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Strategic management
Points to cover
📌 Strategic Management Notes – Structured Format
1️ ⃣ Introduction to Strategic Management
Definition & Meaning Importance & Benefits Strategic vs. Tactical vs. Operational Planning
2️ ⃣ Strategic Management Process
Environmental Scanning Strategy Formulation Strategy Implementation Strategy Evaluation
3️ ⃣ Internal Analysis & Diagnosis (Important for exams!)
SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) Value Chain Analysis (Primary & Support Activities) Core Competencies & Resource-Based View
4️ ⃣ External Analysis
PESTLE Analysis (Political, Economic, Social, Technological, Legal, Environmental) Porter’s Five Forces Model (Competition Analysis) Competitive Advantage & Business Environment
5️ ⃣ Strategy Formulation
Corporate-Level Strategies (Growth, Stability, Retrenchment) Business-Level Strategies (Cost Leadership, Differentiation, Focus) Functional Strategies (Marketing, HR, Operations)
6️ ⃣ Strategy Implementation
Leadership & Change Management Organizational Structure & Culture
Balanced Scorecard
7️ ⃣ Strategy Evaluation & Control
Key Performance Indicators (KPIs) Financial & Non-Financial Measures Challenges in Strategy Implementation 1️. Introduction to Strategic Management
Definition & Meaning
Strategic Management is the process of planning, monitoring, analyzing, and assessing all the activities required to achieve organizational objectives. It involves setting goals, formulating strategies, implementing them effectively, and evaluating outcomes.
Importance & Benefits
Provides a competitive advantage Helps in resource allocation and decision-making Aligns organizational vision, mission, and goals Aids in risk management and long-term planning
Strategic vs. Tactical vs. Operational Planning
Planning Type Scope Time Frame Example Strategic Planning Organization-wide Long-term (3-5 years) Expanding into a new market Tactical Planning Departmental level Medium-term (1- years) Launching a new product line Operational Planning Day-to-day activities Short-term (weeks/months) Increasing production efficiency 2️. Strategic Management Process
1️. Environmental Scanning
Analyzing internal and external factors affecting the business. Tools used: SWOT Analysis, PESTLE Analysis, Porter’s Five Forces.
2️. Strategy Formulation
Developing strategies based on organizational goals and external environment. Types of Strategies: Corporate, Business, and Functional-Level Strategies.
3️. Strategy Implementation
Porter’s Five Forces is a framework to analyze industry competition:
- Threat of New Entrants – How easy is it for new businesses to enter the market?
- Bargaining Power of Suppliers – How much control do suppliers have over prices?
- Bargaining Power of Buyers – Can customers negotiate prices?
- Threat of Substitutes – Are alternative products/services available?
- Industry Rivalry – How intense is competition within the industry? Example: In the smartphone industry, Apple faces high industry rivalry and supplier bargaining power, but has low threat of substitutes due to brand loyalty. 5️. Strategy Formulation
Corporate-Level Strategies
Growth Strategy – Expansion into new markets (e.g., Amazon entering the healthcare industry) Stability Strategy – Maintaining current operations without expansion Retrenchment Strategy – Cutting down costs or divesting unprofitable segments
Business-Level Strategies (Porter’s Generic Strategies)
Cost Leadership – Offering lower prices than competitors (e.g., Walmart) Differentiation – Unique product offerings (e.g., Apple’s premium branding) Focus Strategy – Targeting niche markets (e.g., Tesla’s luxury EVs)
Functional Strategies
Marketing Strategy – Branding, advertising, pricing strategies HR Strategy – Recruitment, training, employee engagement Operations Strategy – Supply chain, logistics, quality control 6️. Strategy Implementation
Key Factors for Successful Implementation
Leadership & Change Management – Strong leadership ensures smooth execution. Organizational Structure & Culture – Aligning structure with strategy. Balanced Scorecard – Measuring performance across financial, customer, internal processes, and learning perspectives. 7️. Strategy Evaluation & Control
Key Performance Indicators (KPIs)
Financial Metrics – Revenue growth, ROI, profit margins Customer Metrics – Customer retention, satisfaction scores Operational Metrics – Efficiency ratios, production costs
Challenges in Strategy Implementation
Resistance to change from employees Poor communication of strategic goals Lack of resources and financial support
- Case Studies in Strategic Management
Apple Inc. – Differentiation Strategy
Apple focuses on premium branding, innovation, and ecosystem integration to maintain its competitive edge. Their differentiation strategy allows them to command high prices and customer loyalty.
Tesla – Focus and Innovation Strategy
Tesla employs a niche focus strategy by targeting high-end electric vehicle consumers. Their emphasis on innovation and sustainability has disrupted the automobile industry.
Amazon – Growth Strategy
Amazon's expansion into new markets (AWS, healthcare, grocery) showcases its aggressive growth strategy. The company uses cost leadership and operational efficiency to dominate multiple industries.
Google – Business-Level Strategies
Google integrates cost leadership (affordable cloud services) and differentiation (unique AI- powered services) to sustain its industry position.
