Chapter I

Introduction to Strategic
Management

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 Introduction
- The word Strategy comes from the Greek
word ‘Strategos’ which means a general.
- In military science, Strategy literally means
the art & science of directing military forces
in a war or battle.
- Today, the term strategy is used in business to
describe how an organization is going to
achieve its overall objectives.

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 Introduction (Finished)
- Most organizations have several alternatives for
achieving its objectives.
- Strategy is concerned with deciding which
alternative is to be adopted to accomplish the
overall objectives of the organization.
- Strategy is a Comprehensive long term plan.
- It tries to answer three main questions:
- What is the present position of the firm?
- What should be the future position of the firm?
- What should be done to attain the future
position?

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 What is strategy?
- Strategy is a plan of action or policy designed
to achieve a major overall aim.
- Strategy is the determination of the basic
long-term goals & objectives of an
enterprise & the adoption of the course of
action and the allocation of the resources
necessary for carrying out these goals.

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 What is strategy? (Finished)
- Strategy includes the determination &
evaluation of alternative paths to achieve an
organization’s objectives & mission.
- The term Strategy can be defined in a
Simple words as follows:
- Strategy is a broad long-term plan
designed to achieve the overall objectives of
the firm

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 Characteristics of Strategies

- Strategies are developed in order to

achieve the objectives of the
organization.
- To formulate strategies, one has to know
the objectives that are to be pursued &
also the policies that must be followed.

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 Future Oriented
- Strategy is a future oriented plan. It is designed to attain
future position of the organization.
- Through Strategy, management studies the present position
of the organization & their aims at attaining the future
position of the organization.
- The strategy provides answer to certain questions relating to
-Profitability of the present business
-Continuity of the present business
-Entry into difference businesses in future
-Effectiveness of the present policies of the organization.
-Growth & expansion of the business in the
long run.

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 Unified, Comprehensive and
Integrated Plan
- A Strategy is not Just plan. It is a unified,
comprehensive & integrated plan. It is unified
as it unifies all the parts of sections of the
organization together.
- It is comprehensive as it covers all the major
aspects or areas of the organization.
- It is integrated as all the parts of the plan are
compatible with each other and fit together
well.
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 Strategy Alternatives
- Organizations need to frame alternative strategies. It
is not sufficient to frame one or two strategies.
Small organizations survive with one or two
strategies due to fewer complexities in their
business. However, large organizations need to
frame alternative strategies in respect of growth &
survival of the organization.
- It can be divided into four broad groups:
- Stable Growth Strategy
- Growth Strategy
- Retrenchment Strategy
- Combination Strategy
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 Business Environment
- The internal and external environment affects the
strategy formulation & implementation.
- The internal environment related to mission &
objectives of the firm, the labor management
relations, the technology used, the physical, financial &
human resources.
- The external environment related to Competition,
Customer, Channel, intermediaries, Government
policies & other social, economic & political factors.

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 Allocation of Resources
- For effective implementation of Strategy, there
is a need for proper allocation of the resources.
- Proper allocation of resources is required to
undertake the various activities so as to attain
objectives.
- The resources can be broadly divided into 3
groups:
- Physical resources such as plant & machine
- Financial resources i.e. Capital
- Human resources i.e. Man Power
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 Universal Applicability
- Strategy is universally applicable. It is
applicable to business organization as well as
to non-business organization.
- This is because every organization need to
frame strategies for their growth & survival.
- The presence of Strategies keeps the
organizations moving in the right direction.

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 Periodic Review
- Strategies need to be reviewed
periodically. Such review is required to
revise the strategies depending upon the
changing needs of the business.
- Periodic review of strategies is required
to gain competitive advantage in the
market.

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 Applicable to all functional areas
- Strategies are applicable to all functional
areas.
- The functional areas include production,
marketing, finance, human resources
management, etc.
- Strategies aid in planning, organizing,
directing & controlling activities in all
functional areas.
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 What is strategic Management?
- Strategic Management involves developing
and implementing plans to help an
organization achieve its goals and objectives.
- The process can include formulating strategy,
planning organizational structure and
resource allocation, leading change
initiatives, and controlling processes and
resources.
 What is strategic Management? (Con’t)
- Strategic planning involves identifying business
challenges, choosing the best strategy, monitoring
progress, and then making adjustments to the
executed strategy to improve performance.
- Tools like SWOT (Strengths, weaknesses,
opportunities, and threats) analysis are used to
assess where opportunities and threats lie between
the organization, its competition, and the overall
market.
- Strategic Management happens at broader levels
like organization-wide leadership, but it can also be
implemented at a department or team level.
What is Strategic Management ? (Con’t)
- In other words, Strategic Management is a
stream of decisions & actions which leads
to the development of an effective strategy
or Strategies to help achieve corporate
objectives.
- The Strategic Management process is the
way in which strategists determine
objectives & make strategic decisions.

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 What is strategic Management? (Finished)

- Strategic Management is a systematic

approach to a major & increasingly
important responsibility of general
management to position & relate the firm
to its environment in a way which will
assure its continued success.

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THANK YOU!