Characteristics Of Strategy A second way to define strategy is in primary characteristics. Describe how strategic decisions differ from other decisions that managers make 3. Strategy implementation includes designing the organizations structure, distributing resources, developing decision making process, and managing human resources. A retailer selling kids wear also starts selling lady wears is a case of related concentric diversification. After conducting environment scanning, managers formulate corporate, business and functional strategies. Six levels down from top management, an applications engineer in the specialty metals division was faced with a notice of a substantial cost overrun on an expensive piece of test equipment. It provides a framework or structure for decision-making by company leaders.
Understand the types of strategic decisions for which different managers are responsible 5. Functional Strategies: These strategies may be Operations Strategy, Marketing Strategy, Finance Strategy, and Human Resource Strategy. These decisions may be concerned with possessing new resources, organizing others or reallocating others. Moreover the advertising is also effectively made through internet which greatly influences the sales of the organization. Though these steps do not follow a rigid chronological order, however they are very rational and can be easily followed in this order.
These are related to production and factory growth. Strategic Intent: It provides Vision — what the organisation wants to become, Mission — what business the firm is in, Values — a common set of beliefs guiding the behaviour of organisational members, and Objectives — Qualitative goals. One of the differences between strategic and day-to-day business operations is time — strategy occurs over time and has a long-term impact while day-to-day business operations produce immediate or instant measures that may have a short-term effect. Characteristics that leaders exhibit during this step in the strategic process include strong analytical skills, as well as the ability to synthesize and present data. It involves a systematic analysis of the internal strengths and weaknesses financial, managerial, marketing, or technological and of external opportunities and threats like change in demand, law, or technologies. An industry analysis can provide business owners with information regarding effective business-level strategies currently in use in by other companies.
Many managers come and many managers go away from the task of formulation. At a minimum, leadership characteristics necessary for this stage in the strategic management process include the ability to operationalize strategic plans, craft innovative solutions, consider long-term goals and how leadership's decision-making affects stakeholders. Under the pressure of long-term resource constraints, planners learn how to set up a circulatory flow of capital and other resources among business units. Benefits The benefits of strategic information management can be felt from the executive level right down to the functional staff level. Through a process of curiosity, inquiry and knowledge transfer — top-down, bottom-up and lateral — managers learn to understand the actions that further the organizational mission, as well as those actions that detract from the organization's values and principles. Business strategies help companies create a competitive advantage in the marketplace.
In resource-based or process-oriented industries, strategies for shared resource units often determine or constrain business-unit strategy. Scanning Outside-In and Inside-Out There are a variety of analysis tools available that can be used to inform management strategy. In this regard Michael Porter has given three generic strategies, which can be converted into four. Diversification: Adding a new customer function s , customer group s , or alternative technologies to an existing business is known as diversification. Green has special expertise in the areas of health, recreation, travel, home and garden, and personal finance. These are related to overall Counter planning of all Organization.
A shared belief that the enterprise can largely create its own future, rather than be buffeted into a predetermined corner by the winds of environmental change. Formulating a strategic plan involves discussions on what constitutes wise business decisions, how to recognize competition and how to respond to it. Only a few companies that we studied are clearly managed strategically, and all of them are multinational, diversified manufacturing corporations. The way to satisfy that need may change, and business will opt the new methods. Considerations Business owners may need to develop business-level strategies with characteristics specific to their local business environment. An actual strategy, in contrast, as a longer-term plan that set the direction and tone of the shorter- range plan. Above all, strategy is an expensive process both in terms of money and managerial time.
Shared concern planning—In some large companies, a distinct level of planning responsibility is required to devise strategies that meet the unique needs of certain industry or geographic customer groups or to plan for technologies e. Concept of Strategy : Before pondering over the process of strategy formulation, we must first understand as to what the term strategy implies. The team members discovered that design improvements had given the competitor such a commanding advantage in production cost that there was no point in trying to compete on price. Business runs in a cyclical mode: There are periods of stability interrupted by periods of radical and revolutionary change. Leadership characteristics during this phase of strategic management include forward thinking and the rationale to determine what constitutes in-time action.
The issues that forecast-based plans address—e. Corporate strategies provide direction when the company enters new economic markets. Cost leadership allows business owners to produce consumer goods or services at the lowest cost in an industry. Ask anyone who is manufacturing readymade garments, about his business and his answer will be readymade garments manufacturing. Always define your business on the basis of core need being fulfilled.
The definition of a strategic planning framework is, therefore, a pivotal responsibility of top management, supported by the corporate planning staff. It helps in analyzing the internal and external factors influencing an organization. Into a sales environment where close personal relations on the plant floor and with the process engineers was formerly the key to success, it is systematically injecting a top-management-oriented, technically and financially argued sales approach. Strategic planning easily degenerates into a mind-numbing bureaucratic exercise, punctuated by ritualistic formal planning meetings that neither inform top management nor help business managers to get their jobs done. Instead of behaving like large unwieldy bureaucracies, they have been nimbly leap-frogging smaller competitors with technical or market innovations, in true entrepreneurial style. It is used to examine which environmental and internal factors affect the organization's position and how successfully they are meeting the goals and objectives of the organization and its departments.