Strategic Management:
an overview
Session 1
Civil Service College Dhaka
Presentation by
Dr. Muhammad G. Sarwar
Email: sarwar_mg@yahoo.com
Cell: 01821443741
Presentation Contents
Strategic Management: course outline
Strategic Management: references
What is Strategic Management?
Stages of Strategic Management
Strategic Management Model
Benefits of Strategic Management
Why Strategic Planning/Management may
fail?
 Strategic Management and Business Ethics
 Guidelines for Effective Strategic
Management
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Strategic Management: course outline
Sl.
No.
Topic Title
1
Strategic Management: an overview
2
Strategy Formulation
 Designing Vision and Mission Statements
Session
no.
1
1
•
Setting Company/Organization Objectives
1
•
Internal Assessment
1
•
External Assessment
1
•
Strategy Analysis and Choice
1
4
Strategy Evaluation
1
4
5
Strategy Evaluation
Limitations of Strategic Management: why
strategy may fail ?
1
1
3
Strategic Management: references

Fred R. David (2008), Strategic
Management: Concepts and Cases, 11th
Edition, Prentice Hall

Arthur A. Thompson, Jr. (2010) Crafting
and Executing Strategy: the quest for
comparative, 16th Edition, McGraw Hill
4
What is Strategic Management?
Strategic Management is an art and
science of formulating, implementing and
evaluating cross-functional decisions that
enable an organization to achieve its
objectives (Fred R. David, 2008).
 Strategic Management is the approaches
to grow, attract and please clients,
compete successfully and achieve targeted
levels of organizational performance
(Arther A. Thompson, 2010)

5
What is Strategic Management?
(contd.)
In ultimate analysis Strategic Management
is the Quest for Competitive Advantage.
 4 most frequently used strategic
approaches:

◦ Striving to be the industry’s low-cost provider
◦ Outperforming rivals based on quality,
diversity, style, technology, value –added
services etc
◦ Focusing on a narrow market niche
◦ Developing capability that rivals can’t easily
imitate.
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What is Strategic Management?
(contd.)
Strategic Management focuses on
 Integrating management,
 Production/operation.
 Financing/accounting,
 Marketing,
 Research & development,
 MIS
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Strategic Management vs. Strategic
Planning
The term ‘Strategic Management’ is
mostly used in academia, whereas the
term ‘Strategic Planning’ is mostly used in
business world.
 Strategic Management refer to strategy
formulation, implementation and
evaluation.
 Strategic Planning refer only to strategy
formulation.
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Stages of Strategic Management
Strategic Management process consists of 3
stages:
1. Strategy formulation,
2. Strategy implementation, and
3. Strategy evaluation.
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Strategy formulation
Strategy formulation includes:
 Developing a vision and mission statements
 Identifying organization’s external
opportunities and threats
 Indentifying internal strengths and
weaknesses
 Establishing long-term objectives
 Generating alternative strategies
 Choosing particular strategies.
10
Strategy formulation (contd.)
Strategy formulation involves questions like:
 What new businesses to enter ?
 What businesses to abandon ?
 How to allocate resources to attain goals
and targets?
 Whether to expand existing production
capacity or diversify !
 Whether to enter international market !
 Whether to merge or form a joint venture !
 How to avoid a hostile takeover ?
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Strategy implementation
Strategy implementation is the ‘action stage’
of Strategic Management. It requires:
 Setting annual objectives
 Devise policies to attain set objectives
 Motivate employees to achieve objectives
 Allocating resources for achieving
objectives
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Strategy evaluation
Strategy evaluation is the final stage of
strategic management. 3 strategy
evaluation activities:
1. Reviewing external and internal factors
that are the basis of current strategies,
2. Measuring performance, and
3. Taking corrective actions.
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Strategic Management Model
Strategy
Formulation
Strategy
Evaluation
Strategy
Implementation
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Strategy as a Blend of Proactive
Initiatives and Reactive Adjustments
Strategy Evolves over Time
Prior
version
of
strategy
New initiatives
+
ongoing strategy
elements
+
Adaptive reactions
to changing
circumstances
Latest
version
of
strategy
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Management Strategy vs. Business
Model
An Organization's management strategy relates
broadly to its competitive initiatives and action
plan to attain the set objectives.
 Business model focus on how the business will
generate revenues sufficient to cover cost,
produce attractive profits and return on
investment.
 A business model is the story line of the
Management how the strategy will be a
moneymaker.
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Historical Development of Strategic
Management
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History of Strategic Planning began in the military.
Word ‘Strategy’ comes from Greek word ‘Straegos’,
that refers to military general and combines ‘stratos’
(army) and ‘ago’ (to lead).
Both Military Strategy and Business Strategy focus how
to use their own strengths to exploit enemy’s /
competitor’s weaknesses.
Fundamental difference between Military Strategy and
Business Strategy is that Military strategy is based on
the assumption of ‘Conflict’, whereas Business Strategy
is based on the assumption of ‘Competition’.
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Historical Development of Strategic
Management (contd.)
Strategic Management as an academic
discipline started to develop in the 1950s.
Most influential pioneers were: Alfred
Chandler, Philip Selznick, Igor Ansoff and
Peter Drucker.
 Alfred Chandler developed the idea of
coordinating the various aspect of
management under one all-encompassing
strategy.
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Historical Development of Strategic
Management (contd.)
Philip Seznick introduced the idea of matching
organization’s internal factors with the external
environmental circumstances.
 Igor Ansoff developed a strategy grid that
compared market penetration strategies,
product development strategies, market
development strategies, horizontal and vertical
integration and diversification strategies.
 Peter Drucker developed the theory of
management by objectives (MBO) that involve
the entire organization in setting objectives.
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Benefits of Strategic Management
Financial Benefits:
 Strategic management make organization
more profitable and successful
Nonfinancial Benefits:
 Objective view of management problems
 Framework for improved coordination
 Identify, prioritize and exploit opportunities
 Encourage forward thinking
 Encourage favorable attitude toward change
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Why Some Firms Do No Strategic
Planning ?
Poor Reward Structure
 Fire Fighting
 Content with Success
 Overconfidence
 Prior Bad Experience
 Fear of Failure
 Waste of Time
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Why Strategic Planning/Management
may fail?
Strategic planning to satisfy regulatory
requirement,
 Top management not actively supporting
the strategic planning process
 Failing to involve key employees in all
phases of strategic planning
 Becoming so engrossed in current
problems that insufficient planning is done
 Failing to communicate the strategy to
employees who continue working in dark
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Strategic Management and Business
Ethics
All Strategy formulation, implementation
and evaluation decisions have ethical
ramifications.
 Good Business Ethics is a prerequisite for
good strategic Management.
 Business Ethics is defined as principles of
conduct within organization that guide
decision making and behavior, like harming
the natural environment is unethical.
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Strategic Management and Business
Ethics (contd.)
A strategy can’t be considered ethical
just because it is legal,
 To meet the standard of being ethical, a
strategy must pass moral scrutiny,
 To be ethical a strategy must not be
shady, unconscionable, injuries to others
or unnecessarily harmful to the
environment.
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Guidelines for Effective Strategic
Management
Effective Strategic Management is openmindedness; a willingness and eagerness to
consider new information, new viewpoints,
new ideas, and new possibilities.
 Strategic Management is a self-reflective
learning process that familiarizes managers
and employees in the organization with key
strategic issues and feasible alternatives for
resolving those issues.
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Thanks
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