1. INTRODUCTION TO
CORPORATE STRATEGY
BY: DR. DEBAJANI PALAI
FACULTY: IMIT

2. CONCEPT OF STRATEGY
 The term strategy is derived from the Greek word “Strategos” means a plan or
process or a set of decision rules or an arrangement to create a common thread.
 It is the path or the way to achieve the goals of the organization or corporate.
 It helps the manager proactively to direct or run the organization in a volatile
environment.
 It consists of WH questions.

3. DEFINITION
 Mintzberg has defined the strategy which consists of “5Ps” such as: plan, pattern,
position, ploy and perspective.
 A Plan “how to achieve the target”.
 A Pattern “to take consistent actions over time”.
 A Position “to be achieved by offering goods and services in particular market”.
 A Ploy “how to beat the competitors by using tactics and tricks with proper
allocation and utilization of resources”.
 A Perspective “it is the vision of the organization what it want to be”.

4. IMPORTANCE OF THE STRATEGY IN
CORPORATIONS/ORGANIZATIONS
 Strategy is concerned with to achieve the broad goals of the organization.
 It establishes unique value proposition compared to its competitors.
 It provides tailored value to its customers.
 It clearly identifies and clarifies what not to do.
 It empowers the organization to move towards its vision.
 It creates environmental scanning to gain competitive advantage.

5. EXTERNAL & INTERNAL ENVIRONMENT
 External environment is the environment outside of the organization which
influences the business. It can broadly be categorised into two parts: Micro
Environment & Macro Environment.
 Micro Environment studies the small area of business or immediate periphery of
the organization. It directly influence and regulate the business.
 E.g.: customers, suppliers, creditors, vendors, competitors and local community.

6. CONT…
 Macro Environment: It studies overall business activity in a broad manner. It
influences business on the basis of “PEST”: Political, Economic, Socio-cultural and
Technology.
 Political Factors consists of employment laws, tax policy, policies regarding trade
& tariffs, environmental regulation and political stability.
 Economic Factors consists of economic growth, interest rate, exchange rate and
inflation rate.
 Socio-Cultural Factors consists of health consciousness, population growth rate,
age, career attitude, emphasis on safety etc.
 Technological Factor consists of R & D activity, automation, technology incentives
and change in technology.

7. ELEMENTS OF POLITICAL & LEGAL
ENVIRONMENT
 The three basic elements of political environment are Government, Legal &
Political.
 Government: Govt. policies, rules & regulations are controlling & monitoring the
business enterprises and its activities in the state.
 The strategist should analyze & evaluate policies and practices of the Govt. and
frame the strategy accordingly.
 Example: The tax policy of the Government and its impact on business.

8. CONT…LEGAL
 Sound legal system is the basic requirement for running of the business within the
state.
 The strategist should be aware of various laws which are protecting consumers,
competitors & organization.
 Business organizations should aware of the laws which are relevant to company,
competitors, intellectual property, foreign exchange and labor etc.

9. CONT…POLITICAL
 Political system also influences to business & its activities.
 Political pressure groups influence to the Government and control business
activities to some extent within the country.
 Recently, special interest groups & political action committee put pressure to
business organizations & to pay more attention towards consumer’s rights,
minority rights & women rights.

10. ELEMENTS OF ECONOMIC ENVIRONMENT
 The economic environment constitutes economic conditions, policies & the
system of the economy.
 The economic condition includes nature of the economy, the general economic
situation in the region, resources available, market, money, material, demand,
supply, cost, purchasing power, income, saving, credit availability, investment etc.
 It also includes development process of the country, NI, public finance, trade
policies etc.

11. CONT…ECONOMIC ENVIRONMENT
 The elements of market are: suppliers, customers and competitors.
 The marketing intermediaries are: middle men, agent, merchants, marketing
agencies, advertising agencies, marketing research firms, media, consulting firms
and public.
 The customers are: individual, household, industries, commercial establishments,
Government & other institutions.
 Supplier provides inputs or raw materials and components to the organization
who plays very vital role for smooth functioning of the business. At the same time,
the uncertainty associated with the supply is inventory maintenance, delay in
supply chain etc.

12. SOCIO-CULTURAL & DEMOGRAPHIC
ENVIRONMENT
 The organization consists of people of diversified age, gender, race, color, religion,
region, language etc. which create differentiation in perception, personality and
overall behavior or performance.
 The same product can be used varied in different society and different culture
because of cultural values, traditions and belief.
 Similarly, the belief is associated with the brand name which can be reflected
through the product.
 The MNCs should focus on the cross-cultural learning.

13. CONT… DEMOGRAPHIC ENVIRONMENT
 It consists of elements like: the size of the population, growth rate, age
composition, family size, education level, income distribution etc.
 The family structure decides the pattern of consumption.
 The educational awareness decides the selection of the product.
 The income level influences the buying pattern.

14. TECHNOLOGICAL ENVIRONMENT
 The basic characteristics of technological environment are risk & uncertainty
associated with technology, technological advancement, opportunities of
developed technology.
 Technological issues are cost of technology, effective access of internet, reliability
and validity of information, efficient technical-know- how etc.

15. INTERNAL ENVIRONMENT ANALYSIS
 Internal Environment is a component of the business environment, which is
composed of various elements present inside the organization that can affect and
be affected by the decision of the organization and its activities.
 The internal environment of the organization consists of employees,
management, owner, shareholders, investors and all other resources.
 Factors influencing external environment are: value system, vision, structure,
culture, human resource, physical resource, technical-know-how etc.

16. CONT…
 The internal environment environmental analysis generates long list of resources
and capabilities which play vital role in strategy formulation.
 It determines the strength and weakness of the organization by focusing on four
important perspectives. These are
 Comparison with organization’s past performance.
 Stages of product/market evolution
 Comparison with the competitors
 Comparison with key success factors

17. COMPARISON WITH PAST CAPABILITIES &
PFM
 The past or historical experience of the organization stands as a base for
strategists. They can be familiar with internal capabilities and constraints.
 The internal elements to be compared are organization’s financial capacity,
production facility, manpower strength, marketing tricks and overall control
system.
 This study of past performance will help the strategist to develop a suitable
strategy for the organization.

18. STAGES IN PRODUCT/MARKET
EVOLUTION OR PRODUCT LIFE CYCLE
 To ascertain internal environment product life cycle is very important. Different
stages of product life cycle like: introduction, growth, maturity and decline/
saturation.
 Each stage of product life cycle demands different attention of the strategist. The
growth stage involves brand recognition, product or market differentiation and
heavy flow of financial resources to beat competitor’s move.
 At the maturity stage growth continues in the diminishing rate which demands
expand of market segment, technological up gradation etc.
 At the decline stage financial control mechanism and superior supplier and
customer relationship is maintained.

19. COMPARISON WITH COMPETITORS
 The organization competes with its customers on the basis of its marketing
potential, financial resources, operating facilities, location, technical-know-how,
brand image, managerial talent and levels of integration.
 The organization selects the strategy by evaluating the strength and weakness of
each and every factor.
 While selecting the strategy the strategist compares the organization’s key internal
capabilities with those of its rivals.

20. COMPARISON WITH KEY SUCCESS
FACTORS
 The key success factor of the organization must be identified by the strategist.
 By scrutinizing industry competitors as well as customer needs, entry barrier,
availability of substitute and suppliers the strategist formulates strategy

21. STRATEGIC ADVANTAGE PROFILE (SAP)
 Strategic Advantage Profile (SAP) is a summary statement which provides an overview
of the advantages and disadvantages in key areas which affect future operations of the
organization.
 It is the systematic evaluation of strategic advantage which is significant for the
business and its environment.
 It involves analysis of internal strength and weakness along with opportunities and
threats by focusing on complete study of functional areas like: marketing, production,
finance, accounting, personnel, R&D.
 The strategist must be aware of strategic advantages or strengths of the firm to be able
to choose the best opportunity for the organization.
 Hence, to face environmental opportunities and threats the business must keep
constant analysis of SAP.