Strategic Management

1.
Porter's five forces:

Porter's Five Forces Framework is a method of analysing the operating environment of
a competition of a business. It draws from industrial organization economics to derive
five forces that determine the competitive intensity and, therefore, the attractiveness of
an industry in terms of its profitability.
Porter's 5 forces are:
1.Competition in the industry:
 The first of the Five Forces refers to the number of competitors and their ability to
undercut a company.
 The larger the number of competitors, along with the number of equivalent
products and services they offer, the lesser the power of a company.
2.Potential of new entrants into the industry:

 A company's power is also affected by the force of new entrants into its market.
 The less time and money it costs for a competitor to enter a company's market
and be an effective competitor.
3.Power of suppliers:
 The next factor in the Porter model addresses how easily suppliers can drive up
the cost of inputs.
 It is affected by the number of suppliers of key inputs of a good or service, how
unique these inputs are, and how much it would cost a company to switch to
another supplier.
4.Power of customers:
 The ability that customers have to drive prices lower or their level of power is one
of the Five Forces.
 It is affected by how many buyers or customers a company has, how significant
each customer is, and how much it would cost a company to find new customers
or markets for its output.
5.Threat of substitute products:

 The last of the Five Forces focuses on substitutes. Substitute goods or services
that can be used in place of a company's products or services pose a threat.
 Companies that produce goods or services for which there are no close lock in
favorable terms.
2. Strategic Management:
Strategic management is the ongoing planning, monitoring, analysis and assessment of
all necessities an organization needs to meet its goals and objectives. Changes in
business environments will require organizations to constantly assess their strategies
for success.
Main reasons for need of strategic management

1. Increasing Rate of Changes:
 The environment in which the business operates’ is fast, changing.
 A business concern which does not keep its policies up-to-date, cannot survive
for a long time in the market.
2. Higher Motivation of Employees:

 The employees (human resources) are assigned clear cut duties by the top
management viz.
 When strategic management is followed in any organisation, employees become
loyal, sincere and goal oriented
3. Strategic Decision-Making:
 Under strategic planning, the first step is to set the goals or objectives of a
business concern.
 Strategic decisions taken under strategic management help the smooth sailing of
an enterprise.
4. Optimization of Profits:
 An effective strategy should develop from policies of a concern. It takes into
account actions of competitors.
 It considers future operations in respect of market area and opportunity,
executive competence, available resources and limitations imposed.
5. Miscellaneous:
 Mr. H.N Broom in his book on ‘Business Policy and Strategic Action’ has
mentioned that a strategy has a primary concern with the following:
a) Marketing opportunity: Products, prices, sales potential and sales promotion.
b) Available distribution channel and costs.
3. Process of Strategy Formulation:

I. Environmental Analysis and Diagnosis:
 This step is common to both-corporate planning and strategy formulation.
II. Development of Strategy Alternatives:

1. The mission of the enterprise
2. Long-range goals of the enterprise.
3. Outcomes of SWOT analysis
III. Evaluation of Strategy Alternatives:

After development of strategy alternatives, each such alternative is critically evaluated from the
following perspectives:
1. Risk and resource implications
2. Contribution to mission and long-range objectives
IV. Development of Tactics:

Strategies are converted into tactics or operational plans, for implementation purposes.
1. Preparation of advertising budget
2. Deciding about media of advertising
3. Designing of advertising message
V. Implementation of Tactics:
 A practical step here is to put the tactics or operational plans into practice.
 For this purpose, management must ensure that necessary resources are made available to those,
charged with the responsibility for the implementation of tactical plans.
VI. Review of Strategy:

After the tactics are put into practice to realize the intentions behind strategy formulation; a
progressive management must review the success or results shown by strategy on a regular and
constant basis; so that
1. Strategy may be revised suitably and
2. Better strategy formulation may be done in future
4.Corporate Governance:
Corporate governance is the system of rules, practices, and processes by which a firm is directed
and controlled. Corporate governance essentially involves balancing the interests of a company's
many stakeholders, such as shareholders, senior management executives, customers, suppliers,
financiers, the government, and the community.

Principal include corporate Governance:
 Internal controls and internal auditors.
 The independence of the entity's external auditors and the quality of their audits.
 Oversight and management of risk.
 Oversight of the preparation of the entity's financial statements.
 The resources made available to directors in carrying out their duties.
Corporate social responsible:

 Corporate social responsibility (CSR) is a self-regulating business model that helps a company
be socially accountable to itself, its stakeholders, and the public. By practicing corporate social
responsibility, also called corporate citizenship,
 To engage in CSR means that, in the ordinary course of business, a company is operating in
ways that enhance society and the environment instead of contributing negatively to them.
TYPES OF CORPORATE SOCIAL RESPONSIBILITY:

1. Environmental Responsibility:
Environmental responsibility refers to the belief that organizations should behave in as environmentally f
Companies that seek to embrace environmental responsibility can do so in several ways:
 Reducing
 Increasing
 Offsetting
2. Ethical Responsibility:
 Ethical responsibility is concerned with ensuring an organization is operating in a fair and ethical
manner.
 Organizations that embrace ethical responsibility aim to achieve fair treatment of all
stakeholders, including leadership
3. Philanthropic Responsibility:
 Philanthropic responsibility refers to a business’s aim to actively make the world and society a
better place.
4. Economic Responsibility:
 Economic responsibility is the practice of a firm backing all of its financial decisions in its
commitment to do good in the areas listed above.
5. strategic management framework:
 The strategic management framework provides a detailed overview of the
strategy process adopted by many organizations.
 This framework separates the strategy process into three high level activities:
defining vision and mission, formulating strategy and implementing strategy.
Stage 1: Vision and Purpose:

The organization’s vision and mission then go on to be a constant point of reference
throughout the remainder of the organization’s strategy process.
Stage 2: Strategy Formulation:

The second stage of this framework takes an organization through the process of
formulating a strategy. This is done in several sub-stages.
a) Analysis
b) Strategy Formation
c) Goal setting
Stage 3: Implementing your strategy:

The third stage of this framework focuses on the implementation of strategy, which is
considered to have two sub-stages.
1. Implementing a strategic structure:
In this stage, the organization ensures it is effectively structured to deliver on its
strategy. The thinking here is that before you go and do something, you need to have all
your pieces in the right place.
2. Controlling your strategic delivery:
The last part of this model considers the need to effectively control and deliver your
objectives. Once you have all the right pieces in place and you press the “start” button
on your strategy, you need to monitor and control your performance on a constant basis
6.Stakeholders are an Important:
Stakeholders are an important part of any business or company. They invest their
money, efforts, expertise, knowledge, and time. Every stakeholder holds a specific
responsibility and duty in the company, collectively, all the stakeholders bring success
to the company.
 To sum it up - without stakeholders there would be no projects. Engaging project

stakeholders can bring many benefits to the project.
 They can get involved in the decision-making process and influence the
organisation's actions in a way that is helpful to the project management team.
 Stakeholders' investment can be a valuable source of information, not only for
education but for building relationships as well.
 Fostering good relationships is necessary in the project management world and,
engaging with influential groups increases the chances of success.
So, a short answer to the question "Why are stakeholders important?" is for achieving
better outcomes, whether it’s education, connection, engagement or profit. And what is
the best way to engage with stakeholders? Let us quickly recap the importance of
stakeholder analysis and stakeholder management processes in project management:
Now that you are familiar with the importance they have for the project, you might wish
to improve your stakeholder relations.

Strategic Management

Uploaded by

Copyright:

Available Formats

Strategic Management

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Strategic Management

Uploaded by

Copyright:

Available Formats

1.

Porter's five forces:

2.Potential of new entrants into the industry:

5.Threat of substitute products:

Main reasons for need of strategic management

2. Higher Motivation of Employees:

3. Process of Strategy Formulation:

II. Development of Strategy Alternatives:

III. Evaluation of Strategy Alternatives:

IV. Development of Tactics:

VI. Review of Strategy:

Corporate social responsible:

TYPES OF CORPORATE SOCIAL RESPONSIBILITY:

Stage 1: Vision and Purpose:

Stage 2: Strategy Formulation:

Stage 3: Implementing your strategy:

 To sum it up - without stakeholders there would be no projects. Engaging project

You might also like