Documente Academic
Documente Profesional
Documente Cultură
Index
Topic Name
Introduction
Pg no
2
Strategy
Strategic Planning
Strategic Management process
Models Of Strategic Management
Strategic leadership/role of strategy manager
Globalization impact on Strategic Management
Strategic Management process of e-business
Strategic Management process of Hindustan Unilever ltd
Case study
Conclusion
Bibliography
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7
14
23
28
33
44
50
61
67
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Chapter 1
Introduction
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Chapter 2
What is strategy?
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Chapter 3
Strategic planning
Strategic planning
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The strategy statement of a firm sets the firms long-term strategic direction and broad
policy directions. It gives the firm a clear sense of direction and a blueprint for the firms
activities for the upcoming years. The main constituents of a strategic statement are as
follows:
1. Strategic Intent
An organizations strategic intent is the purpose that it exists and why it will continue
to exist, providing it maintains a competitive advantage. Strategic intent gives a
picture about what an organization must get into immediately in order to achieve the
companys vision. It motivates the people. It clarifies the vision of the vision of the
company. Strategic intent helps management to emphasize and concentrate on the
priorities. Strategic intent is, nothing but, the influencing of an organizations
resource potential and core competencies to achieve what at first may seem to be
unachievable goals in the competitive environment. A well expressed strategic intent
should guide/steer the development of strategic intent or the setting of goals and
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Chapter 4
Strategic Management Process
Strategic management process means defining the organizations strategy. It is also defined as
the process by which managers make a choice of a set of strategies for the organization that
will enable it to achieve better performance. Strategic management is a continuous process
that appraises the business and industries in which the organization is involved; appraises its
competitors; and fixes goals to meet the entire present and future competitors and then
reassesses each strategy. There probably is general acceptance of the idea that strategic
management is concerned with the strategic processes that produce desired responses to an
organization's changing environment. The strategic management process is concerned with a
long-run perspective. The time horizon involved often is at least 3 years and normally may be
5 or 10 years into the future. However, in certain extremely dynamic industries, the strategic
management process could be concerned with much shorter time frames. Strategic
management is the management of change. This involves the system of corporate values, the
corporate culture, and all managerial process of change, such as leadership, planning, control,
and human resources management.
There are four steps in Strategic Management Process:
i.
Organizational environment consists of both external and internal factors. Environment must
be scanned so as to determine development and forecasts of factors that will influence
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national environment
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Strategy Formulation
Strategy formulation refers to the process of choosing the most appropriate course of
action for the realization of organizational goals and objectives and thereby achieving
the organizational vision. The process of strategy formulation basically involves
six main steps. Though these steps do not follow a rigid chronological order, however
they are very rational and can be easily followed in this order.
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iii.
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Excellently formulated strategies will fail if they are not properly implemented. Also, it is
essential to note that strategy implementation is not possible unless there is stability between
strategy and each organizational dimension such as organizational structure, reward
structure, resource-allocation process, etc.
Strategy implementation poses a threat to many managers and employees in an organization.
New power relationships are predicted and achieved. New groups (formal as well as
informal) are formed whose values, attitudes, beliefs and concerns may not be known. With
the change in power and status roles, the managers and employees may employ
confrontation behavior
Following are the main differences between Strategy Formulation and Strategy
ImplementationStrategy Formulation
Strategy Implementation
Strategy Formulation includes planning and Strategy Implementation involves all those
decision-making involved in developing means related to executing the strategic
organizations strategic goals and plans.
plans.
short,
Strategy
Implementation
is
Formulation
emphasizes
effectiveness.
efficiency.
Implementation
requires
co-
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Strategy Evaluation
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There are many benefits of strategic management and they include identification, prioritization, and explorat
of opportunities. For instance, newer products, newer markets, and newer forays into business lines are o
possible if firms indulge in strategic planning. Next, strategic management allows firms to take an objective v
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also the assessment of profitability that has to do with evaluating whether the business is strategically aligned
its goals and priorities.
The key point to be noted here is that strategic management allows a firm to orient itself to its market
consumers and ensure that it is actualizing the right strategy.
Financial Benefits
It has been shown in many studies that firms that engage in strategic management are more
profitable and successful than those that do not have the benefit of strategic planning and
strategic management. When firms engage in forward looking planning and careful
evaluation of their priorities, they have control over the future, which is necessary in the fast
changing business landscape of the 21st century. It has been estimated that more than
100,000 businesses fail in the US every year and most of these failures are to do with a lack
of strategic focus and strategic direction. Further, high performing firms tend to make more
informed decisions because they have considered both the short term and long-term
consequences and hence, have oriented their strategies accordingly. In contrast, firms that do
not engage themselves in meaningful strategic planning are often bogged down by internal
problems and lack of focus that leads to failure.
Non-Financial Benefits
The section above discussed some of the tangible benefits of strategic management. Apart
from these benefits, firms that engage in strategic management are more aware of the
external threats, an improved understanding of competitor strengths and weaknesses and
increased employee productivity. They also have lesser resistance to change and a clear
understanding of the link between performance and rewards. The key aspect of strategic
management is that the problem solving and problem preventing capabilities of the firms are
enhanced through strategic management. Strategic management is essential as it helps firms
to rationalize change and actualize change and communicate the need to change better to its
employees. Finally, strategic management helps in bringing order and discipline to the
activities of the firm in its both internal processes and external activities.
Closing Thoughts
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Chapter 5
Models Of strategic Management
1. BCG Matrix
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The five forces mentioned above are very significant from point of view of strategy
formulation. The potential of these forces differs from industry to industry. These forces
jointly determine the profitability of industry because they shape the prices which can be
charged, the costs which can be borne, and the investment required to compete in the
industry. Before making strategic decisions, the managers should use the five forces
framework to determine the competitive structure of industry.
The five factors of Porters model in detail:
Risk of entry by potential competitors: Potential competitors refer to the firms which
are not currently competing in the industry but have the potential to do so if given a
choice. Entry of new players increases the industry capacity, begins a competition for
market share and lowers the current costs. The threat of entry by potential competitors is
partially a function of extent of barriers to entry. The various barriers to entry are
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Economies of scale
Brand loyalty
Government Regulation
Customer Switching Costs
Absolute Cost Advantage
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Ease in distribution
Strong Capital base
Rivalry among current competitors: Rivalry refers to the competitive struggle for
market share between firms in an industry. Extreme rivalry among established firms
poses a strong threat to profitability. The strength of rivalry among established firms
within an industry is a function of following factors:
Bargaining Power of Buyers: Buyers refer to the customers who finally consume the
product or the firms who distribute the industrys product to the final consumers.
Bargaining power of buyers refer to the potential of buyers to bargain down the prices
charged by the firms in the industry or to increase the firms cost in the industry by
demanding better quality and service of product. Strong buyers can extract profits out of
an industry by lowering the prices and increasing the costs. They purchase in large
quantities. They have full information about the product and the market. They emphasize
upon quality products. They pose credible threat of backward integration. In this way,
they are regarded as a threat.
Bargaining Power of Suppliers: Suppliers refer to the firms that provide inputs to the
industry. Bargaining power of the suppliers refer to the potential of the suppliers to
increase the prices of inputs( labour, raw materials, services, etc) or the costs of industry
in other ways. Strong suppliers can extract profits out of an industry by increasing costs
of firms in the industry. Suppliers products have a few substitutes. Strong suppliers
products are unique. They have high switching cost. Their product is an important input
to buyers product. They pose credible threat of forward integration. Buyers are not
significant to strong suppliers. In this way, they are regarded as a threat.
Threat of Substitute products: Substitute products refer to the products having ability
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Chapter 6
Strategic Leadership/Role of leader and strategy managers
Strategic leadership refers to a managers potential to express a strategic vision for the
organization, or a part of the organization, and to motivate and persuade others to acquire
that vision
A few main traits / characteristics / features / qualities of effective strategic leaders that
do lead to superior performance are as follows:
Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their
words and actions.
Keeping them updated- Efficient and effective leaders keep themselves updated about
what is happening within their organization. They have various formal and informal
sources of information in the organization.
Judicious use of power- Strategic leaders makes a very wise use of their power. They
must play the power game skillfully and try to develop consent for their ideas rather than
forcing their ideas upon others. They must push their ideas gradually.
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are strategy-makers
and strategy-implementers
is
that more
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The CEO and other senior corporation-level executives who have primary
responsibility and personal authority for big strategic decisions affecting the total
enterprise and the collection of individual businesses the enterprise has diversified
into
Managers who have profit-and-loss responsibility for some specific business unit
and who are delegated a major leadership role in formulating and implementing the
implementation authority over all academic matters plus budgetary control for that campus,
3.
The academic deans have responsibility for charting future direction at the
faculty/college level;
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Competitive advantage is the set of factors that differentiates an organization from its
competitors. In developing, implementing and managing global and national
strategies, an organization sets itself apart. In terms of performance, this means that
the organization becomes more efficient in its operations, such as manpower
planning or manufacturing and in reaching its customers. Strategic management also
enables an organization to identify ways of penetrating new markets, globally and
nationally.
Culture
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Chapter 7
Globalization impact on strategic Management
The globalization of business has become so rapid that a new field called "Global Strategic
Management" has now emerged. This new field is a blend of strategic management and
international business that develops worldwide strategies for global corporations. Whereas
most studies in this field focus on ordinary business conditions, the revolutionary events of
the past few years make it clear that the present is not ordinary. Such epoch-shattering
events as the collapse of communism, the unification of Europe, the information revolution,
the arrival of an environmental ethic, and other remarkable new developments signal that a
new era is emerging in global affairs. This article describes a broader approach to global
strategic management that encompasses these revolutionary changes.
The viewpoint presented here was developed in a project sponsored by the World Future
Society called "WORLD 2000." WORLD 2000 focuses on conducting a global strategic
management process among business, government, education, and other sectors of society to
define the emerging global system and help institutions adapt to changes. It represents a
fresh examination of the forces that are integrating the earth into a coherent global order as
well as those that are creating the disorder that tends to characterize our time: the unification
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Expands the market place to national and international markets .All any one now
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Chapter 8
Strategic management process of e-business
The e-business strategic management process illustrated is based on the traditional model of
strategic management. It is a systematic process consisting of four interrelated steps: (1)
Analyze the external and internal environments, (2) Select the e-business strategy, (3)
Implement the e-business strategy, and (4) Evaluate the success of the e-business strategy.
Step 1: Analyze The Companys External And Internal Environments
In the traditional strategic planning model, managers identify their companys strengths and
weaknesses, as well as the obstacles and opportunities in their business environment. They
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Chapter 9
Strategic management of HUL
Introduction:
Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim.
Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspatii Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited
(1935). These three companies merged to form HUL in November 1956; HUL offered 10%
of its equity to the Indian public, being the first among the foreign subsidiaries to do so.
Unilever now holds 67.25% equity in the company. The rest of the shareholding is
distributed among about three lakh individual shareholders and financial institutions.
The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company
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Chapter 10
Case Study on Strategic Management
Case 1
DD is the Indias premier public service broadcaster with more than 1,000 transmitters
covering 90% of the countrys population across on estimated 70 million homes. It has more
than 20,000 employees managing its metro and regional channels. Recent years have seen
growing competition from many private channels numbering more than 65, and the cable
and satellite operators (C & S). The C & S network reaches nearly 30million homes and is
growing at a very fast rate.
DDs business model is based on selling half hour slots of commercial time to the
programme producers and
Charging them a minimum guarantee. For instance, the present tariff for the first 20 episodes
of a programmeRs.30 lakh plus the cost of production of the programme. In exchange the
procedures get 780 seconds of commercial time that he can sell to advertisers and can
generate revenue. Break-even point for procedures, at
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Answers
1) For several years Doordarshan was the only broadcaster of television programmes in
India. After the opening of the sector to the private entrepreneur (cable and satellite
channels), the market has witnessed major changes. The number of channels has increased
and also the quality of programmes, backed by technology, has improved. In terms of
quality of programmers, opportunity to advertise, outreach activities, the broadcasting has
become a popular business. Broadcasters too have realized the great business potential in the
market. But for this, policies need to be rationalized and be opened to the scope of
innovativeness not only in term of quality of programmes. This would not come by simply
going to more areas or by allowing bureaucratic set up to continue in the organization.
Strategically the DD needs to undergo a policy overhaul. DD, out of three options, namely
privatization, public service broadcaster or a middle path, can choose the third one, i.e. a
combination of both. The whole privatization is not possible under the diversified political
scenario. Nor it would be desirable to hand over the broadcasting emotively in the private
hand as it proves to be a great means of communication many socially oriented public
programmers. The government could also think in term of creating corporation (as it did by
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T Threats
Desertion of advertisers and producers may result in loss of revenues.
Due to quality of program the reach of C & S network is continuously expanding.
As the C& S network need the trained staff, some employees of DD may switchover
and take new jobs
3) It is suggested that the DD should adopt a middle path. It should have a mix of both the
options. It should
Economized on its operational aspects and ensure more productivity in term of revenue
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Answers
1) SWOT Analysis is at used by organization for revolving strategic options. For the future.
The term Swot refers to the analysis of strength, weaknesses, opportunities and that facing a
company. Strength and weaknesses are identifying in the internal environment, whereas
opportunities and threats are located in the external environment.
Strength: Strength is an inherent capability of the organization which it can used to gain
strategic advantage over its competitor.
Weakness: A weakness is an inherent limitation or constraint of the organization which
creates strategic disadvantage to it.
Opportunity: An opportunity is a favorable condition in the external environment which
enables to the organization its position.
Threat: An favorable condition in external environment which cases a risk for, or damage
to the organization position.
2)
Weaknesses are inherent limiting factors of an organization. They are internal by nature to
the working of the organization. The case study does not clearly mention the points that can
conclusively be weaknesses of the company. However, a deeper analysis will bring out that
the company is totally new to the snacks business and is highly aggressive in its approach.
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Chapter 11
Conclusion
Business history shows that high performing enterprises often initiate and lead, not just react
and defend. They launch strategic offensive to secure sustainable competitive advantage and
then use their market edge to achieve superior financial performance. Aggressive pursuit of
a creative, opportunistic strategy can propel a firm into a leadership position, paving the way
for its goods and services to become the industry standard. In a dynamic and uncertain
environment, strategic management is important because it can provide managers with a
systematic and comprehensive means for analyzing the environment assessing their
organization's strengths and weakness and identifying opportunities for which they could
develop and exploit a competitive advantage. The strategic management process includes
eight steps identifying the organization's current mission, objectives and strategies,
analyzing the environment, identifying opportunities and threats in the environment,
analyzing the organization resources, identifying the organization's strengths and
weaknesses, formulating strategies, implementing strategies and evaluating
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Bibliography:
http://www.managementstudyguide.com/strategic-management-process.htm
http://www.ache.org/pdf/secure/gifts/Harrison_Chapter5.pdf
http://jupapadoc.startlogic.com/compresearch/papers/JCR07-2.pdf
Andrews K.R. 1987. The Concept of Corporate Strategy. Richard D. Irwin.
Gluck F.W. 1985 A Fresh Look at Strategic Management. Journal of Business
21http://srinivasatimes.com/Strategic%20management%20case%20studies.pdf
http://my.safaribooksonline.com/book/management/9788131759844/case-study-on-tata-skystrategic-advantage-through-technology/c11-sec1005#X2ludGVybmFsX0h0bWxWaWV3P3htbGlkPTk3ODgxMzE3NTk4NDQlMkZjMTEtc
2VjMS0wMDQmcXVlcnk9
http://www.hul.co.in/aboutus/ourhistory/
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