Strategic Management

Session-1

Strategy – Military Origin

– The concept of strategy is ancient and originated in the study of success in war.

– The word strategy comes from the Greek ‘stratos’ (army) and ‘agein’ (to lead).

– The “strategos” in Athens was an elected general.

Strategy• Mintzberg (1987) defines strategy in terms of 5Ps. These 5Ps are:• 1P Plan: is a direction, a guide or a course of action from the

present (or from the past) and into the future. However that ‘future’ is defined by whatever the time horizons associated with it.

• 2P Ploys: are the competition strategies designed to maintain, reinforce, achieve or improve the relative competitive position of the organization within its sector and markets)

• 3P Patterns: are the consistency of firm decision making.• 4P Position or positioning: where the firm ‘locates’ itself within its

external and competitive environments; and by which it positions particular products or services against the demands of the market segments it serves .

• 5P Perspective: is the main business concept or idea and the means by which that concept or idea is put into practice or implemented.

Strategy as Plan

Strategy is an intended, well planned and consciously followed course of action. The strategy is made in advance of its implementation and is followed up by actual implementation and development - also called ‘deliberate strategy’.

Strategy as Ploy

• A ‘ploy’ is usually a maneuver in a competition or a game, one that is taken to get the better of your competitor. Ploys are usually undertaken to deter competitors from entering the market, for example by building new facilities with plenty capacity, or lowering prices.

Strategy as Pattern

• It may be possible to look back at what has happened, and describe a company’s strategy in terms of a pattern that emerged

• The degree of consistency in company’s strategic actions defines company’s strategy

• This definition focuses on strategic outcomes rather than planning.

• Apple reacts to competitive challenges by innovating

Strategy as Position

Strategy is also a position—specifically, a means of locating an organization in its "environment." In ecological terms, strategy becomes a "niche"; in management terms, a product-market "domain." Position is usefully identified with respect to competitors (literally so in the military, where position becomes the site of the battle)

Strategy as Perspective

While position looks out, seeking to locate the organization in the external environment, perspective looks inside the organization. Here, strategy becomes the ingrained way of perceiving the world and defining self.Strategy is the way a company views itself in the world, through the eyes of its management and employees. Strategy can be defined in terms of the corporate personality and culture a company has adopted over time. Mid-90s internet was viewed as tool for communication -Jeff Bezoz viewed it as a sales channels - Amazon

What is Strategy?

• A company’s strategy consists of the set of competitive moves and business approaches that management is employing to run the company

• Strategy is management’s “game plan” to– Attract and please customers

– Stake out a market position

– Conduct operations

– Compete successfully

– Achieve organizational objectives

Strategy -Definition

• High level plan to achieve one or more goals under conditions of uncertainty