Strategic Management: Unit 1 Choice of Strategy
Strategic Management: Unit 1 Choice of Strategy
Strategic Management: Unit 1 Choice of Strategy
Strategy is the : Determination of long term goals and objectives Adopting course of action to achieve the goals and objectives Allocation of resources Strategic Management is basically formulating, Implementing and evaluating cross functional decisions to achieve organizational objectives.
Levels of Strategy
1) Corporate level strategy : At this level the issues pertaining to business ethics , integrity, and social commitments are dealt . Major financial policy decisions involving acquisitions, diversification and structural designing etc belong to the category of corporate level strategy.
2) Business level strategy : Business or divisional level strategy usually occurs at business unit or product level and it emphasizes improvement of the competitive position of a companys product or services in the specific industry or market segment served by that business unit.
3) Functional level strategy : It involves decision making with respect to specific functional areas say production , marketing , personnel , finance. These are described as tactical decisions.
Choice of Strategy
Strategic choice is the selection of a strategy or set of strategies that helps in achieving organizational goals, in the light of environment -al opportunities, threats, organizational strengths and weakness. Strategic choice is made from among ranked alternatives and finally the best choice is made.
Choice Process
Focusing on Strategic Alternatives
Evaluating the Strategic Alternatives Choosing from among the Strategic Alternatives
Subjective factors
Behavioral factors: 1) Organizational past strategies 2) Personal factors 3) Attitude towards risk 4) Internal political consideration 5) Time consideration 6) Personal aspirations and preferences 7) Value system of Top management
3) Profit Impact of market strategy :It is used to evaluate the extent to which market share of a particular product should be increased.
Time Dimension: Time element influences strategic choice . It affects the way managers try to match short term and long term perspectives.
Contingency approach: It implies that the suitability of a strategic action is contingent on various factors particularly environmental factors. Strategy is formulated for each possible scenario.
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