1. Strategic Management: an overview
Session 1
Civil Service College Dhaka
Presentation by
Dr. Muhammad G. Sarwar
Cell:

2. Presentation Contents
Strategic Management: course outline
Strategic Management: references
What is Strategic Management?
Stages of Strategic Management
Strategic Management Model
Benefits of Strategic Management
Why Strategic Planning/Management may fail?
Strategic Management and Business Ethics
Guidelines for Effective Strategic Management

3. Strategic Management: course outline
Sl. No.
Topic Title
Session no. 1
Strategic Management: an overview 2
Strategy Formulation
Designing Vision and Mission Statements
Setting Company/Organization Objectives
Internal Assessment
External Assessment
Strategy Analysis and Choice 4
Strategy Evaluation 5
Limitations of Strategic Management: why strategy may fail ?

4. Strategic Management: references
Fred R. David (2008), Strategic Management: Concepts and Cases, 11th Edition, Prentice Hall
Arthur A. Thompson, Jr. (2010) Crafting and Executing Strategy: the quest for comparative, 16th Edition, McGraw Hill

5. What is Strategic Management?
Strategic Management is an art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives (Fred R. David, 2008).
Strategic Management is the approaches to grow, attract and please clients, compete successfully and achieve targeted levels of organizational performance (Arther A. Thompson, 2010)

6. What is Strategic Management? (contd.)
In ultimate analysis Strategic Management is the Quest for Competitive Advantage.
4 most frequently used strategic approaches:
Striving to be the industry’s low-cost provider
Outperforming rivals based on quality, diversity, style, technology, value –added services etc
Focusing on a narrow market niche
Developing capability that rivals can’t easily imitate.

7. What is Strategic Management? (contd.)
Strategic Management focuses on
Integrating management,
Production/operation.
Financing/accounting,
Marketing,
Research & development,
MIS

8. Strategic Management vs. Strategic Planning
The term ‘Strategic Management’ is mostly used in academia, whereas the term ‘Strategic Planning’ is mostly used in business world.
Strategic Management refer to strategy formulation, implementation and evaluation.
Strategic Planning refer only to strategy formulation.

9. Stages of Strategic Management
Strategic Management process consists of 3 stages:
Strategy formulation,
Strategy implementation, and
Strategy evaluation.

10. Strategy formulation Strategy formulation includes:
Developing a vision and mission statements
Identifying organization’s external opportunities and threats
Indentifying internal strengths and weaknesses
Establishing long-term objectives
Generating alternative strategies
Choosing particular strategies.

11. Strategy formulation (contd.)
Strategy formulation involves questions like:
What new businesses to enter ?
What businesses to abandon ?
How to allocate resources to attain goals and targets?
Whether to expand existing production capacity or diversify !
Whether to enter international market !
Whether to merge or form a joint venture !
How to avoid a hostile takeover ?

12. Strategy implementation
Strategy implementation is the ‘action stage’ of Strategic Management. It requires:
Setting annual objectives
Devise policies to attain set objectives
Motivate employees to achieve objectives
Allocating resources for achieving objectives

13. Strategy evaluation
Strategy evaluation is the final stage of strategic management. 3 strategy evaluation activities:
Reviewing external and internal factors that are the basis of current strategies,
Measuring performance, and
Taking corrective actions.

14. Strategic Management Model
Strategy Formulation
Strategy Implementation
Strategy Evaluation

15. Strategy as a Blend of Proactive Initiatives and Reactive Adjustments
Strategy Evolves over Time
Prior version of strategy
New initiatives +
ongoing strategy elements
Adaptive reactions to changing circumstances
Latest version of strategy

16. Management Strategy vs. Business Model
An Organization's management strategy relates broadly to its competitive initiatives and action plan to attain the set objectives.
Business model focus on how the business will generate revenues sufficient to cover cost, produce attractive profits and return on investment.
A business model is the story line of the Management how the strategy will be a moneymaker.

17. Historical Development of Strategic Management
History of Strategic Planning began in the military.
Word ‘Strategy’ comes from Greek word ‘Straegos’, that refers to military general and combines ‘stratos’ (army) and ‘ago’ (to lead).
Both Military Strategy and Business Strategy focus how to use their own strengths to exploit enemy’s / competitor’s weaknesses.
Fundamental difference between Military Strategy and Business Strategy is that Military strategy is based on the assumption of ‘Conflict’, whereas Business Strategy is based on the assumption of ‘Competition’.

18. Historical Development of Strategic Management (contd.)
Strategic Management as an academic discipline started to develop in the 1950s. Most influential pioneers were: Alfred Chandler, Philip Selznick, Igor Ansoff and Peter Drucker.
Alfred Chandler developed the idea of coordinating the various aspect of management under one all-encompassing strategy.

19. Historical Development of Strategic Management (contd.)
Philip Seznick introduced the idea of matching organization’s internal factors with the external environmental circumstances.
Igor Ansoff developed a strategy grid that compared market penetration strategies, product development strategies, market development strategies, horizontal and vertical integration and diversification strategies.
Peter Drucker developed the theory of management by objectives (MBO) that involve the entire organization in setting objectives.

20. Benefits of Strategic Management
Financial Benefits:
Strategic management make organization more profitable and successful
Nonfinancial Benefits:
Objective view of management problems
Framework for improved coordination
Identify, prioritize and exploit opportunities
Encourage forward thinking
Encourage favorable attitude toward change

21. Why Some Firms Do No Strategic Planning ?
Poor Reward Structure
Fire Fighting
Content with Success
Overconfidence
Prior Bad Experience
Fear of Failure
Waste of Time

22. Why Strategic Planning/Management may fail?
Strategic planning to satisfy regulatory requirement,
Top management not actively supporting the strategic planning process
Failing to involve key employees in all phases of strategic planning
Becoming so engrossed in current problems that insufficient planning is done
Failing to communicate the strategy to employees who continue working in dark

23. Strategic Management and Business Ethics
All Strategy formulation, implementation and evaluation decisions have ethical ramifications.
Good Business Ethics is a prerequisite for good strategic Management.
Business Ethics is defined as principles of conduct within organization that guide decision making and behavior, like harming the natural environment is unethical.

24. Strategic Management and Business Ethics (contd.)
A strategy can’t be considered ethical just because it is legal,
To meet the standard of being ethical, a strategy must pass moral scrutiny,
To be ethical a strategy must not be shady, unconscionable, injuries to others or unnecessarily harmful to the environment.

25. Guidelines for Effective Strategic Management
Effective Strategic Management is open- mindedness; a willingness and eagerness to consider new information, new viewpoints, new ideas, and new possibilities.
Strategic Management is a self-reflective learning process that familiarizes managers and employees in the organization with key strategic issues and feasible alternatives for resolving those issues.

26. Thanks