THE

STRATEGIC

MANAGEMENT

PROCESS

The heart and soul of managing a

business lies in the crafting,

implementing and executing

the chosen strategy.

Strategy is the game plan that management

is going to use to stake out a market

position, conduct its operations, attract and

please customers, compete successfully as

well as achieve organizational objectives

• A strategy entails managerial choices

among alternatives and signals organizational

commitment to specific markets, competitive

approaches and ways of operating.

• Strategy relates to a company’s competitive

initiatives and business approaches.

Why Strategic Management1. Managers need to proactively shape

how the company’s business will be conducted.

Exert strategic leadership and commit the enterprise to going about its business.

Prescriptions for doing business, road map to competitive advantage, plan for pleasing customers or achieving good performance.

2. Managers need to mould the efforts and

decisions of the different divisions,

departments, managers and groups into a

coordinated, compatible whole.

Five Tasks of Strategic Management 1. Forming a strategic vision of where the

organization is heading.

2. Setting objectives i.e. specific performance outcomes

3. Crafting a strategy to achieve the desired outcome

4. Implementing and Executing the chosen strategy

5. Evaluating performance and initiating corrective adjustments

Recycle tasks1,2,3 or 4

Crafting

Strategy

Implementing

& Executing the

strategy

Evaluating

Performance

Monitoring

New developments

& initiating

Corrective adjustment

Developing

A strategic Vision &

Business Mission

Setting

objectives

Crafting

Strategy

Implementing &

Executing the strategy

Developing Strategic Vision & Business Mission

Developing a Strategic Vision

What is our vision for the company

Where should the company headed

What should its future focus be

What kind of enterprise should we become

What industry standing do we want to

achieve

INTEL

“ Getting to a billion connected

computers worldwide millions

of servers and trillions of

dollars”

Strategic Vision

• Management’s views and conclusions to the long-term direction and future business scope.

• Management’s aspirations for the organization and its business providing a view of “ where we are going ”.

Strategic Vision Vs Mission Statement Strategic Vision

‘where we are going’

Mission Statement

(business scope)

“who are we and what we do”

Mission Statement

• The corporate philosophy, identity, character and image.

• Describes an organization’s present capabilities, customer focus, activities

and make up.

Why a Strategic Vision

• Strategic vision has greater direction setting and strategy making sense.

• Managers are compelled to look beyond today and think strategically.

Setting Objectives

• Objectives are set to convert strategic vision and mission into specific performance targets. (the results and outcomes the organization

wants to achieve)

• By setting objectives and then reassuring

them, managers are able to track the

organization's progress.

• Objective setting should be done by all

managers because every unit in a company needs concrete, measurable performance targets that contribute towards achieving company vision.

• The need for both good financial and strategic performance calls for management to set financial and strategic objectives.

Crafting Strategy

Strategy reflects managerial choices among

alternatives and signals organisational

commitment to particular products, markets

competitive approaches and ways of operating the business.

Fundamental Business Questions

• Whether to concentrate on a single business

or build a diversified group of business

• Whether to cater for a broad range of

customers or a particular market niche

• Whether to develop a wide or narrow product

line

• Whether to pursue a competitive advantage

based on low cost or product superiority etc

Strategy making brings into play the

critical managerial issues of how to

achieve the targeted results in light of

the organisation’s situation and prospects.

Strategy

Deliberate & purposeful action

Reactions to developments, market

conditions & competitive pressures

Collective learning of the organisation

over time

• Strategy is something managers shape and

reshape as events transpire out side the

company

• Strategy is both pro-active (intended) and reactive (adaptive).

Characteristics of strategy

Company strategies address how

• To grow the business

• To satisfy customers

• To out compete rivals

• To respond to market conditions

• To manage functions of the business

• To develop organisational capabilities

• To achieve strategic and financial objectives

• The strategy tends to be company specific, customised to suit its situation and objectives.

• Strategy content thus has to be fairly detailed in order to portray the defining characteristics of the authors.

• Strategy is a blend of holdover approaches, fresh actions and reactions with some about to be launched moves and changes.

• It is partly visible and partly hidden to the outside view.

Strategy making is fundamentally a market driven

and customer driven entrepreneurial activity, the

essential qualities being;

• talent for capitalising an emerging market

opportunities and evolving customer needs

• bias for innovation and creativity,

• appetite for prudent risk-taking

• a strong sense of what needs to be done to grow and

strengthen the business

Implementing & Executing the Strategy

This involves

• assessing what it will take to develop the needed organisational capabilities to reach the targeted objectives.

• Figuring out what must be done to put the strategy in place to carry out and produce good results.

Strategy Implementing

managerial exercise of putting a freshly chosen strategy in place

Strategy Execution

the managerial exercise of supervising the on going pursuit of strategy, making it

work, improving competence with which it is executed and showing measurable

progress in achieving targeted results.

Managing the strategy execution process includes

• Building an organisation capable of carrying out strategy

• Allocating company resources

• Establishing strategy supportive policies and operating procedures

• Motivating people

• Tying the reward structures to achieving of targeted results

• Creating conducive company culture and

work climate

• Installing information, communication and

operating systems that support the strategy

• Installing best practices and programmes

for continuous improvement

• Exerting internal strategic leadership

• Good strategy execution will involve creating a strong “fit” with above

aspects

• Strategy execution cuts across all facets of managing and must be initiated from all units inside the organisation

Evaluating Performance, Monitoring New developments and Initiating corrective Adjustments

Management needs to stay on top of the

company’s situation deciding whether

things are going on well internally and

monitoring outside developments

closely.

Managerial actions that may be taken to hasten implementation or improve executing of strategy include• Revision of budget• Changing policies• Reorganising, changing personnel• Building new competencies and capabilities• Revamping activities and work processes• Changing culture • Revising compensation practices

Strategy executing is always a product of

organisational learning it is achieved

unevenly coming quickly in some areas and

late in others.

‘Strategic management is not a box of tricks

or a bundle of techniques. It is analytical

thinking and commitment of resources to

action’

Peter Drucker

END