STRATEGIC

MANAGEMENT
Mariyam Muzammil
2015-145

Learning outcomes:
Strategic management & its importance.
Strategic management process.
Corporate strategies & its types.
Competitive strategies.
Current strategic management issues.

Strategic management
Strategic management is the set of managerial
decisions and actions that determines the long
run performance of an organization.

Strategy:
Strategy is a plan that how effectively an
Organization runs its business, how it competes
its competitors, and how it attracts and satisfies
its customers.

Business model
Business model is a design for how an organization makes
money

Objectives of business model:

Whether the customer will value what the company is
providing.
Whether the company can make any money doing that.

Example:
Dells online selling strategy.

IMPORTANCE OF
STRATEGIC MANAGEMENT

Importance of Strategic
Management
For Organizations Performance.
To Face Changing Situations.
To Deal With Complexity & Diversity.

For Organizations
Performance
Some business succeed while some fail ??
Because successful business have:
Well developed strategic management.
Well defined goals.

To Face Changing situations

Customers needs
Technology

To Deal With Complexity &

Diversity
To manage every part of organization
To coordinate with different employees
To get effective work done by employees

Efforts and courage are not enough

without purpose and direction
John F. Kennely

An
y
Qu
est
ion
s
?

STRATEGIC MANAGEMENT
PROCESS
Rabiya Mohsin

What is Strategic
Management
Process?
A six step process that encompasses

strategic planning, implementation and

evaluation

Steps of Strategic
Management Process
Strategic planning
Strategic planning tells what organizational goal is and how to achieve
those goals.
Identifying the organizations current mission, goals, and strategies
Doing an external analysis
Doing an internal analysis
Formulating Strategies

Implementation
Evaluation

Steps of Strategic
Management Process
Identifying the organizations current
mission, goals, and strategies:
What is Mission?
Mission is a statement that answers this question;
What is our reason for being in business?
For example:
Mission of Nike

Components of Mission
statement

Customers: Who are the organization's customers?

Products or services:What are the organization's major products or
services?
Markets:Where does the firm compete?
Technology:What is the firm's basic technology?
Concern for survival, growth, and profitability:What is the
firm's commitment towards economic objectives?
Philosophy:What are the basic beliefs, core values, aspirations and
philosophical priorities of the firm?
Self-concept:What are the organization's major strengths and
competitive advantages?
Concern for public image:What is the firm's public image?
Concern for employees:What is the firm's attitude/orientation

Steps of Strategic
Management Process
Doing an external analysis
Focuses on identifying opportunities and threats.
We see the specific and general environment.

Opportunities:
External environmental factors that can be used for the
organizations advantage.

Threats:
External environmental factors that present challenges to the
organization.

Steps of Strategic
Management Process
Doing an internal analysis
Focuses on identifying strengths and weakness.
Assessment of organizational resources and capabilities

Strengths:
Any activities the organization does well or unique resource that it
has.

Weaknesses:
Any activities the organization does not do well or resource it needs
but does not posses.

Core-competencies

Steps of Strategic
Management Process
SWOT Analysis:
An analysis of organization's strength, weakness,
opportunity and threat.

Steps of Strategic
Management Process
Formulating Strategies
Develop and evaluate strategic alternatives.
Select appropriate strategies for all levels in the
organization that provide relative advantage over
competitors.
Match organizational strengths to environmental
opportunities.
Correct weaknesses and protect against threats.

Steps of Strategic
Management Process
Implementing Strategies
No matter how effectively an organization has planned its
strategies, it cant succeed if strategies arent
implemented properly.

Evaluating Results
How effective have strategies been?
What adjustments, if any , are necessary ?

TYPES OF
ORGANIZATIONAL
STRATEGIES
Jahanzaib Tahir

Consider your goal like a war to win and use whatever

strategies you know to win.
Bangabiki Habyarimana

Types of Organizational
Strategies
Corporate-Level Strategies
Managers at the top level of the organization are responsible for these.

Business-Level Strategies
Managers at the middle level of the organization are responsible for
these.

Functional-Level Strategies
Managers at the low level of the organization are responsible for these.

Corporate-Level Strategies
Definition:
An organizational strategy that seeks to determine
what businesses a company should be in or wants
to be in.

Types of Corporate-Level
Strategies
Following are the types of corporate-level strategies that are
of great
concern to the managers at the top level of the organization.
Growth Strategy
Stability Strategy
Renewal Strategy

Growth
Definition:
A corporate-level strategy that seeks to increase the
organizations
operations by expanding the number of products offered or
markets
served.

How can an organization

grow?
An organization can grow by adopting following ways:
Concentration
Vertical Integration
Horizontal integration
Diversification
Related Diversification
Unrelated Diversification

Concentration
When an organization concentrate on
the primary line of business & increases
the number of products or market share
in the primary business.

Example
McDonalds, Starbucks and Subways are
three firms that have relied heavily on
concentration strategies to become
dominant players.

Vertical Integration
Definition:
The degree to which a firm owns its
upstream suppliers and its downstream
buyers is referred to as vertical integration.
Types:
Expansion
referred to
Expansion
referred to

of activities downstream is
as forward integration.
of activities upstream is
as backward integration.

Horizontal Integration
In horizontal integration, a company
grows by combining with other
organizations in the same industry.
It decrease the competition between
the organizations.

Example:
HP , GSK

Diversification
Firms using diversification strategies
enter entirely new industries.
Types:
There are two types of diversification strategies:
Related diversification
Unrelated diversification

Stability
Definition:
A corporate level strategy characterized by an absence of significant
change.
It may seems strange that an organization might not want to
grow!!

Example:
In case market situation changes drastically and the industry future
becomes uncertain the managers decide to choose stability strategy.
Another situation if the manager feels that there next move may result in
slow or no growth opportunity. They keep operating the organization at
current levels.

Renewal
Definition
A corporate level strategy designed to address organizational
weakness that are leading to performance declines.
Types:
There are two main types of renewal strategies, namely:
Retrenchment Strategy
Turnaround Strategy

Types of Renewal Strategy

Retrenchment Strategy
Common short-run strategy designed to address organizational
weaknesses and deficiencies that are leading to performance
declines.

Turnaround Strategy
A renewal strategy designed for situations where the firms
performance
problems are more serious.

Corporate Folio Analysis

When an organizations corporate strategy involves a
number of businesses, managers can manage this
collection, or portfolio, of businesses using a corporate
portfolio matrix.
The first portfolio matrix the BCG matrix introduced
the idea that an organizations businesses could be
evaluated and plotted using a 2x2 matrix.

BCG Matrix

Utility of Corporate Portfolio

Matrix
A corporate portfolio matrix such as the BCG matrix can
be a useful strategic management tool.
It provides a framework for understanding diverse
business and helps the manager establish priorities for
making resource allocation decisions.