Strategy in general sense is the technique which is adopted to meet the requirement of target/objective and every person in routine life daily set his goals of the day and also prepare the plan and strategies which he adopted to materialize his goals successfully as he is wishing to be. Therefore, sty ratify is a set of techniques which are used or adopted to meet the requirements of a target or objectives which might be social and as well as corporate.
What is Corporate Strategy?
Every business has its own goals and objective for which it is being formed, in the same way every business has its own strategies and techniques which the business executive formulate, adopt and implement to achieve their vested interest or achieve their goals and objectives. A strategy is being formulated by considering all the available labor resources, financial resources, competitive advantages and other available favorable resources etc. which are the competitive advantageous edge of the company.
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A corporate strategy seeks to determine what businesses a company should be in or wants to be in. It reflect the direction in which the organization is going and the roles that each business unit in the organization will play in pursuing that direction and different companies have different corporate strategies which integrates the strategies of ties various business units.
What is Strategic Management?
Management is the body of an organization which consists on promoters, internal stakeholders, external stakeholder which invest, earn, loss and work for the betterment of the company or as well as the achievement of the organization's objectives and goals for which the organization is brought into existence. Managers play their roles in the management to set of managerial decisions and an action which helps to determines and improves the performance of the organization in the long-run. It is important task of managers and entails all of the basic management functions and through management process the managers examine relevant variables in deciding what to do and how to do. When managers adopted management process they can plan better, perform proper and implement the strategies in their letters and spirits to achieve the organization's goals and also can better cope with the uncertainties in environments and can review the strategies to the extent of requisite changes.
Sources of Management Information
It is important to remember that information is different from data, although the two are often interchanged. The word data means facts whereas information is data that has been processed in such a way that it has meaning. Management uses this information to improve the quality of their decision making and strategic planning. Information can arise within and outside the organization. For example, information about production and cost will arise from within the organization, whereas information about potential demand and eventual sales with need to be gathered outside the organization. Formal systems generate information in such areas as accounts, production, sales and human resources management. It is important to note that management may receive information from the informal communication systems, or the grapevine, however this information should be treated with caution because of its unreliability. The accounting system is one of the most powerful systems in an organization because it expresses the company's inputs and outputs in monetary value. External sources of information will include legal and regulatory information, research intelligence, and marketing intelligence.
Corporate Strategic Planning
Planning is a business process through which the business executive determines the goals and objective of the company for which the company struggles to achieve them in future. Corporate strategic planning process consists on different things which are Economy Assumptions, business goals and objectives which are struggled to acquire in future in a particular time, Assumptions regarding SWOT Analysis, Observing business goals and objective to plan for strategies and substitute strategies to attain the targets and finally formulate the business strategies and the way by which the same is implemented and monitored. Strategic planning in the corporate sector is the backbone of the business which is being formulated before starting of any business by considering all the micro and macro level environmental factors along with the internal environment of the company and the same is being tried to implement in accordance with the planning.
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Strategic planning represents a systematic attempt to influence the medium and log term future of the organization by defining overall company objectives, appraising those major factors within the company and the environment that will affect the achievement of the objectives and it also help the managers to establish sufficient detailed action plan which can be amended as necessary. Managers evaluate the progress of the organization through the help of the strategic planning.
Nature and Scope of Corporate Strategic Planning
Corporate planning is a continuous process by which the long term objectives of an organization may be formulated and subsequently attained by means of long term strategic actions. Planning helps the organization to define its purposes and activities. It enables performance standards to be set so that results can be compared with the standard to help managers to see how the organization is progressing towards its objectives. A business plan is important to an organization because its contents can be monitored subsequently to see whether the forecast is within reasonable limits. It would be of no use having a business plan without it being subject to controls which are usually exercised by the finance department.
The process of strategic planning is more than ensuring the organization will remain financially sound and be in a position to maintain its financial position. Through this process it can be seen that such strategies are useful for the organization or not and whether it is pointing the direction in which an organization is to move in the long run in the future. These strategies should be so clear to be evaluated the present position of the organization, whether the organization has been achieved its goals or not, but they are not so specific that they tie down the organization to meeting what could be impossible long term targets in conditions of uncertainty. All the decision in the process of planning are made by the strategic management because it can difference in how well an organization performs and the managers examine relevant variables in deciding what to do and how to do it when managers used strategic management process and it is also important because it is involved in many of the decisions that managers make.
What is SWOT Analysis?
Every business has some strengths, weaknesses, opportunities and threats which depend upon the company's competitive advantages, human resources, financial resources, company's product portfolio and company's strategies in connection of its goals and objective in future. SWOT analysis helps the managers or the executive body of the company to assess the position of the company in the market environment by considering the available opportunities, the strengths of the company which helps the company to meet its objectives, the weaknesses of the company which cause hinder in the way to achieve its targets and the threats of economical environment which are uncertain and could be occurred at any time or at any stage of company's strategy. SWOT analysis also possibly enables the company to audit its position in the market with the help of market audit to plan for future to resolve the problems prevailing in the market environment because hindrances in the market environment changes from time to time.
Strengths of a company are its special skills and competitive advantages which prejudice the company upon the other rivals and competitors but on the other hand, the company also suffers from some weaknesses which cause difficulties and hindrances in the rapid progress of the company and also slow the progress of the company. The weaknesses of the company cause difficulties to avail the opportunities available to the company in a particular time when the company fails to avail such opportunities, the rivals and competitors take the advantages of the same and such opportunities become threats.
SWOT analysis indeed enable a company to consider all the factors, variables, weakness, threats prevailing in the market environment as well as in the internal environment of the organization causing hurdles and all the opportunities available to it and by auditing the market helps to find the solution in shape of formulation of good strategy, with the solution of all the weaknesses and threats that might be possible in future and also helps for the adoption of a comprehensive strategy which makes an organization able to resolve the problems and to maintain its position. A good strategy is such a strategy which enables an organization to convert its weaknesses into its strengths and the possible threats into the opportunities.
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Environment is the circumstances in which the organization works or intends to work to achieve the vested interests as well as to achieve the organizational objectives and goals. The term environment also consists on market forces and factors works and prevails in the market environment which the organization has to face, which can indirectly affect the organization's performance and indirectly increase or decrease the profits of the organization. The environment may produce controllable, uncontrollable or unexpected input to he system. It provides opportunities that the organization can exploit towards new markets or new discoveries. Environmental analysis also brings the executive management of the organization in a position that the organization can observe the possible threats, which endanger the organization's survival which include the rival's actions and the threats of uncertain acts of the government or political uncertainties in the environment. That the possible opportunities and threats available in the market may be political, economic, technological, social and ethical. A company has to struggle or formulate such strategies which help the organization to maintain its growth and enables the organization resolve such problematic situations. A company can do so if it responds to all available opportunities and challenges. Changes in the internal and external environment will affect company's inputs and outputs.
PEST analysis refers to the external forces and factors which need to be considered by any organization while it is formulating its strategies which directly consistent to the internal environment of the organization and also based upon the competitive advantages and special skills which dominant the organization upon the other. The management body of an organization is not only determined by internal considerations and choices but is also affected by other available forces and factors in the external environment because these forces, factors and variables influence the organizational performance and might be caused hindrance in success of the organization depend on the successful management of the opportunities, challenges and risks presented by the changes in the external environment. The organization exists in the context of a complex commercial, economic, political, technological, cultural and social world. An analysis of the political, economic, social and technological dimensions, which can influence the organization, is commonly known as a PEST analysis. This environment is more complex for some organization than for others and an understanding of its effects is of central importance when deciding on strategies. The historical and environmental effects on the business must be considered, as well as the present effects and the expected changes in environmental variables.
Corporate Portfolio Analysis
There are many sorts of analysis are being done by many analyst in different times to help the business community to understand the market environment as well as to formulate their strategies in lie of their business activities. These approaches help the managers of the organization in many ways. In the same way the Boston Consulting Group known as BCG introduced corporate portfolio analysis which helps the managers who has to plan the activities of an organization which involves in a number of businesses. BCG concept or corporate portfolio analysis helps the managers in collection of various kinds of information of the businesses which directly or indirectly affect the business activities. The Boston Consulting Group was the first institution which for the first time used the portfolio matrix, which afterwards commonly known as the BCG matrix. Corporate portfolio analysis in simple term is an idea, that the businesses of an organization could be evaluated and plotted using a 2x2 matrix to understand the potential of every element or factor by putting either into vertical axis or horizontal axis to identify which ones offered high potential and which were are wasting the organizational resources. Market share are shown on horizontal axis, which could be evaluated as fighter low or high and in the same way on the vertical axis the market growth is shown, which also could be evaluated as fighter low or high. Businesses are put into four categories in BCG matrix which are Question Mark, Stars, Cash Cows and Dongs.
According to BCG concept, when a company introduce a new brand in the market then such business falls in the first category as Question Mark because such product or brand has to gain the market value or confidence of the consumers and when such product attain the market confidence then the sale of such product rise sharply and the product become the star of the market. At this stage a number of competitors entered into the market, and the product makes huge profits and become the cash cows but as much as the competitors enter into the market of such brand get down to the level and it become the Dog of the market and this is the stage when the business comes to the survival stage and such product vanish from the market because the production of such product stop. The hardest decision for the managers of the organization is about the question mark. After due analysis, some will be sold off and others turned into stars.
Tools and Techniques of Planning
Every business is being done on the basis of the planning and the planners of the organization are the executive management and the managers of the organization are the authorities who perform this duty and are also help responsible for this whether their planning cause profit or loss to the organization. The process of the planning could be categorized into two phases, according to the first phase the information necessary for the planning or for the formulation of the strategies flows from the bottom level to the upper level and as well s in the second phase the necessary information flows from top level to the bottom level. Normally the first phase is being used in the organization in which the information is collected from the all available sources and the whole information collected flowed to the executive management for the formulation of the necessary strategies and after formulation of the strategies the procedures and information regarding the implementation of the strategies transferred towards the lower management to implement the strategies to achieved the vested and interest goals of the organization.
Planning in all the organization on manager level is being formulated in the particular process and all the plans have to pass from the same process till its final form and uphill its implementation tilts the vested interest are achieved.
STEP NO. 1
The first step of planning is the audit of the market in which the manager of the organization checks the position of the organization in the market because without evaluating the market position of the organization, and the previous strategy of the organization, the management could not formulate such strategies which could resolve the problems faced by them in its preceding years and what were the causes of the failure of those strategies. Finally to formulate a comprehensive strategy it is necessary to evaluate the position of the organization that where it is now.
STEP NO. 2
That after auditing the market position of the organization the second step is to set the goals and define the objectives, that what is the destination and goals of the organization in the future. The management should prepare a comprehensive plan which should be free from all the previous mistakes and laciness. All the goals being set by the organization should be in accordance with the available resources of all sorts to the organization.
STEP NO. 3
Every organization has different resources and different opportunities to achieve its objectives but the management of the organization is of this responsibility to choose the right and the best way which would be in accordance of the company's resources. Once the way is chosen the management has to resolve all the possible hindrances of the way and should review the plan till the organization avail all the fruits of the way which are being observed while it was chosen.
STEP NO. 4
Organization is an association of different persons who had different skills and had gathered for the achievement of goals and objectives of the organization. To meet the organizational objectives the organization management allocates its resources and manpower into different groups and delegate different duties to each person who is a part of the organization to overcome the possible problems in future. Every person allocated and delegated a special duty has a skill in such duty and has the power to face and overcome the problems in a manner which are useful for the organization to achieve its goals and objectives.
STEP NO. 5
The most important step of the planning is the implementation of such strategy or planning. Plan making is not as complicated as the implementation of the strategy and its way chosen for the betterment and achievement of the organizational goals and objectives. The most important and compulsory thing is to implement the strategy chosen in its letters and spirits in accordance with the way chosen.
STEP NO. 6
Changing in the environment cause hurdles and obstacles in the way of the organization, therefore the management of the organization has to control and review the strategy chosen with the changing in the market environment and according to the actions of rivals and government. It also has to control the strategy in all the steps and also has to observe the changing trends of the market environment and should take the necessary measures to improve the strategy chosen. It also has to amend the necessary amendment in the strategy to the extent that it could easily resolve the hurdles faced by it and achieve the organizational goals and objectives.
How strategic options could be defined?
Every organization possesses different resources and different competitive advantages which make it dominant upon the other organization. Therefore every organization avails different strategic options available in the external environment. Strategic options are basically the creative alternatives available in the environment which are different for different organizations. These options could be identified by the trends, strengths, opportunities of the organization in the market environment which the management of the organization utilize to get it out from the unstable circumstances of the environment or to convert its weakness and threats faced by it in different scenarios.
There are different group in the market which affect the activities of the organization to achieve their vested interest and these groups are called the stakeholders which directly and indirectly affect the market and some of them tried to cause hurdles in the way of the organization so that it could not reach to its destination but the management of the organization is of the responsibility to chose those strategic options to get the organization out from such scenarios and again rail it towards its destination by defeating to those elements/factors/groups.
What are strategic decisions?
Strategic decisions are the decisions which the management of the organization takes when the organization suffers from uncertainties available of the market environment which might be artificial due to rival actions of the competitors or due to the emerging changing in the environment. Sometimes the government changes its policies which directly affect the market environment. In short, in uncertainties or uncontrollable situations all the decisions which the management of the organization takes are its strategic decisions which are being taken to get the organization out of the uncertain situations. An organization's management struggles to achieve its organizational objectives but emerging changing in the market environment and rival actions of the competitors sometimes indulge a company in such a situation that the strategy adopted by the organization lacks the solution of prevailing problems artificially created by those factors, therefore the management of the organization has to review the strategy time to time to improve its lack nesses to death uncertainties which become hurdle in the way of the organization.
What Measures an Organization Takes To Choose the Best Strategic Option
There are different strategic options available to different organizations in same situations because there resources and organizational advantages are different which create difference in their working performance than each other. Therefore, every organization in the mean time avail many opportunities but on the other hand it faces different threats in the same time, in the same way it has many strategic options available, out of which the management of such organization has to choose the best one option which enables the organization to compete its competitors and the rival actions and reach to its destination by achieving its organizational objectives. The management of the organization can meet its such responsibilities by considering its resources, internal environment, external factors, forces, variables and all the possible factor which might be cause any sort of hurdle as well as scruitnizabley observe the rivals/competitors activities and then the strategy which closely match and sustainable in the environment should be adopted by the organization which directly and implied resolve the possible problems in future in the environment. The most important thing after choosing the strategy and setting of organizational objectives, the management has to completely control, implement and review the strategic option till it meets its destination by achieving its objectives.
Corporate Strategic Performance
Generally every organization struggles to develop in future and become more prosperous than before, therefore, the it efforts to achieve more huge tasks to raise huge profits and introduce more inventions to overcome the market but unfortunately, there are some factors which struggle to defeat the organization that it could not sustain in the market. Therefore, when the company once formulate its corporate strategy which is indeed is a process of formulation of strategies, setting of organizational goals, setting priorities of the objective, their controlling, implementing, reviewing and more effective achieve their fruits, it has to continuously evaluate its corporate strategic performance in all the aspects of the market environment. The executive management of the organization has to remove all the deficiencies of the previous strategies by considering the emerging changes in the environment. As we know that planning is useless until and unless it could not be implemented in its letters and spirits and this could only be possible when the organization time and again continuously evaluate its strategic performance till the time for which such decision are made or options are chosen because such decisions or options are not for short time but for a particular time frame because of the strategic decision or option chosen by the organization fails then the whole struggle of the organization remain fruitless and become financial a loss for the organization which directly affect the profits of the organization. Therefore, the organization has to evaluate its corporate strategic performance continuously time to time till the achievement of its objectives.
Environmental Contemporary Issues
There are several contemporary issues which are prevailing in the environment whether on micro level or on macro level. These are the issues which are reducing the trend of globalization in larger sense but on micro level are also creating inflation which is most dangerous for the economy. All the government on global level are struggling for to get rid of these issues but still are struggling but are fail to control them completely. As the technology is inventing but is creating more problems for human instead of enabling him to progress it is complicating the life of human being more and more. The contemporary issues which the economy of the world are facing are; 1- Instability in economy, 2- Inflation, 3- Energy crisis, 4- Religionist, 5- Extremism, 6- Industrial crisis, 7- Terrorism, 8- Financial crisis.
To stable the economy of the world all the countries have to work on their part to get rid of these issues for the betterment of the humanity. All the countries government should formulate such policies which should be in one sense improve the business opportunities in the country but more emphasize create opportunities for the under develop countries to compete these crisis and issues on global level for the betterment of the humanity.
In the light of the above mentioned study it is being concluded by me:
1- That corporate strategy is basically the strategy which an organization being chosen or adopted in accordance of its available resources and its competitive advantages which make such organization dominant upon the other organizations.
2- That different organization has different kind's problems in same situations/scenarios because those ones have different resources and different skills or competitive advantages which create such difference in the same situations.
3- That the manager of an organization is the key person who collects all the necessary information for the formulation of corporate strategy and is the only link between the executive management and the lower management. He is the more effective person who helps the executive management of the organization for the formulation of a comprehensive corporate strategy and also can positively observe the organization's internal environment, implementing the strategy chosen and help in reviewing of the strategy by informing the executive management for the necessary amendment in the strategy, which help the organization to achieve its objectives.
4- That different sort of analysis have been discussed hereinabove but in my view the SWOT analysis is the best one which helps the management to know about their Strengths, Weaknesses, Opportunities available to the organization and also the possible threat that might have been faced by the organization if it will not adopt the necessary precautions.
Finally the every organization can play its role in the development of the economy of the country and more specifically for its own by raising huge profits if it works positively by considering all the factor, forces and variables that directly and indirectly affect the market environment and cause loss. For avoiding such losses the organization has to her or recruit high skill employees and should also provide them the working safety assurance by adopting the precautionary measures. Each and every employee of the company should have the feeling that he is working of his own business and he is not working for others then the organization will progress day and nights and this could only be possible by creating friendly and positive attitudes of the executive management towards the lower management.