The summary model -Elements of strategic Management

The process consists of- :

Strategic positionStrategic choices

Strategy into action

Strategic position:

Scanning the environment

Culture and stakeholder expectations

Aligning resources and strategic capability.

Strategic Choice :

Identifying the strategic options

Evaluating Options

Selecting strategy

Strategy Implementation

Organization structure and design

Planning and allocating

resources

Managing strategic change

The components of strategic management:

Broadly the components are subparts in the process of strategic management.

Strategic position 1. Assessing the company’s external

environment, including both the competitive and general contextual factors.( scanning the environment)

2. Formulating the company’s mission,

vision, philosophy and goals.( meeting cultural and stake holder expectations)

3. Developing a company profile that reflects its internal conditions and capabilities.( aligning resources and strategic capability)

Strategic Choice 4. Identifying the most desirable options by

evaluating each option in light of the company’s mission.

( identifying the options)

5. Analyzing the company’s options by matching its resources with the external environment. (evaluating the options)

6.Selecting a set of long-term objectives and grand strategies that will achieve the most desirable options. (selecting the options)

Strategy implementation

7.Implementing the strategic choices by means of budgeted resource allocations in which the matching of tasks, people, structures, technologies and reward systems is emphasized.

(organization structure and design) (planning and allocating resources)

8.Developing annual objectives and short-term strategies that are compatible with the selected set of long-term objectives and grand strategies.

9.Evaluating the success of the strategic process as an input for future decision- making.

(managing strategic change)

e.g. General Electrice.g. General ElectricVision:Vision: to be no 1 or no 2 in any to be no 1 or no 2 in any market that they operate.market that they operate.Strategic position:Strategic position: to scout the landscape for any to scout the landscape for any acquisition, merger, divesture to acquisition, merger, divesture to improve its competitive positioning in improve its competitive positioning in line with its resources and strategic line with its resources and strategic capability.capability.

Strategic Choice :Strategic Choice : Having identified the possible Having identified the possible acquisition , move at break neck speed acquisition , move at break neck speed to pre-empt competition and acquire to pre-empt competition and acquire the same.the same.This will give a better competitive This will give a better competitive advantage.advantage.

Strategy ImplementationStrategy Implementation : : 1. Complete the acquisition.1. Complete the acquisition.2. Work for the successful integration 2. Work for the successful integration of the merged company and manage of the merged company and manage the strategic changethe strategic change

Levels of strategy Levels of strategy planningplanning In the hierarchy the three levels are- Corporate level, the business level and

functional level.Corporate level : Strategies

are devised in an attempt to exploit the firm’s distinctive competencies, by developing long-term plans for business operations.

Corporate level strategy Corporate level strategy deals deals basically with-basically with-- - the selection of the areas of business the selection of the areas of business in which the company is going to in which the company is going to operate, operate, - the ways in which business will be - the ways in which business will be integrated and managed,integrated and managed,- the development of synergies by - the development of synergies by coordinating and sharing different coordinating and sharing different resources,resources,- and investment of financial resources - and investment of financial resources across units.across units.

Business LevelBusiness Level: : Business level strategy involves Business level strategy involves decisions about the competitive decisions about the competitive position of a single business unit. position of a single business unit. The managers at this level The managers at this level translate the general statements translate the general statements of corporate strategic planners of corporate strategic planners into exact, concrete functional into exact, concrete functional objectives and strategies for objectives and strategies for individual business divisions,individual business divisions,

The goal of business level managers is The goal of business level managers is to select, enter and grow in the most to select, enter and grow in the most profitable market segment with the profitable market segment with the highest potential for growth. highest potential for growth. This strategy is concerned with using This strategy is concerned with using generic strategies such as cost generic strategies such as cost leadership, differentiation and focus to leadership, differentiation and focus to create competitive advantage.create competitive advantage.

Functional level :Functional level :This level consists of managers from This level consists of managers from geographic, product and functional areas. geographic, product and functional areas. They design short-term strategies and fix They design short-term strategies and fix annual objectives in different areas.annual objectives in different areas.Functional level strategies address Functional level strategies address problems related to the efficiency and problems related to the efficiency and effectiveness of production, success of effectiveness of production, success of particular products and services in particular products and services in increasing their market share, quality of increasing their market share, quality of customer service.customer service.They are quantifiable and operational in They are quantifiable and operational in nature.nature.