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Introduction to SMIntroduction to SM

MeaningMeaning

DefinitionsDefinitions

CharacteristicsCharacteristics Nature and scopeNature and scope

Need for SMNeed for SM

BenefitsBenefits

Concerns of SMConcerns of SM

Phases of SMPhases of SM

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Strategic ManagementStrategic Management Strategic management is the study of why some firmsStrategic management is the study of why some firms

outperform others.outperform others.

How to create a competitive advantage in the market placeHow to create a competitive advantage in the market placethat is unique, valuable, and difficult to copythat is unique, valuable, and difficult to copy

Total organizationTotal organization

perspective, integrating acrossperspective, integrating acrossfunctional areas.functional areas.

Two perspectives of leadership: romantic view andTwo perspectives of leadership: romantic view andexternal control perspective.external control perspective.

Strategies put together an understanding of theStrategies put together an understanding of theexternal environment with an understanding of internalexternal environment with an understanding of internalstrengths and weaknesses.strengths and weaknesses.

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What is strategicWhat is strategic

management?management?A continuous, iterative process aimed atA continuous, iterative process aimed at

keeping an organization as a wholekeeping an organization as a whole

approporiately matched to its environmentapproporiately matched to its environment(Certo and Peter)(Certo and Peter)

Keeping the business in tune withKeeping the business in tune with

management and marketing forces bothmanagement and marketing forces bothoutside and inside the firmoutside and inside the firm

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Definition of StrategicDefinition of Strategic

ManagementManagementStrategic management consists of the analysis,Strategic management consists of the analysis,decisions, and actions an organizationdecisions, and actions an organizationundertakes in order to create and sustainundertakes in order to create and sustain

competitive advantages (Dess, Lumpkin, &competitive advantages (Dess, Lumpkin, &Eisner,Eisner, Strategic Management: CreatingStrategic Management: CreatingCompetitive Advantage, 3rd Ed.Competitive Advantage, 3rd Ed., p. 9)., p. 9).

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Definition of StrategicDefinition of Strategic

ManagementManagementAnalysisAnalysis

Strategic goals (vision, mission, strategic objectives)Strategic goals (vision, mission, strategic objectives)

Internal and external environment of the firmInternal and external environment of the firm

DecisionsDecisions What industries should we compete in?What industries should we compete in?

How should we compete in those industries?How should we compete in those industries?

ActionsActions

Allocate necessary resourcesAllocate necessary resources

Design the organization to bring intended strategiesDesign the organization to bring intended strategiesto realityto reality

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Some more def.Some more def.

Strategic management is defined as set ofStrategic management is defined as set ofdecisions and action in formulation anddecisions and action in formulation andimplementation of strategies designed toimplementation of strategies designed to

achieve the objectives of the organization.achieve the objectives of the organization. Strategic management is a systematic approachStrategic management is a systematic approach

to a major and increasingly importantto a major and increasingly importantresponsibility of general mgmt to position andresponsibility of general mgmt to position andrelate the firm to its environment in a way whichrelate the firm to its environment in a way whichwill assure its continued success and make itwill assure its continued success and make itsecure from surprises.secure from surprises.

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characteristicscharacteristics

Process of managing total organizationProcess of managing total organization

Adaptation to the environmentAdaptation to the environment

Pervasive, integrated &co ordinatesPervasive, integrated &co ordinates Long term missionLong term mission

For attainment of the objectivesFor attainment of the objectives

Embody general management principlesEmbody general management principles Organization work as open systemOrganization work as open system

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Nature & scope of SMNature & scope of SM

Route map for the organisationRoute map for the organisation

Decision guideDecision guide

Lays down growth objectivesLays down growth objectives

What to do how to do where to reachWhat to do how to do where to reach Look forward and far aheadLook forward and far ahead

Monitor environment anticipate change and prepareMonitor environment anticipate change and preparefor the unexpectedfor the unexpected

Build competitive advantage and build coreBuild competitive advantage and build corecompetenciescompetencies

Not only anticipate future but shape future.Not only anticipate future but shape future.

Influence the environment.Influence the environment.

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Need for SMNeed for SM

Change in technologyChange in technology

In excess of newIn excess of newproductsproducts

FasterFastercommercializationcommercialization

Emergence of globalEmergence of global

mkts, firms, brandsmkts, firms, brandsAffluent customersAffluent customers

Insulated against theInsulated against theenvironment threatenvironment threat

Respond effectivelyRespond effectively

To grow bigTo grow big

To be expertise inTo be expertise intechnologytechnology

Future orientationFuture orientation Risk appetiteRisk appetite

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Benefits of strategicBenefits of strategic

managementmanagement Establish the missionEstablish the mission

Formulate philosophyFormulate philosophy

Establish policiesEstablish policies Setting objectivesSetting objectives

Developing strategyDeveloping strategy

Plan the organiPlan the organi--zational structurezational structure

Provide personnelProvide personnel

Establish proceduresEstablish procedures

Provide facilitiesProvide facilities

Provide capitalProvide capital Set standardsSet standards

Establish programsEstablish programsand plansand plans

Control informationControl informationActivate peopleActivate people

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More benefitsMore benefits

Financial benefitsFinancial benefits

Offsetting uncertaintyOffsetting uncertainty

Clarity in the objectivesClarity in the objectives Increases organizational effectivenessIncreases organizational effectiveness

Personal satisfactionPersonal satisfaction

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Concerns of SMConcerns of SM

Future.Future.

Growth.Growth.

Environment.Environment.

Portfolios of businessPortfolios of business

Strategy.Strategy.

Integration.Integration.

Creating competitive advantage and coreCreating competitive advantage and corecompetencycompetency

Corporate strategy.Corporate strategy.

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Phases of strategic managementPhases of strategic management

Phase IPhase I-- Basic financial planningBasic financial planning

Phase IIPhase II--Forecast based planningForecast based planning

Phase IIIPhase III-- Externally oriented planningExternally oriented planning Phase IVPhase IV-- Strategic planningStrategic planning