Presentation Management

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STRATEGIC

MANAGEMENT


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RAMSHA NASIR

RIDA FAREED

NADIA BARKAT ALI

SAJJAD ALI MUSLIM

MUHAMMAD YAZDAAN AZAM JAFFRI


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WHAT IS STRATEGY

STRATEGIC MANAGEMENT

IMPORTANCE OF STRATEGIC MANAGEMENT

STRATEGIC MANAGEMENT PROCESS

TYPES OF ORGANIZATIONAL STRATEGIES

STRATEGIC MANAGEMENT IN TODAYSENVIRONMENT


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Strategies are the decisions and plans that

determine the long term performance of anorganization.


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Strategic management is what managers do todevelop the organizations strategies.


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Strategic management specify theorganizations missions, visions and objectivesby developing policies and plans designed toachieve those objectives.

Managers establish the roadmap for how theorganizations will do whatever it is in thebusiness to do.


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One term which is used in strategicmanagement is the BUSINESS MODEL.

BUSINESS MODEL:A strategic design for how a company

could get profit from its strategies and workactivities.

It focuses on two things.

Whether the customers will value what the

company is providing.Whether the company can make any moneydoing that.


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Dell business of selling computers.


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Performance of an organization.

Uncertainty in environments.

Nature of organizations.

Decision-making of managers.


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Step 1: Identifying the organizationscurrent mission, goals, and strategies

o mission- statement of the purpose of anorganization.

o It defines that what is the business is all

about.o It is important in profit and not-for-profit

organizations


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Step 2: Doing an external analysis

o The environmental scanning of specific andgeneral environments.

o A manager has to examine that what trendsand changes are occurring outside the

organization to cope up with current market


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After analyzing the environment, manager has

to access all his information in terms ofopportunities or threats.

o opportunities- positive trends in theexternal environmental

o threats- negative trends in the externalenvironment


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Step 3: Doing an internal analysis

o In this phase, manager has to look inside theorganizations resources and capabilities.

o Resources: assets, financial, physical andhuman intangible.

o Capabilities: skills and abilities of doing

work activities needed in business.o Core-competencies: the value-creating

capabilities and skills of an organization.


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o After internal analysis, manager should be

able to identify organizational strengths andweaknesses.

strengths- Strengths create value for the

customer and strengthen thecompetitive position of the firm.

weaknessescan place the firm at acompetitive disadvantage.

o Organizational culture i.e strong and weakcultures have different effects on strategies.


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Steps 2 and 3 combined are called a SWOTanalysis. (Strengths, Weaknesses,

Opportunities, and Threats)After this SWOT analysis, managers are ready

to formulate suitable strategies. i.e that

1.utilize an organizations strengths andexternal opportunities.

2. protect organization from external threats.3. correct critical weaknesses.


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Step 4: Formulating strategies

In this managers has to consider all therealities of the external environment andtheir available resources to formulate thestrategies which help the organization to

achieve its goal.


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Step 5: Implementing strategies

o Implementation:effectively fitting toorganizational structure and activities to theenvironment.

o a strategy is only as good as itsimplementation


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Step 6: Evaluating resultsLast step is to assess the result of the process that

o How effective have strategies been?

o Have they helped to reach its goal?

o What adjustments, if any, are necessary?


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Corporate Strategy

Business Strategy

Functional Strategy


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Growth Strategy

Seeking to increase the organizations business by

expansion into new products and markets.Types of Growth Strategies

Concentration:

Focusing on a primary line of business andincreasing the number of products offered ormarkets served.


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Vertical Integration:

Backward vertical integration: attempting to gaincontrol of inputs (become a self-supplier).

Forward vertical integration: attempting to gaincontrol of output through control of the distribution

channel and/or provide customer service activities(eliminating intermediaries).

Horizontal Integration:

Combining operations with another competitorin the same industry to increase competitivestrengths and lower competition among industryrivals.


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Related DiversificationExpanding by merging with or acquiring firms indifferent, but related industries that are strategicfits.

Unrelated Diversification

Growing by merging with or acquiring firms inunrelated industries where higher financial returnsare possible


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Stability Strategy:A strategy that seeks to maintain the status quo to dealwith the uncertainty of a dynamic environment, when the

industry is experiencing slow- or no-growth conditions, orif the owners of the firm elect not to grow for personalreasons.

Renewal Strategy:

Developing strategies to counter organization weaknessesthat are leading to performance declines.

Retrenchment:focusing of eliminating non-criticalweaknesses and restoring strengths to overcome

current performance problems.Turnaround:addressing critical long-term performanceproblems through the use of strong cost eliminationmeasures and large-scale organizational restructuringsolutions.


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BCG Matrix

Developed by the Boston Consulting Group

Considers market share and industry growth rate

Classifies firms as:

Cash cows:low growth rate, high market share

Stars:high growth rate, high market share

Question marks:high growth rate, low market share

Dogs:low growth rate, low market share


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A strategy focused on how an organization shouldcompete in each of its businesses.


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Competitive Advantage:

An organizations distinctive competitive edge.

Quality as a Competitive Advantage:

Differentiates the firm from its competitors.Represents the companys focus on quality

management to achieve continuous improvement andmeet customers demand for quality.


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Sustainable competitive advantage:Continuing over time to effectively exploit

resources and develop core competencies that enable anorganization to keep its edge over its industrycompetitors.

Competitive strategies:

Five competitive forces are:

Threat of new entrants

Threat of substitutes

Regaining power of buyers

Bargaining power of suppliers

Current rivalry


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Cost leadership strategy

Differentiation strategy

Focus strategy


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Similar to Porters generic competitivestrategies

The competitive forces in an industry will create asituation where three companies will dominate amarket.

Some firms in the market become super nicheplayers and while others end up as ditchdwellers.

Firms unable to develop either a cost ordifferentiation advantage become stuck in the

middle and lack prospects for long-term success.


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Used to support the business-level strategy

Creates an appropriate supporting role foreach functional area of the organization

e.g., manufacturing, marketing,

human resources


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Strategic FlexibilityNew Directions in Organizational Strategies

e-business

customer serviceinnovation


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Cost Leadership

On-line activities: bidding, order processing,inventory control, recruitment and hiring

Differentiation

Internet-based knowledge systems, on-line ordering

and customer support

Focus

Chat rooms and discussion boards, targeted web sites


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Giving the customers what they want.

Communicating effectively with them.Providing employees with customer servicetraining.


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Possible EventsRadical breakthroughs in products.

Application of existing technology to new uses.

Strategic Decisions about InnovationBasic research

Product development

Process innovationFirst Mover

An organization that brings a product innovation tomarket or use a new process innovations


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THANK YOU FOR

YOURCONCENTRATION

Presentation Management

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