this is a presentation i prepared for my submission in the subject management 2 . The chapter is strategic management . hope you guys find this useful !!!

1. STRATEGIC
MANAGEMENT
By :-
Tejas Atyam
5th sem Production Engg

2. WHAT IS STRATEGY?
 Strategos  Leading an army

3. WHAT IS STRATEGY?
So ,
 Strategic thinking has its roots in military strategy
“The branch of military science dealing with military command and
the planning and conduct of a war.”
 And has evolved to focus on business
“An elaborate and systematic plan of action from long-term
perspective.”

4. IMPORTANCE OF STRATEGY (PLAN)
 A true Story - Hungarian soldiers lost in Alps
 Moral – Sense of purpose, direction

5. LEVELS OF STRATEGY-MAKING

6. A HIERARCHY OF GOALS

7. STRATEGIC VISION VS. MISSION
 A strategic vision
concerns a firm’s
future business path
- “where
we are going”
Markets to be pursued
Future product/market/
customer/technology
focus
 The mission
statement of a firm
focuses on its
present business
purpose - “who we
are and what we do”
Current product and
service offerings
Customer needs being
served
2-7

8. VISION STATEMENTS
 Kraft Foods sample vision statements
Our Vision...
Helping People Around the World Eat and Live Better
 Honda sample vision statements
1970: We will destroy Yamaha
Current: To Be a Company that Our Shareholders, Customers
and Society Want
 Ford sample vision statements
Early 1900s: Democratize the automobile
Current: To become the world's leading Consumer Company for
automotive products and services.
 Caterpillar sample vision statements
Be the global leader in customer value.

9. MISSION STATEMENTS OF SOME GREAT
COMPANIES
 Amazon.com : Our vision is to be earth's most customer
centric company; to build a place where people can come
to find and discover anything they might want to buy
online.
 Dell: Dell listens to customers and delivers innovative
technology and services they trust and value.
 Google: Google's mission is to organize the world's
information and make it universally accessible and useful
 McDonald’s: Tο bе ουr customers’ favorite рƖасе аnd
way tο eat.

10. HOW STRATEGY IS MADE

11. MCDONALD’S STRATEGY
 Key initiatives of McDonald’s “Plan to Win”
Strategy
Improved restaurant operations
Affordable pricing
Wide menu variety and beverage choices
Convenience and expansion of dining
opportunities
Ongoing restaurant reinvestment

12. THE CONCEPT OF STRATEGY:-
 Derived from Greek word “STRATEGIA” Which means
Command, generalship.
 In 1920s, Sears, Roebuck and Co. was giant mail-order
house whose president, General Robert E. Wood,
Recognized the concept and importance of Strategy.

13. THE CONCEPT OF STRATEGY:-
 In 1962, Business historian Alfred D. Chandler
proposed that Strategy be defined as, “the
determination basic long term goals and objective
of an enterprise, and the adoption of courses of
action and the allocation of resources necessary for
carrying on these goals”
 Chandler focused on main three elements which
are:-
1. Courses of action for attaining objectives
2. The process of seeking key ideas
3. How strategy is formulated and not just what
strategy turns out to be

14. STRATEGY:-
 Henry Mintzberg differentiate intended and
emergent strategy.
 In which Intended strategies refer to the plans that
managers develop.
 While emergent strategies are actions that actually
take place over a period of time

15. STRATEGY:-
 Refers to three main aspects which are:
1. Determination of basic long term goals &
objectives.
2. Adoption of courses of action to achieve these
objectives.
3. Allocation of resources necessary for adopting
the courses of action.

16. FEATURES OF STRATEGY:-
 Is a relative combination of actions aimed at to meet a particular
condition to achieve desirable end.
 Is a major course of action through which an organization tries to
relate itself with environment.
 It helps in achieving the pre decided objectives.
 It is a forward looking and it has orientation towards future.
 Strategic action is required in a new situation.

17. ROLES OF DIFFERENT STRATEGIES:
 Overall Company Strategy
This strategy is designed for long term business perspective
and most deals with overall strength of the company. If the
strategy is correct it is the most productive strategy.
 Example:- A two wheeler manufacturing company will have
strategy of mass production and aggressive marketing.
 Growth Strategy
Growth means increase in turnover, expansion or diversion of
business. This strategy means selecting product having fast
growth, acquisition of business of other firms and opening new
markets. It has direct positive impact on the profitability.

18.  Product Strategy
This Strategy means choice of product which can result in
family of product. For new marketers product strategy must be
innovated, for eg. A home appliance like t.v, fridge etc.
 Market Strategy
This strategy deals with product distribution , services, pricing
policy, advertising, packing etc.

19. STRATEGIC FORMULATION
Socio-Economic
Purposes
Strength
And
Weakness
Formulation of Business Strategy
Environme
nt

20.  Strategic planning involves process and methodology.
It starts with deciding social responsibility and then
preceding towards business mission and goals with
strategies to achieve them. This must be
communicated to all concerns of the organization.
 After deciding the mission or aim the next task is to set
the goals in specific and quantitative term. The goals
are the reference for the top management in planning
and business activities. The next step is to set
objectives for the organization. The objective should
be measurable and monitored.

21.  The success in achieving the mission is dependent on
the business strategy of the management. The recourses
must be deployed efficiency to achieve the objectives as
well as to face the competition.
 The business strategy also depends on the environment
factors like technology, market, lifestyle, government
policies etc. A sound business strategy may be
developed to make the organization stable against
various forces and to make it strong. Therefore,
formulating strategy is an unstructured and complex task
also it deals with uncertainty. Figure shows the
formulation of business strategy.
 Development of strategy is a difficult task and it is an
exercise multidisciplinary fields. Formulation of business
strategy reflects attitude and philosophy. Strategies are
formulated within policy frame.

22. LEVELS OF STRATEGY:-

23. LEVELS OF STRATEGY:-
 Strategies exist at a number of level in an organization.
 Still it is possible to distinguish three different level of
strategy which are as :-
1. Strategic level - corporate level strategy.
2. Operational level -business level strategy.
3. Tactical Level -functional level strategy.

24. CORPORATE LEVEL STRATEGY:-
 Concerned with overall scope of an organization.
 Includes issues like diversity of products, business units
etc.
 Strategy formulated by top management to oversee the
interests & operations of multi line corporations.
 Determines what business a company is in, should be in,
or wants to be in, what it wants to do with these business.
 One of the best example is this context be that of
PepsiCo.

25. CORPORATE LEVEL STRATEGY:-
 Corporate level strategy Is the highest level of
strategic decision-making and covers actions
dealing with :
 The objective of the firm,
 Acquisition and allocation of resources
 Coordination of strategies of various SBUs for
optimal performance.
 There main three type of corporate strategy
A. Growth
B. Stability
C. Renewal

26. CORPORATE-LEVEL STRATEGIES
Firm
Status
Valuable
strengths
Critical
weaknesses
Environmental Status
Abundant
environmental
opportunities
Critical
environmental
threats
Corporate
growth
strategies
Concentric Diversification
(Economies
of Scope)
Conglomerate
Diversification
(Risk Mgt.)
Corporate
retrenchment
strategies
Can still go for business-level
growth (economies of scale)
Corporate
stability
strategies

27. BUSINESS LEVEL STRATEGY:-
 Business-level strategy is applicable in those
organizations, which have different businesses-and each
business Is treated as strategic business unit (SBU).
 The fundamental concept In SBU Is to identify the discrete
independent product/market segments served by an
organization.
 Since each product/market segment has a distinct
environment, a SBU is created for each such segment.
 For example, Reliance Industries United operates In textile
fabrics, yams, fibers, and a variety of petrochemical
products.
 For each product group, the nature of market in terms of
customers, competition, and marketing channel differs.

28. THE MULTI-BUSINESS ORGANISATION

29. A SIMPLE ORGANIZATION CHART
(SINGLE PRODUCT BUSINESS)
Business
Research and
Development
Manufacturing Marketing
Human
Resources
Finance
Functional
Level
Strategy
Business
Level
Strategy

30. A SIMPLE ORGANIZATION CHART
(DOMINANT OR RELATED PRODUCT BUSINESS)
Multibusiness
Corporation
Corporate
Level
Business 1
(Related)
Business 2
(Related)
Business 3
(Related)
Business
Level
Research and
Development
Manufacturing Marketing
Human
Resources
Finance
Functional
Level

31. FUNCTIONAL LEVEL STRATEGY:-
 Strategy involves decision making with respect to specific
functional areas say production, marketing etc.
 Decision at the functional level and are often described as
tactical decisions.
 Emphasize on doing things correctly but these decisions
are guided by overall strategic considerations.
 It is the approach taken by functional area to achieve
corporate & business objectives & maximizing resource
productivity.

32. FUNCTIONAL LEVEL STRATEGY:-
 For example, marketing strategy, a functional
strategy, can be subdivided Into promotion, sales,
distribution, pricing strategies with each sub
function strategy contributing to functional strategy.
 Reliance Company’s main strategy Is called
Corporate Level Strategy.
 Reliance’s different Businesses like Textile, Fabric,
Energy as individual unit have different kind of
Business Level Strategy.
 In each Units of Reliance, they have different
departments like Marketing, Finance, Production.
These departments have Functional strategy.

33. STRATEGIC MANAGEMENT
 The art and science of formulating, implementing,
and evaluating cross-functional decisions that
enable an organization to achieve its objectives

34.  Strategic management is used synonymously with the term
strategic planning.
 Sometimes the term strategic management is used to refer
to strategy formulation, implementation, and evaluation, with
strategic planning referring only to strategy formulation.
 A strategic plan is a company’s game plan.
 A strategic plan results from tough managerial choices
among numerous good alternatives, and it signals
commitment to specific markets, policies, procedures, and
operations.

35. STAGES OF STRATEGIC MANAGEMENT
Strategy
formulation
Strategy
implementation
Strategy
evaluatio
n

36. IMPORTANCE OF STRATEGIC MANAGEMENT
 It can make a difference in how well an organization
performs.
 Generally observed that organizations that use strategic
management do have higher levels of performance.
 Using this branch the managers examine the relevant
factors in deciding what actions to take.
 Strategic management helps
 out them to better cope with
 the given complicate situations.

37. ADVANTAGES OF STRATEGIC MGT:-
 Main advantages of strategic management are as follows:
1. Clarity in objective & direction.
2. Improvement in financial benefits of organization.
3. Offsetting environment uncertainty.
4. Organizational effectiveness.
5. Improved Quality of decisions.
6. Motivation & satisfaction.

38. MANAGEMENT BY
OBJECTIVES

39.  Management by Objectives (MBO) is a process of agreeing
upon objectives within an organization so
that management and employees agree to the objectives
and understand what they are in the organization.
 The term "management by objectives" was first
popularized by Peter Drucker in his 1954 book 'The
Practice of Management'

40. DEFINITION:-
 Management by objectives (MBO) is a systematic and
organized approach that allows management to focus on
achievable goals and to attain the best possible results
from available resources.
 It aims to increase organizational performance by
aligning goals and subordinate objectives throughout the
organization.
 Ideally, employees get strong input to identify their
objectives, time lines for completion, etc. MBO includes
ongoing tracking and feedback in the process to reach
objectives.

41. MAIN CONCEPT:-
 The principle behind Management by Objectives (MBO) is
to make sure that everybody within the organization has a
clear understanding of the aims, or objectives, of that
organization, as well as awareness of their own roles and
responsibilities in achieving those aims.
 The complete MBO system is to get managers and
empowered employees acting to implement and achieve
their plans, which automatically achieve those of the
organization.

42. MANAGEMENT BY OBJECTIVES PRINCIPLES
 Cascading of organizational vision, goals and objectives
 Specific objectives for each member
 Participative decision making
 Explicit time period
 Performance evaluation and feedback

43. MBO STRATEGY: THREE BASIC PARTS
 All individuals within an organization are assigned a
special set of objectives that they try to reach during a
normal operating period. These objectives are mutually
set and agreed upon by individuals and their managers.
 Performance reviews are conducted periodically to
determine how close individuals are to attaining their
objectives.
 Rewards are given to individuals on the basis of how
close they come to reaching their goals.

44. THE MBO PROCESS
Define
Organization
al Goals
Define
Employee
Objectives
Continuous
Monitoring
Of Employee
Performance
And Progress
Performance
Evaluation/R
eviews
Providing
Feedback
Performance
Appraisals

45. FEATURES AND ADVANTAGES OF MBO
 Motivation – Involving employees in the whole process of
goal setting. Increasing employee empowerment increases
employee job satisfaction and commitment.
 Better communication and Coordination – Frequent reviews
and interactions between superiors and subordinates helps
to maintain harmonious relationships within the enterprise
and also solves many problems faced during the period.
 The Smart Method

46. WHERE TO USE MBO
 The MBO style is appropriate for knowledge-based
enterprises when your staff is competent. It is appropriate
in situations where you wish to build employees'
management and self-leadership skills and tap their
creativity and initiative.
 Management by Objectives (MBO) is also used by chief
executives of multinational corporations (MNCs) for their
country managers abroad.

47. THE SMART METHOD
Clarity of goals – With MBO, came the
concept of SMART goals i.e. goals that
are:
 Specific
 Measurable
 Achievable
 Relevant, and
 Time bound.

48. THE SMART METHOD
 The goals thus set are clear, motivating and there is a
linkage between organizational goals and performance
targets of the employees.
 The focus is on future rather than on past. Goals and
standards are set for the performance for the future with
periodic reviews and feedback.

49. MANAGERIAL FOCUS
 MBO managers focus on the result, not the activity.
 They delegate tasks by "negotiating a contract of goals"
with their subordinates without dictating a detailed
roadmap for implementation.
 Management by Objectives (MBO) is about setting
yourself objectives and then breaking these down into
more specific goals or key results.

50. MBO AT MICROSOFT
BY BILL GATES
 Eliminate politics, by giving everybody the same message.
 Keep a flat organization in which all issues are discussed
openly.
 Insist on clear and direct communication.
 Prevent competing missions or objectives
 Eliminate rivalry between different parts of the organization
 Empower teams to do their own things

51. MBO: KEY ADVANTAGES AND
DISADVANTAGES
Advantages
 MBO programs continually emphasize what should be done
in an organization to achieve organizational goals.
 MBO process secures employee commitment to attaining
organizational goals.
Disadvantages
 The development of objectives can be time consuming,
leaving both managers and employees less time in which to
do their actual work.

52. OPERATIONAL PLANNING:-
 DEFINATION:-
 Operational Planning Refers To The Process Of
Deciding The Most Effective Use of The Resources
Already Allocated And To Develop A Control
Mechanism To Assure Effective Implementation Of
The Action So That Organizational Objectives Are
achieved.

53. OPERATIONAL PLANNING:-
 Operational Planning Thus Include Adjustment Of
Production , Marketing And Financial Capacity Of
The Organization To The Expected Level Of
Operations, Increasing The Efficiency Of Operating,
Budgeting Future Costs, Developing Control Over
Costs And Efficiency Etc.
 Supervisors Implement Operational Plans That Are
Short Term And Deal With The Day – To – Day
Work Of Their Team.

54. COMPARISON OF STRATEGIC PLANNING AND
OPERATIONAL PLANNING :-
 Strategic Planning Guides The Choice Among The
Broad Directions In The Organization And The
General Allocations Of Its Managerial, Financial
And Physical Resources Over Future Specified
Period.
 Planning Precedes The Operational Planning As
The Latter Is Primarily Implementation Of The Of
The Former.

55. COMPARISON OF STRATEGIC PLANNING AND
OPERATIONAL PLANNING :-
 Strategic planning is usually conducted at the top
level management and other specified planning
staff in an organization . whereas operational
planning is usually spread over a wide range within
the organization an is generally performed by
operating managers with help of the subordinate
staff.

56. DIFFERENT BETWEEN STRATEGIC AND
OPERATIONAL PLANNING:-
POINT STRATEGIC PLANNING OPERATIONAL
PLANNING
o TIME
HORIZON
o SCOPE
Typically More Than 3
Years.
It Focuses At Its Wider
Scope And Looks After
The Entire Organization
Usually Focused On
Within 1 Year In The
Future
Rarely Broader Than
A Strategic Business.
It Has Comparatively
Narrow Scope.

57. POINT STRATEGIC PLANNING OPERATIONAL PLANNING
o COMPLEXITY
o IMPACT
Planning At Strategic
Level Is Most Complicate
As It Varies For Each Type
Of Industry.
It Has Potential To
Drastically Impact, Both
The Ways- Positive And
Negative , The Fortunes
And Survival Of The
Organization .
Up To Certain Extent
It Is Complex But At
The Same Time It Is
Specific As It Focuses
On Limited Domain
Of Application.
It Can Affect Specific
Business But
Generally Not The
Fortunes And
Survivability Of The
Entire Organization.

58. STRATEGIC PLANNING :-
 Strategic planning refers to the process of
deciding on objectives of the organization , on the
changes in these objectives , on the resources
used to attain these objectives and on the policies
that are to govern the acquisition, and disposition of
these resourcces. It is said that leaders make
changes instead of reacting to change.

59. CHARACTERISICS OF STRATEGIC PLANNING
 Strategic planning is a top management activity i .
E. Top managers are actively involved in it /
 Top management gains commitment from other
levels of managers to implement strategic planning
, while the top management is committed to it .
 It is a long range activity .
 Strategic planning should clearly define where
does the company stand and where it should go.

60. ESSENTIALS FOR STRATEGIC
PLANNING:-
o MARKET FORCES
o TECHNOLOGICAL CHANGE
o COMPLEX DIVERSITY OF BUSINESS
o COMPETITION
o ENVIRONMENT