1. Strategic Management (MGT501)
Lecture 1
Dr Muhammad Mustafa Raziq

2. Introduction About the Instructor About Strategy and Management
Themes in Strategic Management
Objectives of the Course
Key texts in Strategic Management

3. Strategy and Management
What is Strategy (a general definition that everyone must know)
This is a term often used in organizations and military
A plan of action designed to achieve a long-term or an overall aim (general definition)
Example: Preparation for an examination
The art of planning and directing overall military operations and movements in a war or battle (military definition)

4. Strategy and Management (continued)
What is Management
General definitions
Getting work done by others (a layman definition)
Direct a set of functions in a way that the organization’s resource (e.g., man, machine, money, material etc.) are utilized in an efficient (doing things right) and effective (doing right things) manner and the organization's goals and objectives are achieved.
What everyone must know about management:
Management in an organization involves planning, organizing, staffing, leading or directing, and controlling.

5. So what is Strategic Management
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.
Simply put, it is making strategy considering the organization’s resources, capabilities, and the external environment.

6. Themes in Strategic Management
Strategic management as a body of knowledge holds high importance among researchers and practitioners. Contemporary issues in the strategic management (development and implementation of strategy in organizations) research are:
Competitive Strategy
Strategy Process
Strategic Human Capital
Strategic Leadership and Governance
Cooperative Strategies
Knowledge and Innovation
Stakeholder Strategy
Teaching Strategy
Corporate Strategy
Entrepreneurship and Strategy
Non-market Strategy (pursuing strategic goals through political and social leverage)
Strategic Foresight
Global Strategy
Operations Strategy
Emergent Strategy
Strategy, Neuroscience and Cognition

7. Objectives of the Course
To introduce you to the main concepts and thought processes in strategic management. What this course covers:
Introduction to Strategic Management
Business Environment
Internal Analysis
Mission, Vision, Strategic Objectives and Business Model
Strategy Formulation
Corporate Level Strategies
Business Level and Functional Strategies
Strategy Execution
Corporate Governance, Strategic Leadership, and Monitoring Strategy Implementation

8. Key Texts in Strategic Management
Texts in Strategic Management are numerous, for example, some good ones are:
Exploring Strategy by Gerry Johnson and colleagues
Strategic Management by Mintzberg and colleagues
Strategic Management: Awareness & Change by Thompson and Martin
What we will be following:
Strategic Management: Text and Cases by Jacob Thomas, 2016, Pearson Publishers, India.
This is one of the easiest books for students - easily available in book stores in Pakistan. The book uses simple English, covers all the key aspects of strategic management, and uses updated literature.

9. Chapter 1: Introduction to Business Policy and Strategic Management
Learning Objectives (in no particular order):
What is strategy, strategic management, and strategy absence in a firm
Different concepts and dimensions of strategy
Role of strategic management professionals and the role of strategy in the management of a firm
Theories used in understanding and formulating strategy
Tools employed in the strategic management process

10. 1.1 Concepts of Strategy
Various definitions have been proposed by different authors at different times. For example:
Chandler (1962): The determination of the basic long term goals and objectives of an enterprise, the adoption of a course of action, and the allocation of resources necessary to carry out these goals.
Ansoff (1965): Strategy is a plan
Porter (1980): Moving from where you are to where you want to be in the future, through sustainable competitive advantage. Strategy is building defenses against the competitive forces or finding a position in the industry where the competitive forces are the weakest.

11. 1.1 Concepts of Strategy (Continued)
Various definitions have been proposed by different authors at different time periods. This suggests that strategy is not a unitary concept. For example (continued):
Pearce et al. (1987a): the process of determining the mission, major objectives, strategies, and policies that govern the acquisition and collaboration of resources to achieve organizational aims.
Mintzberg (1978): Strategy is a pattern in a stream of decisions.
Waters (1985): Strategy is a pattern in a stream of action.
Houlder and Nicholson (2006): A way of channelizing resources to achieve a goal.

12. 1.1 Concepts of Strategy (Continued)
Various definitions have been proposed by different authors at different time periods. This suggests that strategy is not a unitary concept. For example (continued):
Bower and Gilbert (2007): Strategy is deciding which opportunities a company will pursue and which it will pass by and commit resources to policies, programs, people, and facilities.
Rodwell and Shadur (2007): Strategy is the translation of intent into action.

13. 1.2 Meaning and Nature of Strategic Management
Different Dimensions of Strategy:
Strategy is expected to give competitive advantage to a firm in a sustainable manner
At a functional level, every function (e.g. marketing, finance, HR) is to think that it is their efficiency and effectiveness that gives competitive advantage to the firm.
The CEO, COO, CFO are to think similarly that it is their strategic leadership that gives competitive advantage
Similarly, some may view that it is the innovative features or quality of the product or low cost of the product that gives competitive advantage to the firm.

14. 1.2 Meaning and Nature of Strategic Management (continued)
Different Dimensions of Strategy:
Strategy Paradigms – a comparison of the dominant views and the emerging views:
Prevailing Paradigms
Emerging Paradigms
Where and how a firm wants to compete
Where and how a firm wants to serve
Most value to shareholders (ROI)
Most value for customers (customer satisfaction)
More production for market share
Less production for market loyalty

15. 1.2 Meaning and Nature of Strategic Management (continued)
Different Dimensions of Strategy:
Strategy Paradigms – a comparison of the dominant views and the emerging views:
Prevailing Paradigms
Emerging Paradigms
Expand markets using all resources
Use renewable resources or natural resource substitutes
Strategy is for growth of a business
Strategy is for contribution to society and coalition building
Growth is through expansion
Growth is through identity
Strategy is doing better than rivals
Strategy is engaging with society

16. 1.3 Importance and Relevance of Strategy
According to Darwin’s theory of natural selection, it is the adaptation and survival of the fittest – same applies in case of firms
Competitors who make their living in the same way cannot co-exist for long (Example: Carnivores)
Different species will have different nutrition requirements and tap its needs without affecting the needs of other species.
Firms will have competition – there will be a need for a strategy – firms should aim at having a unique advantage – the fittest (or the one with a better strategy) will survive.
Thus strategy is important for long-term survival of any business firm as there is competition out there for customer’s attention and for scarce resources.

17. 1.3.1 Objectives of Business Strategy for a Firm
Achieve sustainable competitive advantage, deliver superior value advantage to your target customers relative to your competitors
Sense and respond to the threats and opportunities in the market (example initiatives)
Achieve superior financial (sales, ROI) and non-financial performance (customer/employee satisfaction, quality, market share)
Utilize resources effectively and efficiently and achieve the ends (vision)
To survive in the times of crisis and environmental changes through flexibility, and adaption and continually scan for environmental changes (example Nokia and Samsung against Apple)
To consider the interests of all stakeholders rather than only shareholders

18. 1.3.2 Various Types of Growth Strategies
Achieving growth is vital for any organization
Growth requires taking up a strategy:
Key determinants of growth are:
Organization's internal strength (resources, capabilities etc.)
External environment (customers, suppliers, political, economic factors etc.)
Values guiding the organization (e.g. customer or profit oriented)
Competitive landscape (industry dynamism)

19. 1.3.2 Various Types of Growth Strategies (continued)
Growth therefore is a key element of the organization's strategy
Being part of strategy, the objectives of growth can be twofold:
Growth seen as an expansion
For example expansion of sales, market, number of consumers, employees, production capacity, profits, shareholders base etc.
Growth seen as an identity
Growth seen in terms of objectives, purposes, goals, for example:
Making life easier, healthier, better, faster; providing safety; providing knowledge;
Ethical identity, quality identity, after sales service identity; nationalist identity; social responsibility identity

20. Summary of the topics covered
Strategy, management, and strategic management
Concepts of strategy
Meaning and nature of strategic management
Importance and relevance of strategy
Objectives of business strategy for a firm
Various types of growth strategies

21. Topics for the next lecture
Characteristics of strategic management and strategic absence
Role of the strategic management professionals (e.g. CEO, line manager, etc.)
Strategic management conceptual framework (e.g. what it involves, performance, rivals, competitive advantage)
Strategic management process, formulation and implementation