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Introduction To Management BBA (Hons) 2 Semester: The Concept of Strategy

This document provides an introduction to the concepts of strategy and strategic management. It defines strategy as a complex plan to achieve organizational goals in the face of challenges. The key aspects of strategy are that it provides direction, relates the organization to its external environment, and determines how the organization will compete. Strategic management is the process by which top management formulates, implements and evaluates strategy over time. It involves defining the organization's mission and objectives, selecting strategies, and establishing plans and standards to implement and monitor the strategies.

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Rizwan ullah Marwat
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32 views4 pages

Introduction To Management BBA (Hons) 2 Semester: The Concept of Strategy

This document provides an introduction to the concepts of strategy and strategic management. It defines strategy as a complex plan to achieve organizational goals in the face of challenges. The key aspects of strategy are that it provides direction, relates the organization to its external environment, and determines how the organization will compete. Strategic management is the process by which top management formulates, implements and evaluates strategy over time. It involves defining the organization's mission and objectives, selecting strategies, and establishing plans and standards to implement and monitor the strategies.

Uploaded by

Rizwan ullah Marwat
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Introduction to Management

BBA(Hons) 2nd Semester

Lecture 13

The concept of strategy

The concept of strategy in business has been borrowed from military science and

sports where it implies out- maneuvering the opponent. The term strategy began

to be used in business with increase in competition and complexity of business

operations.

A strategy is an administrative course of action designed to achieve success in

the face of difficulties. It is a plan for meeting challenges posed by the activities

of competitors and environmental forces. Strategy is the complex plan for

bringing the organization from a given state to a desired position in a future

period of time. For example, if management anticipates price-cut by competitors,

it may decide upon a strategy of launching an advertising campaign to educate

the customers and to convince them of the superiority of its products.

Nature of strategy

 Strategy is a contingent plan as it is designed to meet the demands of a difficult

situation.

 Strategy provides direction in which human and physical resources will be

deployed for achieving organizational goals in the face of environmental

pressure and constraints.


 Strategy relates an organization to its external environment. Strategic decisions

are primarily concerned with expected trends in the market, changes in

government policy, technological developments etc.

 Strategy is an interpretative plan formulated to give meaning to other plans in

the light of specific situations.

 Strategy determines the direction in which the organization is going in relation

to its environment. It is the process of defining intentions and allocating or

matching resources to opportunities and needs, thus achieving a strategic fit

between them. Business strategy is concerned with achieving competitive

advantage.

 The effective development and implementation of strategy depends on the

strategic capability of the organization, which will include the ability not only to

formulate strategic goals but also to develop and implement strategic plans

through the process of strategic management.

 A strategy gives direction to diverse activities, even though the conditions

under which the activities are carried out are rapidly changing.

 The strategy describes the way that the organization will pursue its goals, given

the changing environment and the resource capabilities of the organization.

 It provides an understanding of how the organization plans to compete.

 It is the determination and evaluation of alternatives available to an

organization in achieving its objectives and mission and the selection of

appropriate alternatives to be pursued.


 It is the fundamental pattern of present and planned objectives, resource

deployments, and interactions of a firm with markets, competitors and other

environmental factors. A good strategy should specify;

 What is to be accomplished

 Where, i.e., which product/markets it will focus on

Components of strategy

1. Scope; refers to the breadth of a firm’s strategic domain i.e., the number and

types of industries, product lines, and markets it competes in competes in or

plans to enter.

2.Goals and objectives; these specify desires such as volume growth, profit

contribution or return on investment over a specified period.

3. Resource deployment; strategy should specify how resources are to be

obtained and allocated across businesses, product/markets, financial

departments, and activities.

4. Identification of a sustainable competitive advantage; it refers to examining

the market opportunities in each business and product-market and the firm’s

distinctive competencies or strengths relative to competitors.

5. Synergy; this exists when the firm’s businesses, products, markets, resource

deployments and competencies complement one another i.e., the whole becomes

greater than the sum of its parts (2+2=5)

Strategies can be classified into corporate, business-unit and functional strategies.

Strategic management
Definition; Strategic management is the process by which top management

determines the long-term direction of the organization by ensuring that careful

formulation, implementation and continuous evaluation of strategy take place.

The strategic management process

The process can be broken down into three phases;

1. Strategy formulation

2. Strategy implementation

3. Strategy control

Strategy formulation involves;

 Defining the organization’s guiding philosophy & purpose or mission.

 Establishing long-term objectives in order to achieve the mission.

 Selecting the strategy to achieve the objectives. Strategy implementation

involves;

 Establishing short-range objectives, budgets and functional strategies to

achieve the strategy.

Strategy control involves the following;

 Establishing standards of performance.

 Monitoring progress in executing the strategy.

 Initiating corrective actions to ensure commitment to the implementation of

the strategy

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