Assignment Code: MMPC-012 / TMA / JAN / 2023

Course Code: MMPC-012

Assignment Name: Strategic Management

Year: 2023

Verification Status: Verified by Professor

Note: Attempt all the questions.

Q 1. What is the process of strategic management? Explain.

Ans) Strategic management is a process that involves the formulation, implementation, and evaluation of strategies and plans to achieve the goals and objectives of an organization. It is a dynamic and iterative process that requires a continuous feedback loop between the organization and its environment, and it involves a range of activities and decisions that are aimed at ensuring the long-term viability and success of the organization. The process of strategic management can be broken down into the following steps:

Vision and Mission: The first step in strategic management is to develop a clear and compelling vision and mission for the organization. This involves identifying the core values, purpose, and direction of the organization, and setting goals and objectives that are aligned with this vision and mission. A clear and compelling vision and mission can help guide the organization's strategic decisions and actions. The vision should be a vivid and inspiring description of what the organization aims to achieve, while the mission should outline the organization's purpose, values, and goals. These statements should be communicated effectively to all employees to ensure alignment and motivation. A clear and compelling vision and mission can help guide the organization's strategic decisions and actions. The vision should be a vivid and inspiring description of what the organization aims to achieve, while the mission should outline the organization's purpose, values, and goals. These statements should be communicated effectively to all employees to ensure alignment and motivation.

Environmental Analysis: The next step is to conduct a comprehensive analysis of the external and internal environment in which the organization operates. This involves assessing the opportunities, threats, strengths, and weaknesses of the organization, as well as the key trends and forces that are shaping the industry and the broader business environment. The external environment includes factors such as competition, technological change, economic conditions, and social and political trends, while the internal environment includes factors such as resources, capabilities, culture, and leadership. A SWOT analysis can help identify the key factors affecting the organization's strategy. The external environment includes factors such as competition, technological change, economic conditions, and social and political trends, while the internal environment includes factors such as resources, capabilities, culture, and leadership. A SWOT analysis can help identify the key factors affecting the organization's strategy.

Strategy Formulation: Based on the results of the environmental analysis, the organization can then develop a range of strategic options and alternatives that are aimed at achieving its goals and objectives. This involves identifying the key drivers of success, such as market segmentation, product differentiation, or cost leadership, and developing a strategy that is aligned with these drivers. This step involves developing a range of strategic options and selecting the one that is most likely to achieve the organization's goals. This may involve developing new products or services, entering new markets, or adopting new business models. The strategy should be specific, measurable, achievable, relevant, and time-bound (SMART). This step involves developing a range of strategic options and selecting the one that is most likely to achieve the organization's goals.

Strategy Implementation: Once the strategy has been formulated, the organization can then begin to implement the strategy by allocating resources, setting goals, and establishing performance metrics. This involves aligning the organization's structure, culture, and systems with the strategy, and ensuring that all employees are aware of their roles and responsibilities in achieving the strategy. This step involves translating the strategy into action by allocating resources, establishing goals, and designing processes and systems to support the strategy. This may involve restructuring the organization, hiring new staff, developing new technologies, or creating new partnerships. Communication and collaboration are key to successful implementation.

Evaluation and Control: Finally, the organization must regularly monitor and evaluate the performance of the strategy and adjust and modifications as necessary to ensure that the strategy remains relevant and effective. This involves setting benchmarks, collecting data, and analysing performance metrics, as well as making decisions about resource allocation and strategy refinement. This step involves monitoring and evaluating the performance of the strategy to ensure that it remains relevant and effective. This may involve measuring key performance indicators (KPIs), conducting regular reviews, and making adjustments and modifications to the strategy as necessary. Continuous learning and improvement are essential to long-term success.

It is worth noting that strategic management is not a one-time event, but rather an ongoing process that requires flexibility, adaptation, and agility. In today's rapidly changing business environment, organizations must be able to respond quickly and effectively to new challenges and opportunities. As such, strategic management is a crucial tool for ensuring the long-term viability and success of organizations. Overall, the process of strategic management is an ongoing and dynamic process that requires a continuous focus on the external environment, a deep understanding of the organization's strengths and weaknesses, and a commitment to innovation, flexibility, and adaptation. By following this process, organizations can develop and implement effective strategies that enable them to achieve their goals and objectives in a rapidly changing and complex business environment.

Q 2. Describe the process for analysing the external environment.

Ans) The process for analysing the external environment typically involves the following steps:

Identify the relevant external factors: Begin by identifying the key factors that could impact the organization's performance. This may include economic trends, regulatory changes, technological advancements, demographic shifts, and environmental issues. It is important to consider a wide range of external factors that could impact the organization, as the external environment is constantly changing. SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) can be a useful tool to identify these factors.

Gather information: Collect information on the identified external factors. This can involve conducting research, gathering data from industry reports, analysing competitors' strategies, and monitoring news and social media for relevant information. There are several sources of information that can be used to gather data on the external environment. These include industry reports, market research studies, government publications, news articles, and social media monitoring tools.

Evaluate the impact: Once the information has been gathered, evaluate the potential impact of each factor on the organization. Determine whether each factor represents an opportunity or a threat. When evaluating the impact of external factors, it's important to consider both the likelihood and the severity of their potential impact. A PESTEL analysis (Political, Economic, Sociocultural, Technological, Environmental, and Legal) can be a useful framework for assessing the impact of external factors.

Prioritize the factors: Prioritize the external factors based on their potential impact and the organization's ability to respond to them. Consider the likelihood and severity of each factor's impact and the resources required to address it. Prioritizing external factors involves determining which factors are most important to the organization and require the most attention. This can involve assessing the organization's strengths and weaknesses, as well as its ability to respond to external factors.

Develop strategies: Based on the prioritized external factors, develop strategies to respond to the opportunities and threats that they represent. This may involve developing new products or services, entering new markets, or adjusting pricing or marketing strategies. Once the external factors have been prioritized, it's important to develop strategies that address the most critical opportunities and threats. These strategies should be aligned with the organization's mission, vision, and objectives.

Monitor the environment: Finally, continue to monitor the external environment to identify changes that may impact the organization's performance. This can help to ensure that strategies remain relevant and effective over time. The external environment is constantly changing, and it's important to monitor it on an ongoing basis. This involves regularly reviewing the external factors and adjusting strategies as needed to ensure that they remain effective.

In general, doing an analysis of the external environment is an essential step for any business that has to maintain its competitive edge and adapt to shifting conditions in the environment in which it operates. Organizations can position themselves for success over the long term by first gaining an awareness of the external factors that have an impact on the organisation and then adopting strategies to address those factors.

Q 3. Explain the Resource Based View Model in light of the resources being the key to support the organizational performances.

Ans) The Resource-Based View, often known as RBV, is a management framework that places an emphasis on the significance of a company's resources and capabilities in terms of obtaining both superior performance and a durable advantage over its competitors. According to this point of view, the resources that a firm has available to it are among the most important factors that determine its strategic decisions and its place in the competitive landscape.

The RBV model postulates that there is a distinction between tangible and intangible assets when it comes to resources. In contrast to intangible assets, tangible assets are material resources like buildings, equipment, and financial capital. On the other hand, intangible assets include things like intellectual property, reputation of a brand, and organisational culture. The RBV model is predicated on the assumption that the resources and capabilities of a company are the primary factors that determine the strategic decisions it makes and the position it holds in the market. The terms "financial resources," "physical infrastructure," "equipment," and "inventory" all refer to examples of tangible assets. On the other hand, intangible assets consist of things like human capital, organisational culture, and brand reputation, in addition to intellectual property and organisational culture.

According to the RBV model, businesses should prioritise the cultivation and utilisation of their distinctive resources and capabilities in order to generate value for their clients and other stakeholders. Performing this step requires locating and developing resources that are valuable, unique, unrepeatable, and incompatible with other options (VRIN). It is claimed that the resources that are able to meet these criteria are the key to supporting the performance of the organisation. It is generally agreed that the resources that can fulfil these requirements are the most important for bolstering the performance of a business.

To put it another way, businesses who have access to VRIN resources are in a far better position than those that do not have access to these resources to establish a durable competitive advantage and superior performance. According to the RBV model, a company's resources and capabilities serve as the bedrock upon which its competitive advantage is built. A company can produce value for its customers and stakeholders in a way that is difficult for its competitors to replicate if it makes effective use of the distinctive resources and talents it possesses.

A company that has developed a proprietary technology that is difficult for competitors to copy is an example of a company that possesses a resource that is both valuable and scarce. If the technology is additionally protected by patents or other legal hurdles, it will be difficult for competitors to copy it, which will lead to it being considered inimitable. Additionally, in order for the technology to be termed non-substitutable, it must be a one-of-a-kind resource that is not replaceable by any other type of resource.

In this view, resources are considered the foundation of a firm's competitive advantage. They enable a firm to differentiate itself from competitors by providing unique value to customers. In addition, resources can be leveraged to reduce costs, increase operational efficiency, and improve customer service. Overall, the Resource-Based View model emphasizes the importance of understanding a firm's resources and capabilities in achieving sustainable competitive advantage. By leveraging its unique resources and capabilities, a firm can create value for customers and stakeholders and achieve superior performance over time. By focusing on developing and leveraging VRIN resources, firms can create value for customers and stakeholders and achieve long-term success in their industries.

Q 4. Describe the various factors involved in formulating the competitive strategy.

Ans) Any organization in any type of industry has a competitive strategy. This may be explicit or implicit in nature. If it is explicit then it is developed through a planning process taking into account, the external environment and if it is implicit then it is developed through the activities of different functional units. In the present context the combination of the explicit and implicit strategies can be the best option as it gives the direction to the organization to achieve its set objectives. Developing a competitive strategy is technically developing a formula for success.

The various factors involved in formulating a competitive strategy are:

Consistency testing

It is necessary for an organization to test for consistency of the competitive strategy taking into consideration four important variables. These are

1. Internal Consistency

2. Environmental Fit

3. Resource Fit

4. Implementation

There are certain parameters which need to be checked for all the variables. These are as follows:

Internal Consistency

1. Realistic goals.

2. Key operating policies in sync/alignment with the goals.

3. Key operating policies coordinated with each other.

This aspect of the strategy is making certain that all of the plan's components are compatible not only with one another but also with the organization's overarching objectives and core principles. This includes ensuring that the many aspects of the strategy, such as pricing, marketing, and operations, are linked with one another and support one another in a positive manner.

Environmental fit

1. Capitalization of industry opportunities as per the goals and the policies.

2. Goals and policies deal with the industry threats.

3. Timing of the goals and policies with respect to the environmental changes.

4. Goals and policies respond to societal expectation.

Assessing the external environment and understanding how an organisation may most effectively fit into that context is what this element refers to. This includes doing an analysis of the competitive landscape, establishing how best to position the company in regard to elements such as market trends and customer preferences, and identifying the landscape of existing competitors.

Resource fit

1. Goals and policies match the available resources.

2. Goals and policies adaptable to change.

This aspect relates to ensuring that the organisation have the appropriate resources (such as finances, employees, and technology) in order to properly conduct the plan that has been devised. This includes analysing how the company may best utilise its resources to accomplish its objectives, as well as evaluating the organization's strengths and shortcomings.

Implementation

1. Well-designed goals which can be implemented.

2. Alignment of goals and policies with that of the core values.

3. Sufficient managerial capability for effective implementation.

The way in which the strategy is put into action is what is meant by this component. This comprises the creation of a plan of action, the efficient distribution of resources, the monitoring of progress, and the implementation of revisions as required. In general, keeping these four considerations in mind can be of assistance in ensuring that a competitive strategy is one that can be successfully implemented to realise the objectives of the firm. The aforementioned factors are helpful in building an efficient plan for competing effectively. The process of coming up with a strategy is the next step that the company needs to do.

Q 5. Discuss different types of strategic controls with respect to the strategy of an organization.

Ans) There are four different types of strategic controls and their relevance to an organization's strategy.

Premise control

Premise control involves monitoring the assumptions or premises upon which an organization's strategy is based. It ensures that the assumptions are still valid and relevant and that any changes in the environment are taken into account in the strategy. For example, an organization might monitor demographic, economic, or technological changes to ensure that its strategy is still relevant. Premise control is important because it helps an organization to ensure that its strategy is based on accurate assumptions and relevant information about the environment. This control involves monitoring changes in the environment and making adjustments to the strategy as needed.

For example, if an organization's strategy is based on the assumption that a particular technology will be widely adopted, premise control would involve monitoring adoption rates to ensure that the assumption is still valid. By using premise control, an organization can avoid pursuing a strategy that is no longer relevant, which could lead to wasted resources and missed opportunities. Premise control is particularly relevant in situations where the environment is uncertain or dynamic. It helps an organization to stay abreast of changes and make adjustments to its strategy accordingly.

Implementation control

Implementation control involves monitoring the progress of an organization's strategy implementation. It ensures that the strategy is being executed as planned and that the necessary resources are being allocated to achieve the strategic objectives. Implementation control focuses on the day-to-day activities of the organization and ensures that they are aligned with the strategy.

Implementation control is important because it helps an organization to ensure that its strategy is being executed effectively. This control involves monitoring the progress of the organization's activities and ensuring that they are aligned with the strategy.

For example, if an organization's strategy is to expand into new markets, implementation control would involve monitoring the progress of the expansion and ensuring that the necessary resources are being allocated to achieve the strategic objective. By using implementation control, an organization can ensure that its strategy is being executed effectively and make adjustments as needed to achieve its objectives. Implementation control is particularly relevant in situations where the strategy requires significant changes in the organization's structure, processes, or culture. It helps an organization to identify any issues with strategy implementation and take corrective action as needed.

Strategic surveillance

Strategic surveillance involves monitoring the overall environment in which an organization operates. It helps an organization to identify any emerging threats or opportunities that could impact its strategy. Strategic surveillance focuses on the external environment and involves scanning the environment for potential risks or opportunities. Strategic surveillance is important because it helps an organization to stay ahead of changes in the environment that could impact its strategy. This control involves scanning the environment for potential threats or opportunities and identifying emerging trends.

For example, if an organization's strategy is to develop new products, strategic surveillance would involve monitoring new technologies, emerging customer needs, and market trends to identify potential opportunities. By using strategic surveillance, an organization can ensure that its strategy is responsive to changes in the environment and take advantage of new opportunities as they arise. Strategic surveillance is particularly relevant in situations where the environment is volatile or rapidly changing. It helps an organization to stay ahead of changes in the environment and adjust its strategy accordingly.

Special alert control

Special alert control involves monitoring specific events or issues that could impact an organization's strategy. It helps an organization to respond quickly to unexpected events or issues that could threaten its strategic objectives. Special alert control focuses on specific events or issues that could have a significant impact on the organization. Special alert control is important because it helps an organization to respond quickly to unexpected events or issues that could threaten its strategic objectives. This control involves monitoring specific events or issues that could have a significant impact on the organization and taking immediate action to address them.

For example, if an organization's strategy is to expand into a new market, special alert control would involve monitoring political instability or economic downturns that could impact the success of the expansion. By using special alert control, an organization can respond quickly to unexpected events and mitigate their impact on its strategy. Special alert control is particularly relevant in situations where there is a high level of uncertainty or risk. It helps an organization to be prepared for unexpected events and take corrective action as needed.

In conclusion, strategic controls are critical to ensuring the effectiveness of an organization's strategy. The different types of strategic controls discussed above have different applications and are relevant in different situations. By using a combination of these strategic controls, organizations can monitor and evaluate their strategy and make adjustments as needed to achieve their objectives.