Chapter 1

INTRODUCTION TO STRATEGIC
MANAGEMENT
Topic 1 –Strategic
Management – History &
Meaning
Strategic Management History
 The word strategy has been derived from ‘strategos’
in Greek, which means ‘art of the army general’, or
art of deploying the army.
 In earlier times, the managers focused on “today’s
decisions for today’s business”. However, the rapid
changes experienced by companies have made the
managers to anticipate the future and prepare for it.
 Strategic management as a discipline originated in
the 1950s and 60s. Although there were numerous
early contributors to the literature, the most
influential pioneers were Alfred D. Chandler, Jr., Philip
3

Selznick, Igor Ansoff, and Peter Drucker.

Strategic Management History
 Alfred D. Chandler – coordinating the various aspects
of management under one all-encompassing strategy &
taking a long term perspective when looking to the
future.
 Philip Selznick – matching the organization's internal
factors with external environmental circumstances.
(SWOT analysis by Learned, Andrews, and others at the
Harvard Business School General Management Group. )
 Igor Ansoff – range of strategic concepts and
inventing a whole new vocabulary. (market penetration
strategies, product development strategies, market
development strategies and horizontal and vertical
integration and diversification strategies ) 4

 Peter Drucker - importance of the objectives - theory

Strategic Management Definition
 According to Glueck and Jauch - Strategic
management is a stream of decisions and
actions which leads to the development of
effective strategy or strategies to help achieve
corporate objectives.
 Strategic management deals with decision making and
actions which determine an enterprise’s ability to excel
survive or die by making the best use of a firm’s
resources in a dynamic environment.
 It is the long-range planning which in turn gives rise to
strategic planning subsequently to strategic
management.
5
Strategic Management Objectives
 The main purpose of the study of strategic
management is to examine why some
organization succeed while others fail and yet
others completely change.

 There are two main objectives of strategic

management.
1. To gain competitive advantage, to outperform the
competitors and achieve market dominance.
2. To act as a guide to the organization to help in
surviving the changes in the business environment.
6
Topic 2 – Explain the
meaning of following
–

a)Vision (University
Question)
b)Mission
c)Goals
d)Objectives

e)Philosophy
f)Policies
a)Vision
► Vision: Corporate vision is a short, crisp,
and inspiring statement of what the
organization want to achieve.
► Every new business or organization begins with
an idea. Behind the idea is a vision of what the
organization could be if they have the right
structure, the right leadership, adequate funding,
and a group of people that believe in the vision.
► In simple terms, a vision statement is a written
document that describes where an organization is
going and what it will look like when it gets there.
► The vision speaks to the organization’s purpose
and why it’s important for the organization to
exist.
8
► Writing a vision statement is part of the strategic
planning process. It takes planning, time, and
a)Vision
► Example:
► IKEA: To create a better everyday life for the many people.

► Amazon: To be Earth’s most customer-centric company, where

customers can find and discover anything they might want to buy
online.

9
Characteristics of Vision
Statement
 Nutt and Backoff have identified four generic
features of visions that are likely to enhance
organisational performance:
1. Possibility: This means the vision should entail
innovative possibilities for dramatic organisational
improvements.
2. Desirability: means the extent to which it draws upon
shared organisational norms and values about the way
things should be done.
3. Actionability: means the ability of people to see in the
vision, actions that they can take that are relevant to
them.
4. Articulation: means that the vision is imagery that is
powerful enough to communicate a picture of where the
Mission
 An organizational mission, also known as a mission
statement, is a brief, broad statement about an
organization's goals and how it intends to meet those
goals.
 It often addresses what the organization offers and
how it hopes to serve its customers, community,
employees, investors or other stakeholders.
 It is an action-oriented vision statement, declaring
the purpose an organization serves to its audience.
 A company’s mission statement defines its culture,
values, ethics, fundamental goals, and agenda.
 The statement reveals what the company does, how it
does it, and why it does it. 11

 A company's mission statement should evolve the

Mission
 To offer a wide range of well-designed, functional home
furnishing products at prices so low that as many people
as possible will be able to afford them.

 Our mission is to continually raise the bar of the customer

experience by using the internet and technology to help
consumers find, discover and buy anything, and empower
businesses and content creators to maximise their
success.
Characteristics of Mission Statement
An effective mission statement should possess the following
characteristics.
 • Feasible: The mission should be realistic and achievable.
 • Precise: A mission statement should not be narrow or too broad.
 • Clear: A mission statement should lead to action. BSNLs mission of
“Connecting India‟ leads it to a variety of service with varied tariff
structure to cater to the preferences of mobile phone users.
 • Motivating: The mission should be motivating for the employees to
be inspired for action. For example, India Post’s mission is to “exceed
the expectations of the customer‟ with dedication, devotion and
enthusiasm.
 • Distinctive: A mission statement will indicate the major
components of the strategy to be adopted. The mission should be
unique.
 • Indicates Major Components of Strategy: The mission
statement of IOC emphasizes petroleum refining, marketing and
Difference between Vision and Mission
 The vision statement focuses on tomorrow and
what the organization wants to become. The
mission statement focuses on today and what the
organization does.

 Mission statement questions look like:

What do we do?
Whom do we serve?
How do we serve them?
 Vision statement questions look like:
What are our hopes and dreams?
What problem are we solving for the greater good?
Who and what are we inspiring to change?
c) Goals & d) Objectives
 The process of setting Goals & Objectives involves
breaking up the mission statement into definite
milestones, identifying events & activities, plotting
the stages and targets to a series of goals in a time-
bound manner.

1. Goals - Organizational goals, often used

interchangeably, are the ends toward which
activity is aimed. Goals are the desired outcomes
for individuals, groups, or entire
2. Objectives - What's it: Organizational
objectives are the steps an organization needs
to take to meet its overall goals 15
c) Goals & d) Objectives
 Theorists define Goals as broad organisation-level
targets and Objectives as the ends that state
specifically how such goals are achieved.
 Objectives: Setting Objectives converts the strategic
vision, mission and goals into specific performance
targets
 EXAMPLE: IKEA –
 Vision: To create a better everyday life for the many people.
 Mission: To offer a wide range of well-designed, functional home furnishing
products at prices so low that as many people as possible will be able to afford
them.
 Goal : To have competitive advantage, To have a reputed brand image in
market, To achieve customer satisfaction and loyalty, To manufacture affordable
furniture at low cost
 Objectives: Increase sales by 10% every year, Increase brand awareness to 16

80% within 3 years, To have increase customer retention rate by 20% every
year
c) Goals & d) Objectives
Types of Goals & Objectives
1.Strategic Goals & Objectives - Set
by and for top management of the organization.
Strategic goals & objectives are usually long-term
and from this goal/objectives, other goals/objectives
are made and set for different time-frames and
areas.
2.Tactical Goals - Tactical goals/objectives are
set for middle managers. These goals focus on how
to operationalize actions necessary to achieve the
strategic goals/objectives.
3.Operational Goals - Operational
goals/objectives are set by and for lower-level
managers. Operational goals are usually made to
tackle shorter-term issues associated with the
tactical goals/objectives and lower-managers are
responsible for their attainment.
e)Philosophy
 Philosophy is a theory that acts as a guiding principle
for behaviour. The management philosophy is a set of
beliefs or rules used by managers to help them make
decisions.
 An organizational philosophy describes how you operate,
what you offer and how you are organized to meet
your goals.
 The organization's Philosophy is its distinctive and
relatively enduring principles and values.
 EXAMPLE: Google's Corporate Philosophy
 Focus on the user and all else will follow.
 It's best to do one thing really, really well.
 Fast is better than slow.
 Democracy on the web works. 19

 You don't need to be at your desk to need an answer.

f)Policies
 The organizational policy is a course or method of action selected,
usually by an organization, institution, university, society, etc., from
among alternatives to guide and determine present and future
decisions and positions on matters of public interest or social
concern.
 Organizational policies are rules and regulations employees must follow
to keep business running smoothly. Some are intended to provide
guidance and be helpful to employees. Others aim to protect the business
from legal risk and warn employees not to do certain things.
 Eg of Policies -
 code of conduct.
 recruitment policy.
 internet and email policy.
 mobile phone policy.
 non-smoking policy.
 drug and alcohol policy.
20
 health and safety policy.

Topic 3 – Importance/
Relevance of – Vision,
Mission, Goals,
Objectives (University
Question)
a)Vision

► Vision: Corporate vision is a short, crisp,

and inspiring statement of what the
organization want to achieve.

22
Mission

 An organizational mission, also known as a mission

statement, is a brief, broad statement about an
organization's goals and how it intends to meet those
goals.

23
c) Goals & d) Objectives
 The process of setting Goals & Objectives involves
breaking up the mission statement into definite
milestones, identifying events & activities, plotting
the stages and targets to a series of goals in a time-
bound manner.

1. Goals - Organizational goals, often used

interchangeably, are the ends toward which activity
is aimed. Goals are the desired outcomes for
individuals, groups, or entire
2. Objectives - What's it: Organizational
objectives are the steps an organization needs to
take to meet its overall goals 24
Vision, Mission, Goals, Objectives
 EXAMPLE: IKEA –
 Vision: To create a better everyday life for the many people.
 Mission: To offer a wide range of well-designed, functional home furnishing
products at prices so low that as many people as possible will be able to afford
them.
 Goal : To have competitive advantage, To have a reputed brand image in
market, To achieve customer satisfaction and loyalty, To manufacture affordable
furniture at low cost
 Objectives: Increase sales by 10% every year, Increase brand awareness to
80% within 3 years, To have increase customer retention rate by 20% every
year

25
Importance of Vision and
Mission in an organization
1. The vision and mission statements define the purpose of the organization and
instill a sense of belonging and identity to the employees. This motivates them to
work harder in order to achieve success.
2. The mission statement provides the direction that is to be followed by the
organization while the vision statement provides the goal (or the destination) to
be reached by following the direction.
3. It helps to properly align the resources of an organization towards achieving a
successful future.
4. The mission statement provides the organization with a clear and effective guide
for making decisions, while the vision statement ensures that all the decisions
made are properly aligned with what the organization hopes to achieve
5. The vision and mission statements provide a focal point that helps to align
everyone with the organization, thus ensuring that everyone is working towards a
single purpose. This helps to increase efficiency and productivity in the
organization.
6. The importance for an organization to develop a vision and mission, is important
for strategic direction
Importance/ Relevance of – Goals,
Objectives
 Importance of Goals
Setting goals helps define the direction that a
business will take. Goals should align with your
business’ mission and vision statements, which are
even more general and abstract statements of your
business’ values and aspirations.

 Importance of Objectives
Businesses use objectives to measure their success
and progress toward their goals. Without them,
goals seem out of reach. Objectives can be
motivational to business owners and employees, as
meeting objectives provides a sense of
accomplishment.
Topic 4 – Difference between
organisation Objectives &
Goals (University Question)
Goals & Objectives
 The process of setting Goals & Objectives involves
breaking up the mission statement into definite
milestones, identifying events & activities, plotting
the stages and targets to a series of goals in a time-
bound manner.

1. Goals - Organizational goals, often used

interchangeably, are the ends toward which activity
is aimed. Goals are the desired outcomes for
individuals, groups, or entire
2. Objectives - What's it: Organizational
objectives are the steps an organization needs to
take to meet its overall goals 29
Vision, Mission, Goals, Objectives
 EXAMPLE: IKEA –
 Vision: To create a better everyday life for the many people.
 Mission: To offer a wide range of well-designed, functional home furnishing
products at prices so low that as many people as possible will be able to afford
them.
 Goal : To have competitive advantage, To have a reputed brand image in
market, To achieve customer satisfaction and loyalty, To manufacture affordable
furniture at low cost
 Objectives: Increase sales by 10% every year, Increase brand awareness to
80% within 3 years, To have increase customer retention rate by 20% every
year

30
Difference between organisation
Objectives & Goals
•It has been said that Goals without objectives can
never be achieved while objectives without goals
will never get you to where you want to be.
•Some management academics would say that the
difference between goals and objectives is that a
goal is a description of a destination, and an
objective is a measure of the progress that is
needed to get to the destination.
•Goals are usually set first, followed by objectives
that help you measure your progress toward those
goals.
Difference
between
organisation
Objectives &
Goals
Topic 5 – Explain Steps in Strategic
Management Process (University
Question) (Important Question)
Steps in Strategic Management
Process
 According to Glueck and Jauch - Strategic
management is a stream of decisions and actions
which leads to the development of effective
strategy or strategies to help achieve corporate
objectives.
 Strategic management process is a method by
which managers conceive of and implement a
strategy that can lead to a sustainable competitive
advantage.
 David’s framework is one among the popular
framework to explain the Strategic Management
Process.
Steps
1.Develop vision and mission
2.External environment analysis
3.Internal environment analysis
4.Establish long-term objectives
5.Generate, evaluate and choose strategies
6.Implement strategies
7.Measure and evaluate performance
1. Strategy Formulation (including
Environmental Scanning)
 A. Environmental Scanning / Situation Analysis
 When the company identifies its vision and mission it must
assess its current situation in the market. This includes
evaluating an organization’s external and internal
environments and analyzing its competitors.
 (i) During an external environment analysis managers look into
the key external forces: macro & micro environments and
competition. PEST or PESTEL frameworks represent all the
macro environment factors that influence the organization in
the global environment. Micro environment affects the
company in its industry. It is analyzed using Porter’s 5 Forces
Framework.
 (ii) Competition is another uncontrollable external force that
influences the company. A good example of this was when
Apple released its IPod and shook the mp3 players industry,
including its leading performer Sony. Firms assess their
competitors using competitors profile matrix and
benchmarking to evaluate their strengths, weaknesses and
1. Strategy Formulation
(including Environmental
Scanning)
 A. Environmental Scanning / Situation Analysis

 (iii) Internal analysis includes the assessment of the

company’s resources, core competencies and
activities. An organization holds both tangible
resources: capital, land, equipment, and intangible
resources: culture, brand equity, knowledge, patents,
copyrights and trademarks . A firm’s core
competencies may be superior skills in customer
relationship or efficient supply chain management.
When analyzing the company’s activities managers
look into the value chain and the whole production
process (Value Chain Analysis)
 As a result, situation analysis identifies strengths,
weaknesses, opportunities and threats for the
organization and reveals a clear picture of company’s
1. Strategy Formulation
 B. Strategy Formulation
 ( i) Initial Assessment (Vision & Mission)
 The starting point of the process is initial assessment
of the firm. At this phase managers must clearly
identify the company’s vision and mission
statements.
 Business’ vision answers the question: What does an
organization want to become? Without visualizing the
company’s future, managers wouldn’t know where
they want to go and what they have to achieve.
Vision is the ultimate goal for the firm and the
direction for its employees.
 In addition, mission describes company’s business. It
informs organization’s stakeholders about the
products, customers, markets, values, concern for
Strategic Intent
 Vision - “Vision is a description of something (an
organization, a corporate culture, a business , a
technology, an activity) in the Future “
 Mission - “ Mission is the purpose of the organization’s
existence
 Goals - A strategic goal is a long-term, “big picture”
objective for a business
 Objective – Objective Splits the Vision and mission
into action to be implement It is a short term activity
undertaken with a specific aim
1. Strategy Formulation
 B. Strategy Formulation
 ( ii) Long-term objectives -
 Successful situation analysis is followed by creation of long-term objectives.
Long-term objectives indicate goals that could improve the company’s
competitive position in the long run. They act as directions for specific strategy
selection. In an organization, strategies are chosen at 3 different levels:
 Business level strategy. This type of strategy is used when strategic business
units (SBU), divisions or small and medium enterprises select strategies for
only one product that is sold in only one market. The example of business level
strategy is well illustrated by Royal Enfield firms. Firms may select between
Porter’s 3 generic strategies: cost leadership, differentiation and focus
strategies.
 Corporate level strategy. At this level, executives at top parent companies
choose which products to sell, which market to enter and whether to acquire a
competitor or merge with it. They select between integration, intensive,
diversification and defensive strategies.
 Global/International strategy. The main questions to answer: Which new
markets to develop and how to enter them? How far to diversify?
2. Strategy Implementation
 Strategy implementation is a process by which strategies and policies
are put into action through the development of programs, budgets and
procedures.
 This process might involve changes within the overall culture,
structure, and/or management system of the entire organization.
 It consists of the following steps:
 Setting annual objectives (financial, marketing, operations, human
resources and other functional goals. );
 Revising policies to meet the (new) objectives;
 Allocating resources to strategically important areas;
 Changing organizational structure to meet new strategy;
 Managing resistance to change;
 Introducing new reward system for performance results if needed.
2. Strategy Implementation

 Steps Explanation: The first point in strategy implementation is setting annual objectives
for the company’s functional areas. These smaller objectives are specifically designed to
achieve financial, marketing, operations, human resources and other functional goals. To
meet these goals managers revise existing policies and introduce new ones which act as the
directions for successful objectives implementation.
 The other very important part of strategy implementation is changing an organizational
chart. For example, a product diversification strategy may require new SBU to be
incorporated into the existing organizational chart. Or market development strategy may
require an additional division to be added to the company. Every new strategy changes the
organizational structure and requires reallocation of resources. It also redistributes
responsibilities and powers between managers. Managers may be moved from one
functional area to another or asked to manage a new team. This creates resistance to
change, which has to be managed in an appropriate way or it could ruin excellent strategy
implementation.
Some Terms to Understand in Strategy Implementation (Extra)

 PROGRAMS AND TACTICS: DEFINING ACTIONS

 A program or a tactic is a statement of the activities
or steps needed to support a strategy.
 A set of programs or tactics used by automaker
BMW to achieve its objective of increasing
production efficiency by 5% each year:
 (a) shorten new model development time from 60
to 30 months,
 (b) Reduce preproduction time from a year to no
more than five months, and
 (c) Build at least two vehicles in each plant so that
production can shift among models depending upon
demand.
Some Terms to Understand in Strategy
Implementation (Extra)

BUDGETS: COSTING PROGRAMS

 A budget is the list of cost in the programs in terms
of money
 Example
Nearly 30 years ago American Airlines made a
startling discovery. They determined that
eliminating one olive from each passenger’s salad
plate would reduce costs by $40,000.
Some Terms to Understand in Strategy
Implementation (Extra)

PROCEDURES: DETAILING ACTIVITIES

 Procedures, sometimes termed Standard
Operating Procedures (SOP), are a system of
sequential steps or techniques that describe in
detail how a particular task or job is to be done.
They typically detail the various activities that must
be carried out in order to complete the corporation’s
program.
3. Strategy Evaluation
 Implementation must be monitored to be successful. Due to constantly changing
external and internal conditions managers must continuously review both
environments as new strengths, weaknesses, opportunities and threats may arise.
If new circumstances affect the company, managers must take corrective actions
as soon as possible.
 Usually, tactics rather than strategies are changed to meet the new conditions,
unless firms are faced with such severe external changes as the 2007 credit
crunch.
 Measuring performance is another important activity in strategy monitoring.
Performance has to be measurable and comparable. Managers have to compare
their actual results with estimated results and see if they are successful in
achieving their objectives. If objectives are not met managers should:
 Change the reward system.
 Introduce new or revise existing policies.
 Audit is an important tool to monitor the effectiveness of the strategy
implemented.
A Case Example of Mc Donalds
starting Vegetarian Menu In Indian
Market
 Initially when Mc Donalds started its operation in India
 They carried forward the International Menu in India
 The Revenue was not generated by them due to no
demand
 The Strategic Management Team has
followed all the steps for the success of the
Business but was not able to generate Profit
A Case Example of Mc Donald
starting Vegetarian Menu In Indian
Market
 Solution
 The Strategic Management team analyzed that Indian citizens are not
prone to more non vegetarian food hence they need to change their
strategy for conducting business in India .Hence they started with
vegetarian menu specially in India . Mc don alls started generating
profits and regain its presence in the industry .
 Recent update
 The chain plans to open another vegetarian outlet in north-western
India, near the Vaishno Devi cave shrine in Kashmir, which is a Hindu
pilgrimage site that attracts hundreds of thousands of visitors a year.
 McDonald's has moved to provide more salads and other healthier
foods with less sugar, salt and fat in them, in response to public
concerns about diet.
Topic 6 – Define Strategy, State its importance.
Or (Explain - Strategy as planned action)
Define Strategy
 In order to understand business functions, it is important to
understand the term strategy. After all, every business needs
a strategy to be successful. The word ‘strategy’ comes from
the ancient Greek word ‘Strategos’, meaning ‘the art of the
General’. In ancient Greece, the term Strategos was used in
military science and implied the plan to win a battle.
 However, in business, it is more about the managerial
response to changes in the business environment than the art
of war. In business, strategies are more about understanding
the competition and preparing a plan to match/surpass the
potential of the rivals.
 It is defined by: Miller & Dess (1996) - Strategy is a set of
plans or decisions made in an effort to help
organizations achieve their objectives.
Strategy
 Features of Strategy
 Specialized plan to outperform the competitors.
 Details about how managers must respond to any change in
the business environment.
 Redefines direction towards common goals.
 Reflects the concern to effectively mobilize resources.
 Maximizes the organization’s chances to achieve the set
objectives.

 Strategy is a well defined roadmap of an organization. I

Strategy, in short, bridges the gap between “where we are”
and “where we want to be”.
 Strategy is an action that managers take to attain one or
more of the organization’s goals.
Importance of Strategy
1. Provide Direction and Action Plans: A strategy provides an organization with right direction which need to be
followed for attaining the targets. It given clear cut and detailed plan of action for reaching the desired position in
future. Business gets a complete guide on how things will be done and goals will be accomplished.
2. Identify Trends and Opportunities: It identifies various market trends and future opportunities available to a
business organization. Strategy examines the variations in market such as social, political and technological
changes as well as the customer changes. Once the market changes are identified, it develops tactics accordingly
so that a business can adjust itself to the future changes.
3. Define Accountabilities: Strategy clearly defines the line of accountability within the business enterprise. It also
set the timelines for attaining desired results on agreed strategic initiatives.
4. Improve Communication and Commitment: It enhances the overall level of communication and commitment
within the organization by clarifying the vision and accountabilities. Proper strategic plan aligns all activities of
business and fosters commitment at each level.
5. Allocation of Resources: Right allocation of resources is must for every organization be it a large or a small
organization. Resources are limited and strategy decides what all products, services or market will be the part of
company’s future and what will not be. This way it ensures that resources are deployed efficiently providing
maximum output for the organization.
6. Provide Framework for Decision Making: The strategy provides a well-defined framework for decision making
to business enterprise. It gives a reference point for decisions as each of them need to support the strategy.
Business needs to plan on daily basis for its routine activities on a regular basis. In presence of right framework by
strategies, these plans are made in a timely manner ensuring business growth.
7. Competitive Advantage: Companies are able to achieve competitive advantage over the competitors by forming
strategies. Business is able to understand more about themselves and clearly know where they are going. This way
Topic 7 – Strategic planning v/s Operational
Planning
(University Question)
Strategic Planning
 Strategic Planning is a planning process undertaken by the top level management, to
decide Where the organization wants to reach in future? And What should be done to
pursue the organizational vision, mission, and objectives? It is an analytical process which
examines the micro and macro environment of business. The process is used to define the
company’s vision, ambitions, and set priorities to make a route that will lead the company
towards its ultimate goal.
 The planning is not made for a particular department or unit, but it covers the entire
organization. The strategic planning is done to determine the factors of the internal and
external environment which directly influences the organization. The plan focuses on the
enduring development of the organization.
 The tools used in this process are:
 SWOT Analysis (Strength, Weakness, Opportunities, Threats)
 Portfolio Analysis
 PEST Analysis (Political, Economic, Social, Technological Environment)
 Porter’s 5 forces Analysis (New Entrants, Rival Sellers, Substitute Products, Buyer
Bargaining Power, Supplier Bargaining Power)
 BCG Matrix (Boston Consulting Group)
 These tools help the management to design a strategy considering various elements, that
Operational Planning
 The process which predetermines the day to day activities of the business
is known as Operational Planning. The planning is done to support
the strategic planning to accomplish the organizational goals. In this
process, short run objectives of the company are determined as well as a
means to achieve those objectives are also discovered.
 Middle-level management performs the function of the operational
planning process. It includes planning of regular business activities and
operations for a short period. Under this process, the organization is
classified into the various department, division, unit, and center for which
planning is performed individually, which is aligned with the strategic
planning to reach the organization’s vision.
 The following are the features of Operational Planning:
 Objectives need to be clearly defined.
 Achievement of the desired result.
 The activities are to be performed as decided.
 Maintenance of quality standards.
 Measuring performance.
Process and advantages of
Strategic v/s Operational Planning
 Distinction between formulation' and 'implementation'
hold up. Simply put, your strategic plan shares your vision
for the future, while your operational plan lays out how
you'll get there on a daily to weekly basis. Both concepts
describe your company's plans for the future but in
different contexts.
 Strategic Planning is a planning process undertaken by
the top-level management, to decide Where the
organization wants to reach in future? And What should
be done to pursue the organizational vision, mission, and
objectives? It is an analytical process that examines the
micro and macro environment of a business. The process
is used to define the company’s vision, ambitions, and set
priorities to make a route that will lead the company
towards its ultimate goal.
 The process which predetermines the day to day activities
of the business is known as Operational Planning. The
planning is done to support strategic planning to
accomplish the organizational goals. In this process, the
short-run objectives of the company are determined as
On the basis Strategic Planning Operational Planning
of-
Meaning It involves strategies to be used It involves determining a plan that
at an organizational level to meet requires to be carried out at functional
the visions, mission, and level of the organization.
organization’s objectives.

Objective To establish plans as per the To determine the routine operations of

mission and vision of the a business unit or department.
organization.

Time frame Carried out for long term Short term

Performed by Higher level management Mid-level management

Scope It has a wider scope It has a narrow scope

Changes Is usually unchanged for long Changed from time to time

term
Topic 8 – Explain Henry Mintzberg’s 5
Ps of strategy
(University Question)
 Henry Mintzberg’s 5 Ps

 Mintzberg (1987) defines strategy in terms of 5Ps.

 These 5Ps are:
 1. Plan
 2. Ploys
 3. Patterns
 4. Position
 5. Perspective
 1. Strategy as a Plan
 Planningcomes naturally to many managers and as such, has
become the default first step.
 isa direction, a guide or a course of action from the present
(or from the past) and into the future.
 Planning is an essential part of the strategy formulation process,
so take time to Brainstorm new opportunities. Tools like PEST
Analysis, SWOT Analysis and practical business planning can
help you to formulate an effective strategy.
 2. Strategy as Ploy
 Mintzberg says that getting the better of
competitors, by plotting to disrupt, dissuade,
discourage, or otherwise influence them, can be
part of a strategy.
 For example, a telecommunications company might
buy up patents that a competitor could potentially
use to launch a rival product.
 are the competition strategies designed to
maintain, reinforce, achieve or improve the relative
competitive position of the organization within its
sector and markets
 Here, techniques and tools such as the Futures
Wheel, Impact Analysis and Scenario Analysis can
help you explore the possible future scenarios in
 3. Strategy as Pattern

 Sometimes, strategy emerges from past organizational behavior.

Rather than being an intentional choice, a consistent and
successful way of doing business can develop into a strategy.
 Patterns are the consistency of firm decision making.
 Toolssuch as USP Analysis and Core Competence Analysis can
help you with this. A related tool, VRIO Analysis (Value,"
"Rareness," "Inimitability," and "Substitutability ) can help you
explore resources and assets (rather than patterns) that you
should focus on when thinking about strategy.
 4. Strategy as Position
 "Position" is another way to define strategy – that is, how
you decide to position yourself in the marketplace.
 In this way, strategy helps you explore the fit between
your organization and your environment, and it helps you
develop a sustainable competitive advantage.
 For example, your strategy might include developing a
niche product to avoid competition, or choosing to position
yourself amongst a variety of competitors, while looking for
ways to differentiate your services.
 When you think about your strategic position, it helps to
understand your organization's "bigger picture" in relation
to external factors. To do this, use Porter's Diamond and
Porter's Five Forces to analyze your environment – these
tools will show where you have a strong position, and
where you may have issues.
 5. Strategy as Perspective
 The choices an organization makes about
its strategy rely heavily on its culture –
just as patterns of behavior can emerge as
strategy, patterns of thinking will shape an
organization's perspective, and the things
that it is able to do well.
 Forinstance, an organization that
encourages risk-taking and innovation
from employees might focus on coming up
with innovative products as the main
thrust behind its strategy.
 Toget an insight into your organization's
perspective, use cultural analysis tools like
the Cultural Web.