Strategy Management Ss

8/8/2019 Strategy Management Ss

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ntro uct on

StrategyStrategos


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Contents

Strategy concept and formulation

Types of strategies

Strategic planning process

Strategy Analysis Tools

Generic Corporate Strategies by Porter

Effective Implementation of Strategies


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What is strategy??

The determination of the basic long term goalsand objectives of an enterprise and the adoptionof the courses of action and the allocation ofresources necessary for carrying out these goals".


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What is Strategy?

Strategic Management is a process foranalyzing a company's competitivesituation, developing the company's

strategic goals, and devising a plan ofaction and allocation of resources thatwill help a company achieve its goals.


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Strategy is the answer to?

What do we want to do?

What do we bring to the

table? Where should we put ourefforts, and why?

What do we need to do tocompete, survive, and meetour goals?


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Hows of strategy

How to please customers

How to respond to changing market conditions

How to outcompete rivals

How to grow the business How to manage each functional piece of the business

and develop

needed organizational capabilities

How to achieve strategic and financial objectives

How to balance short term and long term Strategies


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Types of Strategies

Corporate strategy

Business strategy

Functional strategy

CCorporateStrategy

Business

strategyFunctionalstrategy


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Corporate Strategy

v Corporate strategy is one, which decideswhat business the organization should be in,

and how the overall group of activitiesshould be structured and managed.

v Porter has described it as the overall planfor a diversified business.


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Corporate Strategy (..contd)

It deals with three key issues facing the

corporation as a whole:

Directional strategy The firms overall orientation

towards growth, stability and retrenchment. Portfolio analysis The industries or markets in

which the firm competes through its productsand business units.

Parenting strategy The manner in which themanagement coordinates activities and transfersresources and cultivate capabilities among productlines and business units.


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Strategy Formulation

Formulation of strategies is a creative andanalytical process.

The process involves a number of activitiesand their analysis to arrive at a decision.

It suggests the various elements of strategy

formulation and process and the way theyinteract among themselves


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Strategy Formulation(..contd)

Accordingly the various elements are:

Corporate mission and objectives

Environmental analysis

Corporate analysis

Identification of alternatives

Choice of alternatives


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Strategic Planning Process

It is the formal consideration of anorganization's future course. All strategicplanning deals with at least one of three keyquestions:

"What do we do?"

"For whom do we do it?"

"How do we excel?"


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Vision, Mission and Values

v Vision: Defines the desired or intended future stateof an organization or enterprise in terms of itsfundamental objective and/or strategic direction.

v Mission: Defines the fundamental purpose of an

organization or an enterprise, basically describingwhy it exists and what it does to achieve its Vision.

v Values: Beliefs that are shared among thestakeholders of an organization. Values drive anorganization's culture and priorities


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Portfolio Analysis

The Portfolio Analysis module provides projectanalysis across the enterprise. In particular, it helpsproject-control coordinators, project managers, andprogram managers analyze schedule,resources,and

cost data across projects.

Types of Portfolio Analysis

Growth Share Matrix (Boston Consulting Group)

Industry Attractiveness/Business Position Matrix(General Electric)


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The Boston Consulting GroupsGrowth-Share Matrix

20%-

16%-

12%-

8%-

4%-

0Mar ke

tG

rowth

Rate

10x 8x 2x 1x

Relative Market Share.5x .3x .1x

Dogs 8

7

3

?

Question marks

?

?21

Cash cows

6

Stars

5

4


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Problem Child or ?

Low market share inexpanding industry

Needs substantial

cash to improve itsposition.

Can become a star in

future.Leave market.


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Star Strategies

Leader expandingindustry

Generates large profits

Requires substantialinvestments to sustaingrowth

Increase sales e.g. newmarkets, new channels

of distribution

Increase market share


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Cash Cow

Leader in mature or decliningindustry

Can generate funds for otherSBUs

Maintain market share e.g.ensure quality, build customerloyalty, develop substitutebrands

Maximize Cash Flow e.g.

increase usage rate, rate ofreplacement, modify expensestructure, raise prices


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Dogs

Low market share in amature or decliningindustry.

Cost disadvantages andfew growthopportunities.

Harvest or Divest.Concentrate on nichesrequiring limited effort.

Th TOWS M t i


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The TOWS Matrix

v The TOWS matrix, serves as a conceptualframework for future research about thecombination of external factors and thoseinternal to the enterprise, and the strategies

based on these variables.

v TOWS Analysis is a variant of the classicbusiness tool, SWOT Analysis. TOWS and

SWOT are acronyms for differentarrangements of the words Strengths,Weaknesses, Opportunities andThreats.

Th TOWS M t i ( C td)


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The TOWS Matrix(..Contd)

v SWOT or TOWS analysis helps you get a betterunderstanding of the strategic choices that you face.At apractical level, the only difference between TOWS andSWOT is that TOWS emphasizes the external environmentwhilst SWOT emphasizes the internal environment.

v SWOT or TOWS analysis helps you get a betterunderstanding of the strategic choices that you face.

Like How do you:

Make the most of your strengths?

Circumvent your weaknesses?

Capitalize on your opportunities?

Manage your threats?

P t G i St t i


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Porter Generic Strategies

Michael Porter has described a categoryscheme consisting of three general types ofstrategies that are commonly used by businesses

to achieve and maintain competitive advantage.

These three generic strategies are defined alongtwo dimensions: strategic scope and strategicstrength.

Strategic scope is a demand-side dimension andStrategic strength is a side dimension

Porter Generic Strategies( contd)


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Porter Generic Strategies(..contd)

Cost Leadership Strategy

Differentiation Strategy

Segmentation or Focus Strategy

St t I l t ti


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Strategy Implementation

Strategy implementation is the process by whichstrategies and policies are put in to action throughthe development of programs.

Designing the organizational structure

Aligning functional strategies

Obtaining & directing resources

Adapting to changes

I l t ti ti iti


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Implementation activities

Develop a capable organization

Allocate resources

Establish policies & procedures

Motivate & reward people

Create culture and work climate

Install internal support systems

Institute continuous improvement

Exert internal leadership, keep the vision

H t t b i l t d


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How strategy be implemented

C l i


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Conclusion

Strategic management is a continuousprocess.

It is not a one time event.After the first strategic plan is developed,

management still needs to continuously:

Scan the external environment

Evaluate new conditions and events

Take corrective actions as needed

Th t St t !!


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Thats our Strategy!!

Any

Queries???

Thanks!!!

Date post:	09-Apr-2018
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Strategy Management Ss

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