Course Code: 8615
Unit 3
STRATEGIC AND
OPERATIONAL MANAGEMENT
UNIT 3
Outlines
We will learn today about:
Strategic Management Process
◦ Steps in Strategy Formulation Process
◦ Strategy Implementation
◦ Strategy Evaluation
StrategicDecision Making
Operational Management Techniques
Operational Decision Making
Definition of Strategic
Management
Analysis
◦ Strategic goals (vision, mission, strategic
objectives)
◦ Internal and external environment of the
firm
Decisions
◦ What industries should we compete in?
◦ How should we compete in those
industries?
Actions
◦ Allocate necessary resources
◦ Design the organization to bring intended
strategies to reality
Strategic
Management
The strategic management process means
defining the organization’s strategy. It is
also defined as the process by which
managers make a choice of a set of
strategies for the organization that will
enable it to achieve better performance.
Strategic Management is all about
identification and description of the
strategies that managers can carry so as
to achieve better performance and a
competitive advantage for their
organization.
Strategic
management is the study of why
some firms outperform others.
◦ How to create a competitive advantage in the
marketplace that is unique, valuable, and difficult to
copy
“Total
organization” perspective, integrating
across functional areas.
Strategic management consists
of the analysis, decisions, and
actions an organization
undertakes in order to create and
sustain competitive advantages.
Strategic management
process
Environmental Scanning
Environmental scanning refers to a process
of collecting, scrutinizing and providing
information for strategic purposes.
Strategy Formulation
The process of deciding best course of action
for accomplishing organizational objectives.
Strategy Implementation
Strategy into action.
Strategy Evaluation
Measuring performance and taking
remedial / corrective actions.
STRATEGIC DECISION MAKING
Strategic decisions have major resource propositions for
an organization. These decisions may be concerned with
possessing new resources, organizing others or
reallocating others.
Strategic decisions deal with harmonizing organizational
resource capabilities with the threats and opportunities.
Strategic decisions deal with the range of organizational
activities. It is all about what they want the organization
to be like and to be about.
Strategic decisions involve a change of major kind since
an organization operates in ever-changing environment.
Strategic decisions are complex in nature.
Strategic decisions are at the topmost level, are
uncertain as they deal with the future, and involve a lot
of risk.
Benefits of Strategic
Management
FinancialBenefits
Non-Financial Benefits
Closing Thoughts
Financial Benefits
It has been shown in many studies
that firms that engage in strategic
management are more profitable
and successful than those that do
not have the benefit of strategic
planning and strategic
management.
Non-Financial Benefits
The section above discussed some of the
tangible benefits of strategic
management.
Apart from these benefits, firms that
engage in strategic management are more
aware of the external threats, an improved
understanding of competitor strengths and
weaknesses and increased employee
productivity.
They also have lesser resistance to change
and a clear understanding of the link
between performance and rewards.
Closing Thoughts
In recent years, virtually all firms
have realized the importance of
strategic management. However,
the key difference between those
who succeed and those who fail is
that the way in which strategic
management is done and strategic
planning is carried out makes the
difference between success and
failure.
SWOT Analysis
SWOT is an acronym for
Strengths,
Weaknesses,
Opportunities and
Threats.
By definition, Strengths (S) and
Weaknesses (W) are considered to be
internal factors over which
you have some measure of control. Also,
by definition, Opportunities (O) and
Threats (T) are
Advantages of SWOT Analysis
SWOT Analysis helps in strategic planning in
following manner.
It is a source of information for strategic
planning.
Builds organization’s strengths.
Reverse its weaknesses.
Maximize its response to opportunities.
Overcome organization’s threats.
It helps in identifying core competencies of the
firm.
It helps in setting of objectives for strategic
planning.
It helps in knowing past, present and future so
that by using past and current data, future
SWOT ANALYSIS FRAMEWORK
Operations
management
Operations management is the administration
of business practices to create the highest level
of efficiency possible within an organization. It is
concerned with converting materials and labor
into goods and services as efficiently as possible
to maximize the profit of an organization.
Operations Management as the process
whereby resources,
flowing within a defined system, are combined
and transformed by a controlled manner
to add value in accordance with policies
communicated by management.
OPERATIONAL DECISION
MAKING
7 Steps of the Decision-Making Process
Identify the decision.
Gather relevant info.
Identify the alternatives.
Weigh the evidence.
Choose among the alternat
ives.
Take action.
Review your decision.
