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Unit 1 Introduction

8th sem Business strategy

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22 views

Unit 1 Introduction

8th sem Business strategy

Uploaded by

Ragnor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BBA 8 th

Semester
MGT 208 Business Strategy
By Rajesh Karki
Course Details
Unit 1 – Introduction
Unit 2 – Vision and Mission, Objectives and Strategy
Unit – 3 Strategic Analysis
Unit 4 – Strategy Formulation
Unit 5 – Strategy Implementation
Unit – 1
Introduction

Concept of Strategic Management


Is a process that involves strategy formulation and implementation
efforts that results in positive outcomes. It is a set of commitments,
decisions and actions required for a firm to achieve strategic
competitiveness and earn above average returns.
Strategic Management
Characteristics of strategic management
• Ambiguous / uncertain
• Complex
• Organization wide
• Fundamental
• Long term implications
Importance of strategic management

• Builds synergy
• Delivers value
• Exploits core competency
• Deals with opportunity and threats
• Strategic fit
• Competitive capability
• Organizational unity
• Resource management
• Organizational effectiveness
• Manages change
Elements/Process of Strategic
Management
• Strategic planning
• Environmental analysis
• Strategy formulation
• Strategy implementation
• Structure design
• Resource planning
• Management system
• Strategic control
• Feedback
Factors affecting Strategic
Management
• Globalization
• Increased competition
• Technological change
• Knowledge intensity
• Corporate social responsibility an sustainability
• Deregulation and privatization
Changes in the approach to Strategic
Management
• Financial budgeting
• Corporate planning
• Emergence of strategic management
• The quest for competitive advantage
• Adapting to turbulence (hyper competition)
Different perspective on strategy
formulation
• The design perspective: The emphasis of this approach was on the
relationship between strategy and structure.
• The level perspective: According to this perspective, strategy should
be thought at different levels. They are corporate, business and
functional level.
• The positioning perspective: This perspective of strategic
management assumes that a firm’s profitability depends on the
position it occupies in the industry.
• The resource based perspective: This perspective emphasizes the
importance of resources and capabilities of a firm in maintaining
competitive advantage.
Approaches to strategy formulation

• Intended strategy: It is the strategy that the organization has


deliberately chosen to pursue.
• Realized strategy: It is the strategy that the organization actually
carries out.
• Emergent strategy: Under this, the managers use their experience
and learning to develop a strategy that meets the needs of the
external environment.
Strategic Decision

Concept of Strategic Decision


Deals with the long run future of an organization and are rare,
consequential and directive. The decisions encompass the definition of
the business; products and market to be served, functions to be
performed and major policies needed for the organization to execute
these decisions to achieve objectives.
Strategic Decision
Characteristics of strategic decision
• Directive
• Rare
• Consequential
• Competitive advantage
• Strategic fit
• Define scope
• Top management oriented
• Involve resources
• Dynamic
• Irreversible
Strategic Decision
Importance of strategic decision
• Organizational effectiveness
• Improvement in operational capability
• Competitive advantage
• Resource management
• Stakeholder’s interest
• Strategic control
Concept of Strategy
• Long term action plan formulated and implemented for a sustainable
competitive advantage.
• Strategy is concerned with the following issues
• Current and future business.
• Products to be offered by the business.
• Target customer and market of the business.
• Value to be generated for competitive advantage.
• Resources allocation.
• Environmental adaptation.
• Refection of stakeholder’s expectation.
• Organizational structure.
Characteristics of Strategy
• Long term
• Comprehensive action plan
• Competitive advantage
• Stakeholder’s expectation
• Strategic fit
• Based on strategic decisions
• A means only
Need for strategy
• To understand the competitive environment and compete successfully
• To adopt a suitable business model
• To acquire and utilize resources optimally
• To retain the customers by building long term relationship with them
• To expand the business
• To fulfill the stakeholders expectations
• To ensure sustainability of the business
Levels of Strategy
Corporate Level Strategy
• Is related to the choice of direction for a firm as a whole and derived
from the vision and mission statement. It is the uppermost level of
strategy.
• Types of corporate level strategy are:
• Stability strategy
• Expansion / growth strategy
• Retrenchment strategy
• Combination / mixed strategy
Business Level Strategy
• Refers to the strategy pursued by a firm to gain a competitive
advantage by exploiting core competencies in specific product market
and indicates how a firm competes successfully in an individual
product market.
• Types of business level strategy are:
• Cost leadership strategy
• Differentiation strategy
• Focus strategy
Functional Level Strategy
• The strategies which aim at bringing effectiveness in different
functions of a business are called functional strategies. They are
normally prepared for a year or even less than this.
• Types of functional level strategy are:
• Marketing strategy
• Production / operations strategy
• Finance strategy
• Human resource strategy
• Research and development strategy
Company value
• Company values are the principles that guide an organization’s
actions. They are the guiding principle that dictate behavior and
action of persons an organizations.
Strategic plan
• Strategic plan is a long run plan of an organization. It determines
where an organization is going over the time to come, how it is going
to get there and how it will know if it got there or not.
Strategic plan
Characteristics / features of strategic plan
• Long term
• Based on environmental analysis
• Strategic fit
• Involvement of top management
• Set of priority
• A mean only
Strategic plan
Steps in strategic plan
• Define vision and mission
• Environmental analysis
• Determination of long term goal
• Strategy formulation
The End

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