BACHELOR IN BUSINESS ADMINISTRATION

SCHOOL: BUSINESS ADMINISTRATION

SEMESTER

STRATEGIC MANAGEMENT

INDIVIDUAL ASSIGNMENT

Prepared for:

Lecturer’s name: Mr. Saboor

Prepared by:
Policy Resistance Case Study Focused on Government’s Intervention in the Conflict between Bi
Student’s Name: Olowokere-Alafe Olarewaju Adekunle
g-box stores and Traditional market in Korea
ID No: Alfa2018-0729

Subject Code: BBA

Submission date: 14th November, 2020

Contents
QUESTION 1..............................................................................................................................................4
BENEFITS OF STRATEGIC PLANNING AND KEY TERMS OF STRATEGIC MANAGEMENT. .4
1. It allows organizations to be proactive rather than reactive:........................................................4
2. It sets up a sense of direction.......................................................................................................5
3. It increases operational efficiency:...............................................................................................5
4. It helps to increase market share and profitability:.......................................................................5
5. It can make a business more durable............................................................................................5
KEY TERMS IN STRATEGIC MANAGEMENT.................................................................................5
Strategists............................................................................................................................................5
Mission Statements-............................................................................................................................6
External Opportunities and Threats-....................................................................................................6
Internal Strengths and Weaknesses/Internal assessments-...................................................................6
Long-Term Objectives-.......................................................................................................................6
Strategies-............................................................................................................................................6
Annual Objectives-..............................................................................................................................6
Policies-...............................................................................................................................................6
QUESTION 2..............................................................................................................................................7
CONCEPT OF SBU IN A MULTI BUSINESS ORGANIZATION, 3 LEVELS OF STRATEGY-
CORPORATE, BUSINESS AND FUNCTIONAL.................................................................................7
The 3 levels of strategy corporate are:.....................................................................................................7
 Corporate level strategy...............................................................................................................7
 Business unit level strategy..........................................................................................................7
 Market level strategy...................................................................................................................7
How do goals and objectives vary at each level?.....................................................................................7
QUESTION 3..............................................................................................................................................8
THE KEY TRAITS OF A CEO. THE FORCES THAT DESIGN THE STRATEGIC MANAGEMENT
SYSTEMS...............................................................................................................................................8
Courage, Passion & Intensity...................................................................................................................8
Resilience & Drive..................................................................................................................................8
High Emotional Intelligence....................................................................................................................8
Humility..................................................................................................................................................8
Excellent Communication Skills..............................................................................................................8
Forces that design the strategic management systems.............................................................................9
Communication of Corporate Goals-.......................................................................................................9
Goal-Setting Process-..............................................................................................................................9
Environmental Scanning-......................................................................................................................10
Subordinate Managers’ Focus-..............................................................................................................10
Corporate Planner’s Role-.....................................................................................................................10
Linkage of Planning and Budgeting.......................................................................................................10
QUESTION 4............................................................................................................................................11
GRAND STRATEGIES AT THE CORPORATE LEVEL....................................................................11
Stability Strategy...............................................................................................................................11
Growth Strategy.................................................................................................................................11
Retrenchment Strategy.......................................................................................................................11
QUESTION 5............................................................................................................................................11
FACTORS AFFECTING STRATEGIC CHOICES..............................................................................11
Nature of Environmental...................................................................................................................11
Firm's internal realities......................................................................................................................12
CEO/owners company culture:..........................................................................................................12
Firm's capacity to execute the strategy...............................................................................................12
Resource allocation............................................................................................................................12
CITATIONS AND REFERENCES...........................................................................................................13
QUESTION 1
BENEFITS OF STRATEGIC PLANNING AND KEY TERMS OF STRATEGIC
MANAGEMENT

While many organizations understand the importance of strategic planning and spend a great
deal of time and money coming up with the strategic plan, it still remains something that is
reviewed just once a year or worse – a glossy document that sits on the shelf!

“If you don’t know where you are going, you are certain to end up somewhere else.” – Yogi
Berra

You might be thinking: Is it worth embarking on a strategic planning process? There are many
benefits that go along with strategic planning. The key to successful strategic planning is to build
in measures and implementation steps that allow you to engage your staff and monitor the results
at regular intervals. A great resource to get started with is our Free Strategic Plan Template
which you can download as a PDF.
The work of strategic planning doesn’t stop at the strategic plan, but it’s a start! Here are the top
5 benefits of strategic planning:

1. It allows organizations to be proactive rather than reactive: A strategic plan allows

organizations to foresee their future and to prepare accordingly. Through strategic
planning, companies can anticipate certain unfavorable scenarios before they happen and
take necessary precautions to avoid them. With a strong strategic plan, organizations can
be proactive rather than merely reacting to situations as they arise. Being proactive allows
organizations to keep up with the ever-changing trends in the market and always stay one
step ahead of the competition.

2. It sets up a sense of direction: A strategic plan helps to define the direction in which an
organization must travel, and aids in establishing realistic objectives and goals that are in
line with the vision and mission charted out for it. A strategic plan offers a much-needed
foundation from which an organization can grow, evaluate its success, compensate its
employees and establish boundaries for efficient decision-making.

3. It increases operational efficiency: A strategic plan provides management the roadmap

to align the organization’s functional activities to achieve set goals. It guides
management discussions and decision making in determining resource and budget
requirements to accomplish set objectives — thus increasing operational efficiency.

4. It helps to increase market share and profitability: Through a dedicated strategic plan,
organizations can get valuable insights on market trends, consumer segments, as well as
product and service offerings which may affect their success. An approach that is targeted
and well-strategized to turn all sales and marketing efforts into the best possible
outcomes can help to increase profitability and market share.

5. It can make a business more durable: Business is a tumultuous concept. A business may
be booming one year and in debt the next. With constantly changing industries and world
markets, organizations that lack a strong foundation, focus and foresight will have trouble
riding the next wave. According to reports, one of every three companies that are leaders
in their industry might not be there in the next five years… but the odds are in favor of
those that have a strong strategic plan! If you’re considering adopting a strategic plan at
your organization, or are looking for a way to align your staff and daily operations on
your existing one, then Envisio may just be the solution you’ve been looking for.
Envisio’s cloud-based strategic plan management software helps organizations manage
their strategic and operating plans, track performance, and report to stakeholders.

KEY TERMS IN STRATEGIC MANAGEMENT

Strategists-
Strategists are individuals who are most responsible for the success or failure of an organization.
Strategists are individuals who form strategies.
Vision Statements
Many organizations today develop a "vision statement" which answers the question, what do we
want to become? Developing a vision statement is often considered the first step in strategic
planning, preceding even development of a mission statement. Many vision statements are a
single sentence.

Mission Statements-
Mission statements are "enduring statements of purpose that distinguish one business from other
similar firms. A mission statement identifies the scope of a firm's operations in product and
market terms. It addresses the basic question that faces all strategists: What is our business? A
clear mission statement describes the values and priorities of an organization.

External Opportunities and Threats-

External opportunities and external threats refer to economic, social, cultural, demographic,
environmental, political, legal, governmental, technological, and competitive trends and events
that could significantly benefit or harm an organization in the future. Opportunities and threats
are largely beyond the control of a single organization, thus the term external.

Internal Strengths and Weaknesses/Internal assessments-

Internal strengths and internal weaknesses are an organization's controllable activities that are
performed especially well or poorly. They arise in the management, marketing,
finance/accounting, production/operations, research and development, and computer information
systems activities of a business. Identifying and evaluating organizational strengths and
weaknesses in the functional areas of a business is an essential strategic-management activity.
Organizations strive to pursue strategies that capitalize on internal strengths and improve on
internal weaknesses.

Long-Term Objectives-
Objectives can be defined as specific results that an organization seeks to achieve in pursuing its
basic mission.
Long-term objectives represent the results expected from pursuing certain strategies. Strategies
represent the actions to be taken to accomplish long-term objectives. The time frame for
objectives and strategies should be consistent, usually from two to five years.

Strategies-
Strategies are the means by which long-term objectives will be achieved. Business strategies may
include geographic expansion, diversification, acquisition, product development, market
penetration, retrenchment, divestiture, liquidation, and joint venture.

Annual Objectives-
Annual objectives are short-term milestones that organizations must achieve to reach long-term
objectives. Like long-term objectives, annual objectives should be measurable, quantitative,
challenging, realistic, consistent, and prioritized. They should be established at the corporate,
divisional, and functional levels in a large organization.

Policies-
Policies are the means by which annual objectives will be achieved. Policies include guidelines,
rules, and procedures established to support efforts to achieve stated objectives. Policies are
guides to decision making and address repetitive or recurring situations.

QUESTION 2
CONCEPT OF SBU IN A MULTI BUSINESS ORGANIZATION, 3 LEVELS OF
STRATEGY-CORPORATE, BUSINESS AND FUNCTIONAL.

A strategic business unit, popularly known as SBU, is a fully-functional unit of a business that
has its own vision and direction. Typically, a strategic business unit operates as a separate unit,
but it is also an important part of the company. It reports to the headquarters about its operational
status. A strategic business unit or SBU operates as an independent entity, but it has to report
directly to the headquarters of the organization about the status of its operation. It operates
independently and is focused on a target market. It is big enough to have its own support
functions such as HR, training departments etc. There are several benefits of having an SBU.
This principle works best for organizations which have multiple product structure. The best
example of SBU is companies like Proctor and Gamble, LG etc. These companies have different
product categories under one roof. For example, LG as a company makes consumer durables.
It makes refrigerators, washing machines, air-conditioners as well as televisions. These small
units are formed as separate SBUs so that revenues, costs as well as profits can be tracked
independently. Once a unit is given an SBU status, it can make its own decisions, investments,
budgets etc. It will be quick to react when the product market takes a shift or changes start
happening before the shift happens.

The 3 levels of strategy corporate are:

 Corporate level strategy: This level answers the foundational question of what you want
to achieve. Is it growth, stability, or retrenchment?
 Business unit level strategy: This level focuses on how you’re going to compete. Will it
be through customer intimacy, product or service leadership, or lowest total cost? What’s
the differentiation based on?

 Market level strategy: This strategy level focuses on how you’re going to grow. Will it be
through market penetration, market development, product or service development, or
diversification?

How do goals and objectives vary at each level?

Goals and objectives are a critical component of management, both in terms of planning and in
terms of the larger planning-organizing-leading-controlling (P-O-L-C) framework. You can see
their role summarized in the P-O-L-C figure. Unfortunately, because their role and importance
seem obvious, they also tend to be neglected in managerial practice or poorly aligned with the
organization’s strategy. You can imagine why this might be problematic, particularly since one
of a manager’s functions is to evaluate employee performance—it would be nice if employees
could be evaluated based on how their achievement of individual goals and objectives
contributes to those critical to the organization’s survival and success. In this chapter, we
introduce you to the basics on goals and objectives and provide you with an understanding of
how their usage has evolved. We also show you how to develop a personalized set of goals and
objectives to help you achieve your personal and professional aspirations.

QUESTION 3
THE KEY TRAITS OF A CEO. THE FORCES THAT DESIGN THE STRATEGIC
MANAGEMENT SYSTEMS

However, the recruiting industry has evolved, changing the way hiring managers and search
consultants view candidates. When it comes to the C-Suite, especially Chief Executive Officer,
seasoned executives do not consider a long-term track record to be an important predictor of
success, much less the sole factor. Companies and their retained search consultants are looking
for the full package when it comes to their CEO; charisma, passion, personality and culture fit
are high ranking desirable traits needed to back up a proven track record.

Russell Reynolds partnered with Hogan Assessments to get “Inside the Mind of the Chief
Executive Officer,” and discovered CEO’s have a unique psychological profile compared to the
average executive. Below are a few characteristics that they found best-in-class CEOs need to
possess and work to maintain.

Courage, Passion & Intensity: An excellent CEO is drawn to change and effective action like a
moth to a flame. Best-in-class leaders are always looking towards the future, setting ambitious
goals and often rely on their intuition. CEOs take initiative, are quicker to capitalize on
opportunities and are more likely to take high level risks than their other executive counterparts.
Their intensity and passion for growth and development makes them charismatic and persuasive
people.

Resilience & Drive: Leaders know that taking risks and making large-scale changes can lead to
exponential growth or can fail dramatically. A key difference between good CEOs and great
CEOs is the ability to bounce back and push forward. A great CEO is open to learning from their
mistakes and will work to turn unanticipated situations into positive results.

High Emotional Intelligence: CEOs of successful corporations know a key part of success is
attributed to collaboration. Great leaders strongly believe in building strong networks and know
the best way to do so is forging mutually-beneficial relationships. CEOs are not always
extroverted but they can easily read people’s emotions and are generally warm, easy to approach,
trustworthy and uplifting.

Humility: CEOs should convey a personable demeanor, and one way to achieve this is by
remaining humble and modest about their qualifications. Let your work speak for itself and be
mindful of natural confidence being perceived as arrogance or pretention. A great leader is not
self-involved but instead should be consistently working to develop the next great leader(s).

Excellent Communication Skills: Finally, the climb to the top is never reached without
excellent communication skills. Although CEOs are the decision makers of the company, best-
in-practice CEOs know that employees who feel valued and integral to the company’s success
are incredibly productive. Active engagement within your teams leads to better results.
Remember, the best leaders are also the best listeners so offer mentorship and support whenever
possible. Practice empathy and promote internal, cross-functional collaboration.

Forces that design the strategic management systems

Every business carries on strategic planning, although the formality of that process varies greatly
from one company to the next. Conceptually, the process is simple: managers at every level of a
hierarchy must ultimately agree on a detailed, integrated plan of action for the coming year; they
arrive at agreement through a series of steps starting with the delineation of corporate objectives
and concluding with the preparation of a one- or two-year profit plan. However, the design of
that process—deciding who does what, when—can be complex, and it is vital to the success of
the planning effort.
A strategic planning system is nothing more than a structured (that is, designed) process that
organizes and coordinates the activities of the managers who do the planning. No universal, off-
the-shelf planning system exists for the simple and obvious reason that companies differ in size,
diversity of operations, the way they are organized, and managers’ style and philosophy. An
effective planning system requires “situational design”; it must take into account the particular
company’s situation, especially along the dimensions of size and diversity.

Communication of Corporate Goals-

A common roadblock in designing a formal planning system occurs when second-level managers
ask headquarters for guidelines to focus the preparation of their strategic plans. These managers,
uncertain how to tackle the assignment, may ask, implicitly or explicitly, “Tell us where you
want us to go and the performance you expect from us, and we’ll give you a plan of how to
achieve it.” These questions are not unreasonable, but acceding to them may violate the very
purpose for undertaking strategic planning. To determine how goals should be communicated
and how specific they should be is an important matter in planning system design.

Goal-Setting Process-
From the division manager’s viewpoint, should he or corporate management set the division’s
goals? This issue is sometimes cast as a choice between “top-down” and “bottom-up” goal
setting. Actually, of course, management at both levels must agree on divisional goals. An
important issue, however, remains: Which level in the hierarchy should initiate the process? In a
homogeneous company, the same issue arises concerning the general manager and functional
managers. The design of the planning system can strongly influence how this issue is resolved.
The goals that emerge from the programming process in a small company are tied to an approved
set of action programs. Until the president has decided on the programs, no functional manager
can set goals for his sphere of activity. Selection of a set of action programs, therefore, more or
less automatically determines the performance goals for each functional unit. In many small
companies—such as the pharmaceutical concern we spoke of—a “package” of action programs
spells out the functional goals for every department, because of the interdependence of all the
departments.

Environmental Scanning-
A strategic planning system has two major functions: to develop an integrated, coordinated, and
consistent long-term plan of action, and to facilitate adaptation of the corporation to
environmental change. When introducing and developing such a system, companies commonly
concentrate on its integrative aspects. The design of the system, however, must also include the
function of environmental scanning to make sure that the planning effort also fulfills its adaptive
mission.

Subordinate Managers’ Focus-

In a strategic planning effort, where should the second-level managers direct their attention?
What roles do the division manager, functional manager, and top management play? We shall
consider these questions in terms of whether plans should be more quantitative or more
qualitative, more concerned with financial detail or with strategic analysis. Preparation of a
functionally coordinated set of action programs for a small company may require a great deal of
cross-functional communication. Much of this interchange is most efficiently expressed in dollar
or other quantitative terms, such as numbers of employees, units of product, and square feet of
plant space. Use of financial or quantitative data is appropriate for two reasons: (1) it helps each
functional manager understand the dimensions of a proposed program and forces him to think
through the implications of executing it; (2) it permits the president to select more confidently
the set of programs to be implemented. The pharmaceutical company previously referred to, for
instance, focuses on the funds flows that might be expected from the various strategic programs
suggested by the functional departments.
Corporate Planner’s Role-
A major issue in the design of the planning system is where the corporate planner fits. Strategic
planning is a line management function; a sure route to disaster is to have plans produced by
staff planners and then issued to line managers. Strategic planning is essentially a people-
interactive process, and the planner is only one in the cast of characters involved. If the process
is to function effectively, he must clearly understand his proper role. The corporate planner’s
function in small and large companies is quite different. In a small company (or a product
division of a large company), the planner performs the function of staff planning assistant to the
president (or the general manager). While coordinating the planning activities of the functional
managers, he concerns himself with the president’s problem of selecting the best set of action
programs. Only the president—and his planning assistant—have a business-wide perspective of
the choices, and the assistant must do the bulk of the analysis.

Linkage of Planning and Budgeting-

The steps in a typical planning system represent an orderly, gradual process of commitment to
certain strategic alternatives. Each step is, theoretically at least, linked to those preceding. In
financial terms, this linkage may be quite explicit; for instance, a division’s profit forecast
prepared in the first planning cycle may become the profit commitment for next year’s operating
budget. Although few companies expect to achieve this financial linkage in narrowing the
choices, all the parties involved in the process should understand the intended relationship
between the cycles. How fast this narrowing should be is a situational design question that
depends on the particular corporate setting. A tight linkage between planning and budgeting
indicates that more strategic commitments have been made at an earlier stage. A loose linkage,
on the other hand, implies that the narrowing process is slower and will occur mainly late, in the
budgeting stage of the process.

QUESTION 4
GRAND STRATEGIES AT THE CORPORATE LEVEL

The Grand Strategies are the corporate level strategies designed to identify the firm’s choice with
respect to the direction it follows to accomplish its set objectives. Simply, it involves the
decision of choosing the long term plans from the set of available alternatives. The Grand
Strategies are also called as Master Strategies or Corporate Strategies. There are three grand
strategic alternatives that can be followed by the organization to realize its long-term objectives:

Stability Strategy: A strategy is stability strategy when a firm attempts to maintain its status-
quo with existing levels of efforts and it is satisfied with only incremental growth/improvement
by marginally changing the business and concentrates its resources where it has or can develop
rapidly a meaningful competitive advantage in the narrowest possible product market scope. It
has absence of significant change.

Growth Strategy: Growth Strategies are means by which an organization plans to achieve the
increased level of objective that is much higher than its past achievement level. Some
organization may select a growth strategy like to increase their profits, sales or market share,
reduce cost of production per unit and increased in performance objectives.

Retrenchment Strategy: It is a defensive strategy in which a firm having declining performance

decides to improve its performances through contraction in this activity i.e. reducing the scope of
its business by total or partial withdrawal from present business.

QUESTION 5
FACTORS AFFECTING STRATEGIC CHOICES

‘Strategic choice’ involves selecting from among several alternatives the most appropriate
strategy which will best serve the enterprise objectives. To choose a good strategic option, past
data, current data, forecasted data, and various other factors should be examined carefully. The
selection process becomes a complex job because it is influenced by various factors.

Nature of Environmental: The dynamic elements of environment affect the way in which
choice of strategy is made. The survival and prosperity of a firm depend largely on the
interaction of the elements of environment—such as shareholders, customers, suppliers,
competitors, the government and the community. These elements constitute the external
constraints. The flexibility in the choice of strategy is often governed by the extent and degree of
the firm’s dependence on the environment. Pearce and Robinson state, “A major constraint on
strategic choice is the power of environmental elements. If a firm is highly dependent on one or
more environmental factors, its strategic alternatives and ultimate choice must accommodate this
dependence. The greater a firm’s external dependence, the lower its range and flexibility in
strategic choice.” Well established, large companies in different industries are more powerful
vis-a-vis their environments and therefore have greater flexibility in the strategic choice than
their counterparts in the respective fields.

Firm's internal realities: Organizational factors also affect the strategic choice. These include
organizational mission, strategic intent, goals, organization’s business definition, resources,
policies, etc. Besides these factors, organizational strengths, weaknesses, and capability to
implement strategic alternatives also affect the strategic choice.

CEO/owners company culture: In choosing a strategic alternative, strategy makers must

consider pressures from the corporate culture. They must assess a strategy’s compatibility with
that culture. Every organization has its own corporate culture. It is made of a set of shared
values, beliefs, attitudes, customs, norms, etc. The successful functioning of an organization
depends on ‘strategy-culture fit’. The strategy choice has to be compatible with firm’s culture.
The strategic choice should not be out of tune with the cultural framework of the firm. The
culture has substantial influence on the strategic choice. In case of mismatch between strategic
choice and the cultural framework of a company, either one is to be redefined.

Firm's capacity to execute the strategy: Strategy choice must take into account the firm’s
ability to execute the strategy. Without execution, strategy has no meaning. The strategists must
consider the elements like people, skills, processes, resources, and culture of the firm. The ‘suit
must fit.’ Firm’s limitations must be considered for proper execution.

Resource allocation: Research on the resource allocation process emerged in the late 1960s as
scholars sought more accurate portrayals of investment decision making than what had been
abstracted in finance models of capital budgeting. The finance models focused on quantitative
evaluations of predefined investment opportunities available to a firm so that optimal choices
could be made. Neither human behavior nor organizational features had a place in the models.
To fill this gap and put financial evaluation in an organizational context, management
researchers undertook field studies that examined how actual investments were made and, based
on those observations, developed descriptive process models

CITATIONS AND REFERENCES

Ackerman, R. W. 1970. Influence of integration and diversity on the investment process.
Administrative Science Quarterly, 15: 341-351.

Ittner, C. D., & Larcker, D. (2003, November). Coming up short on nonfinancial

performance measurement. Harvard Business Review, pp. 1–8.

Ahuja, G., Novelli, E. 2017. Activity overinvestment: The case of R&D. Journal of
Management, 43: 2456–2468.

Frost, B. (2000). Measuring performance. Dallas: Measurement International.

Arrfelt, M., Wiseman, R. M., Hult, G. T. M. 2013. Looking backward instead of forward:
Aspiration-driven influences on the efficiency of the capital allocation process. Academy of
Management Journal, 56: 1081-1103.