Strategic Management – An Introduction

Strategic Management

First of all, if we have seen, strategic management in an informal sense is not new. In fact, from the epic Mahabharata days, the terminology of strategy is used. If we go back, about more than 5000 years ago where the whole story of Mahabharata happens. In this war, there are two sides, one is the Kauravas and the other is the Pandavas. The Kauravas have 11 Akshauhini Sena and Pandavas have 7 Akshauhini Sena. 

1 Akshauhini = 21,870 chariots + 21,870 elephants + 65,610 horses + 109,350 foot soldiers

In view of these calculations, Kauravas have more strength than Pandavas and Kauravas also have atirathis and maharathis as well. But in war, one day the king Duryodhana came to his guru and asked if we even have a huge amount of soldier’s strengths, but now why our army is decimated. Then the guru told, I planned a new strategic formulation tomorrow. This strategic formulation Pandavas could not formulate except Arjun. They planned a strategy making Arjun busy with some other work. As planning was going well, finally with that strategic formulation one of the brave warriors Abhimanyu died. In this way, the first-time strategy was used. 

But in formal way, the term strategy was used in late 1965 by Igor Ansoff when he was working for a company Lockheed Aircraft Corporation. This company gave him to work on a project, then first time he designed a strategic formulation to solve the project. From that time, he is called as the father of strategic management.

The term “strategy” refers to long-term decisions, they embrace objectives, goals, and courses of action for an organization. The term strategy formally used by Ansoff in 1965, when it came to India the terminology that adopted was corporate planning. It underwent to strategy later. The first Indian company that implemented this corporate planning is BHEL (Bharat Heavy Electrical Limited) in 1974. The term “corporate planning” as presently as liberalization process started gaining momentum, started rechristening itself and have become “Strategic Management”. 

The formal definition of strategic management refers to management in organizations through which the future impact of change is determined and current decisions to reach the desired future are made. It includes the entire process of major outside interest groups and their stakes, expectation of dominant inside stock holder’s information present, past and production performance, evaluation of company performance, formulation of original purpose, mission, objectives, policies and techniques.

Now, with regard to organization in IT sector, we can define strategies in different ways. Starting with growth strategies, the organization looks at this as an option for growth. There are several characteristics of growth strategies:

  1. Hold relative position in high growth product stroke market space.
  2. Increase market share in high growth market.
  3. Market share in mature markets.
  4. Hold robust relative position in mature market, use excess cash flows, funds to effect penetration with existing product line.
  5. Hold robust relative position in diversified product line domestically and use excess cash flow, funds capability and other resources to diversity markets.

The next is dependency reduction strategies. The characteristics are:

  1. Maintaining alternatives.
  2. Building positive image.
  3. Direct confrontation
  4. Contracting that is to scale back uncertainties.
  5. Co-optation.
  6. Coalitions.

There are many strategies that could be followed by IT companies. Strategic management is used to make a long term growth plan. The information from all stages in an organization makes to build, develop and design strategic management activity.


This article is co-authored by Dr. Raul Villamarin Rodriguez & Pokala Pranay Kumar,Woxsen University.