1. Strategic Formation Process
Dr. V. Ramadevi/AP - DoMS

2. STRATEGIC MANAGEMENT : Strategic management is defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable the organization to achieve its objectives." Generally, strategic management is not only related to a single specialization but covers cross-functional or overall organization.
Strategic management is a comprehensive area that covers almost all the functional areas of the organization. It is an umbrella concept of management that comprises all such functional areas as marketing, finance & account, human resource, and production & operation into a top level management discipline. Therefore, strategic management has an importance in the organizational success and failure than any specific functional areas.
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Dr. V. Ramadevi/AP - DoMS

3. (Cont …….
Strategic management deals with organizational level and top level issues whereas functional or operational level management deals with the specific areas of the business.
. Top-level managers such as Chairman, Managing Director, and corporate level planners involve more in strategic management process.
Strategic management relates to setting vision, mission, objectives, and strategies that can be the guideline to design functional strategies in other functional areas
Therefore, it is top-level management that paves the way for other functional or operational management in an organization
Definition:
Glueck – Strategic Management can be defined as a set of decisions, actions resulting in formulations & implementation of strategies designed to achieve the objectives of enterprise.
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Dr. V. Ramadevi/AP - DoMS

4. Strategic management process
Stages of Strategic Management
a. Strategy formulation includes developing a vision and mission, identifying an organizations external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.
b. Strategy implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed;
c. Strategy evaluation is the final stage in strategic management. Managers desperately need to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information.
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Dr. V. Ramadevi/AP - DoMS

5. Strategic Management Process
(Cont……
Strategic Management Process
Scan External Environment – National, Global
Identify Strategic Factors – Opportunities, Threats
Implement Strategy via Changes in: Leadership culture, Structure, HR, Information & control systems
Evaluate Current Mission, Goals, Strategies
Formulate Strategy – Corporate, Business, Functional
Define new Mission Goals, Grand Strategy
SWOT
Scan Internal Environment – Core Competence, Synergy, Value Creation
Identify Strategic Factors – Strengths, Weaknesses 5
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Dr. V. Ramadevi/AP - DoMS

6. Strategy formulation is the process by which an organization chooses the most. appropriate courses of action to achieve its defined goals. ... Strategic plans should be communicated to all employees so that they are aware of the organization's objectives, mission, and purpose.
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Dr. V. Ramadevi/AP - DoMS

7. Setting Organizations’ objectives - The key component of any strategy statement is to set the long-term objectives of the organization. It is known that strategy is generally a medium for realization of organizational objectives. Objectives stress the state of being there whereas Strategy stresses upon the process of reaching there. Strategy includes both the fixation of objectives as well the medium to be used to realize those objectives
Evaluating the Organizational Environment - The next step is to evaluate the general economic and industrial environment in which the organization operates. This includes a review of the organizations competitive position. It is essential to conduct a qualitative and quantitative review of an organizations existing product line. The purpose of such a review is to make sure that the factors important for competitive success in the market can be discovered so that the management can identify their own strengths and weaknesses as well as their competitors’ strengths and weaknesses.
After identifying its strengths and weaknesses, an organization must keep a track of competitors’ moves and actions so as to discover probable opportunities of threats to its market or supply sources.
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Dr. V. Ramadevi/AP - DoMS

8. Setting Quantitative Targets - In this step, an organization must practically fix the quantitative target values for some of the organizational objectives. The idea behind this is to compare with long term customers, so as to evaluate the contribution that might be made by various product zones or operating departments.
Aiming in context with the divisional plans - In this step, the contributions made by each department or division or product category within the organization is identified and accordingly strategic planning is done for each sub-unit. This requires a careful analysis of macroeconomic trends.
Performance Analysis - Performance analysis includes discovering and analyzing the gap between the planned or desired performance. A critical evaluation of the organizations past performance, present condition and the desired future conditions must be done by the organization. This critical evaluation identifies the degree of gap that persists between the actual reality and the long-term aspirations of the organization. An attempt is made by the organization to estimate its probable future condition if the current trends persist.
Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of action is actually chosen after considering organizational goals, organizational strengths, potential and limitations as well as the external opportunities.
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Dr. V. Ramadevi/AP - DoMS

9. Thank-You
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Dr. V. Ramadevi/AP - DoMS