Lec 01 Long Range/Strategic Planning

Summary

This course on strategic management is structured into seven modules, starting with an introduction to the concept and moving through topics like corporate strategy, environmental scanning, and strategic formulation. It touches on the historical use of strategy in the Mahabharata and its modern evolution, particularly in India's public and private sectors. The course emphasizes the importance of strategic planning in adapting to competitive landscapes, as seen with the IT industry's shift to quarterly forecasting. Books by the instructor on strategic management and marketing case studies are recommended for a deeper understanding.

Takeaways

• 📚 The course on strategic management is structured into seven modules, each covering different aspects from introduction to strategic management to other strategic issues like R&D and technology.
• 🏛 The term 'strategy' has ancient roots, dating back to the Mahabharata, where Drona used the concept of strategic formulation in the war context.
• 📈 The modern use of the term 'strategy' in a business context began with H. Igor Ansoff in 1965 while working for Lockheed Aircraft Corporation.
• 🇮🇳 In India, the concept of strategic planning was first introduced by Bharat Heavy Electricals Limited (BHEL) in 1974, initially termed as 'corporate planning'.
• ⏳ The planning horizon in India has evolved from long-term (5-10 years) to shorter-term (1 year or even quarterly) due to increased competition and the advent of liberalization in 1991.
• 📉 The Indian IT industry has been particularly adept at strategic planning, often forecasting and planning on a quarterly basis.
• 🛠 Strategic management involves a comprehensive process including evaluating external and internal factors, formulating strategies, and aligning with organizational goals.
• 🔍 Environmental scanning is a crucial part of the strategic management process, involving both external factors analysis (EFAS) and internal factors analysis (IFAS).
• 🔑 The course emphasizes the importance of understanding the board of directors' role, top management's skills, and strategic decision-making in the Indian context.
• 📚 Two recommended books for the course are 'Strategic Management: The Indian Context' by Prentice Hall and 'Case Studies in Marketing: The Indian Context' by Prentice Sol.
• 📈 Strategic planning is defined as management processes that determine the future impact of change and make current decisions to reach a designed future.

Q & A

What is the main focus of the course on strategic management?

The course on strategic management is focused on covering seven modules that include introduction to strategic management, corporate strategy, strategic management process, 7s framework, corporate policy and planning in India, board of directors' role and functions, environmental scanning, strategy formulation, strategy implementation, evaluation and control, and other strategic issues such as R&D, knowledge management, and strategic risk.

What is the significance of the 7s framework in strategic management?

The 7s framework is a module in the course that helps in understanding the various elements of an organization that need to be aligned for effective strategic management. It is a tool for analyzing and aligning the internal elements of an organization to ensure that they support the strategy.

What are the two books suggested for the course and their editions?

The two books suggested for the course are 'Strategic Management: The Indian Context' by Prentice Hall, which is in its sixth edition and published in the year 2020, and 'Case Studies in Marketing: The Indian Context' by Prentice Hall, which is in its seventh edition and published in 2018.

How did the concept of strategic management evolve in India?

The concept of strategic management in India evolved from the term 'strategy' first used by Ansoff in 1965, to its first use in the Indian context by Bharat Heavy Electricals Limited (BHEL) in 1974 as corporate planning. The term 'strategic planning' was introduced in 1984 when the Indian Telephone Industries (ITI) was opened to competition, and further evolved with the liberalization in 1991, especially impacting the IT industry.

What is the historical reference to strategic formulation mentioned in the script?

The historical reference to strategic formulation mentioned in the script is from the Mahabharata, an ancient Indian epic, where the term was first used by Drona, the teacher of both Kauravas and Pandavas, during the war to describe the 'chakravyuh' or hub-and-spokes model of military formation.

What is the difference between the concept of corporate planning and strategic planning?

Corporate planning is a long-term approach that looks at a scenario projection for 5 to 10 years, while strategic planning is more focused on shorter time horizons, such as 3 years or even a quarter, and involves a more dynamic and responsive approach to changing market conditions.

What is the role of environmental scanning in the strategic management process?

Environmental scanning is a process of analyzing both external and internal factors that can affect an organization. It includes industry analysis (EFAS) and value chain analysis (IFAS), which help in understanding the opportunities and threats in the external environment and the strengths and weaknesses within the organization.

How does the script define strategic planning in the formal context?

Strategic planning is defined in the script as management operational processes in organizations through which the future impact of change is determined, and current decisions are made to reach a designed future. It includes evaluating company strengths and weaknesses, formulating organizational purpose, mission, objectives, policies, and strategies.

What is the significance of the vector space concept in understanding strategy?

The vector space concept is used to explain strategy by considering different dimensions such as product-market scope, growth vector, competitive advantage, and synergy. It helps in identifying the courses of action that an organization should follow to achieve its strategic objectives.

What is the difference between the terms 'purpose' and 'mission' in the context of an organization?

While the terms 'purpose' and 'mission' are often used interchangeably, 'purpose' refers to the fundamental reason for the organization's existence, and 'mission' defines the organization's goals and what it aims to achieve. The script suggests that these terms are used in an interchangeable manner during the planning process.