StrategicManagement.pdf - STRATEGIC MANAGEMENT UNIT-I Section A 1 Explain strategic alliance with illustration An arrangement between two companies that

StrategicManagement.pdf - STRATEGIC MANAGEMENT UNIT-I...

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STRATEGIC MANAGEMENT UNIT-I Section A 1. Explain strategic alliance with illustration An arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project. A strategic alliance is less involved and less permanent than a joint venture, in which two companies typically pool resources to create a separate business entity. In a strategic alliance, each company maintains its autonomy while gaining a new opportunity. A strategic alliance could help a company develop a more effective process, expand into a new market or develop an advantage over a competitor, among other possibilities. Example: Hewlett-Packard and Disney have a long-standing alliance, starting back in 1938, when Disney purchased eight oscillators to use in the sound design of Fantasia from HP founders Bill Hewlett and Dave Packard. When Disney wanted to develop a virtual attraction called Mission: SPACE, Disney Imaginers and HP engineers relied on HP's IT architecture, servers and workstations to create Disney's most technologically advanced attraction. 2. What is strategic planning? How is different from tactical planning? It is a process of deciding on objectives of the organization, on changes in these objectives, on the resources used to attain these objectives & on the policies that are to govern the acquisitions, use & disposition of these resources. Major difference between them is that strategy determines what major plans are to be undertaken & allocates resources to them, while tactics it is means by which previously determined plans are executed. 3. Explain the importance and limitations of strategic management. Strategic management is defined as the set of decisions & actions in formulation and implementation of strategies designed to achieve the objectives of an organization.
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Importance: Financial Benefits: It results into financial benefits to the organizations in the form of increased profit even in the face of environmental threats. Offsetting Uncertainty: By prescribing the future course of action. Clarity in Objectives & Directions: It is used for achieving those objectives; they focus on clarity of objectives. Increased Organizational Effectiveness: Its concept is that the organization is able to achieve its objectives within the given resources. Personnel Satisfaction: If the decisions are systematized in the organization everyone knows how to proceed, how to contribute towards objectives this clarity brings satisfaction. Limitations: Complex & Dynamic Environment: We require knowledge of the trend in the environment, increase in complexity leads in difficult to predict the future outcome Rigidity: There is a need for concept of moving balance among the consideration on which the strategy is based.
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