2232.presentation on strategic managemnt

8/7/2019 2232.Presentation on Strategic managemnt

1/16

Presentationon

introduction to strategic management

Presented By:Ditty Garg

MBA, Lecturer MBA Department


2/16

Presented B y: Ditty Gar g

Meaning & Definition of strategyStrategy is defined as the determination of the basic long-

term objectives and goals of an enterprise and theformulation of plans and the acquisition, allocation andutilisation of resources necessary to accomplish these

goals.It is a unified, comprehensive and integrated plan

designed to assure that the basic objectives of theenterprise are achieved.


3/16


Nature and scope of strategy1. Strategic Issues Warrant Top Management Decisions.2. These Involve the Allocation of Large Amounts and

Resources.3. Strategic Issues are Likely to have Impinging Impact on

the Long Term Prosperity of the Enterprise.4. These are Future Oriented.5. These Demand due Weightage to the Firms External

Environment.

6. Strategic Management Stresses both Efficiency andEffectiveness.


4/16


Importance/ need of strategy1. Strategies are needed to give companies a direction.

2. By setting objectives and drawing up a strategy to accomplish these,companies can invest resources, train people, build up productioncapacity and take a clear position within their environment.

3. It helps in coordinating all strategic initiatives within a company intoa single cohesive pattern. A company-wide master strategy canensure that differences of opinions are ironed-out and oneconsistent course of action is followed throughout the company,avoiding overlapping, conflicting and contradictory behavior.

4. Well planned strategies facilitate optimum resource allocation andhence minimizes the wastage.

5. It helps in conscious evaluation of all the available options before

committing to a course of action.6. Having detailed strategies allows the companies to run with

clockwork precision, reliability and efficiency of a machine.


5/16


Strategic managementStrategic management is the process of systematically

analysing various opportunities and threats vis--visorganisational strengths and weaknesses, formulatingand arriving at strategic choices through critical

evaluation of alternatives and implementing them tomeet the set objectives of the organisation.It is a continuous process of relating the organisation with

its environment by suitable course of action involvingstrategy formulation and its implementation.


6/16


Business policyBusiness: Business means exchange of commodities and

services for increasing abilities.Policy: Policies are the guidelines to action. Policies

include guidelines, procedures, rules, programs and

budgets established to support efforts to achieve statedobjectives.

Business Policy: Business policy is a principle or a groupof related principles, along with their consequent rulesof action that provide for the successful achievement of specific organisation/ business activities. Accordingly, apolicy contains both principle and rule of action. Hence,it is a well developed statement of directions and goals.


7/16


Features of a business policy1. Policies guide action to accomplish predetermined

objectives.2. A policy complements the other policies of the

organisation.

3. A good policy is not altered very often.4. Policy should be fair and honest5. A successful policy is communicated to all. It is well

known, understood and accepted by all.6. Policy should be in writing.7. It should be simple and free from ambiguity.8. Business policy should be consistent with public policy.9. It should comply to ethical standards.


8/16


Functions of strategic management1. It provides the management a perspective which gives equal

importance to present and future opportunities andproblems.

2. It provides the management mechanisms to cope with highlycomplex environment.

3. It provides the management the techniques to manage changes.4. It provides approach to problem solving.5. It facilitates exploitation of the most effective means to

overcome difficulties and face competition.6. It facilitates deployment of limited resources among critical

activities.7. It improves communication and coordination in the

organisation.8. It enhances systematic business decisions.


9/16


10/16

Presented B y

: Ditty Gar g

Strategic decision makingStrategic decision making is the process of selecting

alternatives among the existing situation to makedecision that have long term implication for theorganisational performance. E.g. new product

development, replacement of old machines with the newmachines.Strategic decision making requires more creative

approach. These decisions are made in accordance withwritten policies, procedures or rules.


11/16

Presented B y

: Ditty Gar g

Features of strategic decision making1. Top Management Involvement2. Allocation of Large amounts of Resources3. Effect on Long Term Prosperity of Firm4. Future-Oriented5. Multi-Business Consequences


12/16

Presented B y

: Ditty Gar g

Levels at which strategy operates

Levels Structure Strategy

Corporate

StrategicBusiness Unit

Functional

Corporate Level

Business Level

Functional

Level


13/16

Presented B y

: Ditty Gar g

Corporate level strategyAt the corporate level, strategies are formulated according to

organisation wise policies. These are value oriented, conceptual

and less concrete than decisions at the other two levels. These are

characterised by greater risk, cost and profit potential as well as

flexibility. Mostly, corporate level strategies are futuristic,

innovative and pervasive in nature. They occupy the highest level

of decision making and cover the actions dealing with the

objectives of the firm. Such decisions are made by the top

management of the firm. Examples of such strategies include

acquisition decisions, diversification, structural redesigning etc.

The Board of Directors, CEO are the primary groups involved in

this level of strategy making.


14/16


15/16


Functional level strategyThis strategy relates to a single functional operation an the

activities involved therein. This level is at the operatingend of the organisation. The decisions at this levelwithin the organisation are described as tactical. The

strategies are concerned with how different functions of the enterprise like marketing, finance, manufacturingetc. contribute to the strategy of other levels.


16/16


Strategic decisions at different levels

CorporateLevel Strategy BusinessLevel Strategy FunctionalLevel Strategy

TYPE OF DECISION Conceptual Mixed OperationalIMPACT Significant Major InsignificantRISK INVOLVED High Medium LowPROFIT POTENTIAL High Medium LowTIME HORIZON Long Medium LowFLEXIBILITY High Medium Low

2232.presentation on strategic managemnt

Documents