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Presenters

SAROJ RAJ
UPRETI

SAGAR BHATTA

KALIKA PRASAD
MARAHATTA

STRATEGIC DRIFT
due to change in environment

What is strategic drift?


.
Strategic
drift can be defined as gradual

deterioration of competitive action that results in


the failure of organization to acknowledge and
respond to changes in business environment.

importance
of understanding strategic drift
To identify
external threats 01
to weaknesses
of the business
To understand the
02
need of
acquisition,
merger, and
diversification
To maintain
03
existence of its
own
To match
resources and
potentiality with
opportunities

04

To gain
05 competitive
advantage

To welcome innovation
06

To understand

07 consumer needs
and expectations
To comply with
08 legal policies and
procedures

CHANGE
SCALING

Environmental change

Transformation
al change

Amount
of change
Death

Phase 1
Phase 2
Incremental change
Strategic drift

Phase 3
Flux

Phase 4
Transformational
change or death

Phase 1 : Incremental
stage
03
01

02
Little
significant
changes in
the external
environmen
t

Small
incremental
changes in
business
strategy

Business
remains in
touch with
the external
environmen
t

This is the phase where


business tries to move
with small changes seen in
the external environment.
There is not much
deviation between
business strategy and
environmental changes.

Why Incremental
Change?

Alignment with
environmental change

Experimentation of new
ideas and strategies
s

The success of
past

Phase 2: Strategic
Drift
This is the phase where small, incremental

changes in business strategy fails business


to move with rapid changes in the external
environment.

1Homogeneous mindset
2

Preservation of status
quo

Lack
3 of focus on external environ

5 Reasons for
Strategic Drift

1
2

The problem of
hindsight
It may
be easy to see major
changes with hindsight, but it may
not be easy to see their significance
as they are happening.

Building on the
Managersfamiliar
try to minimise the extent
to which they are faced with
uncertainty by looking for answers
that are familiar.

3
4

Core rigidities
The core capabilities may become
a limit. The formula of success is
hard to imitate by competitors but
it may provoke a routine, making
the habits of the business hard to
question.

Relationship
becomes shackles

The success of a company is


based on an excellent
relationship between customers,
suppliers, and employees.

Lagged
performance
First symptoms
effectsof strategic drifts
are hard to identify. However,
once the shortcomings of a
business are identified, it

Ways to Avoid
Strategic Drift
Encourage diverse
perspective
Continuous innovation
Promote an external
focus
Industry benchmarking & market
research
Monitor performance

Phase 3 : Flux
Declining
performance & low
employee morale
Fluctuation in
strategies but not
in clear direction

1
2

Top management
conflict and
managerial changes
Internal
disagreement on
right strategies and
morale
Customers
becoming
alienated

4
5

3
This is the phase where there is huge gap
between strategy of the business and
requirement of the environment.
Management tries to minimize such gap but
efforts turn out to be indecisive.

Phase 4 :
Transformational
change or death

The 3
possibilities