strategic management(career gyan.org)

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STRATEGIC MANAGEMENT

Question 1Explain the evolution, role and importance of business policy andstrategic management. What would be the role of manager in this age?

Introduction: The term strategic management has been traditionally used. Newtitle such as business policy, corporate strategy and policy, corporate policiesis essentially and extensively used which means more less the same concept.

Evolution of Strategic Management:1) In early 1920s and 1930s the managers used day-to-day planning

methods to perform any task.2) To anticipate the future, they tried using tools like preparation of

budgets and control systems like capital budgeting and management byobjectives.

3) The techniques were unable to emphasize the future adequately.4) The next step was they tried using long range planning which was

replaced by strategic planning and later by strategic management.5) In mid 1930s, according to the nature of business the planning was

done during Adhoc policy making.6) As many businesses had just started operations and were mostly in a

single product line, there arose a need for policy making.7) As companies grew they expanded their products and they catered to

more customer and which in turn increased their geographical coverage.8) The expansion brought in complexity and lot of changes in the external

environment. Hence there was a need to integrate functional areas.9) This integration was brought about by framing policies to guide managerial

action.10)Policies helped to have pre-defined set of actions, which helped people to

make decision.11)Policymaking was the owners prime responsibility.12)Due to increase in the environment changes, in 1930s and 40s policy

formulation replaced ad-hoc policy making, which led to emphasisshifted to the integration of functional areas in this rapidly changingenvironment.

13)Especially after II World War there was more complexity and significantchanges in the environment.

14)Competition increased with many companies entering into the market.15)Policy making and functional area integration was not sufficient for the

complex needs of a business.

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ROLE OF STRATEGIC MANAGEMENT: -

1) Due to increase in the competition, in 1960s there was a demand forcritical look at the bane corrupt of business.

2) The environment played an important role in the business.3) The relationship of business with the environment lead to the concept of

strategy.4) In early sixties, this helped the management to manage between the

business and the environment.5) In early eighties, as many companies were globalised which lead to the

competition of the rivals access the world.6) Japanese companies along with other Asian companies unleashed a

force across the world and posed a threat for the US and Europeancompanies, which led to the current thinking.

7) Strategic management focused on 2 aspects: - Strategic process of business. Responsibilities of strategic management.

8) Unlike others, in this phase the role of senior management is vital and ofutmost importance. Their role was important in decision-making like -

a) Whether a company promotes a joint venture/new decision.b) Decides to go for an expansion.c) Takes other important actions.

8) All these actions and decision had a long-term impact on the companyand its future operations, which was the result of senior managementdecision-making.

9) Strategic management is both about the present and future course ofaction, which was the prime responsibility senior management.

Strategic Management isI. The study of function and responsibilities of senior management

II. A crucial problem that affects success in total enterprise.III. The decision that determine the direction of the organization and shape

of its futureIV. Identity and molding of its character

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V. Mobilisation and their allocation of the resources.

Hence as managers had variety of choices, decisions were based on thecircumstances, which would take the company in specified directions.

IMPORTANCE AND ROLE OF MANAGERS IN STRATEGIC MANAGEMENT: -

I. Strategic management integrates the knowledge and experience gainedin various functional areas.

II. It helps to understand and make sense of complex interaction invarious areas of management.

III. It helps in understanding how policies are formulated and in creatingappreciation of complexities of environment that the senior managementfaces in policy formulation.

IV. Managers need to begin by gaining an understanding of the businessenvironment and to in control.

Here are few steps Indian managers need to do.a) They should know to manage and understand information

technology, which is changing the face of business.b) As public and common investors own and more companies

managers need to acquire skills to maximize shareholder value.c) To have/take a strategic perspective, managers should foresee the

future and track changes in customer expectation. Intuitive, logicreasoning is required for proper decision-making.

d) Successful companies depend on people. For people, managementmanagers should create capability for imitating and managethings through leadership and should possess qualities likepatience, commitment and perseverance.

e) Managers need to provide speed responses to environmentalchanges through informational systems and organizationalprocess.

f) As corporates are becoming more integrated with the public life,corporate governance is becoming important which manager mayhave to practice.

g) Managers should learn to deal with confused and complexsituations. They should know to deal with global managers,business protocols and market conditions.

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h) In complex and certain situations, managers should have thecourage in decision-making to make unconventional decisions.

i) Managers should possess high ethical standards in business andfocus on social responsibility.

ConclusionThus we can say the purpose of strategic management is manifold. To be

successful in the business one should possess/have holistic approach andshould know to integrate the knowledge gained in various functional area ofmanagement. By having generalistic approach, a senior manager canunderstand the complex inter linkages operating within the organisation andshould have systematic approach in decision-making in relation with thechanges which takes place in the environment.

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Question 2What is strategy? At what levels is it formulated?

INTRODUCTION: -

To understand the process of strategic management the concept should beunderstood and controlled. The term strategy is derived from the Greek wordSTRATEGOS Generalship. The actual direction of military force, asdistinct from governing its deployment. The word strategy means THE ARTOF GENERAL . Based on the studies and views by various experts andmanagement gurus Strategy in business has taken various connotations.

STRATEGY:1. Before making a decision managers have to look into the course of

deciding sinceStrategy involves situations like

a) How to face the competition.b) Whether to undertake expansions/diversificationc) To be focused/ broad basedd) How to chart a turn arounde) Ensuring stability/should we go in for disinvestments etc

2. An establishment and successful company would start to face newthreats in the environment. This is due to its success and emergence ofnew competitors. It has to rethink the course of action it has beenfollowing. This is called strategy.

3. With such rethinking and environment analysis, new opportunities mayemerge and be identified.

4. To make use of these opportunities, the company might fundamentallyrethink and reason the ways and means, the actions it had beenfollowing in the past. These are called strategies .

5. For a company to survive and to be successful strategy is one of themost significant concepts to emerge in the field of management.According to Alfred chandler the determination of basic long-term goalsand objectives of an enterprise and the adoption of the course of actionand the allocation of resources for carrying out these goals.William Gluck defines strategy as a unified, comprehension andintegrated plan designed to assure that the basic objectives of theenterprises are achieved.

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6. Michael Porter views strategy as the core of general management isstrategy.Managers must make companies flexible, respond rapidly, benchmark

the best practices, outsource aggressively, develop core competencies;Infact should know how to play new roles everyday. Hyper competition is acommon phenomenon that rivals copy very fast.7. Companies can outperform rivals only if it can establish a difference it

can preserve and deliver greater value at a reasonable cost.8. Strategy rests on unique activities The essence of strategy is in the

activities choosing to perform things differently and to performdifferent activities than rivals.

9. Strategy is long term. If company focus is only on operationaleffectiveness. It can become good and not better. Overemphasis ongrowth leads to the dilutions of strategy. Growth is achieved bydeepening strategy.

10. Strategy is the future plan of action, which relates to thecompanies activities and its mission/vision i.e. when it would like toreach from its current position.

11. It is concerned with the resource available today and those thatwill be required for the future plan of action. It is about the trade offbetween its different activities and creating a fit among these activities.

LEVELS OF STRATEGY:

1. When a company performs different business/ has portfolio of products,the company will organize itself in the form of strategic business units(SBUs).

2. In order to segregate different units each performing a common set ofactivities, many companies are organized on the basis of operatingdivisions/decisions. These are known as strategic business units.

CORPORATE LEVEL

FUNCTIONAL LEVEL STRTEGIES [CORPORATE]

SBU1 SBU2 SBU3 (SBU LEVEL)

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FUNCTIONAL LEVEL STRATEGIES3) Strategies are looked at

v Corporate levelv SBU level

4) There exists a difference at functional levels like marketing, finance,productions etc. Functional level strategies exist at both corporate and SBUlevel. It has to be aligned and integrated.5) CORPORATE LEVEL STRATEGY: Its a broad level strategy and all its planof actions is at corporate level i.e. what the company as a whole. It covers thevarious strategies performed by different SBUs. Strategies needs should be inalign with the company objective.6) Resources should be allocated to each SBU and broad level functionalstrategies. To ensure things there would need to have co-ordination of differentbusiness of the SBUs.FUNCTIONAL STRATEGY: As the SBU level deals with a relatively. Smallerarea that provides objectives for a specific function in that SBU environmentare marketing, finance, production, operation etc.7) For most companies strategies plans are made at 3 levels.

a) FUNCTIONAL STRATEGYb) SOCIETAL STRATEGYc) OPERATIONAL STRATEGY

Societal Strategy: Larger Companies like conglometers with multiple businessin different countries needs larger level strategy.

1) A relatively smaller company may require a strategy at a level higherthan corporate level.

2) Its how the company perceives itself in its role towards the society/ evencountries in terms of vision/ mission statement/ a set of needs thatstrives to fulfill corporate level strategies are then derived from thesocietal strategy.

Operational Level Strategy:

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In the dynamic environment & due to the complexities of business strategiesare needed to be set at lower levels i.e. one step down the functional level,operational level strategies.There are more specific & has a defined scope. E.g. Marketing Strategy couldbe subdivided into sales Strategies for different segments & markets, pricing,distribution etc.Some of them may be common & some unique to the target markets.It should contribute to the functional objectives of marketing function. Theseare interlinked with other strategies at functional level like those of finance,production etc

MISSION/VISION LEVEL

CORPORATE LEVEL

FUNCTIONAL LEVEL STRTEGIES [CORPORATE]

SBU1 SBU2 SBU3 (SBU LEVEL)

FUNCTIONAL LEVEL STRATEGIES

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OPERATIONAL LEVEL

Corporate level is divided from the societal level strategy of a corporationS.B.U Level are put in to action under the corporate level strategy.Functional Strategies operate under SBU Level.Operational Level is derived from functional level strategies

Conclusion:

These are the levels at which strategies are formulated

Question 3What are the Issues in Strategic Decision Making? Explain the role

of Various Strategies.

Issues in Strategic Decision Making

1. While making a decision the company might have different people atdifferent periods of time.

2. Decision requires judgments; a personal related factors are important indecision-making. Hence decision ma y differs as person change.

3. Decisions are not taken individually, but often there is a task indecisions which could be Individual Vs Group decision making. Therewill be a difference between the individual and group decision-making.

4. On what Criteria a company should make its decision, for evaluation ofthe efficiency & effectiveness of the decision making process, a companyhas to set its objectives which serves as main bench mark.

5. 3 Major Criteria in decision Making area. The concept of Maximization.b. The concept of satisfying.

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c. The concept of incrementalism.Based on the concept chosen the strategic decisions will differ.

6. Generally decision-making process is logical and there will be rationalityin decision-making.

7. When it comes to Strategic decision making point of view there would beproper evaluation & then exercising a choice from various availablealternative resource, which leads to attain the objectives in a bestpossible way.

8. Creativity in decision-making is required when there is a completesituation & the Decision taken must be original & different.

9. There could be variability in decision-making based on the situation &Circumstances.

Various Roles of Strategic Management.

Senior management plays n important role in Strategic Management.

Role of Board Of Directors: Board of Directors is the supreme Authority in acompany. They are the owners/ shareholders/ lenders. They are the ones whodirect and responsible for the governance of the company. The Company actand other laws blind them and their actions & they sometimes do get involvedin operational issues. Professionals on the B.O.D help to get new ideas,perspectives & provide guidance. They are the link between the company andthe environment.

Role of C.E.O: Chief Executive Officer is the most important Strategist andresponsible for all aspects from formulations/Implementation to review ofStrategic Management. He is the leader, motivator & Builder who forms a linkbetween company and the board of directors and responsible for managing theexternal environment and its relationship.

Role Of Entrepreneur: They are independent in thought and action and theyset / start up a new business. A Company can promote the entrepreneurialspirit and this can be internal attitude of an organization. They provide a senseof direction and are active in implementation.

Role of Senior Management: They are answerable to B.O.Directors & TheC.E.O as they would look after Strategic Management a responsible of certainareas / parts of terms.

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Role of SBU Level Executives: They Co-ordinate with other SBUs & withSenior Management. They are more focused on their product / burners line.They are more on the implementation role.

Role of Corporate Planning Staff: It provides administrative support toolsand techniques and is a Co-ordinate function.

Role of Consultant: Often Consultants may be hired for a specified newbusiness or Expertise even to get an unbiased opinion on the business & theStrategy.

Role of Middle Level Managers: They form an important link in strategizing &Implementation. They are not actively involved in formulation of Strategies andthey are developed to be the future management.

Conclusion: These are the issues in strategic decision-making and the role inStrategic Management.

Question 4 What is Strategic Management Process? Explain each step briefly.

Here are few definitions of Strategic Management Process.1) According to Glueck its a stream of decisions and actions that lead to

the development of an effective strategy/ Strategies to help achieveCorporate Strategies.

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2) According to Hofer its the process, which deals with fundamentalOrganisational, renewal & growth with the development of strategies,Structures and Systems necessary to achieve such renewal and growthand with the organizational systems needed to effectively manage thestrategy formulation and implementation process.

3) Ansoff defines it as The Systematic approach & importantresponsibility of general management to position and relate the firm toits environment in a way that will assure its Continued Success andmake it secure from surprises.

4) Sharplin defines as the formulation & implementation of plans andCarrying out activities related to the matters, which are vital, and ofcontinuing importance to the total organization.

5) According to Harrison & St John Strategic Management is the processthrough which organization learn from their internal & externalenvironment, establish strategic decision create strategies that areintended to help achieve establish goals & execute there strategiesachieve Establish goals and execute there Strategies all in an effort tosatisfy key organizational stake holders.

From the above block diagram it states that Strategic Management is aprocess, which leads to the formulation of Strategy/ Set of Strategies &

COMPANY VISION &MISSION/ REQUIREMENTS OF MAJORSTOCK HOLDERS STRATEGIC INTENT

EXTENAL & INTERNAL ANALYSIS /SWOT ENVIRONMENT ANALYSIS

DEFINE STRENGTHS/WEAKNESS/ CORECOMPENTENCIES

GENERATE STRATEGIC ALTENATIVES/ EVALUATE &SELECT

IMPLEMENT/ FEEDBACK/CONTROL

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managing thru Organisational System for the achievement of Vision,Mission Goals and Objectives.

Company Vision / Mission

1) Company Vision is What a Company Wishes to become or aspire to be.2) Company Mission is what the Company is and why it exists3) James Parras & James Collins divides Vision/Mission into 2 Parts.

Vision/ Core Ideology Core ValuesCore Purpose

Mission Envisioned Future Audaclous GoalsVivid Description

Core Ideology: Is the unchanging part of organization. It is the character ofan organization, this would not change for a longer time even it weredisadvantage.Core Values : what it believes in.Core Purpose: Existence of Organization and that goes far behind

Envisioned Future: Are the goals to be reached.It is classified into:Audaclous Goals: These are the goals that the company would like to achieve.They are tough needs extraordinary commitment and effort.Vivid Description: These Goals are put into words that evoke a picture of whatit would be like to achieve the Audaclous Goals.

SWOT Analysis: External & Internal Analysis:1. The External Environment is made up of all the Factors, Conditions &

influences outside the organizations.2. it gives rise to opportunities which can be exploited or it may give rise to

threats which can weaken / cause problem to the organization.

STRENGTHS/WEAKNESS/CORE COMPETENCIES

Strengths: its always in relation to the environment. Its an unborn capacity,which needs to fulfill two conditions.

1) Requirement for success.

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2) It gives the Strategic Advantage.It has strengths more than the competitor; it could gain more than theCompetitor.E.g. Superior research where new products & Innovations are required.

Weakness: Its something required for success is missing/inherentinadequacy. It gives strategic disadvantage to the Organisation.E.g. Over dependence on a single product line in a mature market.

Core Competencies: Is developed over a period of time, using thesecompetencies exceeding well, it develops a fine art of Competition with itsrules. This capacity of exercing turns them to core competencies.

General Strategic Alternatives / Evaluate & Select.It means that there is a proper evaluation and exercing a choice from variousalternative available resources in such a way it may lead to the achievement ofcompanys objective.

Implement / Feedback/ ControlImplementation is the responsibility of CEO. He is responsible fromimplementation to review of Strategic Management.

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Question 5Explain Strategic intent, stretch leverage & Fit.

Introduction: for an effective strategic intent one has to develop effectivestrategy, rather than focusing at the resourcefulness of Competition & theirpace at which they are building competencies one has to focus on existingposition.

Strategic Intent is something more than the unfettered ambition. Its not a softtarget. According to Prahlad & Gray

1) It forsees a desired leadership position and establishes the criteria theorganization will chart its progress.

2) It Captures the essence of winning & is stable over time.3) It requires personal effort, Commitment and bit of luck to achieve the

target.4) The Important thing that a company asks for is not How Well Next Year

be different? But they ask, What must we do differently next year toget closer to our strategic intent?

5) Most companies look at change and innovations in isolation6) Innovations come from everywhere & top Management role is to add

value to it.7) Strategic intent leaves room for creativity, innovation & top Management

directs it.8) There must be a balance between resources as a Constrain Vs Resource

as leverage so as to reduce risk. Former is done through building abalanced portfolio of cash generating and cash consuming business andin the latter a well balanced and sufficiently broad portfolio/ collection ofadvantages is assured.

9) It implies a seryable stretch for an organization.10)Since the current capabilities & resources are not------- it will force

inventiveness and the management will keep on involving challenges andthey give time to digest one challenge before launching another.

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11)One important parameter is reciprocal responsibility - Which meansequal blame & credit for both operating levels & top management.

12)Companies with good strategic intent know the importance ofdocumenting failure but instead of blame fixing and nailing people theyare more interested in the management reasons and the orthodoxy, thatmay have led to future.

Stretch: To Achieve strategic intent one has to stretch forward and has to lookat the resourcefulness instead of looking at resources. One has to make use ofInnovation and resources. Stretch leads to leverage.

Leverage: Refers to concentrating on the resources to achieve strategic intent,accumulating, learning, experiences & Competencies in a manner to meet theaspirations by stretching the scarce resource that an organizational resourceto the environment.Instead of allotting the competitors blindly & taking their head companiesmust leverage the resources.

Fit: Strategic fit is the traditional way of looking at strategy. Strategic fit isconservative and seems to be more realistic but u may not be aware of thepotential. Under stretch & leverage Strategic extent could be impossible,idealistic but under fit strategic something far beyond possibilities and look atthe potential possibilities.

Conclusion.

Thus Strategic intent is what the organization strives for e.g. Canon wanted tobeat Xerox. Its an obsession to an organization & it is to win at all levels of theorganization, sustaining that obsession is in quest for global leadership.

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Question 6Write a detailed note on Goals and Objectives.

Goals: - Goal Targeta) Its a target that a company wants to achieve in a future period of time.b) An organization sets a combination of goals, which might be

Qualitatively, Quantitative, and Financial & Non Financial. These Goalsmust be clear and unambiguous.

c) On an organizational level goals are broad in nature and they could setgoals on turnover, profits, returns on assets/equity, market share,Customer satisfaction, Employee satisfaction.

d) Goals should be limited, manageable, and clear& Consistent with eachother, otherwise it may lead to confusion & Contradictions.

e) Goals may be Qualitative, Quantitative in specification.

Objectives:a) Objectives are the ends that specify how the goals shall be achieved.b) They are concrete and specific and they are in contrast with the goals.c) Objectives make the goals operational and tend to Quantitative in

specifications.d) Objectives are set in a way that what the organisation has to achieve for

its employees, shareholders, customers etc.,e) Objectives are in relation with the environment. They are the brains of

Strategic Decision Making.

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f) They are framed in line with the vision/mission of the organization andit helps to pursue them.

g) Objectives are invariably Quantitative and provide clear measures andstandards for performance.

h) It helps to see whether the Organisation is in right track or not.i) Objectives should be concrete, specific, and understandable & should

have clearly defined time frame.j) It must be measurable, actionable, challenging but controllable.k) There must be co-relation with other objectives.l) While setting objectives these are the factors to be evaluated. It should

be specific at the level, which it is being set. It should not be either toonarrow or too broad.

m) There need to be multiplicity of objectives.n) It should be formulated at different time frames like short term, medium

term, and long term & should be linked & consistent.o) Since its in relation with the environment it needs to check whether they

are fulfilling the needs of customers, share holders etc.,p) It should be In reality with the organizational resources and internal

constraints, including policies & lower relationship.

Conclusion: Thus an organization is set up to make Prompt andAccurate decision. Hence goals & objectives are set for the accomplishment ofan organization.

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Question 7What is Environment ? How is it Changing?

Introduction : -Environment means the surrounding. It includes both internal and externalobjects, factors & influences under which someone/something exist.

Environment :

1) The Environment of an organization is the aggregate/total of allconditions events that influences itself & its Surroundings,

2) The dynamic & has relationships with each other.3) The factors in environment may affect the company and visa versa.4) It has a great impact on the company.

Environment Changes:

According to Michael Hommer and James Chapey.

1) An Organisation must be flexible enough to adjust quickly with thischanging environment.

2) The Efficiency of the company comes at the expenses of the efficiency ofthe company as a whole.

3) It requires co-operation & Co-ordination within the organization.4) Few Companies are rigid, non-competitive, inefficient and losing money

because they are not able to adjust themselves with the changingenvironment.

5) In 1776 Adam Smith described in his book, The Wealth of Nations. ThePrinciple of division of labour for increasing the productivity and thereby reducing the cost of goods. American Companies became best in theworld after applying the principles.

6) But in todays world, nothing is constant or predictable & theseprinciples dont work.

7) Market growth, customer demand, the rate of technological change, andnature of competition keeps changing.

8) The three forces that drives company areCustomersCompetition &Change.

Customers : Earlier days, Customers had little choice they used to buy theproduct that was offered to them. These days customers come with more

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specifications and they demand for customized products and they wantindividual attention. Hence customers have upper hands these days. Itsdifficult for an organization to survive in the long run unless they satisfycustomers needs.

Competition : As many companies emerges, the competition rises. They offergood quality of products at lesser price and consumers prefer such products.Earlier the company could get into market with an acceptable product/serviceat the best price would go to sell. But these days customers prefer high qualityat lowest price. The Company, which offers these at best price, goes highquality and best service becomes standard of all the competitors.

Changes : Changes has become both pervasive and persistent becausecompanies face a greater competitors and each one introduces a product andservice innovation to the market with the globalisation of the economy. Hencethe companies need to move fast in pace with the changing environmentotherwise its difficult to move.

CONCLUSION: In todays environment nothing is constant and predictablehence for a company to survive in the long run, it has to satisfy customerneeds and cope with the changes in the environment at a faster rate.

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Question 8Explain the process of SWOT analysis? Elaborate what you would studyin the environment?

INTRODUCTION

The external environment is made of factors, conditions that influences outside theorganization. The external environment gives rise to opportunities, which can beaccomplished, or it may cause problems to the organization.

SWOT ANALYSIS:

The internal environment refers to all factors within the control of and withinthe organization. These factors may impart strengths that can be utilised bythe organization or cause weakness, which becomes threat to the organization.

S Strength O- OpportunityW Weakness T Threats

Strength: It is an inherent capacity that is in relation to the environment. Foran organization to be a success it requires strength and it gives strategicadvantage to gain more than the competition.E.g. Innovation and new products are required for superior research anddevelopment facilities.

Weakness: - It is an inherent inadequacy that is again in relation to theenvironment. It gives strategic disadvantage and something that required forsuccess is missing. It leads to competition where weakness can be used to gainmore due to inherent limitation / constraint/inadequacy.E.g.1) In a mature market over dependence on a single product line.

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2) Lack of capabilities for the development of new product, which is potentiallyrisky for a company during the time of crisis.

OPPORTUNITY: can be accomplished and can help to consolidate andstrengthen the organization. Its a favorable condition for an organization in itsenvironment.E.g. Due to better GDP growth a company provides increase in demand for theproducts/services. It helps in strengthening its position.THREATS: when the opportunities are not utilized properly it can causeproblem to the to the organization which causes threat. It is unfavorablecondition for the organization. It causes risk/damage to an organization.E.g. Due to opening up of economy, the emergence of multinationalcompanies, which are stronger and has good resources, offers stiff competitionto the existing companies in an industry.

CONCLUSION

An understanding of both internal and external environment in terms ofopportunities, threat, strength, weaknesses important for existence, growthand profitability of an organization. A systematic approach and understandingthe environment is SWOT analysis all about.

Environment to be studied

1) Events: Is some specific occurrence that takes place in differentenvironmental sectors. E.g. Bilateral agreement between 2 countries inwhich the company is operating and facing competition from localcompanies.

2) Trends: is the way the environment is shaping up. They are he course ofaction along which events take place like global warming, nuclearfamilies etc.

3) Issues: are the current concerns that arise in response to events andtrends. E.g. Pollution Control, Business ethics after scams.

4) Expectations: are the demands made by interested groups in light oftheir concern. Like corporate governance, greater transparency, strictedauditing norms.

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Question9What are the core competencies and organization capabilities?

CORE COMPENTENCIES:1) An organization with its resources and the capacity of converting the

resources in to outputs and the behaviour of there (i.e. capability andresources) develops certain strength and weakness, which theircombined lead to synergistic effects.

2) Synergy Total (is greater) sum of the parts. In terms of organizationalcompetencies it manifest themselves in advantages over competition.

3) Competencies develop over a period of time.4) Its a fine art of competing with its rivals over a period of time and it

uses these competencies to exceed well. The capability of using thesecompetencies to exceed well turns them into core competence.

5) Core competencies have joined greater currency and popularity as perC.K Prahaled and Gary Hamel. Its a portfolio ofproducts/services/different business.

6) In short run competencies for a company is derived from the priceperformance and in longer run its the ability to build at lower cost andspeedily than others.

7) A diversified company is like a large tree. What are not easily visible andapparent are the core products and leaves, flowers, fruits are the endproduct.

8) Root is akin to Core Competence.9) Core competence is communication, collective learning and co-

ordination of diverse production skills and deep involvement andcommitment to work and delivery of value across all levels andfunctions.

10)Core competencies are the glue that binds existing business and guidemarket entries instead of market attractiveness.

11)Core competencies can be identified by conducting 3 tests i.e providespotential access to wide variety of markets and significant contributionsto the benefit of the end product difficult for competitors to imitate.

12)Building competencies are not sharing costs by SBU (or) out pendingrivals on R and D

13)By not building competencies in emerging markets you may lose thechance of competing in existing markets.

Its important to maintain the competencies even it not active in the market.

ORGANISATIONAL CAPABILITY: -

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1) Its the inherent capacity of an organization to use its strengths andovercome weakness to exploit opportunities and face threats in theexternal environment.

2) Its comparable & its very difficult to measure the capability of anorganization.

3) Strategist would like to know what capacity exist within the organization& what potentials should be developed so that opportunities can beexploited & how it can face threats.

4) Organisational capability includes Financial, Marketing, Operations,Personnel, and Information Management & General Management.

Financial Capability:

1) Source of Funds How well the company can raise funds, their cost &availability.

2) Management & use of funds how optimally it utilizes the funds whereand how they are used.

3) Factor governing marketing capability are the from Ps i.e. Product, PricePlace & Promotion related factors how it generates systematically.

4) Factors influencing personal capability are R & D System, production &Control Systems.

5) Factors leading to personal Capability are industrial & personnelrelations, organizational & employees Characteristics.

6) Factors that lead to information management capability are integrative,systematic & supportive factors.

The retrieval, usage, Acquisition, processing, synthesis, transmission &dissemination of information.

General Management methods & Techniques.To carry at the organizational study internal analysis tools can be used asmentioned below.

1) Value Chair Analysis2) Qualitative & Quantitative analysis both financial non financial.3) Comparative analysis, bench marking, industrial norms.4) Comprehensive Analysis using new tools Balance score card/key factor

making.

Conclusion: These are the factors that influence them.

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Q.10)

These are the levels at which strategies are formulatedThese are the levels at which strategies are formulatedThese are the levels at which strategies are formulatedThese are the levels at which strategies are formulatedThese are the levels at which strategies are formulatedThese are the levels at which strategies are formulatedThese are the levels at which strategies are formulatedThese are the levels at which strategies are formulatedThese are the levels at which strategies are formulated

Issues in Strategic Decision MakingMissionEnvisioned FutureAudaclous Goals

Vivid DescriptionVivid Description: These Goals are put into words that evoke a picture of what it would be like to achieve the Audaclous Goals.

INTRODUCTIONCONCLUSIONEnvironment to be studied

strategic management(career gyan.org)

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