30. Distinctive competenceDistinctive competence
Distinctive competence of a firm refers to a
set of activities or capabilities that a company
is able to perform better than its competitors
and which gives it an advantage over them.
Distinctive competence can lie in different area
such as technology, marketing activities, or
management capability.
Source- Wikipedia

31. Decision making processDecision making process
Because it consists of:
–Setting objectives
–Generating alternatives.
–Choosing one or more alternatives.
–Finally implementing the chosen
alternatives.

32. IntuitiveIntuitive
Webster: It feels that it is true although it
have no evidence or proof of it.
Oxford: having or, perceived by intuition.

33. Contingency strategiesContingency strategies
This strategy is formulate in advance to deal
with uncertainties that are a natural part of
business. There are few approach to help
companies to develop and implement this
strategy i.e. model of contingency planning
process:
Identifying contingency events;
Establishing the trigger points and;
Developing strategies and tactics.

34. Strategic PlanStrategic Plan
Strategic plan (also called a corporate, group
or perspective plan), is a document which
provides information regarding the differences
elements of strategic management and the
manner in which an organization and its
strategist propose to put the strategies into
action. Basic steps in a strategic planning
process are as follows:

35. Step One - Getting ReadyStep One - Getting Ready
An organization that determines it is indeed ready to
begin strategic planning must perform five tasks to
pave the way for an organized process:
–Identify specific issues or choices that the planning
process should address.
–Clarify roles (who does what in the process).
–Create a Planning Committee.
–Develop an organizational profile.
–Identify the information that must be collected to help
make sound decisions.

36. Step Two - Articulating Mission and VisionStep Two - Articulating Mission and Vision
It is like an introductory paragraph. a mission statement
must communicate the essence of an organization to
the reader. It describes an organization in terms of its:
Purpose - why the organization exists, and what it seeks
to accomplish.
Business - the main method or activity through which the
organization tries it fulfil this purpose.
Values - the principles or beliefs that guide an
organization's members as they pursue the organization's
purpose.

37. Step Three - Assessing the SituationStep Three - Assessing the Situation
Once an organization has committed to why it
exists and what it does, it must take a clear-
eyed look at:
- Its current situation.
- Part of strategic planning, thinking, and
management is an awareness of resources and
- An eye to the future environment, so that an
organization can successfully respond to
changes in the environment.

38. Step Three - Assessing the SituationStep Three - Assessing the Situation
- Situation assessment (means obtaining
current information about the organization's
strengths, weaknesses, and performance
information) that will highlight the critical
issues that the organization faces and that its
strategic plan must address.

39. Step Four - Developing Strategies, Goals, Step Four - Developing Strategies, Goals,
and Objectivesand Objectives
Once an organization's mission has been
affirmed and its critical issues identified, it is
time to figure out what to do about them. The
broad approaches to be taken and the general
and specific results to be sought (the goals
and objectives). This strategies may come
from individual inspiration, group discussion,
formal decision-making techniques, and so on.

40. Step Five - Completing the Written PlanStep Five - Completing the Written Plan
The mission has been articulated, the critical
issues identified, and the goals and strategies
agreed upon. This step essentially involves
putting all that down on paper!

41. Format for a Strategic PlanFormat for a Strategic Plan
1. INTRODUCTION
1.1Background and organizational profile
2. MISSION STATEMENT
2.1Vision
2.2Mission
2.3Values
3. ASSESSING THE SITUATION
3.1Introduction
3.2Review of Past Performance
3.3Strengths, Weaknesses, Opportunities and Threats
Analysis
3.4 Critical Issues

42. Format for a Strategic PlanFormat for a Strategic Plan
4. STRATEGIES, GOALS AND OBJECTIVES
4.1Approaches to be taken (Strategies)
4.2General and specific results (Goals and Objectives)
5. IMPLEMENTATION STRATEGY
5.1Implementation of the strategies
5.2Action Planning (activities, budget & financing etc.)
*Source- IGNOU Book

43. ReferencesReferences
Strategic Management and Business Policy-
-Prof. Azhar Kazmi
Strategic management (IGNOU Books)
www.wikipedia.com
www.google.com

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