Strategy and Strategic

Management
Dr. Kunal Gaurav
Professor
School of Business
Definition of Strategy
Strategy is the direction and scope of
an organization over the long term,
which achieves advantage in a
changing environment through its
configuration of resources and
competences with the aim of fulfilling
stakeholder expectations.

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  Strategies are concerned with long-term objectives of business but not on
the routine operations. It deals with probability of innovations, new
methods of production and new markets to be created in future.
 It defines the general course of action which a business needs to follow
for attaining their objectives.
 Strategies are dynamic in nature that changes or need to be modified in
accordance with the changing times or conditions.

Features of  A strategy provides the right combination of internal and external factors
affecting the organization ability to perform its activities towards the
Strategy established goals.
 These are formulated by management at top level and provide direction
to middle as well as low-level managers for framing sub-strategies.
 Strategies are pervasive in nature which are needed at each and every
level of organization.
 It enables business in outperforming its competitors by efficient
allocation of scare resources over distinct areas resulting in optimum
utilization.
 Strategies are forward looking as they are formulated and implemented
for attaining firm’s objectives in future.
  Strategic management is the set of managerial decisions
and actions that determine the long-run performance of the
organization. – Wheelen and Hunger
 Strategic management includes understanding the strategic
Strategic position of an organization, strategic choices for the future,
Management and turning strategy into actions. – Johnson and Scholes
 The strategic management process is the full set of
commitments, decisions, and actions required for a firm to
achieve strategic competitiveness and earn above-average
returns. – Hitt, Ireland, and Hoskisson
  Involvement of top management
 Handles long-term issues
 Offers competitive advantage
Characteristics  Future-oriented
of Strategic  Long-term implications
Management  It affects operational challenges positively
 Organisation-wide impact
 It tends to be complex
 Facilitates strategic implementation
  Strategic Control is all about following the trail or movements of
the strategy as it is implemented in order to identify the areas of
issue or potential areas of the issue so that necessary adjustments
can be made.
 On the other hand, operational control is a subset of
Strategic management control whose aim is to regularly monitor and check
the routine business operations so as to confirm the consistency
Control Vs. and quality in business activities.
 Strategic Control focuses on attaining future goals and not past
Operational performance. The main idea behind that is to look for room for
Control improvements and corrections so as to lead the organization in
the desired direction, rather than pointing out mistakes or errors
that took place in the past.
 In contrast, an operational control system is designed in a manner
that confirms – the day-to-day activities of the business are
directed towards the achievement of predetermined goals and
objectives.
  Feedforward Control: In feedforward control, inputs are
evaluated and necessary corrective steps are taken prior to the
completion of a particular sequence of operation.
 Steering Control: In steering control, action is evaluated and
corrective actions are put in force, while the operation is
undertaken. This is also called concurrent, or real-time control.
Concept of  Feedback control: In feedback control, the results of the action as
Control assessed and corrective steps are taken after the operation is
complete so that desired results are produced in the future.
Strategic
Control Vs.
Operational
Control
  Strategic intent refers to a company’s long-term vision for
its future. It is a compelling statement that paints a picture
of the company’s targeted future position in the market.
This intent should be ambitious, guiding the organization’s
strategic initiatives and providing a sense of purpose to its
activities.
Strategic
Intent  Strategic intent is more than a simple business goal; it
involves a broad declaration of the overall outcomes
the organization wants to achieve. It sets a challenging
and inspiring vision that can empower and motivate
the team to reach beyond their immediate capabilities.
Strategic
Intent
Hierarchy
  Vision implies the blueprint of the company’s future position.
 It describes where the organization wants to land.
 It is the dream of the business and inspiration, base for the
planning process.
Vision  It depicts the company’s aspirations for the business and provides
a peep of what the organization would like to become in future.
 Every single component of the organization is required to follow
its vision.
  Mission delineates the firm’s business, its goals and
ways to reach the goals.
 It explains the reason for the existence of the business.
 It is designed to help potential shareholders and
Mission investors understand the purpose of the company.
 A mission statement helps to identify, ‘what business
the company undertakes.’ It defines the present
capabilities, activities, customer focus and business
makeup.
  It seeks to explain the business undertaken by the firm,
with respect to customer needs, target audience, and
alternative technologies.
Business  With the help of business definition, one can ascertain
the strategic business choices.
Definition
 The corporate restructuring also depends upon the
business definition.
  Business model, as the name implies is a strategy for the
effective operation of the business, ascertaining sources of
Business income, desired customer base, and financing details.
 Rival firms, operating in the same industry relies on the
Model different business model due to their strategic choice.
  These are the base of measurement.
 Goals are the end results, that the organization attempts to
achieve.
Goals and  On the other hand, objectives are time-based measurable
Objectives actions, which help in the accomplishment of goals.
 These are the end results which are to be attained with the
help of an overall plan, over the particular period.
  Typically, a strategic management process includes the
following four steps:
Strategic  Environmental scanning
Management  Strategy formulation
Process  Strategy implementation
 Strategy evaluation
Strategic
Management
Process
  The purpose of environmental scanning is to identify strategic
factors, those internal and external elements that will determine
the future of the corporation.
 Environmental scanning is the monitoring, evaluating and
Environmental disseminating of information from the external and internal
scanning environment to key people within the corporation.
 The simplest way to conduct environmental scanning is through
SWOT analysis.
 SWOT is an acronym used to describe those particular strengths,
weaknesses, opportunities and threats that at strategic factors for
a specific company.
 The VMOST Analysis is a tool that allows a business to
evaluate its core strategies in terms of whether the
supporting activities of that strategy are being carried out.
 The VMOST analysis tries to answer that by looking at five
core elements: vision, mission, objectives, strategies, and
tactics.
  Strategy formulation is essential for optimum functioning of the
organisation. In this stage strategies are framed by envisioning
the future of the organisation in the long run. Strategy
formulation means formulation of long-term organisation plans
that would assist in carrying out or organisation activities in the
best possible way.
Strategy  Followings are some of the strategy formulation decisions
Formulation  What new business to enter?
 What business to abandon?
 Whether to expand operations or diversify?
 Whether to enter international market?
 Whether to merge or form a joint venture?
 How to avoid hostile takeover?
  Once strategies are formulated and a sound strategic plan
has been developed the next step in the process of strategic
management is to ensure effective implementation of
formulated strategies.
Strategy  The process of strategy implementation is generally
conducted by the middle and lower management after
Implementation being assessed by the top level management.
 Strategies are implemented with the help of programmes,
budgets and procedures.
  Evaluation must be incorporated in the process of strategic
management as an essential element of strategy implementation
as it helps in monitoring the whole procedure. After a strategy is
implemented successfully it is important that it is evaluated on a
regular basis.
Strategic  Performance is the final outcome of all the activities involved in
Evaluation and the process of strategic management.
 Managers need comprehensible timely and impartial information
Control from their subordinates in order to successfully carry out their
activities related to strategic evaluation and control.
 This information enable the managers to compare the actual
outcome with the expected result laid down while formulating the
strategy.
Types of
Strategy
  Corporate level strategies are one which are decided by
senior management at the top level of a diversified
company.
 A diversified company refers to a group of companies
that all are operating under its umbrella – like P&G,
HUL, Tata etc.
Corporate
 The corporate level strategy defines the long-term
level strategy objectives of the company and influences all business
units working under it.
 It tells the overall direction of company with regards to
its various businesses and product lines. These
strategies are concerned with market and business in
which a company will operate.
  These strategies are framed at business unit level by senior
managers of that unit.
 It defines the basis on which a firm will compete with others.
 Business strategies aims at building a good competitive position
of company for its products and services.
Business level  This includes competitive and cooperative strategies.
strategy  Business strategies encompasses all approaches and tactics to
compete with competitors, how to differentiate business from
others and manner in which new market will be acquired.
 It is a plan of action adopted by strategic managers for utilizing
company’s resources and gaining competitive advantages over
rivals in market.
  Functional level strategy refer to strategies of various
departments or division within the business enterprise.
 It is also called departmental strategy as every function
of business is vested with its departments.
Functional  This strategy focuses on a particular functional area of
level strategy company such as production, marketing and finance
and sales.
 Functional strategy is formulated in order to attain
specific goals of business units via efficient utilization of
resources.
  Operational level strategy is formed at operating units
of company by operating managers or filed level
managers.
 These strategies deal with translation of business
strategies into an actionable implementation plan.
Operational  Operating managers frame these strategies with
level strategy assistance from mid-level managers for attaining
immediate objectives.
 They are created in departments or divisions for each
set of annual objectives.
  Marketing and business strategies share many similarities with
warfare and military theory.
 Like in the military strategy, marketing aims to spread the
Military influence of the business and conquer new “territories” to sell its
products.
Strategy and  However, types of competition are different in both cases: during
Business the war, one should destroy their enemies and conquer the
territory or some particular object .To start a successful business,
Strategy one should conquer people not by destroying them but by
attracting them and selling goods and services to them.
 At the same time, other players in the market compete over the
customers’ limited resources. The situation looks similar to the
war scene: markets can be seen as battlegrounds, companies as
fighting armies, and their profitability as armies’ power.
 Netflix is an American subscription streaming service and
production company founded in 1997 and headquartered in Los
Gatos, California. It operates on distribution deals and its
productions, called Netflix Originals. It has over 200 million
subscribers worldwide, with over 70 million in the United States.
Netflix is the second largest media company by market
capitalization in the world.

 Netflix’s competitive advantage is having a first mover

What is Netflix’s competitive

advantage?
Wide Range of Content

Global Reach

Information Technology
Thank You!