CHAPTER: INTRODUCTION
STRATEGY
Strategy: A company’s strategy is the ‘game
plan’ management has for positioning the
company in its chosen market arena,
competing successfully, pleasing customers,
and achieving good business performance.
A strategy entails managerial choices among
alternatives and signals organizational
commitment to specific market, competitive
approaches, and ways of operating.
A strategy provides a roadmap to operate by,
a prescription for doing business, a game plan
for building customer loyalty and winning a
sustainable competitive advantage over rivals.
NEED OF STRATEGY
One, is the need to proactively shape how a
company’s business will be conducted.
Two, molding the independent decisions and
actions initiated by departments, managers,
and employees across the company into a
coordinated, companywide game plan.
STRATEGIC MANAGEMENT
refers to the managerial process of forming a
strategic vision, setting objectives, crafting a
strategy, implementing and executing the
strategy, and then overtime initiating
whatever corrective adjustments in the
vision, objectives, strategy, and execution
are deemed appropriate.
Strategic Management is not a box or tricks
or a bundle of techniques. It is analytical
thinking and commitment of resources to
action.- Peter F. Drucker
FIVE TASK OF STRATEGIC
MANAGEMENT
SOME BASIC CONCEPTS
Basic concept of strategic vision, and
Business Mission
Mutual Trust Bank’s vision is based on a
philosophy known as MTB3V. We envision MTB to
be:
One of the best performing banks in Bangladesh
The bank of choice
A truly world-class bank
MTB Mission: We aspire to be the most admired
financial institution in the country, recognized as
a dynamic, innovative and client focused
company, that offers an array of products and
services in the search for excellence and to
create an impressive economic value.
Strategic Objectives
relate to outcomes that strengthen an
organization’s overall business position and
competitive vitality; financial objectives relate to
the financial performances targets management
has established for organization to achieve.
Strategic Vision Vs Business Mission
Coreconcept
where we are going; who we are and what we do
Example
A COMPANY’S ACTUAL STRATEGY IS PARTLY
PLANNED AND PARTLY REACTIVE TO CHANGING
CIRCUMSTANCES
Planned
(or
Intended)
Strategy
Actual
Strategy
Adaptive
Reaction to
Changing
Circumstances
WHAT DOES A COMPANY’S STRATEGY CONSISTS
OF?
Action to strengthen Actions to respond
Moves to divest
company’s resource to changing
base and competitive industry condition
capabilities
Fresh offensive
Moves and The pattern of moves to strengthen
approaches that the company’s long-
actions and
define how company term competitive
business
manages R&D, position and
approaches that advantages
manuf., mkt, fin. and
others key activities. define a
company’s Effort to
strategy broaden/narrow the
Defensive moves to
counter competitors product line,
actions improve product
design, alter product
Action to capitalize quality, alter
on new performance
opportunities. features or modify
Efforts to alter customer service
Action to merge or
acquire, form geographic
strategic alliance, or coverage, integrate
collaborate closely forward or
with certain industry backward, or stake
members. out a different
industry position
CHARACTERISTICS OF STRATEGIC
MANAGEMENT PROCESS
There is much interplay and recycling among
the five tasks
Five strategic management tasks are not
done in isolation from a manager’s other
duties and responsibilities
Crafting and implementing strategy make
erratic demand on a manager’s time.
Day-out time-consuming aspect of strategic
management involves trying to get the best
strategy-supportive performance
WHO PERFORMS THE FIVE TASKS OF
STRATEGIC MANAGEMENT
CEOs and other senior corporate-level
executives
Managers who have profit-and-loss
responsibility for one specific business unit
Functional area head and departmental
heads within a given business unit
Managers of major operating units who have
on-the-scene responsibility for developing
the details of strategic efforts.
Every manager is a strategy maker and
strategy implementer for the area he/she
supervise
THE BENEFITS OF A ‘STRATEGIC
APPROACH’ TO MANAGING
providing better guidance to the entire
organization
making managers and organizational
members more alert to new opportunities
and threatening developments
Providing managers with a rational for
evaluating competition budget requests
helping to unify the numerous strategy
related decisions by managers across the
organization
creating a more proactive management
posture