Strategic management or Business Strategy

Unlock the Secrets to Effective Strategic Management! Dive into the comprehensive presentation on Strategic Management, where you will explore essential concepts, processes, and tools that drive organizational success. Understand the importance and scope of strategic management, differentiate between strategy and operational effectiveness, and master the strategic management process. Learn how to define your strategic intent and position, analyze external and internal factors using frameworks like PESTLE, SWOT, and Porter’s Five Forces, and leverage the Resource-Based View and value chain analysis. Whether you're a student, professional, or strategy enthusiast, this presentation offers invaluable insights to elevate your strategic planning and execution.

1. STRATEGIC
MANAGEMENT

2. Strategic Management involves the
formulation and implementation of the
major goals and initiatives taken by a
company's top management on behalf of
owners, based on consideration of resources
and an assessment of the internal and
external environments in which the
organization competes.

3. IMPORTANCE OF STRATEGIC MANAGEMENT
Direction and Focus: Strategic management provides a clear
direction for the organisation, aligning all stakeholders towards
common goals and objectives.
Resource Optimization: By identifying areas of strength and
potential growth, strategic management ensures optimal utilisation
of resources for maximum returns.
Competitive Advantage: Effective strategic management allows
companies to create a sustainable competitive advantage that sets
them apart.

4. Enhances Decision Making: Provides a framework for making
informed decisions based on systematic analysis.
Improves Organizational Performance: Streamlines operations
and resource allocation to improve efficiency.
Adaptability: In a dynamic business environment, strategic
management equips organisations to adapt to changes swiftly
and stay ahead of the curve.

5. PROCESS OF STRATEGIC MANAGEMENT

6. STRATEGIC
INTENT
Strategic intent is the term used to describe the aspirational
plans, overarching purpose or intended direction of travel
needed to reach an organisational vision.
Gary Hamel, then a lecturer at London Business School, and C.K.
Prahalad, a University of Michigan professor, wrote “Strategic Intent,”
article.
Strategic intent focus on winning, winning customers, winning
against competitors, and winning over the broader market.

7. COMPONENTS

8. PROCESS

9. IMPORTANCE
Achieve clarity of purpose among all managers and employees.
Helps in optimum utilisation and allocation of the resources.
Creates synergy in the efforts of the firm due to common desired strategic direction.
Fosters long term thinking approach among the employees.
Reduces the chances of conflict.
Makes the organization competitive, original and unique.
Promotes logical implementations of the plans.
Enables superior organizational performance and therefore enhances shareholder
value.

10. 1. VISION
It should inspire people in
the organization.
A vision is a Big Picture of
“What” the organization
wants to achieve in
Future.

11. What the organization does to achieve the vision.

2. MISSION:
Short: The mission statement should be easy to remember.
Simple: Mission statement language should be of everyday life.
Example of Mission, “Help people in achieving work using best
practices.”
Operative: A mission statement should provide a clear direction. It
should focus on what an organization does. It also gives a clear route
about initiative and resource allocation.

12. 3. GOALS
Objective is a time-sensitive statement to achieve the goals.
We defined it in measurable terms.
Improve profitability
Increase volume
Provide stability
Goals are statements of mileposts to achieve the vision.
Goals describe – what you want to achieve through your efforts.
4.OBJECTIVES

13. HOW DO YOU SET A
GOOD OBJECTIVE?

15. 4. STRATEGIES:
Strategies are long term implementation plans to achieve
the goals and objectives.
These statements define how you can succeed in achieving
your mission and stay along in the completion.
Strategies are likely to be defined following a SWOT
analysis as both external and internal environment
assessment is needed as an input to develop strategies.

16. 5. TACTICS:
Tactics are short term implementation or action plan to
deliver the long-term strategy.

17. STAKEHOLDERS
A stakeholder is a party that has an interest in a company.
They can either affect or be affected by the business.
The primary stakeholders in a typical corporation are its investors,
employees, customers, and suppliers.
However, with the increasing attention on corporate social
responsibility, the concept has been extended to include
communities, governments, and trade associations.

18. STAKEHOLDER
ENGAGEMENT FOR
STRATEGIC
PLANNING

19. EMPLOYEES
INVESTORS
SUPPLIERS AND VENDORS
COMMUNITIES
GOVERNMENTS
STAKEHOLDERS
CUSTOMERS
Stake
Product/service quality and value
Employment income and safety
Financial returns
Safety
Health, safety, economic development
Taxes and GDP

20. DISTINGUISHING
STRATEGY FROM
OPERATIONAL
EFFECTIVENESS

21. ASPECTS STRATEGY OPERATIONAL EFFECTIVENESS
Definition Long-term direction and
scope of an organization.
Performing similar activities better
than rivals.
Objective
Achieve competitive
advantage and sustainable
growth.
Improve efficiency and effectiveness of
operational tasks.
Focus
Unique positioning in the
market.
Improving processes and procedures.
Time
Horizon
Long-term. Short to medium-term.

22. ASPECTS STRATEGY OPERATIONAL EFFECTIVENESS
Examples
Choosing different activities
or performing similar
activities in unique ways.
Implementing best practices, reducing
waste, and optimizing resources.
Key
Components
Market positioning, value
proposition, unique activities.
Quality management, process
improvement, benchmarking.
Competitive
Advantage
Sustained through unique
strategic positioning.
Temporary, as it can be easily
replicated by competitors.
Examples in
Practice
Apple's unique design and
ecosystem.
MI Phone manufacturing at reduced
cost

23. ENVIRONMENT

24. EXTERNAL
FACTORS
ENVIRONMENT
INTERNAL
FACTORS
PESTEL
Framework
Five Forces of
competition
SWOT
International
Environment
Resources,
Capabilities &competence
Resource
Based View
Value Chains

25. PESTEL
FRAME-
WORK

26. ASPECTS DESCRIPTION FACTORS TO CONSIDER
Political
Influence of government
policies, regulations, and
political stability on business.
Tax policies, trade restrictions, tariffs,
political stability, government
intervention, and environmental
regulations.
Economic
Economic factors that impact
business operations and
decision-making.
Economic growth, interest rates,
exchange rates, inflation,
unemployment rates, disposable
income levels, and economic cycles.
Social
Societal and cultural
influences on consumer
behavior and business
practices.
Demographics, population growth, age
distribution, education levels, social
norms, lifestyle changes, and consumer
attitudes.

27. Aspects Description Factors to Consider
Technological
Impact of technological
advancements and
innovation on business.
R&D activity, automation, rate of
technological change, and technological
infrastructure.
Environmental
Environmental factors affecting
business operations and
sustainability.
Climate change, environmental
regulations, sustainability initiatives,
ecological impacts, and resource
availability.
Legal
Legal frameworks and
regulations that influence
business activities.
Employment laws, consumer protection
laws, health and safety regulations,
and intellectual property rights.

29. Aspects Description Factors to Consider
Strengths
Internal attributes and resources
that support a successful
outcome.
Strong brand reputation, loyal customer
base, unique technology, skilled workforce,
strong financial position, efficient processes.
Weaknesses
Internal factors that could hinder
the achievement of objectives.
Poor location, weak brand, high turnover,
outdated technology, limited financial
resources, inefficient processes.
Opportunities
External factors that the
organization can exploit to its
advantage.
Market growth, new technology, regulatory
changes, demographic shifts, partnerships,
and alliances.
Threats
External factors that could cause
trouble for the organization.
Increasing competition, economic
downturns, changing consumer
preferences, regulatory changes, and
supply chain disruptions.

30. PORTER'S
FIVE FORCES -
THE
FRAMEWORK
EXPLAINED

31. The Porter Five Forces Model is a powerful tool for
analyzing the competitive forces that shape every
industry.
It helps in understanding the strengths and
weaknesses of an industry and formulating
strategies accordingly.

32. 1. THREAT OF NEW ENTRANTS
The threat of new entrants is the possibility that new companies may enter
the industry and increase competition. This force examines how easy or
difficult it is for competitors to join the marketplace. Factors that influence this
threat include:
Barriers to Entry: High barriers such as significant capital requirements,
strong brand loyalty, and strict regulatory policies can deter new entrants.
Economies of Scale: Established companies often have cost advantages
due to economies of scale, making it harder for new entrants to compete.
Access to Distribution Channels: Difficulty in securing distribution
channels can also serve as a barrier to entry for new competitors.

33. 2. BARGAINING POWER OF SUPPLIERS
The bargaining power of suppliers is the ability of suppliers to drive up
the prices of inputs. This force analyzes how much power suppliers have
over the potential to increase prices, which can affect profitability.
Factors to consider include:
Number of Suppliers: Fewer suppliers increase their bargaining power.
Uniqueness of Supplier's Product: If the inputs provided by suppliers
are unique or differentiated, their power increases.
Switching Costs: High switching costs for moving from one supplier to
another can increase supplier power.

34. 3. BARGAINING POWER OF BUYERS
The bargaining power of buyers refers to the ability of customers to drive
prices down. This force looks at the impact customers have on pricing
and quality. Factors to consider include:
Number of Buyers: A smaller number of buyers with large volumes can
exert more pressure on prices.
Importance of Each Buyer: If each buyer is important to the
company’s sales, they have more bargaining power.
Switching Costs: If it is easy for buyers to switch to another product or
service, their bargaining power increases.

35. 4. THREAT OF SUBSTITUTE PRODUCTS OR SERVICES
The threat of substitutes is the likelihood that customers will find a
different way of doing what you do. This force considers the availability
of alternative products or services that can perform the same function.
Factors to consider include:
Availability of Substitutes: More available substitutes increase the
threat.
Relative Price and Performance of Substitutes: If substitutes offer a
better price-performance trade-off, they pose a higher threat.
Switching Costs: Lower switching costs make it easier for customers to
switch to substitutes.

36. 5. INDUSTRY RIVALRY
Industry rivalry measures the intensity of competition among existing competitors
in the market. This force examines how competitive the current market is. Factors to
consider:
Number of Competitors: A higher number of competitors generally leads to more
intense rivalry.
Rate of Industry Growth: Slow growth can increase competition as firms fight for
market share.
Product Differentiation: Low levels of product differentiation can increase rivalry,
as companies compete primarily on price.
Exit Barriers: High exit barriers keep companies in the market even when
profitability is low, intensifying rivalry.

37. ECONOMIC
Global Economic Trends, Exchange
Rates, Trade Policies, Market Size and
Demand
INTERNATIONAL ENVIRONMENT
POLITICAL AND LEGAL
Political Stability, Regulatory
Frameworks, Government Policies,
International Relations
SOCIOCULTURAL
Cultural Differences, Demographics,
Consumer Preferences
TECHNOLOGICAL
Technological Advancements,
Infrastructure, Research and
Development (R&D)
ENVIRONMENTAL & ECOLOGICAL
Sustainability, Climate Change, Natural
Resources
GLOBAL COMPETITIVE ENVIRONMENT
Globalization, Multinational
Corporations, Emerging Markets

38. INTERNAL
ENVIRONMENT

39. RESOURCES
Resources are the assets that organizations use to create value
and achieve their objectives.
TANGIBLE RESOURCES INTANGIBLE RESOURCES
Physical Assets: Buildings,
machinery, equipment, and
technology.
Financial Assets: Cash,
investments, and access to
capital.
Human Resources: Employees
skills, expertise, and knowledge.
Brand Reputation: The value of
the brand and customer loyalty.
Intellectual Property: Patents,
trademarks, and proprietary
technologies.
Organizational Culture: Values,
norms, and behaviors that shape
the organization.

40. CAPABILITIES
Organization's ability to effectively utilize resources to achieve desired
outcomes.
CORE CAPABILITIES DYNAMIC CAPABILITIES
Activities or processes that the
organization performs
exceptionally well and are critical
to its success.
Example: Superior customer
service, efficient supply chain
management, or innovation in
product development.
The organization’s ability to adapt,
integrate, and reconfigure internal
and external competencies to
address rapidly changing
environments.
Example: Flexibility in product
development, responsiveness to
market changes, and continuous
improvement.

41. COMPETENCE
Combination of skills, knowledge, and abilities that enable the
organization to perform activities effectively and efficiently.
CORE COMPETENCE DISTINCTIVE COMPETENCE
Unique strengths that allow the
organization to achieve superior
performance and differentiate
itself from competitors.
Example: Apple’s design
expertise, Google’s search
algorithms, or Amazon’s logistics
capabilities.
Competencies that are not only
unique but also difficult for
competitors to imitate.
Example: Proprietary
technology, unique
organizational culture, or
specialized expertise.

42. RESOURCE BASED VIEW
A POWERFUL FRAMEWORK FOR CREATING ORGANIZATIONAL COMPETENCE
This model emphasizes on the importance of an
organization's internal resources and capabilities in
achieving and sustaining a competitive advantage.
The RBV shows that the key to a firm’s success lies in its
unique resources and capabilities, which are valuable,
rare, inimitable, and organized (VRIO).

44. PRACTICAL APPLICATIONS
Case Study: Apple Inc.
Valuable: Apple's strong brand reputation and loyal
customer base.
Rare: Innovative design and user-friendly interface of its
products.
Inimitable: Integration of hardware, software, and
services creating a unique ecosystem.
Organized: Unique combination of design, functionality,
and brand experience.

45. PRACTICAL APPLICATIONS
Case Study: Google
Valuable: Leading search engine technology.
Rare: Proprietary algorithms and massive data
processing capabilities.
Inimitable: Network effects and continuous
improvement of search technology.
Organized: Dominance in search engine market with
unparalleled accuracy and speed.

46. Heterogeneous- Skills, capabilities and other resources
that organizations possess differ from one company to
another.
Immobile-Resources are not mobile and do not move from
company to company, at least in the short-run. Intangible
resources, such as brand equity, processes, knowledge or
intellectual property, are usually immobile.
ASSUMPTION OF THE RBV MODEL

47. VALUE CHAINS
The value chain is a concept introduced by Michael Porter that
outlines the series of activities involved in creating a product
or service.
By analyzing these activities, organizations can identify
opportunities
to add value,
improve efficiency,
and gain a competitive advantage.

48. INBOUND
LOGISTICS
PRIMARY ACTIVITIES
OUTBOUND
LOGISTICS
OPERATIONS
Activities are directly involved in the creation of a product or service.
MARKETING
AND SALES
SERVICE
SUPPORT ACTIVITIES
Activities assisting primary activities in creating value and ensuring
efficient operations.
FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT
TECHNOLOGY DEVELOPMENT PROCUREMENT

49. 1. Inbound Logistics- Involves receiving, storing, and distributing the
raw materials or inputs needed for production.
Efficient inbound logistics ensure that materials are available when
needed, reducing delays and minimizing inventory costs.
Activities include inventory management, warehousing, and
transportation.
PRIMARY ACTIVITIES
2. Operations-Processes that transform raw materials into finished
products or services. This is where value is added through
manufacturing, assembly, packaging, and testing. Optimizing
operations can lead to increased efficiency, higher quality products,
and lower production costs.

50. 3. Outbound Logistics- Distribution of finished products to customers.
This includes order fulfillment, warehousing, distribution, and
transportation. Effective outbound logistics ensure timely delivery of
products, enhancing customer satisfaction and loyalty.
4. Marketing and Sales-Involve activities that promote and sell the
product or service to customers. This includes advertising, sales force
efforts, pricing strategy, and channel selection. Strong marketing and
sales efforts help to build brand awareness, attract customers, and
generate revenue.
5. Service-Providing post-sale support to customers, including
customer support, repair services, warranty services, and handling
customer feedback. Excellent service helps to maintain customer
satisfaction, build loyalty, and encourage repeat business.

51. 1. Firm Infrastructure- Encompasses organizational structures,
control systems, company culture, and overall management
practices. This includes management, planning, finance, legal,
and quality control activities that support the entire value chain.
SUPPORT ACTIVITIES
2. Human Resource Management-Involves recruiting, training,
developing, and compensating employees. Effective HR practices
ensure that the organization has a skilled and motivated
workforce, which is essential for executing the company's strategy
and maintaining competitive advantage.

52. 3. Technology Development- Includes activities related to
innovation, research and development (R&D), and technological
improvements. Investing in technology development can lead to
new products, improved processes, and enhanced efficiency,
providing a competitive edge.
4. Procurement-Involves acquiring the necessary resources for
the company’s operations, including purchasing raw materials,
negotiating with suppliers, and managing vendor relationships.
Efficient procurement practices help to ensure quality inputs at
competitive prices, contributing to overall value creation.

53. INBOUND
LOGISTICS
AMAZON- PRIMARY ACTIVITIES
OUTBOUND
LOGISTICS
OPERATIONS
Amazon’s extensive network of warehouses and
distribution centers worldwide.
MARKETING
AND SALES
SERVICE
Efficient order processing and packaging in fulfillment
centers.
Delivery services such as Amazon Prime for fast shipping.
Personalized recommendations based on customer
behavior.
Customer support and hassle-free returns.

54. INFRASTRUCTURE
AMAZON-SUPPORT ACTIVITIES
TECHNOLOGY
DEVELOPMENT
HUMAN
RESOURCES
Cloud computing services through Amazon Web
Services (AWS).
PROCUREMENT
Innovations like automated stores (Amazon Go)
reducing human interaction.
AI-driven logistics optimization and drone
delivery experiments.
Negotiations with suppliers for better pricing and
quality.