HND in Business Management

BHND5203 – Strategic Management

QCF Level: 5
Credit Value: 20
Lecturer: Subodha Perera

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 Learning Outcome 04

Understand Strategy in action

(Session 12)

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 Strategy Selection

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 Methods to Pursuing Strategy
 Internal Growth/Organic Growth
 Strategic Alliance
 Mergers/Acquisition

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 Why Organic development
 Highly technical products
 Knowledge and capability development
 Spreading investment over time
 Minimising disruption
 The nature of markets

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 Why Mergers/acquisitions
 Speed of entry.
 The competitive situation
 Consolidation opportunities.
 Financial markets conditions/terms
 Exploitation of strategic capabilities
 Cost efficiency
 Obtaining new capabilities
 Institutional shareholder expectations
 Managerial ambition
 Speculative motives
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 Why Alliances
 The need for critical mass (complementary products)
 Co-specialisation
 Learning

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 Types of Strategic Alliances

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 Strategic Options

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 Criteria for effective strategies

 Certain factors will influence the effectiveness of

strategies and the wisdom of following certain courses
of action.
 The factors considered are:
 Suitability
 Feasibility
 Desirability.

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 Suitability/Appropriateness
Suitability deals with the overall rationale of the strategy.
 Does the strategy address the mission?
 Does it reflect the organization's capabilities?
 Does it make economic sense?
 Evaluation tools include strength, weakness, opportunity, threat
(SWOT) analysis.

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 Examples of Suitability

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 Desirability/Acceptability
 Acceptability is concerned with the expectations of the
identified stakeholders (shareholders, employees and
customers, etc.) with the expected financial and non-financial
outcomes. Return deals with stakeholder benefits.
 Risk deals with the probability and consequences of failure.
Employees are particularly likely to have concerns about non-
financial issues such as working conditions and outsourcing.

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 Criteria for Acceptability

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 Feasibility
Feasibility is concerned with whether the organization has the
resources required to implement the strategy. Resources include
capital, people, time, market access and expertise.

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 Thank you
Session 13 – Strategy Implementation

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