Strategic Management

Strategic Management : 

Strategic Management 1 Lecture 2 Prof.K.Prabhakar Strategic Management

Slide 2: 

Strategic Management 2 “If you don’t have a strategy you will be . . . part of somebody else’s strategy.” - Alvin Toffler

History of Strategy : 

Strategic Management 3 History of Strategy What is the history of Strategy? From where we borrowed the concept?

Etymology of Strategy : 

Strategic Management 4 Etymology of Strategy The word strategy derives from the French stratégie , which derived from Greek "στρατηγία" ( strategia ), "office of general, command, generalship", in turn from "στρατηγός" ( strategos ), "leader or commander of an army, general", a compound of "στρατός" ( stratos ), "army, host" + "ἀγός" ( agos ), "leader, chief",in turn from "ἄγω" ( ago ), "to lead".

Works on War : 

Strategic Management 5 Works on War Sun Tzu 's The Art of War , written in China Political strategy of Niccolò Machiavelli 's The Prince , written in 1513. Carl von Clausewitz 's works on war. The book of five rings by Miyamoto Mushashi written in 1645. In the 20th century, the subject strategic management is influenced by works of these authors.

Sun Tzu’s Theories : 

Strategic Management 6 Sun Tzu’s Theories A conflict of several conditions Moral influence Weather Terrain Command Doctrine

Slide 7: 

Strategic Management 7

Clausewitz: 

Strategic Management 8 Clausewitz Clausewitz saw history as a complex check on abstractions that did not accord with experience. In opposition to Antoine-Henri Jomini he argued war could not be quantified or graphed or reduced to mapwork and graphs. Clausewitz had many aphorisms, of which the most famous is, "War is the continuation of policy by other means”. You can see some communalities of his thoughts in our modern schools of strategy.

Antoine-Henri Jomini : 

Strategic Management 9 Antoine-Henri Jomini Jomini's military writings are frequently caricatured: he took a didactic, prescriptive approach, reflected in a detailed vocabulary of geometric terms such as bases, strategic lines, and key points ( Remember :we will use price points later). Similarly his stress was on maps. You have a complete book on Strategic Maps. BalancedScorecard was converted to strategic maps.

Slide 10: 

Strategic Management 10 Understand the key words Strategy is a set of “related actions”, that managers take to increase the “performance”. What are related actions? What is performance? Strategic Leadership is the task of “most effectively managing” the “ strategy making process” . What is most effectively managing? What is strategy making process? Strategic formulation is the task of determining and selecting strategies. What should be determined? And what should be selected? Strategy implementation is the task of putting strategies into action to improve companies efficiency and effectiveness . What is effectiveness and efficiency? What is its measurement?

Tale of Two Companies : 

Strategic Management 11 Tale of Two Companies Wal-mart Subhiksha

Slide 12: 

Strategic Management 12 Pricing-What, How, Why?

Slide 13: 

Strategic Management 13 Strategic Alternatives for Retailers in Pricing EDLP strategy that promises consumers the lowest available price without coupon clipping, waiting for discount promotions, or comparison shopping; also called value pricing. EDLP saves retailers the time and expense of periodic price markdowns, saves manufacturers the cost of distributing and processing coupons, and is believed to generate shopper loyalty. A manufacturer's successful EDLP wholesale pricing strategy may reduce volatility in production and shipping quantities and decrease the number of time-degraded product units that consumers receive. EDLP has been championed by Wal-Mart and Procter & Gamble.

Slide 14: 

Strategic Management 14 Strategies To be successful, EDLP requires every day low costs in line with the pricing. The opposite of EDLP is HILO or PROMO strategy. It is to satisfy cherry pickers. The opposite of EDPL is price customised to fit brand, category, and market conditions. They include exclusive pricing, moderately promotional pricing, and aggressive pricing strategies. BOGOF’s.

Slide 15: 

Strategic Management 15 Competitive Advantage Results when a company’s strategies lead to superior performance compared to competitors

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Strategic Management 16

Slide 17: 

Strategic Management 17 Business Strategy

Slide 18: 

Strategic Management 18 Corporate Culture

Slide 19: 

Strategic Management 19 Corporate Culture The beliefs and values shared by people who work in an organisation How people behave with each other How people behave with customers/clients How people view their relationship with stakeholders People’s responses to energy use, community involvement, absence, work ethic, etc. How the organisation behaves to its employees – training, professional development, etc.

Slide 20: 

Strategic Management 20 Corporate Culture May be driven by: Vision – where the organisation wants to go in the future Mission Statement – It defines the purpose of the organization. Why it is existing?

Slide 21: 

Strategic Management 21 Corporate Culture May be reflected in: Attitude and behaviour of the leadership Attitude to the role of individuals in the workplace – open plan offices, team based working, etc. Logo of the organisation The image it presents to the outside world Its attitude to change

Slide 22: 

Strategic Management 22 Strategic Planning

Slide 23: 

Strategic Management 23 Strategic Planning First Stage of Strategic Planning may involve: Futures Thinking Thinking about what the business might need to do 10–20 years ahead Strategic Intents Thinking about key strategic themes that will inform decision making “The thicker the planning document, the more useless it will be” (Brent Davies: 1999) Taking time to think and reflect may be more important than many businesses allow time for!

Slide 24: 

Strategic Management 24 Strategic Planning The Vision Communicating to all staff where the organisation is going and where it intends to be in the future Allows the firm to set goals Aims and Objectives: Aims – long term target Objectives – the way in which you are going to achieve the aim

Slide 25: 

Strategic Management 25 Strategic Planning Example: Aim may be for a cosmetics manufacturer to break into a new overseas market Objectives: Develop relationships with overseas suppliers Identify network of retail outlets Conduct market research to identify consumer needs Find location for overseas sales team HQ

End of Lecture 1.1: 

Strategic Management 26 End of Lecture 1.1 These are the points we will be reinforcing what we have learnt in the lecture 1.