Strategic Management

Topics Covered…
 Evolution  Why Strategic Planning  Nature & Scope  Difference between Strategic Decision, Administrative

Decision, Operational Decision

The Evolution of Strategic Planning
 Planning had all along been a part and parcel of the business

activity  Irrespective of size of business – planning is essential. E.g. To achieve a Common objective of “Profit”  Over a time, the planning task was becoming increasingly complex  Every time new factors entered and pose new challenge

Evolution of S.P.


Strategic planning and modern industrial system evolve hand in hand  Each milestone in the growth of the industrial system has constituted a distinct step in the evolution of the strategic planning discipline  Modern industrial history commenced with the beginning of the nineteenth century.  The first three decades of the twentieth century constituted the mass production era in the history of modern business  During this stage, planning centred around maximizing production (Mass Production) and sales and reaping the benefits of high volumes made possible by automation. Big volumes, low price and standardized products assuring good profits

Evolution of S.P.
b) Phase of major environmental change


 From 1930’s, there was intense environmental trouble

 Change in technology, political environment and government

policies  Mass production had lost their merit  Slogan of low price replaced by novelty at high price, production differentiation, market segmentation, pramotion, etc.

Evolution of S.P.
 Firm had large choice for investment


 Investment decisions were becoming increasingly difficult

 Profits were no longer assured
 Assessing attractiveness and risk of different industries

became crucial requirement  Shift from internal orientation to external orientation  Firms had to anticipate environmental trends  Top management left all production, sales, purchase decisions...