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 Selznick, Igor Ansoff, and Peter Drucker.
3
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 )
 Peter Drucker - importance of the objectives - theory of 4

management by objectives (MBO)

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.
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Topic 2 – Explain the
meaning of following –

a)Vision
b)Mission (University
Question)
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.
► Writing a vision statement is part of the strategic
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planning process. It takes planning, time, and
consideration.
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.

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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 organisation is
headed.
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.
A company's mission statement should evolve the same way
11

as the business grows.
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 transportation with
international standards and modern technology. It indicates that IOC is going
to adopt a diversification strategy in future.
 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
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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
80% within 3 years, To have increase customer retention rate by 20% every 16
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.
 You don't need to be at your desk to need an answer.
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 You can make money without doing evil.
 There's always more information out there.
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.
 health and safety policy. 20

 anti-discrimination and harassment 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.

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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

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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 level of performance.
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
situation in the market.
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 public image and
employees of the organization.
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
resources are utilized efficiently and everything goes in right way thereby providing maximum output to business.
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 will lead
the organization towards its vision.
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 well as a means to achieve those objectives
are also discovered
On the basis of- Strategic Planning Operational Planning

Meaning It involves strategies to be used at It involves determining a plan that requires

an organizational level to meet the to be carried out at functional level of the
visions, mission, and organization’s organization.
objectives.

Objective To establish plans as per the mission To determine the routine operations of a
and vision of the organization. business unit or department.

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 term Changed from time to time
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
 Planning comes naturally to many managers and as such, has become
the default first step.
 is a 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 which
competition will occur.
 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.
 Tools such 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.
 For instance, 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.
 To get an insight into your organization's
perspective, use cultural analysis tools like the
Cultural Web.