Strategic management page No. 01. Syllabus 03 02. The Nature of Strategic Management 04

(a) To develop an understanding of the general and competitive business environment,

(b) To develop an understanding of strategic management concepts and techniques,

(c) To be able to solve simple cases.

General Environment–Demographic, Socio-cultural, Macro-economic, Legal/political, Technological, and Global; Competitive Environment.

Meaning and nature; Strategic management imperative; Vision, Mission and Objectives; Strategic levels in organisations.

Situational Analysis – SWOT Analysis, TOWS Matrix, Portfolio Analysis – BCG Matrix.

Meaning, stages, alternatives, strategy formulation.

Marketing strategy, Financial strategy, Production strategy, Logistics strategy, Human resource strategy.

Organisational structures; Establishing strategic business units; Establishing profit centres by business, product or service, market segment or customer; Leadership and behavioural challenges.

Business Process Reengineering, Benchmarking, Total Quality Management, Six Sigma, Contemporary Strategic Issues.

1. Strategy. ‘A course of action, including the specification of resources required, to achieve a specific objective.’ CIMA: Management Accounting: Official Terminology, (2005 edition).

4. 
   “The basic characteristic of the match an organization achieves with its environment is called its strategy.’
   

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   ‘Corporate strategy is the pattern of major objectives, purposes and goals and essential policies or plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be..
   

4. 
   ‘Corporate strategy is concern with an organization’s basic direction for the future: its purpose, its ambitions, its resources and how it interacts with the world in which it operates.
   

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  The purpose and long-term direction of the business;
  

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  The scope of an organization’s activities and actions required to meet its objectives
  

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  Meeting the challenges from the firm’s business external environment, such as
  

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  Meeting the challenges from the firm’s business external environment, such as competitors and the changing needs of customers;
  

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  Using the firm’s internal resources and competencies effectively and building on its strengths to meet environmental challenges;
  

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  Delivering value to the people who depend on the firm, its stakeholders, such as customers and shareholders, to achieve competitive advantage.
  

Whatever interpretation is put on strategy, the strategic actions of an organization will have widespread and long-term consequences for the position of the organization in the marketplace, its relationship with different stakeholders, and overall performance.

C
Strategic business unit

Strategic business unit

Functional

S
Financial Strategy

Marketing strategy

Human resources Strategy

Lost Strategy

Internal Audit
tragety
Organization chart showing corporate, strategic business unit & functional strategies.
Competitors who seemed to be more flexible and entrepreneurial. One consequence was the devolution of responsibility for competitive strategy to strategic business units (S.B.U.).
Corporate strategy today typically restricts itself to determining the overall purpose and scope of the organization. Common issues at this level include:

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  Decisions on acquisitions, mergers and sell-offs or closure of business units;
  

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  Conduct of relations with key external stakeholders such as investors, the government and regulatory bodies;
  

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  Decisions to enter new markets or embrace new technologies (sometimes termed diversification strategies);
  

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  Development of corporate policies on issues such as public image, employment practices or information systems.
  

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  The determination of an organization’s mission;
  
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  The setting of goals and objectives;
  

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  The understanding of the organization’s strategic position;
  
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  The formulation of specific strategies;
  

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  The commitment of resources.
  

1. 
   Analysis 2. Formulation
   

3. 
   Implementation 4. Monitor, review and evaluation.
   

This process seeks to answer questions concerning where the organization is now, where it should go in the future, and how it should get there. The rational model therefore involves a number of interrelated stages. These are illustrated in Figure below, which shows the various stages which management may take to develop a strategy for their organization.

Review & control

1. Mission & objective

Strategy evaluation & choice

Strategic option generation

2. Corporate appraisal (SWOT)

Strategy implementation

Environmental analysis external analysis competitor analysis