際際滷

際際滷Share a Scribd company logo

Concept of strategy - Strategic Management

Download as PPT, PDF
Puneet Sachdeva
Puneet Sachdeva

The term Strategy has been derived from a Greek word strategos, which means generalship the actual direction of Military force, as distinct from the policy governing its deployment

1 of 13
Downloaded 15 times
Concept of StrategyConcept of Strategy The term Strategy has been derived fromThe term Strategy has been derived from a Greek word strategos, which meansa Greek word strategos, which means generalship the actual direction ofgeneralship the actual direction of Military force, as distinct from the policyMilitary force, as distinct from the policy governing its deployment.governing its deployment.
Meaning of StrategyMeaning of Strategy In business Parlance there is no definiteIn business Parlance there is no definite meaning assigned to strategy. A strategymeaning assigned to strategy. A strategy could becould be A plan or course of ActionA plan or course of Action The pattern related to the organisationsThe pattern related to the organisations activitiesactivities Related to pursuing those activitiesRelated to pursuing those activities which move an organisation from currentwhich move an organisation from current to Desired positionto Desired position
Meaning of StrategyMeaning of Strategy Concerned with resources necessary forConcerned with resources necessary for implementing a planimplementing a plan Connected to the strategic positioning of aConnected to the strategic positioning of a firmfirm The planned or actual coordination of theThe planned or actual coordination of the Firms major goals or actions.Firms major goals or actions. # In simplified terms, a strategy is the means to achieve objectives, which is being desired or set by the Organisation.
Levels At which Strategy OperatesLevels At which Strategy Operates There are so many companies in IndiaThere are so many companies in India that are working in different business linesthat are working in different business lines with regard to Products or services e.g.with regard to Products or services e.g. Maruti SuzukiMaruti Suzuki Hindustan LeverHindustan Lever L&TL&T Bharti GroupBharti Group
Levels At which Strategy OperatesLevels At which Strategy Operates For all the companies mentioned above,For all the companies mentioned above, working in the different businesses aworking in the different businesses a single strategy is not only inadequate butsingle strategy is not only inadequate but also inappropriate. The need is for multiplealso inappropriate. The need is for multiple strategies at different Levels.strategies at different Levels.
Strategic Business Unit (SBU)Strategic Business Unit (SBU) In order to segregate different units, eachIn order to segregate different units, each performing a common set of activities,performing a common set of activities, many companies organise on the basis ofmany companies organise on the basis of operating divisions. These divisions areoperating divisions. These divisions are known as Strategic Business Unit, moreknown as Strategic Business Unit, more commonly known as SBU. Generallycommonly known as SBU. Generally SBUs are involved in single line ofSBUs are involved in single line of Business.Business.
Different Levels of StrategyDifferent Levels of Strategy Corporate Office SBU B Finance Marketing ITHRMOperations SBU A SBU C Corporate Level Business Level Functional Level
Corporate LevelCorporate Level Corporate Level Strategy is a completeCorporate Level Strategy is a complete plan of action covering the variousplan of action covering the various functions being performed by differentfunctions being performed by different SBUs. The plan is about the objectives,SBUs. The plan is about the objectives, that the company plans to achieve,that the company plans to achieve, allocation of the resources & coordinationallocation of the resources & coordination of the SBUs for the optimal performance.of the SBUs for the optimal performance.
SBU LevelSBU Level SBU Level strategy is a detailed planSBU Level strategy is a detailed plan setting objectives for SBUs, allocation ofsetting objectives for SBUs, allocation of the resources among functional areas &the resources among functional areas & coordination between them for makingcoordination between them for making optimal contribution to the corporate leveloptimal contribution to the corporate level objectives.objectives.
Functional LevelFunctional Level Functional level strategy deals with aFunctional level strategy deals with a relatively restricted plan, providingrelatively restricted plan, providing objectives for a specific function allocationobjectives for a specific function allocation of resources among different operationsof resources among different operations within that functional area & coordinationwithin that functional area & coordination between them for the optimal contributionbetween them for the optimal contribution to the achievement of the SBU &to the achievement of the SBU & corporate level strategies.corporate level strategies.
Societal LevelSocietal Level Based on a mission statement, a societalBased on a mission statement, a societal strategy is a generalized view of how anstrategy is a generalized view of how an Organisation relates itself to the society inOrganisation relates itself to the society in terms of the needs of the society.terms of the needs of the society. Corporate level strategy could beCorporate level strategy could be designed keeping in view the societaldesigned keeping in view the societal strategy.strategy.
Operational LevelOperational Level Even below the functional level some strategiesEven below the functional level some strategies are required to be set up, these strategies areare required to be set up, these strategies are called the operational level strategies. Eachcalled the operational level strategies. Each functional area could have a number offunctional area could have a number of operational strategies. These strategies wouldoperational strategies. These strategies would deal with a highly specific & narrowly defineddeal with a highly specific & narrowly defined area. A functional strategy at HRM could bearea. A functional strategy at HRM could be further divided into Recruitment & Selection,further divided into Recruitment & Selection, Training & Development, PerformanceTraining & Development, Performance Appraisal, Compensation Management.Appraisal, Compensation Management.
Corporate UmbrellaCorporate Umbrella Activities in each operational area of HRM,Activities in each operational area of HRM, whether Recruitment & selection or Training &whether Recruitment & selection or Training & development could be performed in such a waydevelopment could be performed in such a way that they optimally contribute to the functionalthat they optimally contribute to the functional objectives of HRM department. The functionalobjectives of HRM department. The functional strategy of HRM, Finance, Marketing,strategy of HRM, Finance, Marketing, Operations & IT are interlinked. These functionalOperations & IT are interlinked. These functional level strategies operate under SBU Level.level strategies operate under SBU Level. Various SBU level strategies are put into theVarious SBU level strategies are put into the action under the Corporate Level Strategies.action under the Corporate Level Strategies.

More Related Content

Concept of strategy - Strategic Management

  • 1. Concept of StrategyConcept of Strategy The term Strategy has been derived fromThe term Strategy has been derived from a Greek word strategos, which meansa Greek word strategos, which means generalship the actual direction ofgeneralship the actual direction of Military force, as distinct from the policyMilitary force, as distinct from the policy governing its deployment.governing its deployment.
  • 2. Meaning of StrategyMeaning of Strategy In business Parlance there is no definiteIn business Parlance there is no definite meaning assigned to strategy. A strategymeaning assigned to strategy. A strategy could becould be A plan or course of ActionA plan or course of Action The pattern related to the organisationsThe pattern related to the organisations activitiesactivities Related to pursuing those activitiesRelated to pursuing those activities which move an organisation from currentwhich move an organisation from current to Desired positionto Desired position
  • 3. Meaning of StrategyMeaning of Strategy Concerned with resources necessary forConcerned with resources necessary for implementing a planimplementing a plan Connected to the strategic positioning of aConnected to the strategic positioning of a firmfirm The planned or actual coordination of theThe planned or actual coordination of the Firms major goals or actions.Firms major goals or actions. # In simplified terms, a strategy is the means to achieve objectives, which is being desired or set by the Organisation.
  • 4. Levels At which Strategy OperatesLevels At which Strategy Operates There are so many companies in IndiaThere are so many companies in India that are working in different business linesthat are working in different business lines with regard to Products or services e.g.with regard to Products or services e.g. Maruti SuzukiMaruti Suzuki Hindustan LeverHindustan Lever L&TL&T Bharti GroupBharti Group
  • 5. Levels At which Strategy OperatesLevels At which Strategy Operates For all the companies mentioned above,For all the companies mentioned above, working in the different businesses aworking in the different businesses a single strategy is not only inadequate butsingle strategy is not only inadequate but also inappropriate. The need is for multiplealso inappropriate. The need is for multiple strategies at different Levels.strategies at different Levels.
  • 6. Strategic Business Unit (SBU)Strategic Business Unit (SBU) In order to segregate different units, eachIn order to segregate different units, each performing a common set of activities,performing a common set of activities, many companies organise on the basis ofmany companies organise on the basis of operating divisions. These divisions areoperating divisions. These divisions are known as Strategic Business Unit, moreknown as Strategic Business Unit, more commonly known as SBU. Generallycommonly known as SBU. Generally SBUs are involved in single line ofSBUs are involved in single line of Business.Business.
  • 7. Different Levels of StrategyDifferent Levels of Strategy Corporate Office SBU B Finance Marketing ITHRMOperations SBU A SBU C Corporate Level Business Level Functional Level
  • 8. Corporate LevelCorporate Level Corporate Level Strategy is a completeCorporate Level Strategy is a complete plan of action covering the variousplan of action covering the various functions being performed by differentfunctions being performed by different SBUs. The plan is about the objectives,SBUs. The plan is about the objectives, that the company plans to achieve,that the company plans to achieve, allocation of the resources & coordinationallocation of the resources & coordination of the SBUs for the optimal performance.of the SBUs for the optimal performance.
  • 9. SBU LevelSBU Level SBU Level strategy is a detailed planSBU Level strategy is a detailed plan setting objectives for SBUs, allocation ofsetting objectives for SBUs, allocation of the resources among functional areas &the resources among functional areas & coordination between them for makingcoordination between them for making optimal contribution to the corporate leveloptimal contribution to the corporate level objectives.objectives.
  • 10. Functional LevelFunctional Level Functional level strategy deals with aFunctional level strategy deals with a relatively restricted plan, providingrelatively restricted plan, providing objectives for a specific function allocationobjectives for a specific function allocation of resources among different operationsof resources among different operations within that functional area & coordinationwithin that functional area & coordination between them for the optimal contributionbetween them for the optimal contribution to the achievement of the SBU &to the achievement of the SBU & corporate level strategies.corporate level strategies.
  • 11. Societal LevelSocietal Level Based on a mission statement, a societalBased on a mission statement, a societal strategy is a generalized view of how anstrategy is a generalized view of how an Organisation relates itself to the society inOrganisation relates itself to the society in terms of the needs of the society.terms of the needs of the society. Corporate level strategy could beCorporate level strategy could be designed keeping in view the societaldesigned keeping in view the societal strategy.strategy.
  • 12. Operational LevelOperational Level Even below the functional level some strategiesEven below the functional level some strategies are required to be set up, these strategies areare required to be set up, these strategies are called the operational level strategies. Eachcalled the operational level strategies. Each functional area could have a number offunctional area could have a number of operational strategies. These strategies wouldoperational strategies. These strategies would deal with a highly specific & narrowly defineddeal with a highly specific & narrowly defined area. A functional strategy at HRM could bearea. A functional strategy at HRM could be further divided into Recruitment & Selection,further divided into Recruitment & Selection, Training & Development, PerformanceTraining & Development, Performance Appraisal, Compensation Management.Appraisal, Compensation Management.
  • 13. Corporate UmbrellaCorporate Umbrella Activities in each operational area of HRM,Activities in each operational area of HRM, whether Recruitment & selection or Training &whether Recruitment & selection or Training & development could be performed in such a waydevelopment could be performed in such a way that they optimally contribute to the functionalthat they optimally contribute to the functional objectives of HRM department. The functionalobjectives of HRM department. The functional strategy of HRM, Finance, Marketing,strategy of HRM, Finance, Marketing, Operations & IT are interlinked. These functionalOperations & IT are interlinked. These functional level strategies operate under SBU Level.level strategies operate under SBU Level. Various SBU level strategies are put into theVarious SBU level strategies are put into the action under the Corporate Level Strategies.action under the Corporate Level Strategies.