understanding corporate strategy

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C o n f i d e n t i a l

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Program : MBASemester : II

Subject Code : MB0052

Subject Name : Strategic Management

and Business Policy

Unit Number : 1

Unit Title : Understanding Corporate Strategy

Lecture Number : 1

Lecture Title : Understanding Corporate Strategy

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Understanding Corporate Strategy

Objectives :

Explain strategy, its nature and levels of strategy.

Discuss the concept of strategic window.

Describe corporate strategy in different types of organizations.

Explain why some organizations do not undertake strategic

management

List ten principles of strategy.

In this unit, we will discuss corporate strategy, its

definition and nature, as well as its levels in an organization.

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Unit-1 Understanding Corporate Strategy


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Lecture Outline

Introduction

What is Strategy?

Strategic Window

Corporate Strategy in Different Types of Organizations

Lack of Strategic Management in Some Companies

Ten Principles of Strategy

Summary

Check Your Learning

Activity

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Introduction

Any discussion on business and management today is incomplete

without discussing two major forces: one is competition , and

the other is strategy .

Strategy is a concept that is used universally but understood

differently, and, therefore, defined differently. In fact, strategy as

a concept is better described and more easily put into practice

than defined.

Most companies recognize that strategy is central to business and

management. It is also recognized that it is strategy that makesthe difference between success and failure of many companies

and businesses.

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Strategic Window

A strategic window focuses attention on the fact that there are only limited

periods during which the Fit between the key requirements of a market

and the particular competencies of a firm competing in the market is at an

optimum Disinvestment should be contemplated also .

Here, we are referring to strategic windows, the concept which was

introduced by Abell (1978).

There are only limited periods during which the fit or the match between

the key requirements of a market and the particular competencies of the

firm are at the optimum.

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Corporate Strategy in DifferentTypes of Organizations

Different types of organizations will be different, primarily because of the

nature of their operations and organizational objectives and priorities.

In large businesses or companies whether in the private sector, public

sector or multinationals the situation is entirely different. Both the internal

and the external environment and the organizational objectives and

priorities are different.

Multinationals have a greater focus on growth and development, and also

diversification in terms of both products and markets. This is necessary to

remain internationally competitive and sustain their global presence.

In public sector companies, objectives and priorities can be quite differentfrom those in the private sector. Generation of employment and maximizing

output may be more important objectives than maximizing profit.

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Lack of Strategic Management in

Some Companies

David (2003) has mentioned various reasons for poor or no strategic

planning and management by companies. These are :

Poor reward structure Evasive

Content with success

Overconfidence

Fire-fighting

Waste of time

Too expensive

Previous bad experience

Honest difference of opinion

Self-interest

Fear of the unknown

Fear of failure

Suspicion8

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Ten Principles of Strategy

Duro and Standstrom3 have mentioned about 10 principles of

strategy. These are given in the following:

Set a goal and stick to it

Maintain good morale (good leadership is aprecondition for this).

Accumulate forces

Act aggressively.

Aim for surprise.

Make sure your own forces are secure.

Use your forces economically. Coordination (either through chain of command or through cooperation).

Try to be adaptable.

Simplicity (clear and simple plans and concise orders/instructions)9

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Check Your Learning

1. What is strategy? Mention the different definitions of strategy.

Ans: A plan, method, or series of manoeuvres or stratagems for

obtaining a specific goal or result.

The determination of the basic long-term goals and objectives of anenterprise and the adoption of the courses of action and the allocation of

resources necessary for carrying out these goals - Chandler (1962) The common thread among the organizations activities and product -

markets ... that defines the essential nature of business that theorganization was or planned to be in future - Ansoff (1965)

2. What is Strategic window?

Ans: Short time period between specific events during

which there is an opportunity to capitalize on a market

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Activity

Modi Xeroxs innovative thinking has given birth to the companys

new micro marketing plan. Explain.

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