The art and science of Strategic Management


Strategic Management is the art and science of formulating, implementing and evaluating the strategies for a company to achieve its long-term goals and objectives.

Strategic manangement is an ongoing process that assesses the business in an organization.It helps to determine and estimate its competitors and to set goals and strategies to meet meet all existing and potential competitors.

Methodology of change:

Change management is a way of working at a higher level of proficiency for the project and team members. Change management should always be considered first or at the beginning of the project so as to ensure that change is acceptable, to set rules for change and to outline how these changes will be implemented.

If you wish to develop a change management process for your organization or project, think yourself to be a quaterback and your team to rely on how you implement and accept change. If you outline the change directives clearly, your team will pay attention to your quaterback decisions. The human element of change for your resources , team and people is the toughest part of change management.

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By minimizing resistance to change and maximising employee acceptance , adapting to changed envronment becomes easy.The control guidelines should be made clear on the project goals including outcomes, project scope elements, budgets, teams and stakeholder needs.

Flow Chart It First

The steps of change management should be kept in mind while preparing the flow chart fr your organization.Some of the important points include

Team -How will the members of your team react to change ?

Awareness - Who and what will be affected by change?

Risk - Includes both situational risks and people risks and ideas on how to deal with them.

Readiness - Are your team members ready to handle change? Will they be able to understand the change request process

Plans -A Good change in management can include lots of plans like communication, road maps, training, and resistance. Identify these plans and create them.

Support - Give a chance for your team members to interact and give input to the higher ups by using good coaching skills.

Assess - Assess your project's progress regularly and set good measurable controls.

Resources - Use your team leaders to help you identify weak resources and gaps in performance.

Stakeholders - Never leave the stakeholders out of your change management process.Involve them in the process and flow per your controls.

A good change management policy, when formulated correctly with clear guidelines can be used for amultiple number of times. Change management is not just a theory but an application that can assure success for project managers. Firstly,identify the important elements of projects and create firm controls to ensure that your change management skills are actually working.

John P Kotter's 'eight steps to successful change'

Johm Kotter has developed an eight step helpful model for understading and managing change. Each stage describes a key principle identified by Kotter relating to people's response and approach to change, in which people see, feel and then change.

Increase urgency - Inspires people to take action, make objectives real and rellevant.

Build a powerful team- Get right people in right place with right emotional commitment at right mix of skills and levels.

Get the right vision: Form a team to establish a simple vision and strategy and focus on emotional and creative aspects to drive efficiency and service.

Communication for Buy-in- Involves as many people as possible and communicate the essentials to appeal and respond to people's needs

Empower action-emove the obstacles and encourage constructive feedback and support from leaders

Create short-term wins- Set aims for shorter periods and take manageable number of initiatives. Finish current stages before starting new ones

Build on the change-Encourage determination and persistance and highlight achievement and progress

Anchor the chnages in corporate culture- Streghten the value of successful change via recruitment, prootion and weave change into culture.

Business development driven change

Business development potentially includes a complete set of activities which are involved with the quality and development of the business or the organization. The basic requirement for business development is establishing the business development aims, and then formulating a business development strategy. The strategy comprises of some or all of the following methods of development.

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sales development

new product development

new market development

business organization, shape, structure and processes development (eg, outsourcing, e-business, etc)

tools, equipment, plant, logistics and supply-chain development

people, management and communications (capabilities and training) development

strategic partnerships and distribution routes development

international development

acquisitions and disposals

Generally, business development is partly scientific, and partly subjective because it is based on the feelings and wishes of the business owners or CEO. There are many ways to develop a method for the growth and improvement of business, and rarely is just one of these a single best solution. Thus,Business development is sometimes referred to as 'black art', ie., difficult to analyse, and difficult to apply a replicable process.

Function of Sales Department in organizational change

The change in an organization includes a variety of key roles which can be filled by various individuals or groups at different points of time during the process.One of the ways in which companies learn to cope with rapid changes is by increasing their abilities to learn and change.In the initial stages of learning, each employee is charged with identifying and solving problems.Thereby, the organization engages itself in continnuous experimentation,improving and increasing its capabailities.

The sales department provides managers and sales executives with the best techniques, tools for improving the effectiveness of the sales force.

A company cannot perform well with apoor organizzational design eventhough it has a great mission, great people, great leadership, etc.

The performance of an organization depends on the factors such as work flow, business processes, information sharing and incentives.All of these factors are important aspects of the organization's design and each has its own siginificance in the organization's success.

The process of organizational design provides a perfect definition of goals and responsibilities for each unit within the organization


 Organizational Growth Cycles

An organization developmental theory is helps to examine the problems associated with growth in organizations and the effects of change among employees. In a broader sense, growing organizations pass through five relatively periods of evolution, each of which ends with a period of crisis and revolution.

An evolutionary period is characterized by the dominance of the style of the management in achieving growth, while

A revolutionary period is characterized by the most vital management problem that must be solved before growth continues.

Creativity / Leadership

As mentioned below, the first stage of organizational growth is called creativity. This stage is dominated by the founders of the organization, and the importance is laid on creating both a product and a market.

Usually the founders are technically or entrepreneurially oriented, and they disdain management activities.

But as the organization grows, management problems occur which cannot be handled through informal communication and dedication.

Direction / Autonomy

At this stage, the crisis of leadership occurs and the first revolutionary period begins.The key issue begins with "Who is going to lead the organization out of confusion and solve the management problems confronting the organization?" The solution is to locate and install a strong manager "who is acceptable to the founders and who can pull the organization together." This leads to the next evolutionary period-growth through direction.

During this phase the new manager and key staff take most of the responsibility for instituting direction. The lower level supervisors are treated as functional specialists rather than autonomous decision-making managers.

Delegation / Control

When an organization reaches the growth stage of delegation, it begins to develop a decentralized organization structure. Ultimately, the next crisis begins to evolve as the top managers in the sense that they are losing control over a highly diversified field operation

Often The crisis of control results in a return to centralization, which is now inappropriate and creates resentment and hostility among those who had been given freedom.

Coordination / Red Tape

A more effective solution tends to initiate the next evolutionary period-the coordination stage. This period is characterized by the use of formal systems for achieving greater coordination with top management as the "watch dog."

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Yet most coordination systems eventually get carried away and result in the next revolutionary period-the crisis of red tape. This crisis most often occurs when "the organization has become too large and complex to be managed through formal programs and rigid systems."


If the crisis of red tape is to be overcome, the organization must move to the next evolutionary period-the phase of collaboration. While the coordination phase was managed through formal systems and procedures, the collaboration phase "emphasizes greater spontaneity in management action through teams and the skillful confrontation of interpersonal differences. Social control and self-discipline take over from formal control."

What is market segmentation?

MarketMarket segmentationsegmentationsegmentation is a strategy that involves dividing a larger marketmarketmarket into subsets of consumers who have common needs and applications for the goods and services offered in the marketmarketmarket. Marketing campaigns are often designed and implemented based on this type of customer segmentationsegmentationsegmentation.

One of the main reasons for engaging in market segmentation is to help the company understand the needs of the customer base. Often the task of segregating consumers by specific criteria will help the company identify other applications for their products that may or may not have been self evident before. Uncovering these other ideas for use of goods and services may help the company target a larger audience in that same demographic classification and thus increase market share among a specific sub market base.

Market segmentation strategies can be developed over a wide range of characteristics found among consumers. One group within the market may be identified by gender, while another group may be composed of consumers within a given age group. Location is another common component in market segmentation, as is income level and education level. Generally, there will be at least a few established customers who fall into more than one category, but marketing strategists normally allow for this phenomenon

, What is Product Development?

Product or service development is a smart place to use that cash in order to create future growth for the firm. Many companies reinvest part of their profits in developing new products, either completely new products or extensions or adaptations of existing ones. For some companies, such as pharmaceutical manufacturers, maintaining a robust new product pipeline is essential to long-term growth (and even basic stability) because their drug patents will eventually expire and they will face daunting competition from producers of generic and copycat drugs. Other companies such as toy and clothing producers face highly fickle and changing markets that demand a constant flow of new products. While all research and development into new products doesn't turn up major new product launches, in the long run new products often prove to be some of a company's most important assets.


Product development is the process of designing, creating, and marketing an idea or product. The product can either be one that is new to the marketplace or one that is new to your particular company, or, an existing product that has been improved. In many instances a product will be labeled new and improved when substantial changes have been made.

is wonderful, if no one buys it the company will not make a profit.

Product Development can be accomplished in following stages:


Simply having an "idea" is worthless--you need to have proof of when you came up with the idea for your invention. Write down everything you can think of that relates to your invention, from what it is and how it works to how you'll make and market it. This is the first step to patenting your idea and keeping it from being stolen. You've probably heard about the "poor man's patent"--writing your idea down and mailing it to yourself in a sealed envelope so you have dated proof of your invention's conception. This is unreliable and unlikely to hold up in court. Write your idea down in an inventor's journal and have it signed by a witness. This journal will become your bible throughout the patent process. An inventor's journal can by any bound notebook whose pages are numbered consecutively and can't be removed or reinserted. You can find specially designed inventor's journals at bookstores), or you can save money and purchase a generic notebook anywhere they're sold, such as the grocery store, office supply store, stationary store, etc. Just make sure it meets the requirements above.


You will need to research your idea from a legal and business standpoint. Before you file a patent, you should:

· Complete an initial patent search. Just because you haven't seen your invention doesn't mean it doesn't already exist. Before you hire a patent attorney or agent, complete a rudimentary search for free to make sure no one else has patented your idea. You should also complete a non-patent "prior art" search. If you find any sort of artwork or design related to your idea, you cannot patent it--regardless of whether a prior patent has been filed.

· Research your market. Sure, your brother thinks your idea for a new lawn sprinkler is a great idea, but that doesn't mean your neighbor would buy one. More than 95 percent of all patents never make money for the inventor. Before you invest too much time and money into patenting your invention, do some preliminary research of your target market. Is this something people will actually buy? Once you know there's a market, make sure your product can be manufactured and distributed at a low enough cost so that your retail price is reasonable. You can determine these costs by comparing those of similar products currently on the market. This will also help you size up your competition--which you will have, no matter how unique you think your invention is.

Making a Prototype

A prototype is a model of your invention that puts into practice all of the things you have written in your inventor's journal. This will demonstrate the design of your invention when you present it to potential lenders and licensees. Do not file a patent before you have made a prototype. You will almost always discover a flaw in your original design or think of a new feature you would like to add. If you patent your idea before you work out these kinks, it will be too late to include them in the patent and you will risk losing the patent rights of the new design to someone else.

Filing a Patent

Now that you have all of the kinks worked out of your design, it's finally time to file a patent. There are two main patents you will have to choose from: a utility patent (for new processes or machines) or a design patent (for manufacturing new, nonobvious ornamental designs). You can write the patent and fill out the application yourself, but do not file it yourself until you have had a skilled patent professional look it over first. If the invention is really valuable, someone will infringe on it. If you do not have a strong patent written by a patent attorney or agent, you will be pulling your hair out later when a competitor finds a loophole that allows them to copy your idea. It's best to get the legal help now to avoid any legal problems in the future.

your patent professional.


Corporate failure:

Many businesses fail because of some common causes which many entrepreneurs ignore at the onset of the business. These causes should be studied in depth because no university course gives you enough matter to study, on topics such as this. The most common causes of business failure are:

1. Laying more emphasis on product, rather than market and marketing

The requirement to identify a market for your idea or the product is more important than the product itself. You may have a great idea or a product, but if there are no buyers for the same then it cannot be a success. Smart businesses first identify the market requirement and then develop products accordingly.

2. Laying more emphasis on company image.

To project a high profile image for the company by hiring expensive office space and a fancy logo and website will not do much to facilitate in the success of your business. In fact high overheads, because of expensive space and website maintenance costs, can drive you out of business very fast, because the golden rule for the success of any business is to keep overheads low especially at the start up time.

3. Getting into Undesirable or Bad Business Partnership.

You should get into business partnership only if you find that your ideas match with the probable partner, because business partnerships are even more difficult to maintain than marriages. Many partnerships fail because of lack of communication, proper documentation and deeds. A failed partnership can lead to bankruptcy and soured relations with the business partner.

4. Attempting to have a very complex business model

Simpler the business model, better it is. In a simple and uncomplicated business model everybody, including your vendors, suppliers, employees, and customers are well aware of their responsibilities and goals. In a complex model they have to adapt themselves to new roles that they may not be comfortable with.

5. Attempting to pioneer a new product or industry

Many businesses get into the vicious cycle of trying to pioneer a new product or industry- many a times the whole exercise can drain you and your business completely, without much success. Very few and limited entrepreneurs succeed in radically new businesses. Even customers at times are scared off because of a totally new concept or product, hence chances of success are not assured, despite all the efforts that you may apply.

6. Getting involved in a business lawsuit and bankruptcy

Business lawsuits that are not in your favor can take away all your assets, including your personal assets like home, property, savings etc and make you and your business bankrupt.

7. Getting involved in messy Divorce Proceedings.

In many cases when marriages fall apart for people, their businesses also come to a halt because of the financial disagreements arising out of divorce proceedings.

Basic reasons for failure include the following:






Underestimating start-up costs (for operations &capital expenditure).

Misjudging the size or growth of the overall market.

Lack of relevant sectorial experience.

Inability to supply profitably to required price.

Under-investment in equipment etc.

Insufficient funds or access to top-up finance.

Overoptimistic estimates of market penetration &shares.

Insufficient functional breadth.

Problems with maintaining quality standards.

Excessive overheads (relative to scale of operations).

Wrong mix of funds (e.g. too much debt and gearing too high).

Delays in securing or developing distribution channels.

Unresolved differences of opinion.

Restricted range of offerings.

High operational costs and/or low productivity.

Over reliance on trade credit (receivables).

Underestimating the strength of competitors.

Unreal expectations.

Lack of innovation (me-tooofferings).

Poor capacity utilization.

Mistaking profit for cash flow (see

Misreading customer requirements.

No formal or clear structures.

Problems sourcing supplies.

Inadequate physical distribution.

Overoptimistic projections or overtrading.

Lack of promotion &customer awareness.

Ineffective financial &managerial control systems.

Offerings out of line with customer needs.

Inappropriate business location.

Unable to withstand interest rate increases.

Inability to handle an economic slowdown.

Use market research to confirm demand and assess suitability of proposed offerings.

Create a management team to offset any gaps in experience or expertise.

Raise equity to reduce exposure to interest rate changes, reduce gearing etc.

Joint ventures:

A joint venture is a strategic alliance where two or more people or companies agree to contribute goods, services and/or capital to a common commercial enterprise.Properly chosen and implemented, joint ventures can be a great way for your small business to get in on opportunities (and profits) that otherwise you would miss out on. I like to think of them as diamonds on the beach. You see the diamonds lying on the sand but try as you might, you can't pick them up - until you team with someone else who knows the trick of scooping them up.

By teaming up with other people or businesses in a joint venture, you can:

extend your marketing reach

access needed information and resources

build credibility with a particular target market

access new markets that would be inaccessible without the partner

How to Get a Joint Venture Started

The first step to creating a joint venture is to set your goals and decide what you want your joint venture to do. If you need help getting started with this, look at the four things a joint venture can do that I've listed at the beginning of this article, pick one, and then develop a goal that is as specific as possible.

Then it's time to look for the like-minded - people or firms that might be interested in the same goal or goals you want to pursue. Look in the business groups you already belong to, both in person and virtually. Use your social networking connections. Study business listings in the phone book or on Web sites to find those that might share your goals.

And be open to being asked. Once you start talking to other people about what you might do together, a joint venture idea you haven't even thought of might pop up - one with a lot of potential.

Once you've found the people to share in a joint venture, be sure to have it all put into writing in a joint venture agreement. I strongly recommend hiring a legal professional to do this.



Five Areas to De-risk

1. Operational Risk - Reduce fixed costs, which is also known as operational leverage.  IdentifyHYPERLINK "" efficiencies, work flow automation and other ways to boost productivity.  Put processes in place so your business is not dependent on individuals.  Ensure that operational controls and approvals are in place for spending.

2.  Market Strategy Risk - Focus on your core business, which is presumably the most profitable and stable.  What can you do to improve service and value without increasing costs?  Be active in your business.  Sit down with your customers to understand their needs and how you can do a better job of serving them.

3. Business Interruption Risk - When times are good, you might be able to absorb losses from a business interruption due to catastrophic event,  system failure or even malicious employees.  Now is the time to make sure that your operation is tolerant.

4. Data Security & Compliance Risk - Now is not the time to experience data loss or compromised data security.  Reduce the risk of loss of critical business information and the risk of violating privacy regulations such as PCI and HIPAA by ensuring that audit, governance, backup and recovery, and security policies are in place.

5. Financial risk - What amount of debt can your business support?  Reduce debt load if possible. Refinance short term lines of credit to longer term notes.  Know the cash flow requirements of your business in both the best case and worst case scenarios.

Maximizing Opportunity and Minimizing Risk through Integrated Data Management:

If your company is like most, it spends millions on maintaining data in separate, siloed application databases, using it for narrowly defined tasks, and only reusing it in a few data warehouses or marts-if at all.

Think you need to implement massive and expensive data integration projects? You don't. You can start small. But you need to do some big thinking first.

1. Create policies and procedures that ensure all your operational systems are running with consistent, current data and your business decision makers have access to the right information, at the right time

2. Establish best practices for data integration and management according to your policies and procedures

3. Adopt a standard data integration platform to replace costly and risky hand coding techniques and one-off tools to access and deliver timely, accurate, and consistent data across the organization

Financial Risk: Cash is your fuel so use it wisely. Even big companies occasionally collide with a cash crunch but small and middle-size companies are injured or die all too often in that crunch. When faced with inadequate cash to support necessary growth, Beta Co.* needed ways to build their P&L and balance sheet to attract financing. New management and systems were brought in to make better decisions, increase efficiency, maximize sales efforts, reduce costs, train personnel, and thus improve the P&L. A focus on balance sheet management included new inventory management goals and systems, debt restructuring, new cash management tools, and efficiency improvements that reduced the need for capital investments. High-risk business choices were either not taken or were managed (delayed, information gathered, or negotiated) to reduce risk and maximize success.

The net result was they needed less cash and were able to attract higher quality (e.g. less expensive) financing to stabilize the company, enable growth, and thus reduce the risk of financial failure.

People Risk: Turnover was high, morale was not, training couldn't keep up, and quality and efficiency suffered at Gammatron*. With all the competition, they just couldn't seem to be able to recruit enough qualified people and when they did, they couldn't keep them. They raced as fast as they could and still fell behind.

The secret weapon in their turn-around to success was a root-cause analysis. The root-cause analysis found that they needed to make specific changes to fix the problems not just treat the symptoms. They revised hiring specifications to recruit the right people. They adjusted compensation to be competitive. A new training program was faster and more effective. Management training improved interpersonal relationships and morale. And an efficiency program increased productivity so fewer people were needed. The net result was that turnover was reduced, quality increased, morale went up, and the customers felt better appreciated so business improved. Gammatron was back in the race.

Market Risk: The rules changed and Apex, Inc.* was now sliding off track with declining margins in a market where they used to win. Customers were shifting to the competition in droves and profits were in the pits. When they looked back, they found they could have seen it coming. The race (market) was changing and they were focused on keeping their old car (business methods) in shape while the competition was building new cars (business methods).

Apex got back in the race by doing a thorough strategic market analysis. The analysis clarified the current risks and illuminated strategies for reducing that future risk while maximizing the chance of winning. They set new strategic goals, trained and reorganized the employees to achieve the goals, change supplier relationships and terms, rationalized the customer base to focus on service and profitability, improved margins with an aggressive cost reduction program, put in systems to give them a clear view of the market road ahead, and created new systems to stay on course. They started winning again.

Operating or Manufacturing Risk: In the early 1990's the Jones Company*, was desperate for new business. They sent their salesmen out into the field with new products to win new business. Well, they landed some big ones and set about filling the orders. Unfortunately, the manufacturing process had too much chance (risk) of producing off-quality material and they couldn't meet demand. It was as though they had entered the race with a car that wasn't reliable enough to go the distance. Instead of winning new business they wasted vitally needed cash and resources spinning their wheels in an effort that ended up alienating customers. Operating risk is also market risk.


Strategic management helps you to acknowledge the present business model and its drawbacks.Strategic managemnt emphasizes on a strategic change and business tranformation and the ways to avoid business failure .