Strategy and Strategic Management An introduction

STRATEGY……. Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows: "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

STARTEGY…. Direction: Where is the business trying to get Scope: Which markets should a business compete in/ what kind of activities Resources: What resources (skills, assets, finance, relationships, technical competence, facilities) are required Market : Local or international Environment: What external, environmental factors affect Stakeholders: What are the values and expectations

Plan Versus Strategy A plan is an arrangement, a pattern, a program, or a scheme for a definite purpose. A plan is very concrete in nature and doesn’t allow for deviation A strategy, on the other hand, is a blueprint, layout, design, idea used to accomplish a specific goal. A strategy is very flexible and open for adaptation and change when needed.

Mintezberg’s Five Ps of Strategy Plan – of action Pattern – emerges out of action Position – defines firm’s place in market Ploy – a tactic or a maneuver Perspective – a vision or a direction

Strategic management – the need Globalization – technology driven Boundryless Organisations Changing socio cultural dynamics Rising consumerism Escalating competition Need for multipronged planning Rise of Strategic management

Three Perspectives on SM Traditional Perspective Resource-Based View (RBV) Stakeholder Origin Economics, other business disciplines, Economics, distinctive competencies, Business ethics and social responsibility View of Firm An economic entity A collection of resources, skills, and abilities A network of relationships among the firm and its stakeholders Competitive advantage Situation analysis of internal and external environments leading to formulation of mission and strategies Possession of abilities that are valuable, rare, inimitable Superior linkages with stakeholders leading to trust, goodwill, reduced uncertainty,

Process of strategic managment The Strategic Planning Process Vision and Mission | V Objectives Situation Analysis Strategy Formulation Implementation Control

Benefits of Strategic Managment Identification, prioritization and exploitation of resources Forward thinking Change orientation Resource utilization Coordination communication and control Facilitates Decision making Culminates in organisational integration Establishes positive culture

Limitations of Strategic Managment Hasty implementation Overenthusiastic implementer Lack of clarity Risk or rigidity overriding Regulatory mechanism Lack of top management commitment Employee involvement System and process reorientation Lack of supportive organizational climate