to Kenneth Andrews, a professor at the Harvard
Business School, a corporate strategy is the
pattern of company purposes and goals and the
major policies and actions for achieving them.
Together they define the business of businesses
the company is to be involved with and the kind
of company it is to be. A written statement
of strategy should communicate both a company’s
mission or missions and its primary goals. The
written strategy should also include the company’s
major direction or thrust in products market
research and production methods. A supporting
strategic plan should indicate the major actions
resources allocations and other changes that
will occur during the planning horizon.
Porter, the renowned Harvard Business School
professor has identified three well known strategies
that may lead to competitive success. His first
strategy is in pursuit of overall cost leadership
for the entire market. Firms such as Dupont
are well known for such a strategy. Various
actions such as increasing production efficiencies
underpricing competitors and cutting costs are
directly related to the successful pursuit of
this strategy. Porter’s second strategy
is differentiation of products so that the consumers
see them as unique or very distinctive. General
Motors takes this tack in the automotive industry.
Distinctive brands a heavy investment in product
innovation and memorable marketing campaigns
are linked directly to this general strategy.
The third strategy involves focusing on only
a narrow segment of a larger market emphasizing
either overall cost leadership or differentiation
to achieve goals that top managers set for the
actual strategic management process is often
described as a rational and analytical one involving
the following steps:
Scanning - This step examines and forecasts
government and competitor actions, industry
trends, buyer behaviour and preferences and
company specific threats and opportunities.
Analysis - In this step, managers analyse and
assess company activities to identify current
performance, corporate cultures, strengths,
weaknesses and managerial values and to examine
current mission goals and strategic thrusts.
Goal Setting - Strategic goal setting defines
a mission and sets long term goals.
above analysis is used to generate a new strategy
that fits the organisation’s environment,
its strengths, mission and goals.
Management also entails the reconciliation of
the above analysis with market opportunities,
corporate capabilities, the values of senior
management and legal requirements and social
and environmental responsibilities.
next step is to translate strategies into organisational
actions. This involvesproviding leadership,
communication with managers and down the line
and making many detailed plans and day-to-day
Finally, Strategy Control monitors strategies
and strategic planning to improve both future
performances and the planning process.
factors to Strategic Planning in all situations,
there are constraining factors in the design
and implementation of the strategic management
process. It is important to recognise these
factors and take these into account while designing
the strategy. Some of these are:
and culture of the organisation - The culture
of the organisation will impact the values,
philosophy and attitudes towards factors such
as new business opportunities, people development
policies and attitudes towards shareholders
and government agencies in the regulatory framework.
size and structure - The organisational size
and structure will determine the complexity
of strategic planning which has to be carried
out and the need to take into account proper
understanding of the internal strengths of the
organisation as well as its weaknesses and to
take into account, the power relationships and
the informal and formal nature of the communication
turbulence and dependence - The environmental
change and turbulence taking place will determine
to a very large extent, the dynamic nature of
the strategic planning exercise, specially in
the current changing environmental context in