Creating and Managing Strategy-

A Way to Achieve Growth and Corporate

Leadership

WELCOME TO THE REALITY

Prof. Dr. A.M. Sakkthivel, MBA, PhD, EEC (Stanford, USA)
Full Professor of Marketing
Skyline University College, Sharjah, UAE.
Formerly
 Full Professor of Marketing and Chair-Marketing Area, IFIM Business

School, Bangalore, India.

 Full Professor of Marketing and Asst. Dean for Academic and

Research Affairs, Sur University college, Sur, Sultanate of Oman

Sultanate of Oman
 Associate Professor of Marketing and Head of Graduate Department

of Business Administration,
European University of Lefke, TRNC, Turkey
Prof. Dr. A M Sakkthivel: Skyline University
 Course Coverage – What you learn and gain
Chapter 1: Strategic Management Process
Chapter 2: Company Mission
Chapter 3: External Environment
Chapter 4: Global Environment
Chapter 5: Internal Analysis
Chapter 6: Strategic Choice Analysis – Tools
Chapter 7: Strategic Implementation
Chapter 8: Issues (short and long term) affecting
Strategy Implementation
Chapter 9: Strategy Evaluation – Review/Audit of
Performance
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 PERSONIFYING STRATEGY

WALMART
 https://www.youtube.com/watch?v=D5xKm8tf9Ks

 https://www.youtube.com/watch?v=R1D4rfS6Y28

 https://corporate.walmart.com/our-story/our-locations

 https://www.walmart.com/

 https://www.nasdaq.com/symbol/wmt/financials?query=income-
statement
Prof. Dr. A M Sakkthivel: Skyline University
 STRATEGY IN TODAY’S VERSION

Function to Strategy – Paradigm shift

Business is Strategy
Strategy is Business

Prof. Dr. A M Sakkthivel: Skyline University

Corner stones for Successful Business Strategy

Survival

Sustainability

Growth

Prof. Dr. A M Sakkthivel: Skyline University

 Successful and Failure Companies – Having
followed and Not followed Strategy
 Successful Companies
 Microsoft
 Google

 Amazon

 Apple

Failure Companies
Nokia
Yahoo Prof. Dr. A M Sakkthivel: Skyline University
Successful innovative and futuristic companies to watch
for – Following Game Changer Strategy - Disruption

 Netflix (D-T-H Video Streaming)

 Square (Technology in Banking)
 Tancent (WeChat Messaging App)
 Tesla (Electric Motors for Cars)
 Sales Force.com (CRM For All)

Prof. Dr. A M Sakkthivel: Skyline University

 The Nature and Value of Strategic
Management

Strategic management:
The set of decisions and actions that
result in the formulation and
implementation of plans designed to
achieve a company’s objectives

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Understanding Strategic Intent – Aviation Industry
https://www.youtube.com/watch?v=UaUl1tv3MYU

In terms of Size of Fleet

https://www.youtube.com/watch?v=2X2hrn-vnig

In terms of Coverage

In terms of Service and Facilities
In terms of Cost Leadership
In terms of Profitability

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Nine Critical Tasks of Strategic Management --
Tasks 1-5:

Formulate the company’s mission

Conduct an internal analysis
Assess the external environment –
competitive and general contexts
Analyze the company’s options by
matching its resources with the external
environment
Identify the most desirable options in light
of the mission

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Nine Critical Tasks of Strategic Management --
Tasks 6-9:

Select a set of long-term objectives and

grand strategies that will achieve the most
desirable options
Develop annual objectives and short-term
strategies that are compatible with long-
term objectives and grand strategies
Implement the strategic choices
Evaluate the success of the strategic
process for future decision making

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 What is Strategy?
Large-scale, future-oriented plan
Used to interact within competitive
environment to achieve company goals
Provides a framework for managerial
decisions
Reflects a company’s awareness of the
main elements of competition

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 WHAT IS STRATEGY? – KNOW FROM STRATEGY GURU M E PORTER
https://www.youtube.com/watch?v=3Hd88eBgkw0
5 Golden Rules to understand and Practice Strategy
Rule 1: Operational Effectiveness Is not a Strategy
Rule 2: Strategy Rests on Unique Activities – Air Arabia
Strategic Positions: Variety (Different Services), Need (Low Cost Options) and
Access (Connecting Unique Destinations-Less Traffic)
Rule 3: A Sustainable Strategic Position Requires Trade-offs –
Focus on Core competence – difficult to imitate by competitors – Functional
Benefits (BMW, Apple)
Rule 4: Fit Drives Both Competitive Advantage and
Sustainability – Operational and Execution Excellence (Sony, Samsung)
Rule 5: Rediscovering Strategy – Avoid Growth trap – Desire to
exploit potential and consumer buying power – Avoid rapid diversification
in to non –core areas (DAWOO) – leads to diluting core business value
(Motorola)
Dimensions of Strategic Decisions
 Strategic issues require top-management
decisions
Strategic decisions overarch several
areas of a firm’s operations
Usually only top management has the
perspective needed to understand
their broad implications
Usually only top managers have the
power to authorize necessary resource
allocations

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Dimensions of Strategic Decisions (contd.)
Strategic issues require large amounts of the
firm’s resources
They involve substantial allocations of
people, physical assets, and money
Strategic decisions commit the firm to
actions over an extended period
In highly competitive firms, achieving
and maintaining customer satisfaction
frequently involves commitment from
every facet of the firm

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Dimensions of Strategic Decisions (contd.)
Strategic issues often affect the firm’s long-term
prosperity
Strategic decisions commit the firm for a
long time, typically 5 years; however the
impact lasts much longer
Once a firm has committed itself to a
strategy, its image and competitive
advantages are usually tied to that strategy
Firms become known for what they do and
where they compete. Shifting away from
that can jeopardize their previous gains.

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Dimensions of Strategic Decisions (contd.)

Strategic issues are future-oriented

They are based on what managers
forecast, rather than what they know
Emphasis is on the development of
solid projections that will enable a
firm to seek the most promising
strategic options
A firm will succeed only if it takes a
proactive (anticipatory) stance toward
change

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Dimensions of Strategic Decisions (contd.)
Strategic issues usually have
multifunctional or multibusiness
consequences.
Strategic decisions have complex
implications for most areas of the
firm
Decisions about customer mix,
competitive emphasis, or
organizational structure involve a
number of the firm’s SBUs, divisions,
or program units

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Dimensions of Strategic Decisions (contd.)
Strategic issues require considering the
firm’s external environment
All businesses exist in an open system.
They affect and are affected by external
conditions that are largely beyond their
control
Successful positioning requires that
strategic managers look beyond
operations and consider what relevant
others are likely to do

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Three Levels of Strategy
Corporate level: board of
directors, CEO &
administration [Highest]
Business level: business and
corporate managers [Middle]
Functional level: Product,
geographic, and functional area
managers [Lowest]
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 Alternative Strategic Management
Ex. 1.3
Structures

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Characteristics of Strategic Management
Decisions: Corporate

Often carry greater risk, cost, and

profit potential
Greater need for flexibility
Longer time horizons
Choice of businesses, dividend
policies, sources of long-term
financing, and priorities for growth
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Characteristics of Strategic Management
Decisions: Functional
Implement the overall strategy formulated at the
corporate and business levels
Involve action-oriented operational issues
Relatively short range and low risk
Modest costs: depend upon available resources
Relatively concrete and quantifiable

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Characteristics of Strategic Management
Decisions: Business

Help bridge decisions at the corporate and

functional levels
Less costly, risky, and potentially profitable than
corporate-level decisions
More costly, risky, and potentially profitable than
functional-level decisions
Include decisions on plant location, marketing
segmentation, and distribution

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