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Lecture - 1
Learning Objectives
Understanding the strategic management process Appreciating the need for integrating intuition and analysis in strategic management Understanding the importance of adapting to changing scenarios
Management
Finance Research & Development
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Terminology
Strategic Management Strategic Planning Strategic management
Used more often in academic circles Used more often in the business world
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Same as
Strategic planning
Terminology
Strategic management Refers to:
Strategy formulation Strategy implementation Strategy evaluation
Strategy formulation
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Brief History
1950s
Term strategic planning originates
1960s 1970s
Brief History
1980s
Strategic planning cast aside
Planning models did not yield higher returns
1990s2000
Strategic Management:
Its three phases
1. Strategy Formulation 2. Strategy Implementation 3. Strategy Evaluation
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Strategy Formulation
Vision & Mission Strengths & Weaknesses Opportunities & Threats
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Strategy Formulation
Setting Long-term Goals
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Strategy Formulation
Considerations:
Allocation of resources Businesses to enter/retain Businesses to divest/liquidate
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Strategy Formulation
Considerations:
Joint ventures/mergers
Whether to expand/diversify
Opening foreign markets
Avoiding takeovers
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Strategy Implementation
Policies Annual Objectives Resource Allocation
Employee Motivation
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Strategy Implementation
This is the action phase:
Requires consensus to pursue the goals Includes developing a supportive culture Interpersonal & managerial skills are critical Requires high overall motivation
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Strategy Implementation
Toughest of all phases, it needs:
- Personal discipline - Commitment - Sacrifice
Strategy Evaluation
Fundamental Activities:
Internal assessment External assessment Measuring performance Remedial measurers/Fine tuning
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Strategy Evaluation
Last phase of strategic management:
Todays success does not assure success tomorrow Continuous Modification of strategies Success itself leads to new problems Smugness can bring organizational disaster
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Prime Task
Peter Drucker says:
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alternatives is
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