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*Unit - I* *Strategic Management*

Definition

Systematic analysis of the factors associated

with customers and competitors
(the external environment) and the
organization itself (the internal
environment) to provide the basis for
rethinking the current management
practices. Its objective is to achieve better
alignment of corporate
policies and strategic priorities.

ROLE OF STRATEGIC MANAGEMENT:-

1. Due to increase in the competition, in

1960’s there was a demand for

critical look at the bane corrupt of

business.
2) The environment played an important role
in the business.
3) The relationship of business with the
environment lead to the concept
Of strategy.

4) In early sixties, this helped the

management to manage between
the business and the environment.
5) In early eighties, as many companies were
globalised which lead to the
competition of the rivals access the world.
6) Japanese companies along with other
Asian companies unleashed a
force across the world and posed a threat for
the US and European companies, which led to
the current thinking.

Write a detailed note on Goals and Objectives.

Goals: -

Goal – Target

a) It’s a target that a company wants to

achieve in a future period of time.
b) An organization sets a combination of
goals, which might be Qualitatively,
Quantitative, and Financial & Non Financial.
These Goals must be clear
And unambiguous.
c) On an organizational level goals are broad
in nature and they could set goals on
turnover, profits, returns on assets/equity,
market share, Customer satisfaction,
Employee satisfaction.

d) Goals should be limited, manageable, and

clear& Consistent with each other, otherwise
it may lead to confusion & Contradictions.

e) Goals may be Qualitative, Quantitative in

specification.

Objectives:

a) Objectives are the ends that specify how

the goals shall be achieved.
b) They are concrete and specific and they
are in contrast with the goals.
c) Objectives make the goals operational and
tend to Quantitative in specifications.
d) Objectives are set in a way that what the
organisation has to achieve for its employees,
shareholders, customers etc.,

e) Objectives are in relation with the

environment. They are the brains of Strategic

Decision Making.

f) They are framed in line with the

vision/mission of the organization and it helps
to pursue them.

g) Objectives are invariably Quantitative and

provide clear measures and standards for
performance.

h) It helps to see whether the Organisation is

in right track or not.
i) Objectives should be concrete, specific, and
understandable & should have clearly defined
time frame.

j) It must be measurable, actionable,

challenging but controllable.
k) There must be co-relation with other
objectives.
l) While setting objectives these are the
factors to be evaluated. It should be specific
at the level, which it is being set. It should not
be either too narrow or too broad.

m) There need to be multiplicity of objectives.

n) It should be formulated at different time

frames like short term, medium
term, and long term & should be linked &
consistent.
o) Since its in relation with the environment it
needs to check whether they are fulfilling the
needs of customers, share holders etc.,

*What is strategic planning? * Strategic

planning is a management tool,
period. As with any management tool, it is
used for one purpose only: to
help an organization do a better job - to focus
its energy, to ensure that
members of the organization are working
toward the same goals, to assess and
adjust the organization's direction in response
to a changing environment.
In short, strategic planning is a disciplined
effort to produce fundamental
decisions and actions that shape and guide
what an organization is, what it
does, and why it does it, with a focus on the
future. (Adapted from Bryson's
Strategic Planning in Public and Non profit
Organizations)

*What is the difference between strategic

planning and long-range planning?
* Although many use these terms
interchangeably, strategic planning and
long-range planning differ in their emphasis
on the "assumed" environment.
Long-range planning is generally considered
to mean the development of a
plan for accomplishing a goal or set of goals
over a period of several
years, with the assumption that current
knowledge about future conditions is
sufficiently reliable to ensure the plan's
reliability over the duration of
its implementation. On the other hand,
strategic planning assumes that an
organization must be responsive to a
dynamic, changing environment (not the
more stable environment assumed for long-
range planning).

Certainly a common assumption has emerged

in the non profit sector that the
environment is indeed changeable, often in
unpredictable ways. Strategic
planning, then, stresses the importance of
making decisions that will ensure
the organization's ability to successfully
respond to changes in the
environment.

*Nature of Strategic Management*

Management is everywhere in our life. Day to

day management is required at
the personal life as well as in corporate life.
Strategic management is
related to the formal and organized sector,
especially in corporate sectors.

Furthermore, strategic level refers top-level,

thus, this management process
is very comprehensive. It covers all the areas
of the business. It is not
specific but a holistic in nature. A broad and
top-level strategic
management can be compared with the
specific and functional management
sectors. Strategic management is relatively
more important than any special
functional area because all the functional
areas come under the strategic
management focus. Strategic management
gives the ideology and basic
guideline to all other functional areas.
Nowadays, each functional area is
directed towards the strategic focus. Subjects
such as finance, marketing,
accounting areas are shaping into strategic
finance, strategic marketing,
and strategic accounting. Generally, strategic
management focuses into
long-term goals, relatively broad, and is also
very important for the
success of an organization. Hence, strategic
management is concerned to
whole organization whereas operational
management is related to any specific
functional area. Further, it is more complex
and ambiguous than the
operational managements. In general,
strategic management covers all the
areas of business and focuses into the broad
organizational issues.
*Scope of Business Policy*

No business organization can either survive or

grow without a definite
objective which can only accomplish by
applying different policies from time
to time depending upon the working
condition. Business policies are the
guidelines for organizational thinking. Policies
are framed such that all
the aspects of an organization are considered.
Person concerned with any
type of activity ether commercial or any will
have to think of clear cut
policies right from the formulation stage to
the widening up of the proposed
project.

*Nature and Characteristics of Strategy*

 - It is the combination of different factors.
- It relates the business organization with to
its environment.
- It is an action taken towards a challenge to
solve a particular problem
to attain a desired objectives.
- Strategy should be adaptable i.e strategy
can be updated in accordance
with time.
- Strategy is forward looking.
- It is formulated at the top management
level.
- Strategy is long range.
- It is dynamic.
- It involves assumption of calculated risk.
*Nature and Features of Strategic
Management*

1. It involves long term perpectives

2. It is an intellectual process
3. It involves long wide ramification
(consicuences)
4. It is a continuing dynamic process.

*Importance of Business Policy and Strategic

Management*

1. It help in attainment of organizational

goal.
2. It helps in allocation of resources and
time optimally.
 3. It coordinates the plan and in proper
execution of the plan to
achieve the organizational goal.
4. It helps in finding solution to a problem.
5. Creates a framework for internal
communication among personnel.
6. Signals those problems may arise before
they happen.
7. It gives the firm advantage over
competition.
8. It allows integrating all the business
activity for smooth
operation.
9. It enables for clear understanding of the
business.
10. Alerts the organization to changes and
allows action in response
to change.
*Characteristics / nature of Planning*

1. Primacy of planning
2. Planning is a continuous process
3. Planning leads to higher efficiency
4. Planning contributes to objectives
5. Planning is an intellectual process
6. Planning is selective in nature
7. Planning is flexible in nature.

*Objectives of Planning*

1. It reduces uncertainty and chance

element
2. It brings cooperation and coordination
among various departments of an enterprise.
3. Planning helps in economic operation.
4. It helps in achieving predetermined goal.
5. It helps to reduce competition.

*Importance and Advantages of Planning*

1. Planning focus attention on the enterprise

objectives.
2. Planning is necessary because of
uncertainty and change.
3. Planning is necessary even in routine
operation for increasing the efficiency of the
organization.
4. Planning is economical in cost reduction.
5. Planning is the basis of management
control.
 *Essential Elements of Planning*

1. Forecasting – It is the basic element of

planning where the business
bases its future course of action.
2. Objectives – Objective is the goal for
which an organization is
working for.
3. Procedures – A procedure is the series
related task that make up
the chronological sequence and the
established way of performing the work to
be accomplished.
4. Programmes – Programs are laid down
within the frame work of the
 plan for a complete and orderly course of
action.
5. Rules – Rules are the prescribed
guidelines for operating a
business.
6. Budget – Budget is the estimated figure
of expense which an
organization bears to spend.
7. Strategies – It is the policy that has been
formulated by the top
management level for effective
achievement of goal.

* Strategic Planning*

Strategic planning covers all important areas

of business activities such as
profit, capital expenditure for growth,
organization structure, pricing,
finance, personnel, advertising, labour
relation, technological
capabilities, research and development etc. A
strategy is a plan how
organization can achieve its desired goal in a
particular span of time.

*Kinds of Business Planning*

1. Plans for doing current business

Plans for doing current business are

functional or operating plans. They
focus in immediate customer support and
operating efficiently.
 1. Plans for continuing business

Plans are meant for continuing the business,

meeting the challenge of day
to day change activity in an organization.

1. Plans for growth and development

This strategy is framed for development and

growth of the business
organization. Growth can be obtained in
two ways 1. Internal Growth – Growth
made by product improvement, product
line extension etc, 2. External growth
– it is made through product acquisition
and corporate acquisitions.

*Instruments of Business Planning*

1. Setting of objectives
2. Determining basic policies
3. Strategy
4. Long range plans
5. Operating plans
6. Strategic plans
7. Control mechanism
 *Unit – II*

*Corporate Planning*

Corporate planning is the comprehensive

planning process which involves
continued formulation of objectives and the
guidance of affairs towards
their attainment. It is a systematic and
disciplined exercise designed to
help identification of objectives of an
organization. It is taken by the top
management of the company.

The objective of the corporate planning is to

identify new areas of
investment and marketing, imposition of a
planning discipline on the present
operation.

*Planning*

It refers to the formulation of a unified

comprehensive and integrated plan
aimed at relating the strategic advantage of
the firm of the challenges of
the environment.

Henry Fayol: “*Planning is deciding the best

alternatives among others to
perform different managerial operations in
order to achieve the
pre-determined goals.”*

It determine the future direction of the

company.
*Planning Process*

1. Developing a strategic vision of where the

organization is headed, and
defining the business mission or purpose.
2. Analyzing and diagnosis of the current
and likely future environment,
identifying opportunities and threats.
3. Appraisal of internal capabilities, existing
and potential strengths
and weakness of the organization.
4. Setting corporate objectives in broad
terms.
5. Formulation of alternative strategies,
evaluation of strategic options
and choice of appropriate strategy.
6. Implementation of the chosen strategy
establishing the structural and
 administrative system and the planning and
control mechanism besides
formulating functional policies.
7. Review of strategy, monitoring the results
of strategy
implementations.

*Different aspects of planning*

- The main aim of planning is to achieve

better performance.
- It aims at future prospects.
- Planning is always made in context to
time.
- Planning is predetermined line of action.
- Planning is a continuous activity.
*Features of planning*

- Forecasting and pragmatic thinking.

(Pragmatic – thinking in practical
manner.)
- Focusing long range and short range
propective.
- Flexibility in plans.
- It is comprehensive and goal oriented.
- Focusing on quantative and qualitative
aspects.

*Characteristics / Nature of Planning*

 1. Primacy of Planning:

Planning is a primary function. If planning is

not made in proper then a
manager is always in state of helpless.

1. Planning is Continuous Process:

Planning is a continuous process it not just

start just at the time
of

Implementation but continue to be the part

till the organization
 exists.

Due to continuous change in the business

environment there requires

a continuous planning to keep the business

prepared for all threats

and opportunities.

1. Planning leads to Higher Efficiency:

The efficiency of plan is measured in terms

of profit and profit can

only be achieved when we have minimum

input and maximum output.

Optimal utilization of resources can only be

achieved when we have

proper plan.

1. Planning Contributes to Objectives:

A plan is only made keeping goal in mind. So

objectives can only be
achieved when we have plan set in
accordance to that.

V. Planning is an Intellectual Activity:

Planning involves intellectual thoughts to be

taken into consideration
like

long term goal, consequences etc.

1. Planning is selective in nature:

Planning is choosing best course of action.

1. Planning is Flexible in Nature:

 We can always have updation in the
planning because business

environment is changing and so plan also

need to change.

*Objectives of Planning:*

1. Planning reduce uncertainty.

2. Planning bring coordination and
cooperation between different
departments of an organization.
3. Planning reduces losses of raw materials
and maximizes profit.
4. It help in achieving the predetermined
goal.
5. It reduces competition.
*Q. What are essential elements of a
planning?*

*Different Types of Business Planning:*

- *The most standard business plan is a

start-up plan*, which defines the
steps for a new business. It covers standard
topics including the company,
product or service, market, forecasts,
strategy, implementation milestones,
management team, and financial analysis.
The financial analysis includes
projected sales, profit and loss, balance
sheet, cash flow, and probably a
few other tables. The plan starts with an
executive summary and ends with
appendices showing monthly projections for
the first year.
 - *Internal plans * are not intended for
outside investors, banks, or
other third parties. They might not include
detailed description of company
or management team. They may or may not
include detailed financial
projections that become forecasts and
budgets. They may cover main points as
bullet points in slides (such as PowerPoint
slides) rather than detailed
texts.
- *An operations plan* is normally an internal
plan, and it might also be
called an internal plan or an annual plan. It
would normally be more
detailed on specific implementation
milestones, dates, deadlines, and
responsibilities of teams and managers.
- *A strategic plan * is usually also an
internal plan, but it focuses
 more on high-level options and setting main
priorities than on the detailed
dates and specific responsibilities. Like most
internal plans, it wouldn’t
include descriptions of the company or the
management team. It might also
leave out some of the detailed financial
projections. It might be more
bullet points and slides than text.
- *A growth plan or expansion plan or new
product plan* will sometimes
focus on a specific area of business, or a
subset of the business. These
plans could be internal plans or not,
depending on whether or not they are
being linked to loan applications or new
investment. For example, an
expansion plan requiring new investment
would include full company
descriptions and background on the
management team, as much as a start-up
plan for investors. Loan applications will
require this much detail as well.
However, an internal plan, used to set the
steps for growth or expansion
funded internally, might skip these
descriptions. It might not include
detailed financial projections for the whole
company, but it should at least
include detailed forecasts of sales and
expenses for the new venture.
- *A feasibility plan* is a very simple start-up
plan that includes a
summary, mission statement, keys to
success, basic market analysis, and
preliminary analysis of costs, pricing, and
probable expenses. This kind of
plan is good for deciding whether or not to
proceed with a plan, to tell if
there is a business worth pursuing.
*Strategic Decision Making Process*

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*Mission*

*A mission statement* is a brief description of

a company's fundamental
purpose. A mission statement answers the
question, "Why do we exist?"

The mission statement articulates the

company's purpose both for those in
the organization and for the public.

*Objective*
*Mission*
<http://www.businessdictionary.com/definitio
n/mission.html>,
purpose, or
*standard*<http://www.businessdictionary.co
m/definition/standard.html>that can be
reasonably achieved within the expected
timeframe and with the
available
*resources*<http://www.businessdictionary.co
m/definition/resource.html>.
In general, an objective is broader in
*scope*<http://www.businessdictionary.com/d
efinition/scope.html>than a goal, and may
*comprise*
<http://www.businessdictionary.com/definitio
n/comprise.html> of
several different
*goals*<http://www.businessdictionary.com/d
efinition/goal.html>.
Objectives are the most basic
*planning*<http://www.businessdictionary.co
m/definition/planning.html>
*tools*
<http://www.businessdictionary.com/definitio
n/tool.html> underlying
all planning and
*strategic*<http://www.businessdictionary.co
m/definition/strategic.html>
*activities*
<http://www.businessdictionary.com/definitio
n/activity.html>.
They serve as the basis for
*policy*<http://www.businessdictionary.com/d
efinition/policy.html>and
*performance
appraisals*<http://www.businessdictionary.co
m/definition/performance-appraisal.html>,
and *act*
<http://www.businessdictionary.com/definitio
n/act.html> as glue
that *binds*
<http://www.businessdictionary.com/definitio
n/bind.html> the
entire
*organization*<http://www.businessdictionary
.com/definition/organization.html>together.

*Goal*

Summarized in the phrase "dream with a

deadline," a goal is an observable
and measurable end
*result*<http://www.businessdictionary.com/d
efinition/result.html>having one or more
*objectives*
<http://www.businessdictionary.com/definitio
n/objective.html>to be achieved within a
more or less fixed timeframe.
 *Unit – III*

*Corporate Strategy*

Corporate-level strategies address the entire

strategic scope of the
enterprise. This is the "big picture" view of the
organization and includes
deciding in which product or service markets
to compete and in which
geographic regions to operate. For multi-
business firms, the resource
allocation process—how cash, staffing,
equipment and other resources are
distributed—is typically established at the
corporate level. In addition,
because market definition is the domain of
corporate-level strategists, the
responsibility for diversification, or the
addition of new products or
services to the existing product/service line-
up, also falls within the
realm of corporate-level strategy. Similarly,
whether to compete directly
with other firms or to selectively establish
cooperative
relationships—strategic alliances—falls within
the purview corporate-level
strategy, while requiring ongoing input from

*Different Types of Strategies*

 1. *Grand Strategies*

Grand strategy is a general term for a broad

statement of strategic
action. A grand strategy states the means
that will be used to achieve
long-term objectives. Examples of business
grand strategies that can be
customized for a specific firm include:
concentration, market development,
product development, innovation,
horizontal integration, divestiture, and
liquidation.

1. *Stability Strategy *
 When firms are satisfied with their current
rate of growth and profits,
they may decide to use a stability
strategy. This strategy is essentially a
continuation of existing strategies. Such
strategies are typically found in
industries having relatively stable
environments. The firm is often making a
comfortable income operating a business
that they know, and see no need to
make the psychological and financial
investment that would be required to
undertake a growth strategy.

No change strategies

- *Pause/proceed with caution strategies*

It is employed by the firm that wish to test the
ground before moving ahead
with a full fledged grand strategy, or by firms
that have an intense pace of
expansion and wish to rest for a while before
moving ahead. The purpose is
to allow all the people in the organization to
adapt to the changes. It is a
deliberate and conscious attempt to postpone
strategic changes to a more
opportune time.

*E.g:* In the India shoe market dominated by

Bata and Liberty, Hindustan
Levers better known for soaps and
detergents, produces substantial quantity
of shoes and shoe uppers for the export
market. In late 2000, it started
selling a few thousand pairs in the cities to
find out the market reaction.
This is a pause proceed with caution strategy
before it goes full steam into
another FMCG sector that has a lot of
potential

- *Profit strategies*

No firm can continue with the No – Change

Strategy.* * Sometimes things do
change and the firm is faced with the
situation where it has to do
something. A firm may assess the situation
and assume that its problem are
short lived and will go away with time. Till
then a firm tries to sustain
its profitability by adopting a profit strategy

For instance in a situation when the profit is

becoming lower firm takes
measures to reduce investments, cut costs,
raise prices, increase
productivity and adopt other measures to
solve the temporary difficulties.

The problem arises due to unfavourable

situation like economic recession,
government attitude, and industry down turn,
competitive pressures and like.
During this kind of situation that the firm
assumes to be temporary it would
adopt profit strategies

Some firms to overcome these difficulties

would sell off assets such as
prime land in a commercial area and move to
suburbs. Others have removed
some of its non-core business to raise money,
while others have decided to
provide outsourcing service to other
organizations.

1. *Expansion Strategies*

Growth strategies are designed to

expand an organization's
performance, usually as measured by sales,
profits, product mix, market
coverage, market share, or other accounting
and market-based variables.
Typical growth strategies involve one or
more of the following:

1. With a concentration strategy the firm

attempts to achieve greater
market penetration by becoming highly
efficient at servicing its market with
a limited product line (e.g., McDonalds in
fast foods).
2. By using a vertical integration strategy,
the firm attempts to
expand the scope of its current operations
by undertaking business
activities formerly performed by one of its
suppliers (backward integration)
or by undertaking business activities
performed by a business in its channel
of distribution (forward integration).

*Example of Backward and Forward

Integration*
*No Integration*
*Raw Materials*

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*Intermediate
Manufacturing*

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*Assembly*

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*Distribution*
 [image: Your browser may not support
display of this image.]

*End Customer*

*Backward Integration*

*Raw Materials*

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display of this image.]

*Intermediate
Manufacturing*

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display of this image.]

*Assembly*

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*Distribution*

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*End Customer*

*Forward Integration*

*Raw Materials*
 [image: Your browser may not support
display of this image.]

*Intermediate
Manufacturing*

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display of this image.]

*Assembly*

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*Distribution*

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*End Customer*

1.

A diversification strategy entails moving

into different markets or
adding different products to its mix. If the
products or markets are related
to existing product or service offerings, the
strategy is called concentric
diversification. If expansion is into
products or services unrelated to the
firm's existing business, the diversification
is called conglomerate
diversification.
 - Expansion through concentration
- Expansion through integration
- Expansion through diversification
- Expansion through cooperation
- Expansion through
internationalisation

1. *Retrenchment Strategies*

Retrenchment strategies involve a

reduction in the scope of a
corporation's activities, which also
generally necessitates a reduction in
number of employees, sale of assets
associated with discontinued product or
 service lines, possible restructuring of debt
through bankruptcy
proceedings, and in the most extreme
cases, liquidation of the firm.
- Firms pursue a turnaround strategy by
undertaking a temporary
reduction in operations in an effort to
make the business stronger and more
viable in the future. These moves are
popularly called downsizing or
rightsizing. The hope is that going
through a temporary belt-tightening will
allow the firm to pursue a growth
strategy at some future point.
- A divestment decision occurs when a
firm elects to sell one or
more of the businesses in its corporate
portfolio. Typically, a poorly
performing unit is sold to another
company and the money is reinvested in
 another business within the portfolio that
has greater potential.
- Bankruptcy involves legal protection
against creditors or others
allowing the firm to restructure its debt
obligations or other payments,
typically in a way that temporarily
increases cash flow. Such restructuring
allows the firm time to attempt a
turnaround strategy. For example, since
the airline hijackings and the subsequent
tragic events of September 11,
2001, many of the airlines based in the
U.S. have filed for bankruptcy to
avoid liquidation as a result of stymied
demand for air travel and rising
fuel prices. At least one airline has asked
the courts to allow it to
permanently suspend payments to its
employee pension plan to free up
 positive cash flow.
- Liquidation is the most extreme form of
retrenchment. Liquidation
involves the selling or closing of the
entire operation. There is no future
for the firm; employees are released,
buildings and equipment are sold, and
customers no longer have access to the
product or service. This is a
strategy of last resort and one that most
managers work hard to avoid.

- Turnaround strategies
- Divestment strategies
- Liquidation strategies
1. *Combination Strategies*
- Simultaneous strategies
 - Sequential combination
- Combination of simultaneous and
sequential strategies

1. *Stability Strategies*

Stability strategies refer to attempts

made by an organization at
incremental improvement of functional
performance. The strategies operate
taking into account of certain reasonable
predictable environment. Stability
strategies can be useful in short range
where organization is satisfied with
its current performance.
1. *No – Change Strategies* :

This strategy believes to have no

change in the current
 business. A stable organization working
in a predictable environment decides
to continue with the existing business
policy then it is said to have no
change strategies.
1. *Profit Strategy-*

No change strategy cannot be continued

for longer period of time. A
firm access the problem and assumes that
the life of problem is short and go
away soon so to sustain in the market the
organization has to think for the
profit. Under situation where profit is
drifting then the company has to
change its current strategy and frame
strategy for making the profit, by
reducing in investment, increasing the
price of product. When the problem is
dominant such as economic recession,
government attitude then then companies
assumes that the phase to be temporary
and frame strategy to meet the
situation in accordance that situation.
1. *Pause / Proceed with caution Strategy
–*

This is the strategy which is made by the

firm to test the ground
before actual move in the market or the
firm which wish to expand there
business but rests for a while before the
start.* *
 *Components of Business Environment*
1. * Market Environment* – Market
environment consists of factors
related to the groups and other
organizations that complete with have an
impact on an organization’s market and
business. Some of the factors are:
- Customer or client factor – such as need,
preference, perceptions,
attitudes, values, bargaining power,
buying behaviour and customer
satisfaction.
- Product factor – such as demand,
image, feature, utility,
function, design, life cycle, price,
promotion, distribution, etc.
- Market intermediaries - factor such
middleman,
distributors, channels etc.
- Competitors related factors – such
as different types of
competitors.

1. *Technological Environment - *
Technological environment are those
environment which consists of factors
that are related to knowledge applied
and the material and machine used in
production of goods and services which
have an impact on business of an
organization.

In India we find that technology vary

from different sector.
Some of technological factors are:
- Rising price of fuel have forced the
automobile industry to
manufacture fuel economic vehicle.
- Harmful side effects of allopathic
medicine have forced
pharma companies to look for
substitute medicine. Exploring ayurvedic
medicine is the best option.

1. *Supplier Environment – *The supplier

environment consists of
factors related to cost, reliability, and
availability of the factors of
production.

Some of the important factors and

influences in the supplier
environment are as follows.
- Cost, availability and continuity of
supply of raw materials.
- Cost and availability of finance for
implementing plan.
- Cost, reliability and availability of
energy used in
production.

Supplier environment occupies a

dominant position in strategy
formulation because of the fact that we
are having scarcity of capital and
raw materials.

4. Economic Environment -

*What is Environment ? How is it

Changing? Explain the process of *
 *SWOT analysis? Elaborate what you would
study in the environment? *

Introduction : -

Environment means the surrounding. It

includes both internal and
external objects,

factors & influences under which

someone/something exist.

Environment :

1)The Environment of an organization is

the aggregate/total of all
conditions events
 that influences itself & it’s Surroundings,

2)The dynamic & has relationships with

each other.
3)The factors in environment may affect
the company and visa versa.
4)It has a great impact on the company.

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 INTRODUCTION – SWOT ANALYSIS:

The external environment is made of

factors, conditions that
influences outside the organization. The
external environment gives rise to
opportunities, which can be accomplished,
or it may cause problems to the
organization.

SWOT ANALYSIS:

The internal environment refers to all

factors within the control of
and within the organization. These factors
may impart strengths that can be
utilized by the organization or cause
weakness, which becomes threat to the
 organization.

S – Strength

O- Opportunity

W – Weakness

T – Threats

Strength: –It is an inherent capacity that is

in relation to the
environment. For an

organization to be a success it requires

strength and it gives
strategic advantage to gain
 more than the competition.

E.g. Innovation and new products are

required for superior research
and development facilities.

S – Strength

O- Opportunity

W – Weakness

T – Threats

Strength: –It is an inherent capacity that is

in relation to the
environment. For an
 organization to be a success it requires
strength and it gives
strategic advantage to gain

more than the competition.

E.g. Innovation and new products are

required for superior research
and development

company during the time of crisis.

Opportunity : can be accomplished and

can help to consolidate and
strengthen the

organization. It’s a favorable condition for

an organization in its
environment.
 E.g. Due to better GDP growth a company
provides increase in demand
for the

products/services. It helps in strengthening

its position.

Threats : when the opportunities are not

utilized properly it can
cause problem to

the to the organization which causes

threat. It is unfavorable
condition for the organization.

It causes risk/damage to an organization.

.g. Due to opening up of economy, the

emergence of multinational
companies, which are stronger and has
good resources, offers stiff
competition to the existing companies in
an industry.

CONCLUSION – SWOT Analysis

An understanding of both internal and

external environment in terms of
opportunities, threat, strength,
weaknesses important for existence, growth
and profitability of an organization. A
systematic approach and
understanding the environment is SWOT
analysis all about.