Strategy is derived from the greek wordstrategos.
Strategy refers to the ‘plan or course ofaction’ framed or formulated to achieve aspecified objective or goal.
A comprehensive way to try to pursuecertain ends.
The famous Chinese Philosopher Sun Tzu’s“The Art of War” written in the 6th centuryB.C.
The famous Indian Guru Chanakya’s“Arthasastra” written in the 4th centuryB.C.
The notorious Italian NiccoloMachiavelli’s “The Prince” “TheDiscourses” & “The Art of War” writtenin the 16th century A.D.
To meet the objectives of organization.
Blend of internal and external factors.
Solve certain problems.
Future oriented.
Efficient adoption in organization.
Guide enterprise thinking and action.
Long term objective.
Competitive advantage.
Vector.
Synergy.
Levels of operation-corporate level, businesslevel, functional level.
2 categories of companies-differentdirections or product groups known as profitcentres or sbu’s, single product companies.
SBU was introduced by general electriccompany. Best example is relaince company.
Strategies are formulated according to organizations.
Value oriented, conceptual and less concrete.
These are characterized by greater risk, cost and profit potentialas well as flexibility.
Occupy highest level of strategic decision making and cover theactions dealing with the objectives of the organization.
Decisions are made by top management.
Examples: acquisitions decisions, diversification, structuraldiversifications etc.
Directors and chief executive officer are the primary members.
Make use of business resources.
Allocation of resources among functional areasand coordination between them for achievementof corporate level objectives.
Operate within overall organization.
Has impact on business strategy.
Relates to single functional operation.
Decisions taken are described as tactical.
The strategies are concerned with how differentfunctions of the enterprise like marketing, financemanufacturing etc.
Sometimes a 4th level exists known as the operatinglevel which comes from the functional level strategy.
Example marketing function which is spilt intomarket research, sales promotion etc.
To take decisions.
Deal with new trend.
Financial benefits in the form of increased profits.
Clarity in direction for achieving objective.
Organizational effectiveness.
Satisfaction to the personnel.
Habit of thinking and proactive.
Achievement of goals.
Improves corporate communication. Coordination andallocation of resources.
There are two dimensions of every action. They are substantive andprocedural.
The process of strategy is cyclical in nature.
Elements interact among themselves.
There are 4 phases-identification phase, development phase,implementation phase and monitoring phase.(initially)
C.k.prahalad-strategic intent, environmental analysis, evaluation ofstrategic alternatives and choices, strategy implementation, strategyevaluation and control.
Feedback
Strategy evaluation and control
Implementation of strategy
Choice of strategy
Identifying alternative strategies
Setting objectives and goals
Defining mission and vision and business
Environmental analysis
Organizational analysis
Purpose of the organization.
It could be in the form of vision and mission.
An obsession of having ambitions that may beeven out of proportion to their resources andcapabilities.
Articulates the position of the firm.
A vision should be
◦An organisation charter of core values and principles.
◦The ultimate source of our priorities, plans and goals.
◦A puller into the future.
◦A determination and publication of what makes us unique.
◦A declaration of independence.
Well-conceived vision
Core ideology
Core values and corepurpose
Envisioned future
Long term audaciousgoal vivid descriptionof achievement
Mission is what an organization is and why it exists.
Characteristics of mission
◦It should be feasible.
◦It should be precise.
◦It should be clear.
◦It should be motivating.
◦It should be distinctive.
◦It should indicate the major components of strategy.
◦It should indicate how objectives are accomplishments.
Values of a company state how managers andemployees should conduct themselves.
How they should do business.
What kind of organization they should build acompany.
They depend on organizational culture.
A goal is a precise and measurable desired futurestate that a company attempts to realize.
Goal is to attain mission and vision.
It should address crucial issue.
They should be challenging but realistic.
It should be achieved within a limited time period.
Analysis of the organization’s external operatingenvironment.
Identify strategic opportunities and threats.
It should consider national environment, widersocioeconomic or macro environment.
Impact of globalization on competition within industry.
Examination of macroeconomic, social, government, legal,international and technological factors is essential.
Focuses on reviewing the resources,capabilities and competencies of company.
Goal is to identify strength and weakness ofthe company.
Functional level strategies.
Business level strategies.
Global strategies.
Corporate level strategies.
Increase performance.
Execute strategy plan.
Best organization structure.
Culture and control systems can be improved.
Maximize profit towards growth.
After implementation, monitoring is essential.
To what extent the objectives and goals fixedis effective has to be analyzed.
It is too optimistic then conservative goal hasto be fixed.
General
◦Socio-economic
◦Technological
◦Governmental
Industry
◦Customers
◦Suppliers
◦Competition
International
The economy
Business cycle.
Inflationary and deflationary trend.
Monetary policies.
Fiscal policies.
Balance of payments.
Unemployment rates.
Climatic factors
Social and cultural factors
Demographic factors
