Strategic Management 01

1. Define the terms “Strategy”, “Organizational Strategy” and “Strategic Management

(SM)”

Strategy

Strategy is a plan of action designed to achieve long-term goals.

Organizational Strategy

Organizational Strategy is a detailed plan that outlines how an organization will achieve
its long-term goals and mission.

Strategic Management (SM)

Strategic Management (SM) is the process of planning, implementing, and evaluating

strategies to meet an organization's objectives.

OR

Strategy -Strategy is a decision, or a stream of decisions taken to determine where

you want to be and how you should get there

Organizational Strategy -The broad programme for achieving an organization‟s

objectives and implementing its mission.

Strategic Management- Simply means, managing the strategy. In other words,

formulating and implementing the successful strategies for superior performance
1. Explain dimensions of strategic Management

There are 3 dimensions of strategic Management

 The Strategic Position

 Strategic Choices
 Strategy in Action

The Strategic Position

The Strategic Position refers to understanding where the organization currently stands.
This involves:

- Analyzing the environment: Looking at external factors like market trends, competition,
and regulations.

- Assessing internal capabilities: Evaluating the organization's strengths, weaknesses,

resources, and core competencies.

- Understanding stakeholders: Identifying the needs and expectations of customers,

employees, investors, and other key parties.

Strategic Choices

Strategic Choices are the decisions made about the direction and scope of the
organization. This includes:

- Determining strategic goals: Deciding what the organization wants to achieve.

- Selecting strategic options: Choosing how to compete in the market, whether through
cost leadership, differentiation, or focus strategies.

- Deciding on growth strategies: Considering options like expanding into new markets,
developing new products, or forming alliances.
Strategy in Action

Strategy in Action is about putting the chosen strategy into practice. This involves:

- Implementing the strategy: Executing the plans and actions needed to achieve strategic
goals.

- Allocating resources: Ensuring the right people, money, and tools are in place to support
the strategy.

- Monitoring and adapting: Continuously checking progress, measuring results, and

making necessary adjustments to stay on track and respond to changes.

OR

The Strategic Position is about understanding where the organization is now by looking
at the market, evaluating its strengths and weaknesses, and knowing what stakeholders
need.

Strategic Choices involve deciding what the organization wants to achieve, how it will
compete, and how it will grow, like entering new markets or creating new products.

Strategy in Action means putting the plan into practice, using the right resources, and
regularly checking progress to make sure the organization stays on track and adapts to
any changes.

2. What are the Features of a successful strategy ?

 Strategy should be clear and focused to the strategist

 Strategy should be futuristic
 Strategy should be coherent (combined)
 Strategy should be unique
 Strategy should be creative
 Strategy should be able to create and sustain competitive advantages
 Strategy should be cost effective
3. Difference between Descriptive Perspective of strategy and Prescriptive
Perspective of strategy
OR

Difference between Intended Strategies and Emergent Strategies.

• Descriptive Perspective of strategy – Considers strategy as an art which

resulted into an Emergent strategy
• Prescriptive Perspective of strategy – Considers strategy as a science which
resulted into an Intended strategy

Intended Strategies
- Planned: Deliberately created in advance.
- Top-Down: Formulated by senior management.
- Predictable: Based on analysis, forecasts, and goals.
- Official Roadmap: Represents the formal plan to achieve specific objectives.
- Structured Process: Developed through a structured planning process.

Emergent Strategies
- Unplanned: Develop organically over time.
- Bottom-Up: Can emerge from any level within the organization.
- Adaptive: Arise in response to unexpected opportunities or challenges.
- Flexible: Reflect the organization's ability to adapt to real-world changes.
- Day-to-Day Decisions: Evolve through everyday actions and decisions.

OR
Intended Strategies

Intended Strategies are deliberate plans developed by an organization to achieve

specific goals. These strategies are formulated through a structured planning
process, often involving analysis of the market, competition, and internal
capabilities.
Intended strategies are created by management with the expectation that they will
guide the organization towards desired outcomes. They represent the official
roadmap that the organization plans to follow.

Emergent Strategies

Emergent Strategies are unplanned patterns of actions that arise in response to

unexpected opportunities or challenges. Unlike intended strategies, emergent
strategies develop organically as the organization adapts to changing
circumstances and new information.
These strategies are not formally planned or predicted, but rather evolve through
day-to-day decisions and actions. Emergent strategies reflect the organization's
ability to be flexible and responsive in a dynamic environment.
4. What are the Levels of organizational strategy provide suitable examples.

 Corporate strategy
 Business strategy
 Functional strategy
 Operational strategy

Organizational strategy can be divided into four distinct levels, each addressing different
aspects of an organization's operations and goals. Here’s an overview with examples for
each level:

1. Corporate Strategy

Corporate strategy is the highest level of strategy-making that focuses on the overall
scope and direction of the company. It involves decisions about which industries and
markets the company will compete in and how resources will be allocated among its
different business units.

Example:

A diversified conglomerate like General Electric (GE) decides to exit the financial
services market to focus on its core industrial businesses such as aviation, healthcare, and
renewable energy. This decision involves selling off its financial division (GE Capital)
and reinvesting the proceeds into strengthening its industrial divisions.

2. Business Strategy

Business strategy is concerned with how a particular business unit competes within its
market. It focuses on gaining a competitive advantage, responding to market changes,
and achieving specific objectives within a single business unit or product line.
Example:

Tesla's business strategy in the electric vehicle market involves differentiating itself
through cutting-edge technology, high-performance electric cars, and a strong brand
image focused on innovation and sustainability. Tesla competes by continuously
improving battery technology, expanding its Supercharger network, and introducing new
models to meet market demand.

3. Functional Strategy

Functional strategy refers to the detailed plan for managing specific functions within a
business unit, such as marketing, finance, human resources, and production. It supports
the business strategy by optimizing the performance of individual departments.

Example:

The marketing department of Apple Inc. implements a functional strategy that

emphasizes premium branding and product differentiation. This involves high-quality
advertising campaigns, strategic product launches, and maintaining a strong presence in
retail and online stores to create a distinct market perception and drive sales.

4. Operational Strategy

Operational strategy is the level of strategy that deals with the day-to-day operations of
the company. It involves plans and processes to efficiently produce goods or deliver
services, ensuring that the company can meet its short-term objectives.

Example:

A fast-food chain like McDonald's focuses on operational strategy by streamlining its

kitchen processes to ensure quick service and consistent food quality. This includes
standardized cooking procedures, optimized supply chain management, and the use of
technology for order processing and inventory control.

OR
1. Corporate Strategy

Corporate strategy is about the big picture decisions for the whole company. It decides
what industries or markets the company will be in and how to distribute resources among
different parts of the company.

Example:

Imagine Disney deciding to buy Pixar. This is a corporate strategy decision because it
changes the overall direction of the company by adding a new line of business (animated
movies).

2. Business Strategy

Business strategy focuses on how a single part of the company (a business unit) competes
in its specific market. It looks at how to win customers and achieve goals in that
particular area.

Example:

Nike’s strategy for its running shoe division might focus on using cutting-edge design
and technology to make the best running shoes, and marketing them to serious athletes.

3. Functional Strategy

Functional strategy is about how specific departments within the business (like marketing,
finance, or production) support the overall business strategy. It involves detailed plans for
each department to help achieve the business goals.

Example:

Coca-Cola’s marketing department might decide to focus on social media campaigns and
sponsorships of major sporting events to increase brand awareness and drive sales.
4. Operational Strategy

Operational strategy deals with the day-to-day operations that make the business run
smoothly. It focuses on efficiency and effectiveness in daily activities.

Example:

A restaurant like McDonald's might have an operational strategy that ensures all food is
prepared quickly and consistently, using a streamlined kitchen process and automated
ordering systems.
5. Briefly explain the role of Strategic Management in organisational context and
Role of Strategic Management as a discipline.

The role of Strategic Management in organisational context

To create a strategic plan, a company analyzes external factors like economic conditions,
laws, technology, social trends, customer needs, and competitors. Internally, it assesses
strengths, weaknesses, resources, and culture. By identifying opportunities and threats,
and leveraging strengths while addressing weaknesses, the company sets priorities like
customer satisfaction or market expansion. This helps in forming strategies for growth,
efficiency, innovation, or better customer service, guiding the company towards its goals.

Role of Strategic Management as a discipline.

To develop the knowledge, skills, and commitment needed to manage a company

strategically within its industry and the broader social and political context, while
effectively using its resources and unique strengths to achieve a sustainable competitive
advantage.

6. What are the Importance of Strategic Management?

 Diagnoses Problems and Priorities: Helps identify strategic issues and set priorities.

 Provides Direction: Offers a clear road map and strategic direction for the company.

 Achieves Advantages: Helps gain and keep sustainable competitive advantages.

 Boosts Performance: Improves corporate performance and ensures long-term survival

and growth.

 Prepares for Complexity: Helps understand and manage the complex business

environment in advance.

 Wins Competition: Develops successful strategies to excel amidst tough competition.