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title: '[SESSION 01] Introducing Strategic Management'

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**Please refer the slides along with the note**
# [SESSION 01] Introducing Strategic Management
## 1. Strategy
**Determining goals and objectives** and determing **how to achieve it** either cunning(shrewd) or smart way.
##### Examples


### Close Terms to Strategy
1. Action plan
2. Game plan
3. Ploy
4. Plot
5. Programme
6. Tactic
7. Trick
8. Purpose
9. Solution
10. Policy

### Features of successful Strategy
1. Clear and focused
2. Futuristic
3. Coherent/Consisitency (Ex: Ford motor company)
4. Unique (Ex: Cocacola, Kandalama Hotel)
5. Creative/Innovation
6. Deceptive (Chinese goods)
7. Competitive advantage (advantage that can be gained over the competitor)
8. Cost effective

##### Should the strategy be ethical? **NO**
New competitor comes to the market and the products pushed to the market is bought by the giant company. New competitor believes that they have a demand for their products in the market. They pushed a lagre bulk next time and giant company does the same. But, at the next instance where the company push a large bulk to the market,no one buys. Competitor gains losses and move away from the business.

### Origin of Strategy
- Greek word - 'Strategos'
- Army commander in chief in ancient Greek city-sites
- Then an art and developed as a science later
- 1965 - Albert chander apply to the business world 

### How strategies come about?
1. Descriptive perspective - **An art** resulted in to an **emergent stategy**/Comes up from practise
2. Prespective perspective - **Science** resuslted to an **intended strategy**/Develop pre

### Intended vs Emergent strategies

| Intented Strategies | Emergent Stratgeies |
| ----------- | ----------- |
| Planned | Suddenly  |
| Formulate | Situationally |
| Rationally | Irrational |
| Deliberate | Practise |
| Science | Experimentation |
| Ex: Restructuring of Org/Diversification,Aqusisition| Ex: Heyor Electrical company, Portable Sanitizers(Pen size to carry out every where) |

**Emergent strategies are often success than Intended strategies**

## 2. Organization Strategy
Direction and scope of an organizationa ovr the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholders expectations.
Ex: Amazon, Disney, Sampath Bank

### Five Ps
1. Plan
2. Ploy
3. Position - Sony
4. Pattern - Ford motor company
5. Perspective - Sampath Bank, Apple

### Four Lences(Perspective)
1. Strategy as a design
2. Strategy as a experience
3. Strategy as a variety
4. Strategy as a discourse

## 3. Strategic Management
**Managing the strategy, formulating and implementing**
Primarily : Understand the strategic **position** of an organization, Available **choices**, selecting and managing strategy(**Action**)

### 3.1 Strategic positioning
Identifying the impact of Environment analysis, internal analysis and stakeholder analysis.

#### Strategic analysis

### 3.2 Strategic choice
### 3.3 Strategic action

### Strategic management vs Operational/Functional Management
| Strategic management | Operational management |
| ----------- | ----------- |
| Long-term | Short-term  |
| Complex | Routinished |
| Entire Organisation | Functional Area |

**Role of Stategic managemt has 2 perspectives as**
1. Organisational Context
2. Academic discipline/Context

### Importance of Strategic Management
[V- Volatile,U- Uncertain,C- Complex,A- Ambigious]
1. Diagnose problems/issues
2. Roadmap
3. Gain and retain advantages
4. Corparate performance and ensure long term survival and growth
5. Manage the changes and address compelxity
6. Win over competitiors

### Evolution of Stategic Management
1. Business policy era(Had stable environments) - 1960s (Advertising, recruitment)
2. Strategic Planning (Changed the environment) - 1960-80s (Hired specialists and firms)
3. Strategic Management - (Focused of implementation as well) - 1980-2000
4. Strategic thinking driven strategic management (VUCA)- >2000s (Innovations and creativity)

# [SESSION 02] Approaches to sense the future direction of an Organisation

## Nature of the business environment (Refer table on page 03)
### Environment Dynamism
The quality of being dynamic.Changes overtime independently (Opposite of static).
1. Dynamic
2. Stalk 

### Environment Complexity
Quality of being complicated and diffucl to be understand. Depend on environmental factors, interactions with those factors, interdependencies among those factors and diversity among factors.
1. Simple
2. Complex: Lot of variable/factors affect the company

## Approaches towards sensing the future (Refer table on page 04)
1. Strategic planning -> Simple and static environments
2. Strategic thinking -> Complex and dynamic environments (Example for discontinivity is Britannica dictionary)[Intuitively, imaginatively and creativity is essential to face turbulant environements]

## 1. Strategic Planning
- Specialists/Experts/Outside the organisation -> **Planned**
- Dowers/Managers/Inside the organisation -> **Implementation**
- Analytical -> Internal and External analysis (PESTLE,Value chain analysis,Scenario analysis, Five forces model)- Based on manipulation of numbers.
- **Rearrange** and **Preservation** of **Established categories** (Current strategies within the organisation)
**Note:** Strategic planning does not help to retain in turbulant environments because in any of the above mentioned steps, organisation does not seek for creativity, innovation and moving in to new makrkets overcoming the existing boundaries.

**According to meansberge strategic planning does not help in making strategies, rather it is mechanism to facilitate strategic formulation and strateic implementation. Strategic planning is not good for crafting/building strategies**

Ex: On the Spot insurance -> Was a brilliant idea, but idea is not enough. For that we need **strategic planning** to succefully market the product.

##### Strategic programming = Strategic Planning
Elaboration - Process of presenting strategy in details and consist of 3 steps
1. Cordification: Operationalization of the strategies
2. Elaboration: Breaking down the strategies(Detailed action plans)
3. Converstion: Budgeting and related to performance

### Fallacies(Mistaken beliefs) of Strategic Planning
1. Prediction: While the plan is prepared, environmental factors will retain same. (Truth is environment changing/Dynamic environment)
2. Detachment: Planners/experts were seperated from dowers.(Experts do not contact dowers when planning)
3. Formalization: Rational process/has a sequence.(Truth is strategies can be generated with a sequencial order/formal systems/mechanical process)

#### Danger of Formalization
- Reduce creativity
- Compress creative thinking 

## 2. Strategic Thinking
Merely thinking about strategies. Crafting strategic architecture. Creative imagination.(Mental or thinking process in order to achive goals or objectives/Congnitive process)
**Objective:** Capture the market before others by being very unique, opportunistic and farsighted.(Bottom top approach)

- Synthesis: A strategic thinker has a mental model of the complete system of value creation from beggining to end.Consider all the factors together (Holistic/systematic view, unlike analytical thinkers)
- Intuition(Sensing correct paths without facts/data) and creativity
- Integrated and holistic view of the enterprise(After 5year how will be the organisation)
- Creative act of synthesizing experiences (Intuition/Imagination/creativity in order bring new ideas)in to a novel strategy

**Note:** There is no sheduled and immaculately(perfect)processes to design strategies. 

### Obstacles to Strategic Thinking
- Tend to depend on analysis a lot(Environmental analysis, internal audits, Stakeholder expectation analysis)
- Depend on theoritical models (What we want to understand is that, theories provide the background to develop strategies, but upon depending on models, we cannot develop successful strategies) 
- Lack of imagination and creativity
- Traditional practices within the industry (Sampath bank introduces ATM, all the bank copied the same strategy)
- When going to fulfill the short-term profits, no time for proper strategies

### Strategic Planning vs Strategic Thinking (Refer page 16)
| Strategic planning | Strategic thinking |
| ----------- | ----------- |
| Analytical | Synthesis/Holistic view |
| Left brain | Right brain |
| Intendent strategies | Emergent strategies |
| Top down approach|Bootom to top approach|
| Unrealistically aiming for perfection(idealistic & normative models)|Do not depend on Standard approaches|
| Adapt rational decision making| Adapt irrational decision making|
| Stable and changing business environments| Hightly turbulant and volatile business environments|

## 3. Left and Right-Handed planners
- Analytical thinkers - Use scientific,systematic approaches, bring order and sequence **(Right-handed)**
- Creative thinkers - Fresh percepective to find unconventional, uncommon and radical process. Look for many right answers. Ability to think in new areas, relax and unofficial, No pre-determined processes **(Left-handed)**

**Note:** Go through the slide no 21, 22, 23 and 24
- Left brain people read the word
- Right brain people read the color

# [Session 03] Setting the Future Direction
## Strategic Direction
A set of action that has to be taken in to practised in order to achieve goals of organizational strategy(Roadmap). Can be at the coaparate level, business level,functional level or in the operational level.  

## Major elements in the strategic management process
Mainly made up 4 main processes as follows,(More like a flow chart)
1. Strategy formulation(First at the corparate level, then at the business level) [What and How gonna to acoumplish]
- Discovering a vision
- Developing a mission statement based on the vision
- Developing goals and objectives based on mission

2. Strategy analysis (Internal strategic analysis-skilled employees/resources/budget, External strategic analysis-SWOT)
- Carryoing out an environment analysis (KPIs,Leading and laging KPIs)
- Selecting an appropriate strategy
3. Strategy implementation
4. Strategy evaluation

## Strategic pillars needed to articulate the future directions
If remove one of them, surely organisation gonna collapse. These are bind to each other to achieve strategic objectives.
1. **Strategic Leadership:** Management ability proactive/flexble/anticipate/change agent(Result: Balance the long run and short term objectives)
2. **Corporate Philosophy:**: Expresses the organisational values/why the company is operated/values,missions of the organisation/Guide the orient the business
3. **Strategic Thinking:** Creativity/Holistic view/Think out of the box
4. **Futuristic Orientation:** Practise of looking ahead and trying to discover it/holistic concept/To identify and interprest the challenges

### 1. Strategic Leadership
Managers potential or the ability to express the strategic vision to the entire organization(Part of the org)+ managers ability to percuade or motivate others to aquire the vision.**Aim is always transform the organisaion and survival/integrate the short-term decisions with future outcomes**
1. Broad in scope
2. Future focused (Transactional & transfermational leadership)
3. Change orientation/Change agent

### 2. Corporate Philisophy
Basic beliefs that people in the business are expected to go and should be guided by beliefs. Simply, a statememt that can be used to guide behaviours and decisions in an organisation. 

#### Advantages
- Expresses the organisation culture: Employees to intepret the ambiguous thingsiin a manner that would make sense.
- Contribute the organisation performance: Employees commitment will be increased/feeling of commitment towards the organisation

### 3. Strategic Thinking 
**Discussed in the session 02**

### 4. Industry Foresight/Futuristic Orientation
A deeper insight into the future. How an organisation navigate from one place to another.
Continuos activity->Industry foresight

#### Why Industry Foresight?
- Knowldge gap can be identifed
- Recruite new people with the latest capabilities
- Control the evolution of the industry
- Informs corparate direction

#### How to see the Future?
1. Looking outward
2. Looking forwarf 
3. Build a collective view of the future

##### What requires?
- Strategic thinking - Creativity and imagination 
- Always be curious - Six thinking pattern
- Spend on intellectual energy(Patents etc.)
- Go beyond what customer requires
- Not taking competitors as benchmarks/Go beyond competitors
- Think out of the box

## What is a Vision?
Colorful dream that gonna happen in future which appears in the mind of the founder. Gives a direction(path) rather than a destination. A pathway organisation should follow.

### Articulating the vision
Discovering the vision. Communicate to the other members in the organisation. Chances of encouting erros will be less as the organisation has a roadmap

#### Benifits
- Solid foundation
- Something fixed
- Provide set of guidelines
- Gives aspiration/motivation

### Vision
#### 1. Core ideology
Why does the organisation exist. Meaningful only for the organisational members.Not outsiders. Members within the organisation should be able to justify. Core ideology will remain the same eventhough the environment changes.
##### 1.1 Core Values: Values which will remain fixed/permenent and won't change for any reason
##### 1.2 Core purpose: Reason for existance. Guide and direct the organisation. Find who fits and not to the organisation. Will remain same.

#### 2. Envisioned Future
Will change in the long run.
##### 2.1 Long term Goals - BHAG [Big Hairy(Complex) Audacious(effort) Goals]: Can be achived only in the long run.
##### 2.2 Vivid Description: Once the long term goals are achieved, what sort of a situation/position organisation be in.

## Vision in to a **Mission**
Convert the vision in to a mission. Mission define the future direction and the scope. Helps to seperate the business from the competitors. Coverting tangible item
**Its something that can be achieved.**

## Mission in to **Strategic Goals**
Covert mission in to goals. Goals which can be achived and should be SMART. Set goals priority areas in the mission statement.

## Goals in to **Objectives**
Operationalise the goals. Breaking down the goals in to seperate objectives. More like Yardsticks,Rulers,Measures(KPIs)

# [Session 04] Understanding the **Strategic Position** through Macro and Micro Environment Analysis - **External Environment**

## Strategic Position
Understanding of an organisation in the environment how others see the organisastion. How you pitch your organisation.
Apple: In the mobile industry how you recognize Apple company

**Note:** Strategic analysis is carried out to understand the strategic position of an organisation

### Elements of Strategic Management
#### 1. Strategic Position
##### 1.1 The environment (External environment)
##### 1.2 Stakeholder analysis (Expectations and purposes)
##### 1.3 Internal environment (Resources,Culture.Competences)
#### 2. Strategic Choices 
##### 2.1 Bases of strategic choices
##### 2.2 Strategic options
##### 2.3 Evaluation and selection
#### 3. Strategy into action
##### 3.1 Structure and design
##### 3.2 Control of resources
##### 3.3 Strategic change

### Strategic analysis
1. Market Based View: More focused on external environment and attract opportunities in the marketplace
2. Resourse Based: More focused on the internal environment and the resources, capabilities and the culture of the organisation 

### Organisational Envionment
All the organisations depend on the envirnment. Organisation should adapt along with the environment changes.(Directly or indirectly affects).
Also a treat to the org and can be fatal if the org does not adapt the organisational changes. Manager should analyse, predict and influence the environment changes. (Ex:Macdonalds)

#### External Organisational Environment
There is a possibility of affecting the organisation.
##### Layers in business environment
1. The organisation
2. Competitors and market
3. Industy/sector
4. Macro environment

##### 1. Macro Environment
Could affect lesser or higher depend on the nature of the organisation.
- **PESTEL:** Refer page number 15
**Key drivers for change** are the factors that are likely to have a high impact on the success or failure of strategy
Ex: Due to the Covid what are the key drivers for change?
    - Online trasactions
    - Home-delivary services
    - Online purchases
    
    **Building Scenarios**are detailed and plausible views of how the business environment of an organisation might develop in the future based on key drivers for change about which there is a high level of uncertainty.(Simply plan A abd then backup plans for different scenarios, plan b,c and d)
Different views/plans about future based on key drivers

##### 2. Industries and sectors
An industry is a group of firms producing the same principal product or service. Competitiveness depend on attractiveness of the sector/industry

- **Five Forces Framework:** Helps to identify the attractiveness of an industry
    - Risk of entry:
    - Bargaining power of suppliers:swicthing cost to find a new supplier is low->High bargainig power to the organisation.
    - Bargaining power of buyers:If the particular buyer buys majority from the industry->high bargaining power|swiching cost is less->high bergaining power
    - Threat of subtitutes:Price performance ratio
    - Rivalvary within the industry:Growth rate high->Rivalvary is high

###### Key issues in Five Forces Framework
- **Defining the "right" industry:** An organisation in the toursm industry woould fall in to transport industry as well. Cannot cleary identtify the right industry.
- **Converging industries:** Previously seperated industries, with the time industries have been converged/merged. Analysis done in the past, will not be applicable for present.
- **Complementary products:** Only talk about subtitite products in the model.

##### 3. Competitors and Markets
Can be grouped into two major categories
1. Scope of an organization's activities
2. Resource commitment
- **Strategic groups:** 
Competitor firms in a seperate industry they do have similar/competive strategic phases
    - Maruti/Suzuki wagon r-Affortable low price better quality is the strategy | BMW/Audi high price and high quality is the strategy(Brand image).
    - Toyota vehecles are everywhere in the country but no Tesla in sri lanka. (Geographical coverage)
- **Market segments:** 
Is a group of customers who have similar needs that are different from customer needs in other parts of the market
- **Strategic customer:** 
is the person(s) at whom the strategy is primarily addressed (Ex: Baby cheramy-User will be baby but customer will be the mother. should address the customer)
- **Critical success factor:** 
Features that are particularly valued by a group of customers and organisation must excel to outperform
competition (Ex: Mobile phone for take selfie: High quality camera should be provided)

# [Session 05] Understanding the Strategic Position through Internal Environmental Scanning; Strategic Capabilities **Internal Environment**

## Importance of Internal environment
Market would change all the time. Depend on the strategic capability of the business, will decide the future of the organisation(CD shops have been vanished)

### Strategic capabilities
Ability to perform at the level required to survive and prosper. It is underpinned by the resources and competences of the organisation.

Only the industry will be identical, orgnisations have different capabilities, heterogeneous.

#### Resources
1. Tangible resources (Labour,capital and finance)
2. Intangible resources (Reputation,info and knowledge)

#### Competences
Skills and abilities use the resources effectively and efficiently. (Consistency within the cricket team)Refer page number 09
**Ex:** Softlogic one has Odel,Burgerking, Softlogic, Asiri hospitals under their name. They should have competences in all above mentioned areas to address the customer requirements.

**Refer page no: 10**

### How to sustain the competitive advantages

- Valuable: Google search engine, Tesla electric car, coca cola
- Rare: should be rare
- Inimitable: should be costly and hard to copy
- Non-substitutable: should not be close substitutes in the market

### Dynamic capabilities
Is focused on the dynamic environment, when everything are changing, organisation comes up with innovation products.

**Strategic capabilities that they have inside the organisation to achieve competitve advanatge in changing market is known as dynamic capabilities. Or else the organisational ability to renew and recreate strategic capabilities to meet the needs of changing environment.**

Dynamic capabilities may be relatively formal such as systems for new product development or procedures for agreement for capital expenditure. Ex: Restaurant today should connected with home-delivary services.

#### Cautions and reminders
Sampath bank introduces the ATM. Today it is not something that provides competitive advantage. And beyond that parking, internat banking, cash deposits should be provided by the ATM today.

**Refer the slides as they are clear from here onwards**
- Extending capabilities: Extending to other devisions as well. Oppo, oneplus, Vivo comes under one company nder different CIOs. But there sharing their capabilities. 
- Stretching capabilities: Streching to go to a new market or add a product to the existing market.NTV streched their organisation as M entertainment.

Value chain - (http://lms.mgt.sjp.ac.lk/mod/url/view.php?id=46393)


# [Session 06] Understanding the Stakeholder Expectations and Requirements

An underlying issue raised by this session is strategic purpose of the organisation should be determined **shareholders in the case of a commercial enterprise** or **to broader stakeholder interests – at the extreme society and the social good**

### Who are Stakeholders?
Individuals and groups who has innate interest in business
organization’s activities and who directly and indirectly
**influence** or **being affected** by the organisations' purposes and strategies.

### Different Types of Stakeholder Groups
#### 1. Primary vs Secondary
Primary stakeholders are the individuals or groups directly benefitting or being affected by organisational activities [Customers, Employess, Suppliers] 
Primary stakeholders who do not engage in direct economic exchange with the oranisation

#### 2. Internal vs External (Within and outside the organisation)

#### 3. Contractulal vs Community
Contractual stakeholders are the individuals or groups who has a legal contract with the organisation.
Community stakeholders are the individuals or groups who don't have any legal contract with the organisation [Media and public]


