Strategic Management - An IntroductionStrategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry.

Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance. The manager must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), i.e., they should make best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats. Strategic management is nothing but planning for both predictable as well as unfeasible contingencies. It is applicable to both small as well as large organizations as even the smallest organization face competition and, by formulating and implementing appropriate strategies, they can attain sustainable competitive advantage.

Strategic Management is a way in which strategists set the objectives and proceed about attaining them. It deals with making and implementing decisions about future direction of an organization. It helps us to identify the direction in which an organization is moving.

Strategic management is a continuous process that evaluates and controls the business and the industries in which an organization is involved; evaluates its competitors and sets goals and strategies to meet all existing and potential competitors; and then reevaluates strategies on a regular basis to determine how it has been implemented and whether it was successful or does it needs replacement.

Strategic Management gives a broader perspective to the employees of an organization and they can better understand how their job fits into the entire organizational plan and how it is co-related to other organizational members. It is nothing but the art of managing employees in a manner which maximizes the ability of achieving business objectives. The employees become more trustworthy, more committed and more satisfied as they can co-relate themselves very well with each organizational task. They can understand the reaction of environmental changes on the organization and the probable response of the organization with the help of strategic management. Thus the employees can judge the impact of such changes on their own job and can effectively face the changes. The managers and employees must do appropriate things in appropriate manner. They need to be both effective as well as efficient.

One of the major role of strategic management is to incorporate various functional areas of the organization completely, as well as, to ensure these functional areas

harmonize and get together well. Another role of strategic management is to keep a continuous eye on the goals and objectives of the organization.

Strategy - Definition and Features

The word “strategy” is derived from the Greek word “stratçgos”; stratus (meaning army) and “ago” (meaning leading/moving).

Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.

A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment so as to meet the present objectives. While planning a strategy it is essential to consider that decisions are not taken in a vacuum and that any act taken by a firm is likely to be met by a reaction from those affected, competitors, customers, employees or suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of events and the need to take into consideration the likely or actual behaviour of others. Strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers and society at

large.

Features of Strategy

1. Strategy is Significant because it is not possible to foresee the future. Without a perfect foresight, the firms must be ready to deal with the uncertain events which constitute the business environment.

2. Strategy deals with long term developments rather than routine operations, i.e. it deals with probability of innovations or new products, new methods of productions, or new markets to be developed in future.

3. Strategy is created to take into account the probable behaviour of customers and competitors. Strategies dealing with employees will predict the employee behaviour.

Historical development of strategic management

The strategic management discipline originated in the 1950s and 1960s. Among the numerous early contributors, the most influential were Alfred Chandler, Philip Selznick, Igor Ansoff, and Peter Drucker. The discipline draws from earlier thinking and texts on 'strategy' dating back thousands of years.

Alfred Chandler recognized the importance of coordinating management activity under an all-encompassing strategy. Interactions between functions were typically handled by managers who relayed information back and forth between departments. Chandler stressed the importance of taking a long term perspective when looking to the future. In his 1962 ground breaking work Strategy and Structure, Chandler showed that a long-term coordinated strategy was necessary to give a company structure, direction and focus. He says it concisely, “structure follows strategy.”[7]

In 1957, Philip Selznick formalized the idea of matching the organization's internal factors with external environmental circumstances.[8] This core idea was developed into what we now call SWOT analysis by Learned, Andrews, and others at the Harvard Business School General Management Group. Strengths and weaknesses of the firm are assessed in light of the opportunities and threats in the business environment.

Igor Ansoff built on Chandler's work by adding concepts and inventing a vocabulary. He developed a grid that compared strategies for market penetration, product development, market development and horizontal and vertical integration and diversification. He felt that management could use the grid to systematically prepare for the future. In his 1965 classic Corporate Strategy, he developedgap analysis to clarify the gap between the current reality and the goals and to develop what he called “gap reducing actions”.[9]

Peter Drucker was a prolific strategy theorist, author of dozens of management books, with a career spanning five decades. He stressed the value of managing by targeting well-defined objectives.[10] This evolved into his theory of management by objectives (MBO). According to Drucker, the procedure of setting objectives and monitoring progress towards them should permeate the entire organization.

Strategy theorist Michael Porter argued that strategy target either cost leadership, differentiation, or focus. These are known as Porter's three generic strategies and can be applied to any size or form of business. Porter claimed that a company must only choose one of the three or risk that the business would waste precious resources. W. Chan Kim and Renée Mauborgne countered that an organization can achieve high growth and profits by creating a Blue Ocean Strategy that breaks the trade off by pursuing both differentiation and low cost.

In 1985, Ellen-Earle Chaffee summarized what she thought were the main elements of strategic management theory by the 1970s:[11]

Strategic management involves adapting the organization to its business environment.

Strategic management is fluid and complex. Change creates novel combinations of circumstances requiring unstructured non-repetitive responses.

Strategic management affects the entire organization by providing direction. Strategic management involves both strategy formation (she called it content) and

also strategy implementation (she called it process). Strategic management is partially planned and partially unplanned.

Strategic management is done at several levels: overall corporate strategy, and individual business strategies.

Strategic management involves both conceptual and analytical thought processes.

Growth and portfolio theoryIn the 1970s much of strategic management dealt with size, growth, and portfolio theory. The long-term PIMS study, started in the 1960s and lasting for 19 years, attempted to understand the Profit Impact of Marketing Strategies (PIMS), particularly the effect of market share. It started at General Electric, moved to Harvard in the early 1970s, and then moved to the Strategic Planning Institute in the late 1970s. It now contains decades of information on the relationship between profitability and strategy. Their initial conclusion was unambiguous: the greater a company's market share, the greater their rate of profit. Market share provides economies of scale. It also provides experience curve advantages. The combined effect is increased profits.[12]

The benefits of high market share naturally led to an interest in growth strategies. The relative advantages of horizontal integration, vertical integration, diversification, franchises, mergers and acquisitions, joint ventures and organic growth were discussed.

Other research indicated that a low market share strategy could still be very profitable. Schumacher (1973),[13] Woo and Cooper (1982),[14] Levenson (1984),[15] and later Traverso (2002)[16]showed how smaller niche players obtained very high returns.

By the early 1980s the paradoxical conclusion was that high market share and low market share companies were often very profitable but most of the companies in between were not. This was sometimes called the “hole in the middle” problem. Porter explained this anomaly in the 1980s.

The management of diversified organizations required additional techniques and ways of thinking. The first CEO to address the problem of a multi-divisional company was Alfred Sloan at General Motors. GM employed semi-autonomous “strategic business units” (SBU's), with centralized support functions.

One of the most valuable concepts in the strategic management of multi-divisional companies was portfolio theory. In the previous decade Harry Markowitz and other financial theorists developed modern portfolio theory. They concluded that a broad portfolio of financial assets could reduce specific risk. In the 1970s marketers extended the theory to product portfolio decisions and managerial strategists extended it to operating division portfolios. Each of a company’s operating divisions were seen as an element in the firm's portfolio. Each operating division was treated as a semi-independent profit center with its own revenues, costs, objectives and strategies.

Several techniques were developed to analyze the relationships between elements in a portfolio. B.C.G. Analysis, for example, was developed by the Boston Consulting Group in the early 1970s. Shortly after that the G.E. multi factoral model was developed by General Electric. Companies continued to diversify until the 1980s when it was realized that in many cases a portfolio of operating divisions was worth more as separate completely independent companies.

Strategic Management Process - Meaning, Steps and Components

The strategic management process means defining the organization’s strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises it’s competitors; and fixes goals to meet all the present and future competitor’s and then reassesses each strategy.

Strategic management process has following four steps:

The strategic management process means defining the organization’s strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises it’s competitors; and fixes goals to meet all the present and future competitor’s and then reassesses each strategy.

Environmental Scanning - Environmental scanning refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it

Strategy Formulation - Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies

Strategy Implementation - Strategy implementation implies making the strategy work as intended or putting the organization’s chosen strategy into action. Strategy implementation includes designing the organization’s structure, distributing resources, developing decision making process, and managing human resources

Strategy Evaluation - Strategy evaluation is the final step of strategy management process. The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions. Evaluation makes sure that the organizational strategy as well as it’s implementation meets the organizational objectives

These components are steps that are carried, in chronological order, when creating a new strategic management plan. Present businesses that have already created a strategic management plan will revert to these steps as per the situation’s requirement, so as to make essential changes.

 Components of Strategic Management Process

Strategic management is an ongoing process. Therefore, it must be realized that each component interacts with the other components and that this interaction often happens in chorus.

Strategy Evaluation Process and its Significance

Strategy Evaluation is as significant as strategy formulation because it throws light on the efficiency and effectiveness of the comprehensive plans in achieving the desired results. The managers can also assess the appropriateness of the current strategy in todays dynamic world with socio-economic, political and technological innovations. Strategic Evaluation is the final phase of strategic management.

The significance of strategy evaluation lies in its capacity to co-ordinate the task performed by managers, groups, departments etc, through control of performance. Strategic Evaluation is significant because of various factors such as - developing inputs for new strategic planning, the urge for feedback, appraisal and reward, development of the strategic management process, judging the validity of strategic choice etc.

The process of Strategy Evaluation consists of following steps-

Fixing benchmark of performance - While fixing the benchmark, strategists encounter questions such as - what benchmarks to set, how to set them and how to express them. In order to determine the benchmark performance to be set, it is essential to discover the special requirements for performing the main task. The performance indicator that best identify and express the special requirements might then be determined to be used for evaluation. The organization can use both quantitative and qualitative criteria for comprehensive assessment of performance. Quantitative criteria includes determination of net profit, ROI, earning per share, cost of production, rate of

employee turnover etc. Among the Qualitative factors are subjective evaluation of factors such as - skills and competencies, risk taking potential, flexibility etc.

Measurement of performance - The standard performance is a bench mark with which the actual performance is to be compared. The reporting and communication system help in measuring the performance. If appropriate means are available for measuring the performance and if the standards are set in the right manner, strategy evaluation becomes easier. But various factors such as managers contribution are difficult to measure. Similarly divisional performance is sometimes difficult to measure as compared to individual performance. Thus, variable objectives must be created against which measurement of performance can be done. The measurement must be done at right time else evaluation will not meet its purpose. For measuring the performance, financial statements like - balance sheet, profit and loss account must be prepared on an annual basis.

Analyzing Variance - While measuring the actual performance and comparing it with standard performance there may be variances which must be analyzed. The strategists must mention the degree of tolerance limits between which the variance between actual and standard performance may be accepted. The positive deviation indicates a better performance but it is quite unusual exceeding the target always. The negative deviation is an issue of concern because it indicates a shortfall in performance. Thus in this case the strategists must discover the causes of deviation and must take corrective action to overcome it.

Taking Corrective Action - Once the deviation in performance is identified, it is essential to plan for a corrective action. If the performance is consistently less than the desired performance, the strategists must carry a detailed analysis of the factors responsible for such performance. If the strategists discover that the organizational potential does not match with the performance requirements, then the standards must be lowered. Another rare and drastic corrective action is reformulating the strategy which requires going back to the process of strategic management, reframing of plans according to new resource allocation trend and consequent means going to the beginning point of strategic management process.

Practical Ways to Apply your Strategic Management   Skills. Even if your current job description doesn’t mention strategic management, applying your strategic skills can add considerable value to your organization and fast track your professional development. It’s also a great way to transition into a more strategy-related position.

Before pursuing a career as a strategist, I worked as a technology expert in the banking industry where my role was to find solutions for complex technical problems.  Indeed, my role was very technical and had little to do with strategic planning or building strategies. At the time, I was also attending an MBA program and learning new skills. I started applying what I was learning about strategy to my technical projects at the bank. This gave me a competitive edge and allowed me to differentiate my work. Later on, I was able to make the transition from technical roles to more strategy-related roles quite easily.

If you’re interested in applying your strategic skills or just having more influence on your projects, here are some things that you can do right away to include more strategy in your daily activities:

Act like a Strategist: Have a look around you and investigate ways to use your strategic skills. Are there better ways to execute the projects you’re currently involved with? When you consider all projects as a complete set, can you identify any visible gaps that management may not have seen yet?  Choose one or two topics that you think are valuable to your organization and articulate them in a one-page document. Once you have thought out your ideas on paper, you will be ready to participate in discussions about these issues when they arise.

Be a Mentor: Strategists are strong influencers and know how to lead with integrity.  A great way to develop your leadership skills and influence is to become a mentor. If your organization has a mentorship program, join it. If your organization doesn’t offer this type of program, look around your community and volunteer as a mentor for a non-profit organization or charity. You will gain invaluable experience and skills while making a difference for others in need.

Go beyond being an Expert: Learn everything possible about a relevant subject and get involved in discussions about it. Go beyond reading trivial product specs; participate in discussions on forums and blogs, read and report on in-depth analysis articles, and keep yourself on top of the news. You will soon become the reference person in the organization about this subject. In my experience, when you have this type of knowledge, you are able to strategically influence projects related to the subject. You may even have more power to change things than the project manager

running the show. But, use your skills with caution… you are a strategist, not an untouchable guru.Transitioning into a strategic management role is not easy, especially if your current position has nothing to do with strategy. You may need time to re-position yourself within the organization, as well as to expand your skills and reputation. But you can start to develop your potential immediately by applying strategy to your current tasks. You don’t need to wait until your next career move to start using your strategic skills. Just keep your goals in mind and think strategically.

ANNEX 1: PROCESS FOR PREPARING THE EVALUATION PROGRAMMEINTRODUCTIONThis annex contains a description of (i) the annual programme process, and (ii) the process for revising the programme if necessary during the year. Both processes are shown in process map 1 (below). The section numbers in the accompanying text correspond to the numbered boxes in the process map.

ANNUAL PROCESS

Step 1: Identify needs for evaluation evidence (Evaluation Team)The Evaluation Strategy states that NERC will conduct evaluations to fulfil evaluation customers’ needs for evidence. The first step in the Evaluation Programme process is therefore NERC’s Strategic Management Tool, which covers NERC’s objectives, performance and investments. The Evaluation Team will, in consultation with relevant staff: Use the Strategic Management Tool to identify current priority evidence needs. This might, for example, be where there is an information gap, where there has been a notable output (i.e. where it would be valuable to document the outcome and/or to identify best practice), or where there is a concern about performance; and From this list, identify which of those needs have to be met through evaluation (as it may be the some of the evidence needs could be met using other performance information tools e.g. performance monitoring, audit). Examples of where an evaluation might be needed include: where the evidence cannot be captured through metrics alone; where the evidence requires synthesis and expert opinion; or where an independent view is required.

Step 2: Prepare long list of potential evaluations based on evidence needs (Evaluation Team)The Evaluation Team will then develop a long list of potential evaluations based on the identified priority needs for evaluations, and informed by learning from previous evaluations (e.g. what works and what doesn’t, and which areas have been evaluated recently). This might involve combining several similar needs into one proposed evaluation. The list will be accompanied by background information covering, for

example, any links/overlaps with NERC’s internal audit timetable or with cross-council initiatives.

Step 3: Provide feedback on long list of priorities and suggest potential additional evaluations(Evaluation Advisory Group)This long list will be considered by the Evaluation Advisory Group, who will be asked to: Provide feedback on the relative priority of the proposed evidence needs, the appropriateness of the proposed timing (e.g. would it be more helpful if brought forward or deferred based on evidence needs and relative priority), and how the findings of the proposed evaluations would be used; and Identify any additional priority needs for evidence, again with justification as to why they are priority and how the findings would be used.

PROCESS FOR HANDLING REVISIONS DURING THE YEAR

Step 6: Review the programme (Evaluation Team)It is likely that the programme may need to be slightly altered as the year progresses, for example following changes in policy, changes in resource availability or in light of ad-hoc requests made during the year. Ad-hoc requests should be sent, with agreement from the appropriate director, to the Evaluation Team leader. Each request will need to be accompanied by a justification explaining why the request is urgent and how the findings will be used. In giving their agreement, directors will be asked to maintain an overview of the relative priority of evidence needs.

Step 7: Propose revisions where appropriate (Evaluation Team)The Evaluation Team will consider the request and make a recommendation to HOSO in light of a) the priority and justification for this request compared to the programmed evaluations, and b) the availability of time and resources.The process then feeds back into step 5: HOSO will make a decision as to whether, and if so how, to revise the programme, with advice from key advisers where appropriate. Requests judged to be of high priority or urgency will be implemented during the year by the Evaluation Team when resources are available, or by the requester’s group with advice from the Evaluation Team. Requests judged to be of lower priority or urgency may be added to the long list of potential evaluations for the future Evaluation Programme.

Limitations of strategic management

In 2000, Gary Hamel coined the term strategic convergence to explain the limited scope of the strategies being used by rivals in greatly differing circumstances. He lamented that successful strategies are imitated by firms that do not understand that for a strategy for the specifics of each situation.

But in the world where strategies must be implemented, the three elements are interdependent. Means are as likely to determine ends as ends are to determine

means. The objectives that an organization might wish to pursue are limited by the range of feasible approaches to implementation. (There will usually be only a small number of approaches that will not only be technically and administratively possible, but also satisfactory to the full range of organizational stakeholders.) In turn, the range of feasible implementation approaches is determined by the availability of resources.

Another critique of strategic management is that it can overly constrains managerial discretion in a dynamic environment. "How can individuals, organizations and societies cope as well as possible with ... issues too complex to be fully understood, given the fact that actions initiated on the basis of inadequate understanding may lead to significant regret?"

Some theorists insist on an iterative approach, considering in turn objectives, implementation and resources. I.e., a "...repetitive learning cycle [rather than] a linear progression towards a clearly defined final destination."] Strategies must be able to adjust during implementation because "humans rarely can proceed satisfactorily except by learning from experience; and modest probes, serially modified on the basis of feedback, usually are the best method for such learning."

Woodhouse and Collins claim that the essence of being “strategic” lies in a capacity for "intelligent trial-and error" rather than strict adherence to finely-honed strategic plans. Strategy should be seen as laying out the general path rather than precise steps.

"Creative" vs analytic approaches

In 2010, IBM released a study summarizing three conclusions of 1500 CEOs around the world: 1) complexity is escalating, 2) enterprises are not equipped to cope with this complexity, and 3) creativity is now the single most important leadership competency. IBM said that it is needed in all aspects of leadership, including strategic thinking and planning.

Similarly, Mckeown argued that over-reliance on any particular approach to strategy is dangerous and that multiple methods can be used to combine the creativity and analytics to create an "approach to shaping the future", that is difficult to copy

SWOT Analysis

An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given below-

1. Strengths - Strengths are the qualities that enable us to accomplish the organization’s mission. These are the basis on which continued success can be made and continued/sustained. Strengths can be either tangible or intangible. These are what you are well-versed in or what you have expertise in, the traits and qualities your employees possess (individually and as a team) and the distinct features that give your organization its consistency. Strengths are the

beneficial aspects of the organization or the capabilities of an organization, which includes human competencies, process capabilities, financial resources, products and services, customer goodwill and brand loyalty. Examples of organizational strengths are huge financial resources, broad product line, no debt, committed employees, etc.

2. Weaknesses - Weaknesses are the qualities that prevent us from accomplishing our mission and achieving our full potential. These weaknesses deteriorate influences on the organizational success and growth. Weaknesses are the factors which do not meet the standards we feel they should meet. Weaknesses in an organization may be depreciating machinery, insufficient research and development facilities, narrow product range, poor decision-making, etc. Weaknesses are controllable. They must be minimized and eliminated. For instance - to overcome obsolete machinery, new machinery can be purchased. Other examples of organizational weaknesses are huge debts, high employee turnover, complex decision making process, narrow product range, large wastage of raw materials, etc.

3. Opportunities - Opportunities are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable. Organizations can gain competitive advantage by making use of opportunities. Organization should be careful and recognize the opportunities and grasp them whenever they arise. Selecting the targets that will best serve the clients while getting desired results is a difficult task. Opportunities may arise from market, competition, industry/government and technology. Increasing demand for telecommunications accompanied by deregulation is a great opportunity for new firms to enter telecom sector and compete with existing firms for revenue.

4. Threats - Threats arise when conditions in external environment jeopardize the reliability and profitability of the organization’s business. They compound the vulnerability when they relate to the weaknesses. Threats are uncontrollable. When a threat comes, the stability and survival can be at stake. Examples of threats are - unrest among employees; ever changing technology; increasing competition leading to excess capacity, price wars and reducing industry profits; etc.

BCG Matrix

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of SBU’s (Strategic Business Units). In other words, it is a comparative analysis of business potential and the evaluation of environment.

According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

The analysis requires that both measures be calculated for each SBU. The dimension of business strength, relative market share, will measure comparative advantage indicated by market dominance. The key theory underlying this is existence of an experience curve and that market share is achieved due to overall cost leadership.

BCG matrix has four cells, with the horizontal axis representing relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if all the SBU’s are in same industry, the average growth rate of the industry is used. While, if all the SBU’s are located in different industries, then the mid-point is set at the growth rate for the economy.

Resources are allocated to the business units according to their situation on the grid. The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular type of business.

   10 x                                  1 x                                  0.1 x

Figure: BCG Matrix

1. Stars- Stars represent business units having large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest. SBU’s located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. If successful, a star will become a cash cow when the industry matures.

2. Cash Cows- Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units. These SBU’s are the corporation’s key source of cash, and are specifically the core business. They are the base of an organization. These businesses usually follow stability strategies. When cash cows loose their appeal and move towards deterioration, then a retrenchment policy may be pursued.

3. Question Marks- Question marks represent business units having low relative market share and located in a high growth industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question marks are generally new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. Most businesses start as question marks as the company tries to enter a high growth market in which there is already a market-share. If ignored, then question marks may become dogs, while if huge investment is made, then they have potential of becoming stars.

4. Dogs- Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitor’s/rival firms. These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim, it should be liquidated if there is fewer prospects for it to gain market share. Number of dogs should be avoided and minimized in an organization.

Limitations of BCG Matrix

The BCG Matrix produces a framework for allocating resources among different business units and makes it possible to compare many business units at a glance. But BCG Matrix is not free from limitations, such as-

1. BCG matrix classifies businesses as low and high, but generally businesses can be medium also. Thus, the true nature of business may not be reflected.

2. Market is not clearly defined in this model.3. High market share does not always leads to high profits. There are high costs

also involved with high market share.4. Growth rate and relative market share are not the only indicators of

profitability. This model ignores and overlooks other indicators of profitability.

5. At times, dogs may help other businesses in gaining competitive advantage. They can earn even more than cash cows sometimes.

6. This four-celled approach is considered as to be too simplistic.

Recommendations

The final section of the written case analysis should consist of a set of definite recommendations and a plan of action. Your set of recommendations should address all of the problems/issues you identified and analyzed. If the recommendations come as a surprise or do not follow logically from the analysis, the effect is to weaken greatly your suggestions of what to do. Obviously, your recommendations for actions should offer a reasonable prospect of success. High-risk, bet-the-company recommendations should be made with caution. State how your recommendations will solve the problems you identified. Be sure the company is financially able to carry out what you recommend; also check to see if your recommendations are workable in terms of acceptance by the persons involved, the organization's competence to implement them, and prevailing market and environmental constraints. Try not to hedge or weasel on the actions you believe should be taken.

By all means state your recommendations in sufficient detail to be meaningful get down to some definite nitty-gritty specifics. Avoid such unhelpful statements as "the organization should do more planning" or "the company should be more aggressive in marketing its product." For instance, do not simply say "the firm should improve its market position" but state exactly how you think this should be done. Offer a definite agenda for action, stipulating a timetable and sequence for initiating actions, indicating priorities, and suggesting who should be responsible for doing what.

In proposing an action plan, remember there is a great deal of difference between, on the one hand, being responsible for a decision that may be costly if it proves in error and, on the other hand, casually suggesting courses of action that might be taken when you do not have to bear the responsibility for any of the consequences. A good rule to follow in making your recommendations is: Avoid recommending anything you would not yourself be willing to do if you were in management's shoes. The importance of learning to develop good judgment in a managerial situation is indicated by the fact that, even though the same information and operating data may be available to every manager or executive in an organization, the quality of the judgments about what the information means and which actions need to be taken does vary from person to person.Gragg, "Because Wisdom Can't Be Told," p. 10.

It goes without saying that your report should be well organized and well written. Great ideas amount to little unless others can be convinced of their merit this takes tight logic, the presentation of convincing evidence, and persuasively written arguments.

conclusion

Strategic management is a continuous process. There are three stages in this process: strategy formulation, strategy implementation, and evaluation and control.

Strategy management is also viewed as series of steps. Therefore, the strategic- management process can be best be studied and applied using the model. A review of the major strategic management models indicates that they all include the following steps: performing an environmental analysis, establishing organizational direction, formulating organizational strategy, implementing organizational strategy, evaluating and controlling strategy.

The strategic management process mostly involves top management, board of directors, and planning staff. In its final form, a strategic decisions is moulded from the streams of inputs, decisions, and actions.

All organizations engage in the strategic management process. The success of an organization is generally dependent upon the strategic management and organizational abilities of the managers.

Many research studies show both financial and nonfinancial benefits which can be derived from a strategic-management approach to decision making.

Moreover, the concept of strategic management is still involving and will continue to undergo change. Therefore, understanding and following and complete process of strategic management can be helpful to practicing managers to gain organizations' objectives

Amity university lucknow

Amity business school

Business policy and strategic management

Assignment on

“evaluation of strategic management in India and current rents”

Submitted to:

Mr. Rajnish Shankhdhar

Submitted by:

Ayushi singh

Bba-6th sem

Enrolment no. A7006410051