Perspective Management

- Jasiya Syed

What is Strategic Management ?

• It is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives.

• The strategic management process involves analyzing cross-functional business decisions prior to implementing them.

• There are 3 steps in Strategic Management:      Planning, Execution And Monitoring.

Classes of Decision

Classes of Decision

There are three Main Classifications -

1. Corporate - a corporation’s overall direction and the management of its businesses.

2. Business - emphasizes improving the competitive position of a corporation’s products or services in a specific industry or market segment.

3. Functional - concerned with developing a distinctive competence to provide a company or business unit with a competitive advantage.

Levels of Strategies

What is Strategy ?

• A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.

• The art and science of planning and marshalling resources for their most efficient and effective use. The term is derived from the Greek word for general ship or leading an army.

Types of Strategies

1. Growth strategies - seek an increase in size and the expansion of current operations.

2. Concentration strategies - growth occurs through expansion in the same business area.

3. Diversification strategies - growth occurs through acquisition of or investment in new and/or different business areas.

4. Intensification Strategy - Intensification is the development of land at a higher density than currently exists through redevelopment, reuse of former industrial and commercial sites

5. Restructuring and divestiture strategies• Liquidation• Restructuring• Divestiture

6. Cooperative strategies - strategic alliances of two or more organizations partner to pursue an area of mutual interest.7. E-business strategies

8. Stability strategy - It implies continuing the correct activities of the firm without any significant change in direction.• Pause process with certain strategy • No change strategy • Profit strategy

Porter’s Model

Generic strategies for gaining competitive advantage:• Differentiation strategy• Cost leadership strategy• Focused differentiation strategy• Focused cost leadership

strategy

Role of a Strategist

Strategist & Their Role

1. EntrepreneurThe entrepreneur always searches for change, responds to it and exploits it.

2.Board of Directors • Directions to managers + Operational

matters of significance,• Formal and informal functions,• Vital link between the company and the

environment.

opportunity.

3. CEO’s • The Role Modelling Approaches• Chief architect of organizational purpose,

strategist or planner• Organizational leader, organizer, or

organizational builder• Chief administrator, implementer, or

coordinator• Communicator of organizational purpose,

motivator, personal leader or mentor.

4. Strategic Business Units (SBU’s)• The executive head of each SBU is responsible for the framing of strategies for that SBU and for the coordination with the other SBUs in the organization.

• “SWOT Analysis is a strategic planning tool that separates influences on a business’s future success into internal and external factors”

• “SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business”

What is SWOT Analysis ?

SWOT Analysis Matrix

How it Works….

1. STRENGHTS • What advantages does the company have?• What makes company standout from its

competitors?• What positive aspects does the company enjoy

in the current environment ?

2. WEAKNESSES• Which areas are causing concerns?• Which issues can be avoided?• Company’s reputation among its customers

3. OPPORTUNITIES• How can the company be more innovative ?• Which are the new markets or consumers that

can be trapped ?• Which area has the company not ventured into

?• What are the upcoming trends that are

catching up in the market ?

4. THREATS• Are there any new competitors emerging in the

industry ?• What are the issues that threatens the

company’s position ?• Is there any significant change(s) in the

industry of operation ?

How it helps us….

• It is an important techniques which provide quality information to the managers to take effective decision for future development of organization.• It helps understand organization’s Internal

and External Environment at a competitive position.• It also provides basic and important areas of

organization with information as to What to develop and What to Overcome ?

BCG Matrix

The Boston Consulting group’s product portfolio matrix (BCG) is designed to help with long-term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue or develop products.The Matrix is divided into 4 quadrants derived on market growth and relative market share.

• Dogs• Question marks / Problem Child• Stars• Cash Cows

BCG MATRIX

• High market share is not the only success factor

• Market growth is not the only indicator for attractiveness of market.

• Sometimes Dogs can earn even more cash as Cash Cows.

• The BCG Model is seen as simplistic and it can be difficult to classify products in smaller businesses where the relative market share is too small to quantify.

• It’s also based on the concept that market share can be achieved by spending more on the marketing budget.

Limitations of BCG

Strategic Management Model

Wheelen & Hunger’s Strategic Model

How to work on it……

1. Monitoring, evaluating and disseminating information from the environment to key people within the corporation.

2. Scan via SWOT analysis:• Look for opportunities/threats in the external

environment• Look for strengths/weaknesses in the

internal environment

Strategy Formulation

The process of developing long-range plans to deal effectively with environmental opportunities and threats in light of corporate strengths and weaknesses.  Composed of:

•  Vision and Mission•  Objectives•  Strategies•  Policies

• Vision :It is a statement about what an organization ultimately wants to accomplish. It captures the company’s aspiration.

• Mission :The purpose or reason for the corporation’s existence. It tells who the company is, what they do as well as what they’d like to become.

• Objectives :The end results of planned activity.  They state WHAT is to be accomplished by WHEN. They should be quantified, if possible. Should be specific, measurable and obtainable.

• Policies –It is a broad guideline for decision making that links the formulation of a strategy with its implementation.E.g. - 3M’s policy requiring researchers to spend 15% of their time working on something other than their primary project.

Strategies

It states how the corporation will achieve its mission and objectives.

Types of adaptive strategies

• Prospector strategy - Appropriate in dynamic, high-potential environments

• Defender strategy - Appropriate in stable or declining environments

• Reactor strategy - Following competitors as a last resort regardless of environment

Strategy Implementation

The process of putting strategies and policies into action through the development of:

• Programs - statements of activities or steps needed to accomplish a single-use plan.

• Budgets - statements of a corporation’s programs in money terms.

• Procedures - systems of sequential steps or techniques that describe in detail how to perform particular tasks or jobs.

• Evaluation & Control –

The process of monitoring corporate activities and performance results so that actual performance can be compared with desired performance.

Benefits of Strategic Management

“Strategic management allows and organization to be more proactive than reactive in shaping its own future.”

• Non-Financial Benefits• Financial Benefits

Non-Financial Benefits

• Improved understanding of competitor’s strategies.

• Enhanced awareness of threats.

• Reduced resistance to change.

• Enhanced problem-prevention capabilities.

Financial Benefits

• Improvement in sales. • Improvement in

profitability. • Improvement in

productivity

Example

Konkan Rail project• Estimated Cost – Around 3000 Cr.• Final Approximate Cost -2980 cr.• Time required to Complete - 7 years• Time estimated to Complete – 8 years

Mumbai Sea Link • Estimated cost - Rs300 cr.• But the bridge was delayed by five years• Final approximate Cost - Rs1,634 crore.

BW Sea-Link Konkan Railway

Thank You For Your Patience!!!