Notes for mba (strategic management) unit i • 1. STRATEGIC MANAGEMENT ___ Semester III UNIT – I STRATEGY AND PROCESSConceptual Framework for Strategic Management, The Concept of Strategy and the Strategy FormationProcess – Stakeholders in Business – Vision, Mission and Purpose – Business Definition, Objectives andGoals – Corporate Governance and Social Responsibility – Case Study CONCEPTUAL FRAMEWORK FOR STRATEGIC MANAGEMENTIn earlier times, the managers focused on “today‟s decisions for today‟s business”.

However therapid changes experienced by companies have made the managers to anticipate the future andprepare for it. They have prepared systems, procedures and manuals and evolved budgets andplanning and control systems, which included capital budgeting and management by objectives.The inadequacy of these techniques has led to the emergence of long range planning which inturn gives rise to strategic planning subsequently to strategic management.Strategic management deals with decision making and actions which determine an enterprise‟sability to excel survive or die by making the best use of a firm‟s resources in a dynamicenvironment. The main purpose of study of strategic management is to examine why someorganization succeed while others fail and yet others completely change.Consider the following examples:  Bharat Heavy Electricals Ltd. (BHEL) is now planning to expand its range to 800 MW supercritical power projects.  LG Electronics India Ltd.

Notes on strategic management, including industry analysis, generic strategies, global strategy. R.Srinivasan, Strategic Management -The Indian Context. 4th Edition, Prentice Hall of India, 2012. Strategic Management – Decision Making Process. External Factor Analysis Summary (EFAS): Maytag as Example.

(LGEIL) signed a MOU with Maharashtra government to expand manufacturing facility at Pune for Rs.900 crores.  GAIL India has received an offer from China Gas Holdings for participation in a gas based petrochemical project to be set at Humor in Mangolia.  The world‟s largest steel conglomerate Mittal Steel Company is to become the second largest stakeholder in a Chinese Steel firm in Hunan Province.  Mittal singed three MOUs with Jharkhand Government for setting up 12 million tonne Greenfield project in two phases.  Maruthi Udyog slashed the price of Maruti-800 by Rs.16000 in small car segment drastically.  Lenova, the Chinese computer giant acquired IBM in China.

 Tata Steel entered a joint venture agreement with Iranian Mines and Mining Industries Development and Renovation Organization.These examples illustrate how organizations react to environment and adopt suitable course ofaction such as divestment, expansion and stability as part of their operations. The decisionsregarding up-gradation of product mix, joint ventures and expansion have a long term impact onthe activities and such crucial decisions are taken by senior management. The top management ismainly responsible for providing a sense of direction and guiding future course of action for anyfirm. Strategic management deals with long-term decisions taken up by top management whichgives overall direction to the organization. Proshivka monitora lg w2243s. Strategic Management provides a cooperative,integrated and enthusiastic approach for tackling problems and realizing opportunities.S.N.Selvaraj, M.B.A., M.Phil., (Ph.D)., Assistant Professor (email:sn.selvaraj@yahoo.com) Page 1 • An enterprise‟s success mainly depends on three board factors: (1) The Industry, it belongs to (2) The Nation, it is located and (3) Its own resources, capabilities and strategies.

Fig: Determinants of Company Performance Company Resources, Industry Context National Context Capabilities and Strategies Company PerformanceIndustry: Some industries are profitable than others due to industry attractiveness. A company inattractive industry will achieve success compared to a firm in a less attractive industry.

Duringthe last decade software industry is more profitable than pharmaceutical industry.Nation: The country also influences the competitiveness of company based within the nation.Some countries enjoy competitive advantage with regard to certain industries. For example, theworld‟s most successful automobile and consumer electronics companies are located in Japan.The most successful pharmaceutical companies are located in U.S. And Switzerland. Many of thesuccessful financial services companies are located in the United States and Great Britain. Thesuccess or failure of individual firms depends on national competitive advantage.Company: Firm‟s resources, capabilities and strategies are the strongest reasons for the success orfailure of the firm. Some firms thrive even in less attractive industry whereas some firmsperform poorly in spite of being in profitable industry.