MEANING OF STRATEGY

 It means special type of plan prepared for meeting the

challenge posed by the activities of competitors and
other environmental forces.
“ STRATEGY is the complex plan for bringing the
organization from a given posture to a desired position in
a future period of time.”
CONCEPT OF STRATEGY:
 It is a plan/courses of action/decision rules which are

leading to particular direction.

 It depends on the vision/mission of the company.

 It deals with the future, which has uncertainties

 It is concerned with the resources necessary for

implementing a plan or following a course of action.

DEFINATION OF STRATEGY
 It can be defined as, “ The determination of
the basic long term goals & objectives of an
enterprise & adoption of the course of action
& the allocation recourses necessary's for
carrying out these goals.
STRATEGIC MANAGEMENT
 It can be defined ,“As the process through
organization analyze and learn from there
internal and external enviroments,establish
strategic direction, create strategies that are
intended to achieve establish goals and execute
these strategies, all in an effort to satisfy key
organizational state holder.”
 According to SHARPLIN, strategic management

is “the formulation and implementation of plans

and carrying out of activities relating to the
matter which are are of vital,prevasive or
continuing important to the total organization.”
PROCESS OF STRATEGY MANAGMENT

Company vision, mission and objectives

SWOT Analysis
1. Environment Scanning
2. Organizational Appraisal

Generate strategic Alternatives / Evaluate

and select
Implementation of strategy
• Organizational structure
• Organizational systems
• Resource Allocation
• Behavioral Issues

• Evaluation of strategy
• Process of evaluation
• Criteria for evaluation
• Techniques of evaluation
1. The first step in strategy formulation is defining the vision,
mission and objectives of the organisation. Once formulated
the mission statement guide the organisation for many
years.

2. SWOT means Strengths, weakness, opportunities and

threats. It help enterprises to matching its strengths and
weakness with opportunities and threats operating in the
environment.

3. Strategic alternatives and choices are required for evolving

alternative strategy out of many possible options and
choosing the most appropriate strategy or strategies in the
light of environment opportunities and threats and
corporate strength and weakness.
4. The chosen strategy must be implemented effectively in
order to achieve the strategic objective. Implementation of
strategies consists of designing the organisation structure,
developing appropriate systems and procedures, procuring
and allocating the sources and managing human behavior
so as to ensure the effective use of capabilities for
accomplishing the desired objectives.

5. An implemented strategy must be monitored to determine

the extent to which the objectives are achieved . In the
final analysis, the strategies are successful only when the
designated objectives are achieved.
ISSUE IN STRATEGIC DECISION MAKING
1. Criteria for decision making:- The process of decision making requires
objective setting . there are major view points regarding setting criteria for
decision making,
a) The first is concept is maximisation. The behaviour of the firm is oriented
towards achieving these objectives and, in the process, maximising its
return.
b) The second view is based on satisficing. It means to setting objectives in
such a manner that the firm can achieve them realistically, through a
process of optimisation.
c) This is the concept of incrementalism. According to this the behaviour of
the firm is complex and the process of decision making, which includes
objective-setting. Through such an approach, the firm moves towards its
objectives in small, logical and incremental steps.
2. RATIONALITY IN DECISION MAKING- rationality in strategic
decision making , means exercising a choice from among various
alternative course of action in such a way that it leads to achievements of
objectives in the best possible manner.

3. CREATIVITY IN DECISION MAKING- to be creative , a decision

must be original and different. A creative strategic decision-making
process may considerably affect the search for alternatives where novel
and untried means may be looked for and adopted to achieve objectives
in an exceptional manner . It is normally associated with individuals and is
sought to be developed through techniques such as brainstorming.

4. VARIABILITY IN DECISION MAKING- it is common observation

that, given an identical set of conditions, two decision makers may reach
totally different conclusions. This is also happen in case discussions also.
A case may be analysed differently, its outcome, its perception may be
different depend upon the people. Such things happen due to variability in
decision making . every situation is unique and there are no set formulas
that can be applied in strategic decision making.
5. Person related factors in decision making- there are a host of
person related factors that play a role in decision making. Some of these
are: age, education, intelligence, personal values, cognitive styles, risk
taking ability and creativity.

6. INDIVIDUAL VERSUS GROUP DECISION MAKING- owing to

person related factors, there are individual differences among decision
makers. These differences matter in strategic decision making.
MEANING OF MISSION
 Mission is the purpose and the scope of the
organisation, its responsibilities to its publics
such as shareholders, employees, suppliers,
customers and the society , its area of
product and market involvement and the
managements performance expectations.
 In short it means what the company is and

why it exits . so that a mission should be

feasible, realistic and achievable.
DEFINATION
 According to Thompson , “ essential purpose of
the organisation, concerning particularly why it in
existence, the nature of the businesses it is in and
the customers it seek to serve and satisfy.”
 HOW MISSION FORMULATED
Three key elements must be taken into account in
developing mission statement:
1. HISTORY OF THE ORGANISATION :- critical
characteristics and events of the past must be
considered in formulating a mission statement.
2. ORGANISATION’S DISTINCTIVE COMPETENCIES :- the
organisation should seek to do what it does best. Once
this has been determined, it can incorporate its
competency into mission statement.
3. ORGANISATION’S ENVIROMENT : - management
should identity the opportunities provided and
threats/ challenges posed by the environment
before formulating a mission statement.
 ELEMENTS OF A MISSION STATEMENT
1. The mission should specify the products to be
produced and / or services to be rendered,
markets and / or customers groups to be served
and the type of technology.

2. The primary concern for survival and

development through profitability.

3. The organisational philosophy in terms of basic

beliefs, values, attitudes and aspirations.
characteristics
1. Feasible
2. Precise
3. Clear
4. Motivating
5. Distinctive
6. It indicate the major components of strategy
7. It should indicate how objectives are to be
accomplished