 Strategy is derived from the greek word strategos.  Strategy refers to the ‘plan or course of action’ framed or formulated to achieve a specified objective or goal.  A comprehensive way to try to pursue certain ends.

 The famous Chinese Philosopher Sun Tzu’s “The Art of War” written in the 6 th century B.C.  The famous Indian Guru Chanakya’s “Arthasastra” written in the 4 th century B.C.  The notorious Italian Niccolo Machiavelli’s “The Prince” “The Discourses” & “The Art of War” written in the 16th century A.D.

 To meet the objectives of organization.  Blend of internal and external factors.  Solve certain problems.  Future oriented.  Efficient adoption in organization.  Guide enterprise thinking and action.

 Long term objective.  Competitive advantage.  Vector.  Synergy.

 Levels of operation-corporate level, business level, functional level.  2 categories of companies-different directions or product groups known as profit centres or sbu’s, single product companies.  SBU was introduced by general electric company. Best example is relaince company.

 Strategies are formulated according to organizations.  Value oriented, conceptual and less concrete.  These are characterized by greater risk, cost and profit potential as well as flexibility.  Occupy highest level of strategic decision making and cover the actions dealing with the objectives of the organization.  Decisions are made by top management.  Examples: acquisitions decisions, diversification, structural diversifications etc.  Directors and chief executive officer are the primary members.

 Make use of business resources.  Allocation of resources among functional areas and coordination between them for achievement of corporate level objectives.  Operate within overall organization.  Has impact on business strategy.

 Relates to single functional operation.  Decisions taken are described as tactical.  The strategies are concerned with how different functions of the enterprise like marketing, finance manufacturing etc.  Sometimes a 4 th level exists known as the operating level which comes from the functional level strategy.  Example marketing function which is spilt into market research, sales promotion etc.

 To take decisions.  Deal with new trend.  Financial benefits in the form of increased profits.  Clarity in direction for achieving objective.  Organizational effectiveness.  Satisfaction to the personnel.  Habit of thinking and proactive.  Achievement of goals.  Improves corporate communication. Coordination and allocation of resources.

 There are two dimensions of every action. They are substantive and procedural.  The process of strategy is cyclical in nature.  Elements interact among themselves.  There are 4 phases-identification phase, development phase, implementation phase and monitoring phase.(initially)  C.k.prahalad-strategic intent, environmental analysis, evaluation of strategic alternatives and choices, strategy implementation, strategy evaluation and control.

Feedback Strategy evaluation and control Implementation of strategy Choice of strategy Identifying alternative strategies Setting objectives and goals Defining mission and vision and business Environmental analysisOrganizational analysis

 Purpose of the organization.  It could be in the form of vision and mission.  An obsession of having ambitions that may be even out of proportion to their resources and capabilities.

 Articulates the position of the firm.  A vision should be ◦ An organisation charter of core values and principles. ◦ The ultimate source of our priorities, plans and goals. ◦ A puller into the future. ◦ A determination and publication of what makes us unique. ◦ A declaration of independence.

Well-conceived vision Core ideology Core values and core purpose Envisioned future Long term audacious goal vivid description of achievement

 Mission is what an organization is and why it exists.  Characteristics of mission ◦ It should be feasible. ◦ It should be precise. ◦ It should be clear. ◦ It should be motivating. ◦ It should be distinctive. ◦ It should indicate the major components of strategy. ◦ It should indicate how objectives are accomplishments.

 Values of a company state how managers and employees should conduct themselves.  How they should do business.  What kind of organization they should build a company.  They depend on organizational culture.

 A goal is a precise and measurable desired future state that a company attempts to realize.  Goal is to attain mission and vision.  It should address crucial issue.  They should be challenging but realistic.  It should be achieved within a limited time period.

 Analysis of the organization’s external operating environment.  Identify strategic opportunities and threats.  It should consider national environment, wider socioeconomic or macro environment.  Impact of globalization on competition within industry.  Examination of macroeconomic, social, government, legal, international and technological factors is essential.

 Focuses on reviewing the resources, capabilities and competencies of company.  Goal is to identify strength and weakness of the company.

 Functional level strategies.  Business level strategies.  Global strategies.  Corporate level strategies.

 Increase performance.  Execute strategy plan.  Best organization structure.  Culture and control systems can be improved.  Maximize profit towards growth.

 After implementation, monitoring is essential.  To what extent the objectives and goals fixed is effective has to be analyzed.  It is too optimistic then conservative goal has to be fixed.

 General ◦ Socio-economic ◦ Technological ◦ Governmental  Industry ◦ Customers ◦ Suppliers ◦ Competition  International

 The economy  Business cycle.  Inflationary and deflationary trend.  Monetary policies.  Fiscal policies.  Balance of payments.  Unemployment rates.  Climatic factors  Social and cultural factors  Demographic factors