1. Strategic Management
An Introduction

2. What is Strategic Management?
Strategy refers to the plans made and action taken to enable an organization to fulfill its identified objectives
Strategy is management’s game plan for strengthening the organization’s position, pleasing customers, and achieving performance targets
A continuous, iterative process aimed at keeping an organization as a whole approporiately matched to its environment
Keeping the business in tune with management and marketing forces both outside and inside the firm
Without a strategy, managers have:
No thought-out course to follow
No roadmap to manage by
No action program to produce the intended result

3. Components of Strategic Management
Vision, Mission, and Company Profile
Recognizing and evaluating external and internal environment
Strategic Analysis and Choice
Strategy Formulation
Strategy Implementation
Evaluation of performance

4. What does a company’s strategy consist of?
How to respond to changing industry and market conditions
How best to capitalize on new opportunities
How to manage each functional piece of the business
How to achieve strategic and financial objectives
How to satisfy customers
Broad or narrow product line?
Amount of customer service provided?
How to grow the business
Concentrate on a single business strategy?
Diversify into related or unrelated industries?
Expand globally?

5. Benefits of strategic management
Establish the mission
Formulate philosophy
Establish policies
Setting objectives
Developing strategy
Plan the organizational structure
Provide personnel
Establish procedures
Provide facilities
Provide capital
Set standards
Establish programs and plans
Control information
Activate people
It helps in answering questions:
Where is the Organization now?
Where will be the organization in a certain timeframe?
What are the risks and payoffs?
What could be possible changes in organization’s internal & external environment?

6. Phases of strategic management
Phase I: Basic Financial Planning
Phase II: Forecast based planning
Phase III: Externally oriented planning
Phase IV: Strategic Management

7. Basic Model of strategic management
Environmental
Scanning
Strategy
Formulation
Strategy
Implementation
Evaluation &
Control
Internal
External
Mission
Objectives
Strategies
Policies
Programs
Budgets
Procedures
Actual vs Desired performance

8. Environmental Scanning
Environmental scanning is the monitoring, evaluating, and dissemination of information from the external and internal environments to key people within the organization
Internal Environment
External Environment
Tools for scanning

9. Environmental Variables
Societal Environment
Sociocultural forces
Economic forces
Task Environment
Governments
Shareholders
Suppliers
Internal Environment
Structure
Culture
Resources
Associations
Trade
Creditors
Special Interest Groups
Employees/ Labor Unions
Competitors
Customers
Political Legal Forces
Technological Forces

10. Strategy Formulation
Strategy Formulation is the development of long-range plans for the effective management of environmental opportunities and threats, in light of the organization’s weaknesses and strengths
Vision & Mission
Objectives: end results of planned activity (it can be in terms of profitability, efficiency, growth, shareholder wealth, market leadership etc.)
Levels of Strategies: Corporate, Business and Functional
Policies: a broad guideline for decision making that links the formulation of strategy with its implementation
ITC Vision: Sustain ITC's position as one of India's most valuable corporations through world class performance, creating growing value for the Indian economy and the Company’s stakeholders
ITC Mission: To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value

11. Strategy Implementation
Strategy Implementation is the process by which strategies and policies are put into action through the development of programs, budgets and procedures
Programs
Budgets
Procedures

12. Evaluation and Control
Evaluation and control is the process in which corporate activities and performance results are monitored so that actual performance can be compared with desired performance.
Performance is the end result of activities

13. Initiation of Strategy
Henry Mintzberg: “It is most often an irregular, discontinuous process, proceeding in fits and starts. There are periods of stability in strategy development, but also there are periods of flux, of groping, of piecemeal change and of global change.”
New CEO
External Intervention
Threat of a change in ownership
Performance Gap
Strategic Inflection Point: introduction of new technologies, different regulatory environment, change in customers values or preferences

14. Strategic Decision Making
What makes decision strategic?
Rare: unusual with few precedents
Consequential requiring: commit substantial resources and demand a great level of commitment
Directive: set precedents for lesser decisions and actions throughout the organization
Modes of Strategic Decision Making (Mintzberg)
Entrepreneurial
Adaptive
Planning
Logical Incrementalism: Mix of above three