3 Strategic Management Model

3
Strategic Management
Strategic Management Models
Dr Elangovan
Mintzberg’s 5 P’s of Strategy
5 Ps Strategic Management
Benefits of Strategic Management
• Strategic management allows an organization to be more
proactive than reactive in shaping its own future;
• It allows an organization to initiate and influence (rather than
just respond to) activities-and thus to exert control over its
own destiny.
Benefits to a Firm That Does Strategic Planning
•Helps analyze the internal (Strengths and
weakness) and external (opportunities and
threats) factors and keep pace with the
1
changing nature of the industry.
Strategic Management Benefits
•Helps assess and select the best strategies
based on changing market conditions (Such
as – Market Penetration, Market
2
development, product development)
•Helps define roles and responsibilities of employees to
enable the effective execution of tasks. 3
•Employees gain a better understanding of how and
when to perform the assigned jobs
$20 billion revenue target by 2020
•Helps design business policies to
well-defined long term objectives
4
utilization of resources
5 and ensure optimum allocation and

•Helps identify companywide goals
If there is one word that describes the

character of the Tata group and the Tata
brand, it is “trust".
•Helps evaluate the outcomes of
plans or strategies and compare them
6
against benchmarks or targets
•Facilitates effective
communication and coordination
7
at all levels of the organization
•Allows firms to assess and determine strategies to face
competition and enhance overall business revenue and
8
profitability
Why Some Firms Do No Strategic Planning ?
• No formal training in strategic management

• No understanding of or appreciation for the benefits of
planning
• No monetary rewards for doing planning
• No punishment for not planning
• Too busy “firefighting” (resolving internal crises) to plan ahead
• View planning as a waste of time, since no product/service is
made
Why Some Firms Do No Strategic Planning?
• Laziness; effective planning takes time and effort; time is
money
• Content with current success; failure to realize that success
today is no guarantee for success tomorrow; even Apple Inc.
is an example
• Overconfident
• Prior bad experience with strategic planning done
sometime/somewhere
Pitfalls in Strategic Planning (1 of 2)
• Using strategic planning to gain control over decisions and resources
• Doing strategic planning only to satisfy accreditation or regulatory
requirements
• Too hastily moving from mission development to strategy formulation
• Failing to communicate the plan to employees, who continue working in the
dark
• Top managers making many intuitive decisions that conflict with the formal
plan
• Top managers not actively supporting the strategic-planning process
• Failing to use plans as a standard for measuring performance
Pitfalls in Strategic Planning (2 of 2)
• Delegating planning to a “planner” rather than involving all
managers
• Failing to involve key employees in all phases of planning
• Failing to create a collaborative climate supportive of change
• Viewing planning as unnecessary or unimportant
• Becoming so engrossed in current problems that insufficient or no
planning is done
• Being so formal in planning that flexibility and creativity are stifled
How to Gain and Sustain Competitive Advantage?
Comparing Business and Military Strategy
Comparing Business and Military Strategy
• A fundamental difference between military and business
strategy is that business strategy is formulated, implemented,
and evaluated with an assumption of competition, whereas
military strategy is based on an assumption of conflict
• Both business and military organizations must adapt to
change and constantly improve to be successful
Excerpts from Sun Tzu’s The
Art of War Writings
• War is a matter of vital importance to the
state: a matter of life or death, the road
either to survival or ruin. Hence, it is
imperative that it be studied thoroughly
• Know your enemy and know yourself,
and in a hundred battles you will never
be defeated
• Skillful leaders do not let a strategy
inhibit creative counter-movement
Entrepreneurial mode
• -Strategy is made by one powerful person
• -Focus on opportunities and problems are secondary
• -Strategy is guided by the founder’s own vision of
direction and is exemplified by large, bold decisions
• - Dominant goal is growth of organization
• Example: Chaudhary Group, Bhat Bhateni.
Adaptive mode
• This decision making mode is characterized by reactive
solution to existing problems, rather than proactive search
for new opportunities
• Focuses on existing problems rather than searching for
new opportunities
• Strategy is fragmented and it is developed to move the
organizational incrementally
• Examples: colleges, hospitals, government agencies etc
Planning mode
• This mode involves systematic gathering of information for
situational analysis, the generation of feasible alternatives
strategies and the rational selection of the most
appropriate strategy
• It includes both proactive search for new opportunities
and the reactive solution to existing problems
• Example: Hewlett Packard
Characteristics of Strategic Decision
Rare: Strategic decisions are unusual and typically have no
precedence to follow
Consequential: Strategic decisions commit substantial

resources and demand a great deal of commitment from
the people at levels
Directive: Strategic Decisions set precedents for lesser

decisions and future actions throughout the organization
The above given characteristics can be further broken down
into other numerous characteristics. These include:
• Long term direction
• Complex and uncertain
• Affected by values and expectation of top stakeholders
• Future oriented
• Considers factors in the firm’s external environment
• Requires allocation of large amount of resources
• Defines the scope of firm
• Affect operational decision
Asynchronous Exercise
• How do we apply strategy
for our personal success?
• Write not more than 1000
Submission words explaining your
personal strategy using the
strategy model

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3

5 and ensure optimum allocation and

If there is one word that describes the

• No formal training in strategic management

Consequential: Strategic decisions commit substantial

Directive: Strategic Decisions set precedents for lesser

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