Introduction and Concept Of Strategy

Concept of Strategy

Strategy is a long-term plan that outlines how an

organization intends to achieve its goals and sustain
competitive advantage.
It refers to the comprehensive plan or set of actions
designed to achieve organizational goals and objectives.
It involves making choices about how to allocate
resources, respond to competition, and position the
organization in its environment to create long-term value.
 Features of Strategy

• Goal Orientation
• Long-term Vision
• Competitive Advantage
• Resource Allocation
• Consistency
• Risk Management
 Steps to Create effective Strategy

1. Gather the facts

2. Develop a vision statement
3. Develop a mission Statement
4. Identify strategic objectives
5. Develop tactical plans
6. Performance management
Corporate Policy; As a field of Study

• Corporate Policy:

• Corporate policies are overarching guidelines and principles that apply to an

entire organization

• Corporate policy refers to a set of guidelines, rules, and principles established

by a company to govern its operations and conduct.

• Business policies, on the other hand, are more specific and are formulated at
the operational or departmental level. They address the day-to-day activities
and decision-making processes within a particular business unit or functional
area
Features of corporate policies

• Top management function

• Intrgration of functional Areas.
• Resources focus
• Enhancement of analytical skills.
Nature/Importance of Business Policy

• Long-Term Perspective
• Strategic Orientation
• Consistency
• Flexibility
• Delegation of Authority
• Resource Allocation
• Communication and Transparency
 Purpose/Objectives of Business Policy

• Achievement of goals
• Risk Management
• Strategic Clarity
• Long-Term Sustainability
• Profitability
• Stakeholder Satisfaction
• Organizational Alignment
 CHIEF EXECUTIVE- JOB
• 1
CEO- CHIEF EXEUTIVE OFFICER

The CEO is typically responsible for making

major corporate decisions, managing the overall
operations and resources of the company, and
ensuring that the organization's goals and
objectives are met. The specific duties and
responsibilities of a CEO can vary depending on
the size and nature of the organization,
ROLES AND RESPONSIBILITIES OF CEO

• Leadership: The CEO is the leader of the organization,

setting the company's vision, mission, and strategic direction.

• Strategy Development: The CEO is responsible for

developing and implementing the company's strategic plans.
This involves analyzing market trends, competition, and
internal capabilities to make informed decisions about the
company's future direction.

• Decision-Making: CEOs are often called upon to make

critical decisions on a wide range of issues, from financial
matters to human resources to product development.
 Financial Management

• CEOs oversee the financial health of the

organization. They work with CFOs and
finance teams to develop budgets, manage
expenses, and ensure the company's financial
stability and growth.

• Team Building
The CEO is responsible for assembling and
leading an executive team capable of executing
the company's strategy. They must also ensure
 CFO-Chief Financial Officer
• Optimizes the financial position.
• Prepares company’s historical reports.
• Manages cash flow and liquidity.
• Financial planning and analysis.
Roles and Responsibilities of BOD
• Strategic Planning: The board is responsible for setting
the company's strategic direction. They work with senior
management to establish long-term goals and objectives

• Governance: The board is responsible for ensuring that

the company operates in compliance with all relevant laws
and regulations. They establish corporate governance
policies and practices to promote transparency,
accountability, and ethical behavior.

• Hiring and Firing the CEO: The board typically hires and,
if necessary, fires the CEO (Chief Executive Officer).
Audit Committee:
• Many boards have an audit committee responsible for
overseeing the company's financial reporting process,
internal controls, and external audit.

• Advisory Role: The board often serves as a source of advice

and counsel to the CEO and senior management. They
provide guidance based on their experience and expertise.

• Decision-Making: Boards make critical decisions on behalf

of the company, such as mergers and acquisitions, major
investments, and significant changes in corporate strategy.
THE STRATEGIC MANAGEMENT PROCESS

1. Mission and Vision Statement.

2. SWOT Analysis
3. Setting Up of Objectives
4. Strategy Formulation
5. Strategy Implementation
6. Monitoring and Evaluation
7. Feedback and Adaptation
8. Strategic Control
9. Review and Renewal
Environmental Scanning and Appraisal

• Environmental Scanning
Environmental scanning is a process
used by organizations to gather and analyze
information about their external
environment. It is a critical component of
strategic management and decision-making
Environmental scanning involves
monitoring, evaluating, and interpreting both
the macro and microenvironment factors
that can affect an organization
key aspects of environmental scanning:

• Macroenvironment: This includes the broad

external factors that can affect an organization, such as
political, economic, social, technological, environmental, and
legal (PESTEL) factors.
• Microenvironment: This encompasses the more immediate
factors that can influence an organization, such as competitors,
customers, suppliers, and partners
• Information Sources: Environmental scanning involves
gathering information from various sources, including market
research, industry reports, news sources, government
publications,
• SWOT Analysis
Environmental Appraisal

• Environmental appraisal is a process used to

assess and evaluate the impact of various
factors on the environment. It is often
conducted in the context of business,
government policies, or development projects
to understand the potential environment
FACTORS AFFECTING ENVIRONMANTAL
APPRAISAL

• Strategical Factors.
• Age of organization
• Size of Organization
• Types of business
• Volatility of Environment.
 Corporate Competence

• Corporate competence refers to a

company's ability to effectively and
efficiently execute its activities, achieve its
objectives, and sustain a competitive edge
in its industry. It encompasses a wide
range of factors, including skills,
resources, knowledge, organizational
structures, and the ability to adapt to
changes in the external environment.
Key Components of Corporate Competence:

• Core Competencies:

These are unique strengths or capabilities that give a

company a competitive advantage.
• Examples include proprietary technologies, specialized
expertise, or exceptional customer service.
• Resource Management:

The ability to allocate and utilize resources (financial,

human, technological) effectively.
• Includes managing capital, recruiting talent, and
deploying infrastructure.
• Strategic Management:

• The capacity to adapt to market changes, innovate, and

respond to challenges effectively.
• Involves foresight, scenario planning, and the ability to pivot
strategies when necessary.

• Operational Efficiency:

• The capability to optimize processes, reduce waste, and

maximize output.
• Ensures the delivery of products or services at a high standard
and cost-effectiveness.
 Ethical Values
•
• Personal Ethics

Personal ethics refers to an individual's set

of moral principles and values that guide
their behavior and decision-making in
personal and professional contexts. These
ethics are shaped by various factors,
including cultural background, upbringing,
personal experiences, education, and
philosophical or religious beliefs. Personal
 Key Components of Personal
Ethics:

• Core Values: Principles like honesty, integrity,

fairness, and respect often serve as the
foundation for personal ethics.
• Moral Responsibility: Personal ethics
involve a sense of accountability for one's
actions and their consequences.
• Consistency: A hallmark of strong personal
ethics is behaving in a way that aligns
consistently with one's stated values.
•
 BUSINESS ETHICS
• Business ethics refers to the moral principles
and values that guide the behavior and
decision-making processes within an
organization.

• It involves considering not only profit and

financial gain but also the impact of business
activities on various stakeholders, including
customers, employees, suppliers, shareholders,
the community, and the environment.
 Key aspects of business ethics

• Honesty and Integrity-truthful and fair in

their dealings,not engaging in fraud.

• Fairness and Equity- Treating all

stakeholders fairly and equitably is essential.
This includes not discriminating against
employees, customers, or suppliers

• Respect for Human Rights- Avoid

 Industry Structure

• It describes how firms within an industry

interact with one another, customers, and
other stakeholders, and it determines the
dynamics of competition, profitability, and
growth. Understanding industry structure is
crucial for strategic planning, as it shapes a
company's ability to succeed and sustain
competitive advantages.
Key Components of Industry Structure

• Threat of New Entrants:

The ease or difficulty for new competitors to enter the industry.
• High entry barriers (e.g., economies of scale, brand loyalty, or
regulatory requirements) make it harder for new firms to enter,
reducing competition.
• Bargaining Power of Suppliers:
The power of suppliers to influence prices, terms, and quality.
• Strong supplier power exists when there are few substitutes,
unique products, or high switching costs.
 Reconcilling Divergent Values

• Divergent values refer to differences in the

principles, beliefs, or priorities held by
individuals or groups within an organization.
These differences can arise due to personal
backgrounds, cultural influences, professional
training, or contrasting perspectives on
organizational goals and practices. Divergent
values often shape decision-making, behavior,
and interactions in the workplace, which can
either enhance innovation or lead to conflict.
 Common Areas of Divergent Values
• Profit vs. Sustainability
• Some managers may prioritize maximizing short-term profits, while others emphasize long-term
sustainability and environmental responsibility.

• Innovation vs. Stability

• Divergent values may manifest in a preference for taking risks to innovate versus maintaining
stability and minimizing uncertainty.

• Individual Achievement vs. Team Collaboration

• While some managers value individual performance and recognition, others may prioritize
teamwork and collective success.

• Customer Focus vs. Operational Efficiency

• Tensions can arise when some value investing heavily in customer satisfaction, while others focus
on streamlining internal processes and cost-cutting.

• Top-Down Authority vs. Employee Empowerment

• Managers with traditional views may favor strict hierarchies, while others advocate for
participative or decentralized management styles.
 Modification of Values

The modification of values refers to the

process of influencing or changing the shared
beliefs, norms, and principles that shape
individuals' behavior and attitudes within an
organization. Values are deeply rooted, but
they can be reshaped over time through
intentional efforts. Here’s how values are
typically modified in an organizational context
 Challenges in Value Modification

• Resistance to change: Employees may

struggle to let go of long-standing beliefs.
• Misalignment: Inconsistent actions by
leaders or policies that contradict desired
values.
• Time and resources: Cultural shifts
require sustained effort and investment.
Moral components of corporate strategy

• The moral components of corporate strategy

refer to the ethical considerations and
principles that guide a company’s decisions and
actions to align its business objectives with
societal values and stakeholder expectations.
These components emphasize the
responsibility of corporations to act in ways
that are fair, just, and beneficial to society
• Stakeholder Considerations
Addressing the needs and interests of all stakeholders,
including employees, customers, suppliers, investors,
and local communities.
Avoiding actions that harm or exploit stakeholders for
short-term gains.
• Sustainability
Integrating environmental, social, and economic
sustainability into the corporate strategy.
Ensuring that business operations minimize harm to the
environment and contribute positively to long-term
societal well-being.
Ethical Decision-Making
• Ensuring that corporate strategies are guided by
integrity, honesty, and transparency.
• Weighing the ethical implications of business decisions
and their potential impact on stakeholders.

Corporate Social Responsibility (CSR)

• Committing to initiatives that benefit society, such as
community development, environmental protection,
and support for social causes.
• Balancing profit-making with efforts to improve social
welfare.
 Community Consideration
• Companies can play a significant role in community
considerations by:
• Supporting sustainable development
• Companies can invest in education, job creation, and skills
development to help communities become self-sufficient.
• Engaging in community engagement
• Companies can get involved in the community through:
• Supporting local charities
• Sponsoring local events
• Organizing clean-up events
• Volunteering in local schools or community projects
• Supporting healthcare initiatives
• Promoting gender equality and social inclusion
 Environmental Responsibility

• Companies have a growing responsibility

to minimize their impact on the
environment. This includes reducing
pollution, conserving resources.

• Social Responsibility
Businesses should contribute positively to
the communities in which they operate
CORPORATE SOCIAL
RESPONSIBILITY

• Corporate social responsibility (CSR) is a

concept that refers to a company's
commitment to operating in an ethical and
socially responsible manner. It involves taking
into account the interests of various
stakeholders, including employees, customers,
communities, and the environment.
CSR towards various Aspects
Corporate Portfolio Analysis
Corporate portfolio analysis is a set of
techniques that help strategist in taking
strategic decision regard to individual product or
business in a firm’s portfolio.
Each segment of a company’s product line is evaluated
including sales, market share, cost of production and
potential market strength.
 Techniques of Corporate Portfolio Analysis

• • BCG (Boston Consulting Group) Matrix

• • GE(General Electric’s 9 cell) model
• • Hofer’s Product Market Evolution
• • Directional Policy & the strategic position
 BCG Matrix
Boston Consulting Group (BCG) Matrix
Purpose: Assesses business units based on market
growth rate and relative market share.
Quadrants:
Stars: High growth, high market share.
Cash Cows: Low growth, high market share.
Question Marks: High growth, low market share.
Dogs: Low growth, low market share.
Use: Helps allocate resources by identifying which units
to invest in, divest, or maintain.
General Electric (GE) / McKinsey Matrix

• Purpose: Evaluates business units based

on industry attractiveness and competitive
position.
• Grid: 9-cell matrix (3x3), ranging from high
to low for both dimensions.
• Use: Provides nuanced recommendations
for growth, investment, or divestiture.
 Ansoff Matrix
• Purpose: Focuses on growth strategies by
analyzing markets and products.
• Market Penetration: Existing products, existing
markets.
• Market Development: Existing products, new
markets.
• Product Development: New products, existing
markets.
• Diversification: New products, new markets.
• Use: Guides strategic decisions on growth
directions.
 COMPETITOR ANALYSIS

• This process helps organizations identify

opportunities and threats in the market
and develop strategies to gain a
competitive advantage.
 Competitor’s Analysis Process
• 1-Identify Competitors:
• Direct Competitors: Those offering similar products or
services to the same target market.
• Indirect Competitors: Those addressing the same 2.
Gather Information:

• 2-Product or Service Offering: Understand what

products or services your competitors offer.
• Pricing: Analyze their pricing strategy. Are they
positioned as a low-cost provider or a premium brand?
• Market Share: Determine the market share of each
competitor.customer need with different products or
services.
3- SWOT ANALYSIS

• 3. SWOT Analysis:

• Strengths: Identify their advantages over

your business.
• Weaknesses: Determine areas where they
may be vulnerable.
• Opportunities: Identify external factors that
can be exploited.
• Threats: Recognize potential challenges or
4- Customer Reviews and
Feedback:

• Analyze customer reviews and feedback

to understand what customers like or
dislike about competitors' products or
services.

• 5. Marketing and Branding:

• Study their marketing strategies and

branding efforts.
6. Distribution Channels:

• Understand how competitors distribute

their products or services. Are they using
similar channels to reach customers.

• 7. Financial Analysis
• Review competitors' financial statements
to understand their financial health and
stability.
• Look at trends in revenue, profitability, and
9. Regulatory and Legal Environment

• Understand how competitors navigate

regulatory challenges.
• Are there any legal issues that may impact
their operations.

10. Future Plans

Try to predict competitors' future strategies

and plans.
 STRATEGIC AUDIT

• A strategic audit is a comprehensive

review and evaluation of an organization's
overall strategic direction, performance,
and effectiveness.
• The purpose of a strategic audit is to
assess whether an organization's current
strategy is well-aligned with its mission,
vision, and objectives, and to identify
areas for improvement.
STRATEGIC AUDIT PROCESS
 Stretegic Implementation

• It involves translating high-level strategic

goals and plans into action to achieve
desired outcomes.

• Strategic implementation refers to the

process of executing and realizing the
strategies formulated by an organization.
 Strategic Implementation Process

• Step 1- Clarify the Strategic Plan

• Step 2- Develop an Implementation Plan
• Step 3- Align Resources
• Step 4- Establish Key Performance
Indicators (KPIs)
• Step 5- Build a Culture of Accountability
• Step 6- Monitor and Evaluate Progress
• Step 7- Adapt and Adjust
• Step 8- Achievements
 Structural Implementation

• It involves designing an organizational

structure that aligns with the chosen
strategic direction and facilitates the
achievement of strategic objectives.

• Behavioual Implementation

Behavioral implementation in strategic

management refers to the integration of
 Concept of Core Competence

• The concept of core competence is a key strategic

management concept introduced by Gary Hamel and
C.K. Prahalad in their influential article titled "The Core
Competence of the Corporation," published in the
Harvard Business Review in 1990.

• Core competence refers to a unique set of capabilities

and resources that a company possesses and leverages
to gain a competitive advantage in its industry. These
capabilities are often at the heart of a company's ability
to innovate, adapt, and outperform competitors.
 Features of Core Competence

• Unique Capabilities: Core competencies are distinctive

capabilities that are unique to a particular organization. These
can be a combination of skills, technologies.
• Strategic Value: Core competencies contribute significantly to
the company's competitive advantage and success in the
marketplace. They are essential for delivering value to
customers.
• Difficult to Imitate: Successful core competencies are
challenging for competitors to replicate.
• Long-Term Focus: Core competencies are enduring and
provide a foundation for long-term competitive advantage.
• Strategic Flexibility: Companies with well-defined core
competencies are better positioned to adapt to changes in the
business environment.
Examples of Core Competences of various companies

Apple Inc
• Design and innovation in user interfaces and hardware.
• Seamless integration of hardware and software (e.g., iOS
ecosystem).
Google (Alphabet Inc
• Search algorithm and data analytics.
• Online advertising and monetization.
Amazon:
Efficient supply chain and logistics management.
Advanced data analytics for customer personalization.
 Capability and Organizational Learning

• Organizational learning refers to the

process by which an organization acquires,
retains, and applies knowledge to improve
its performance and adapt to changes in its
environment.

• It involves the continuous development of

skills, knowledge, and capabilities at both
individual and collective levels within the
organization.
Key elements of organizational learning

• Information Acquisition: Organizations gather

information from various sources, both internal and
external. This can include market trends, customer
feedback, competitor actions, and other relevant data.
• Knowledge Creation: Through the interpretation and
synthesis of information, organizations generate new
knowledge.
• Knowledge Retention: Organizations need mechanisms
to capture and store knowledge, making it accessible to
employees.
• Knowledge Transfer: Facilitating the sharing of
knowledge among employees
 Organizational Learning Theories

• Single-loop and Double-loop Learning

• Single-loop learning: Involves making

adjustments within existing frameworks
without questioning the underlying
assumptions. It is a corrective process that
addresses errors and improves performance
without challenging the organization's
fundamental beliefs.

•
 Argyris and Schön's Model

• Developed by Chris Argyris and Donald

Schön, this model distinguishes between
"espoused theories" (what organizations
say they do) and "theories-in-use" (what
they actually do). Learning occurs when
there is alignment between these two.
Huber's Knowledge-Based View

• Proposed by George P. Huber, this theory

emphasizes the role of knowledge in
organizational learning. It suggests that
organizations learn through the
acquisition, assimilation, transformation,
and exploitation of knowledge.
 Learning Organization Theory

• Peter Senge's concept of a learning

organization emphasizes continuous
learning, systems thinking, shared vision,
team learning, and personal mastery.
Organizations that embrace these
principles are better equipped to adapt
and thrive in dynamic environments.
 Management of Strategic Change

• Organizations implement strategic

changes to their business to help achieve
goals or boost their competitive advantage
in their market. By understanding this
concept, you can learn when to implement
such change and the different types of
strategic change you can pursue.
Undertaking this process requires
research and planning to ensure that it
runs smoothly.
 Types of Strategic Change
• Transformational Change

• This is a radical, fundamental shift in an

organization’s operations, often involving a
complete overhaul of the business model,
strategy, or culture. Significant external
changes in the market or industry might trigger
it. For example, digital transformation is a
common form of transformational change
where a business fundamentally changes its
activities to incorporate digital technologies.
• Incremental Change: This refers to a
series of small, gradual changes that
improve an organization’s strategy,
processes, or structures over time. Instead
of one large-scale overhaul, incremental
change opts for a step-by-step approach
that can be easier to manage and cause
less disruption.

• Anticipatory Change: Anticipatory change

• Reactive Change: Reactive change occurs in response to
unexpected events or crises that have already happened. It’s
typically more urgent and less planned than anticipatory change.
For instance, many companies rapidly shifted to remote working
arrangements due to the COVID-19 pandemic.

• Planned Change: Planned change is a deliberate, structured

process where changes are thought out and implemented
systematically. It’s often led by management and can encompass
various strategic shifts, from restructuring to new market entry.
• Emergent Change: Emergent change is less structured and more
organic, often arising spontaneously from employees’ actions and
interactions rather than being directed from the top. It’s a flexible
approach to change that can help organizations adapt to complex,
unpredictable environments.
AN OVERVIEW OF LEADERSHIP

• Leadership in management refers to the

ability of individuals or groups to guide,
inspire, and influence others to achieve
common goals or objectives within an
organization. It involves the process of
leading and directing a team or an entire
organization to work collaboratively
towards a shared vision.
 Nature of Leadership

• Setting a Vision and Goals: Leaders articulate a compelling vision

for the future and establish clear goals that align with the overall
mission of the organization.

• Inspiring and Motivating: Effective leaders inspire and motivate

their team members to give their best effort. This often involves
creating a positive and encouraging work environment.

• Decision-Making: Leaders are responsible for making important

decisions that impact the organization. This requires a combination
of analytical skills, judgment, and the ability to consider various
perspectives.

• Communication: Leaders must be skilled communicators. Clear

and effective communication ensures that everyone in the
organization understands the vision, goals, and expectations.
 Leadership Styles
• Autocratic Leadership:
• In this style, the leader makes decisions without input from
others.
• It is effective in situations where quick decisions are required or
in cases where the leader possesses specialized knowledge.
• Democratic Leadership:
• This style involves team members in decision-making processes.
• It fosters a sense of inclusion and collaboration, leading to higher
morale and commitment among team members.
• Transformational Leadership:
• Transformational leaders inspire and motivate their teams by
setting a compelling vision and encouraging innovation and
creativity.
• They often focus on developing and empowering their team
members to achieve their full potential.
 Corporate Culture

• Corporate culture refers to the shared values, beliefs,

attitudes, and practices that shape how employees
interact and work within an organization. It
encompasses the company’s norms, ethics, goals, and
work environment, influencing everything from
decision-making to how employees collaborate and
communicate.
 Key Elements of Corporate Culture

• Core Values and Beliefs

• These are the guiding principles that define the organization’s
identity. Examples include integrity, innovation, customer
focus, or teamwork.
• Leadership Style
• The way leaders manage and communicate significantly
shapes corporate culture. It could range from authoritative to
collaborative.
• Work Environment
• This includes the physical setup (open offices, remote work
policies) and the emotional atmosphere (supportive,
competitive, etc.).
 Corporate politics

• Corporate politics refers to the use of power,

influence, and networking within a workplace
to achieve personal or organizational goals.
While sometimes necessary for navigating
complex organizational structures, it can also
lead to conflicts, miscommunication, or
unethical behavior.
 Key Elements of Corporate Politics
• Power Dynamics
Power often comes from formal authority, expertise, alliances, or access to
information.
• Understanding who holds influence within the organization is crucial.
• Networking and Alliances
Building relationships with influential colleagues and leaders can provide
support and open opportunities.
Strategic alliances help in advancing shared interests.
• Conflict and Competition
Conflicts may arise from competing interests, resource allocation, or clashing
personalities.
• Managing conflicts diplomatically is a valuable skill.