1. Scenario Based MCQs (New Pattern) 2. Cases Discussions ...

1. Scenario Based MCQs (New Pattern)

2. Cases Discussions (New Pattern)

3. MTPs and RTPs Discussions

SM[STRATEGIC MANAGEMENT]

Prof. Om TrivediIIM-C Alumnus, Visiting Faculty at NIRC & WIRC of ICAI, External Subject Expert at the BOS of ICAI and Plus Educator at Unacademy.

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MCQs in KBCA Style

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Copyright © 2020 Om Trivedi, All rights reserved.

Strategic Management


“Victorious warriors win first

and then go to war, while

defeated warriors

go to war first and

then seek to win”


Model Question

Gennex is a company, headquartered in Bangalore, India, that designs, manufactures and sells computer hardware and software. It is considered one of the Big Five Technology Companies, alongside Apple, Amazon, Google, and Microsoft. Gennex is well known for its innovative products that has helped the company to have advantage over its competitors. It is well known for its size and revenues. The company also has a high level of brand loyalty and is ranked as one of the world's most valuable brands. It also spends on research and development and concerned with innovative software. Often the unique features of their product, that are not available with their competitors helps them to gain competitive advantage. Because of the product’s unique attributes, it increases its prices and is also able to pass the costs to its customers who cannot find substitute products easily. Gennex using the strategy is consistently gaining its position in the industry over its competitors.

Required: Identify and explain that which one of the three base generic strategies, Gennex has opted to gain competitive advantage over its rivals.


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Copyright © 2020 Om Trivedi, All rights reserved.Copyright © 2020 Om S Trivedi, All rights reserved.

EIS-SM

“Small Milate Jao Large Banate Jao”


Answer to Question No. 6(a)Synopsis: Gennex is gaining competitive advantage over the Big Technology

Companies Apple, Amazon, Google and Microsoft through its well known innovative hardware and software products. Its size and revenues is based upon high level of brand loyalty, value creation with research and development in innovative software. The unique features of Gennex product helps it to increases its prices and its ability to pass the costs to its customers is consistently gaining its position in the industry over its competitors.

In the light of the above scenario, I state that Gennex has opted “Differentiation” strategy from one of the three base generic strategies: Cost Leadership, Differentiation and Focus, as suggested by Michael Porter to gain competitive advantage over its rivals.

Copyright © 2020 Om Trivedi, All rights reserved. Copyright © 2020 Om Trivedi, All rights reserved.For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in

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Copyright © 2020 Om Trivedi, All rights reserved.For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in Copyright © 2020 Om Trivedi, All rights reserved.For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in


CH. NO. SM – CHAPTERS (NEW) MARKS

WEIGHTAGE

1. An Introduction to Strategic Management 6-8

2. Dynamics of Competitive Strategy 12

3. Strategic Management Process 6

4. Corporate Level Strategies 8

5. Business Level Strategies 6-8

6. Functional Level Strategies 6-8

7. Organization and Strategic Leadership 8-10

8. Strategy Implementation and Control 8-10Copyright © 2020 Om Trivedi, All rights reserved.

CH. NO. SM – CHAPTERS (OLD) MARKS

WEIGHTAGE

1. Business Environment 6

2. BP, SM, SM Process and Strategic Intent 10

3. Strategic Analysis 10

4. Strategic Planning 8

5. Functional Level Strategies 8

6. Strategy Implementation and Control 10

7. Reaching Strategic Edge 8

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SM Examination Paper - Trend Analysis

Question Numbers MCQs/SBQs – 15 Marks

6 (a) & (b)- Marks- 3+2 = 5

7 (a) & (b)- Marks- 2*5 = 10

8 (a) & (b)- Marks- 5*2 = 10

9 (a) & (b)- Marks- 5*2 = 10

10 (a) & (b)- Marks- 7+3 = 10

Question TypesCompulsory Questions

Compulsory Questions

Descriptive or Case Based



Descriptive and Short Notes


An Introduction

to Strategic

Management

CHAPTER – 1


Learning OutcomeWhat is Business Policy?

What is Strategy?

Types of Strategy


Objectives of SM

Advantages and

Limitations of SM

Management

Levels of Management

Strategic Levels in

Organization

Levels of Strategy

Corporate Strategy

Business Strategy

Functional Strategy

Strategy in NPOsCopyright © 2020 Om Trivedi, All rights reserved.

What is Business Policy?

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What is Business Policy?

Study of the functions and responsibilities of the top

management.

Determines the Future course of action.

Moulding the character and identity of an

organization.

Helps in Mobilization of resources to achieve goals.

SFM-2



Hyundai Motor Unveils 'Strategy 2025’

Hyundai announces a set of strategies to achieve steady growth: • Boost profitability

• Enhanced customer value and cost structure

• Sell 670,000 EVs annually

• Become top three EV manufacturer by 2025

• Offer most new models with EV drivetrain by 2030 in

major markets, 2035 in emerging markets

• Invest KRW 61.1 trillion into R&D and future technologies

through 2025

• Target operating margin of 8% in automotive business

• 5% market share by 2025Copyright © 2020 Om Trivedi, All rights reserved.

Strategy

The concept of strategy has been borrowed from the military and adapted for use in business.

Military Strategy

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StrategyStrategy refers to the

ideas,

plans,

action and

support

that firms employ to compete successfully

against their rivals.

It helps firms achieve competitive advantage.Copyright © 2020 Om Trivedi, All rights reserved.


Cost (Ind. Avg.)= Rs. 5,000

Value Created= Rs. 10,000

Price Offered = Rs. 8,000

CM= Rs. 2,000

FM= Rs. 3,000

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Cost = Rs. 4,000

Value Created= Rs. 12,000

Price Offered = Rs. 8,000

CM= Rs. 4,000

FM= Rs. 4,000

Pro

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Value CreationProviding products and services to the

customers with more worth.


Competitive Advantages

It allows a firm to gain an edge over

rivals when competing.

The set of unique features of a company

and its products that are perceived by the

target market as significant and superior

to the competition.For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in


A long range blueprint of an organization’s desired:

• Image: What it wants to be?

• Direction: What it wants to do?

• Destination: Where it wants to go?

Strategy


Strategy is partly proactive and partly reactive

Proactive StrategyIt is an approach where organization takes the initiative or acts as first mover.

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Reactive StrategyIt is an approach where organizations react to their competitor’s actions.






Intended or Planned Strategy

Plan at the beginning.

The strategy that an organization

hopes to execute.

Business Plan of Honda Automobiles for Indian

market to increase its market share through direct

marketing, advertising, sales promotions etc. with

the help of dealers and showrooms.

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Emergent Strategy

Plan that develops over time.

An unplanned strategy that arises in response

to unexpected environmental changes.

Honda Automobiles started the use of digital

marketing and emergence of social media,

dashboards and social websites to enhance a

marketing plan. Copyright © 2020 Om Trivedi, All rights reserved.

Realized Strategy

How the plan worked at the end.

The strategy that is in fact followed by an

organization.


Reliance Industries - Future

Group deal


Kishore Biyani, Group CEO, Future Group.

“As a result of this reorganisation and transaction,

Future Group will achieve a holistic solution to the

challenges that have been caused by COVID and

the macro-economic environment.

This transaction takes into account the interest of all

its stakeholders including lenders, shareholders,

creditors, suppliers and employees giving continuity

to all its businesses,”

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Isha Ambani, Director, Reliance Retail Ventures • "With this transaction, we are pleased to provide a home to the

renowned formats and brands of Future Group as well as

preserve its business ecosystem, which have played an

important role in the evolution of modern retail in India.

• We hope to continue the growth momentum of the retail industry

with our unique model of active collaboration with small

merchants and kiranas as well as large consumer brands. We are

committed to continue providing value to our consumers across

the country."Copyright © 2020 Om Trivedi, All rights reserved.

Future Retail’s Business

Stores: 1,700

Cities: 414

Income: Rs 20,185.37

crore in FY19-Rs

15,717.09 crore in FY20

Valued at ₹43,000 crore

Employees: Over 45,000


MANUFACTURER

DISTRIBUTORS

Distribution Centre

Distribution Network

Retail Store Fulfilment Centre

CUSTOMERS

Delivery Network


Reliance Retail’s

Stores: 11,806

Towns: 7,000

Space: 28.7 M Sq.

ft.

Turnover: 1,40,000+ Crores

For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in

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Copyright © 2020 Om Trivedi, All rights reserved. Copyright © 2020 Om Trivedi, All rights reserved.

What’s there in the Deal?

Retail & Wholesale Undertaking is being transferred to

Reliance Retail and Fashion Lifestyle Limited (RRFLL),

a wholly-owned subsidiary of Reliance Retail Ventures

(RRVL).

The Logistics & Warehousing Undertaking is being

transferred to RRVL.



What’s there in the Deal? Future Group will first merge certain companies carrying on the

aforesaid businesses into Future Enterprises Limited (FEL).

Future Group lenders have been saved from a $2.2 billion hit on

their exposure to the conglomerate after the company

announced its sale of all its businesses to Reliance Industries

(RIL) for ₹24,713 crore.

Reliance Retail Ventures (RRVL) will hold 13.14% stake in

Kishore Biyani's Future Enterprises Ltd and will take over debt

of ₹12,500 crore.


Why this Deal, now? Future Group had a consolidated debt of ₹12,778 crore as of Sep.

2019.

Future Retail had a gross debt of ₹2,657 crore as of March 2019.

The retail giant had been in financial difficulty since the nationwide

lockdown started hurting its businesses.

Future Retail’s net profits declined to ₹164.56 crore on a

consolidated basis in Q3FY20 from ₹197.60 crore in the year-ago

period.

Revenue from operations decreased to ₹5,193.19 crore in Q3FY20

compared to ₹5,368.46 crore in Q3FY19.

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Why this Deal, now? RRVL reported a consolidated turnover of Rs 162,936 crore

and net profit of Rs 5,447.96 crore for the year ended March

31, 2020.

The deal with Future Group also makes Reliance Retail more

attractive for potential global partners and suitors.

“RIL has received strong interest from strategic and financial

investors in Reliance Retail.” - RIL's 43rd AGM, Mukesh

Ambani

For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in Copyright © 2020 Om Trivedi, All rights reserved.

Case Study: Facebook In 2003, Mark Zuckerberg after being dumped by his girlfriend,

created a website called “FaceMash” where the attractiveness

of young women could be voted on. This evolved first into an

online social network called ‘Thefacebook’ that was for Harvard

students only. When the network became extremely popular, it

then morphed into Facebook, a website open to everyone.

Facebook is so pervasive today that it has changed the way we

speak, such as the word friend being used as a verb. Ironically,

Facebook’s emphasis on connecting with existing and new

friends is about as different as it could be from Mark

Zuckerberg’s original concept.

In fact, Mark Zuckerberg’s emergent and realized strategies

turned out to be far nobler than the intended strategy.



Strategic management is an ongoing process that

Evaluates and controls the business and the

industries


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Assesses its competitors and sets goals and

strategies to meet all existing and potential

competitors.




Reassesses each strategy to determine how it has

been implemented.


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Evaluates and controls the business and the industries

Assesses its competitors and sets goals and strategies

to meet all existing and potential competitors; and

Reassesses each strategy to determine how it has

been implemented.



Objective of Strategic Management

To create competitive advantage.

To guide the company successfully

through all changes in the environment.


Advantages of SM Proactive: Helps to become more proactive.

Decision-making: Provides decision-making framework.

Direction-setting for the company.

Avoid costly mistakes.

Competitive Advantages and Core competencies

Threat Identification:

Reputation: Building of the organizations.

Longivity: Helps to enhance the longevity of the business.

Future Oriented: Prepare the corporation to face the future.

PD 2Avoid

and

CTRLFuture

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Limitations of SM

Complex and turbulent environment.

Costly process.

Time-consuming process.

Competition analysis is a challenging task.

ComplexCTC

Analysis


Management

Management is both art and

science.

It is the art of making people

more effective than they

would have been without you.

The science is in how you do it.


Levels of Management

Board of directors, chief executive or managing director.

Branch managers anddepartmental managers

Supervisors, foreman, section officers and superintendent.


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Finance HR IS Production R & D S & Mkt.

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Strategic Levels in OrganizationsRoles

and Functions


Levels of Strategy

Copyright © 2020 Om Trivedi, All rights reserved.For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in Copyright © 2020 Om Trivedi, All rights reserved.

Corporate Strategy

Corporate strategy is the growth design of the

firm as it spells out the growth objective

the direction,

extent,

pace and

timing

of the firm’s growth.

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Corporate Strategy

Corporate level strategy is concerned with:

Competitive Contact

Reach

Managing Activities and Business Interrelationships

Management Practices

CRM-2



Business Strategy

Plans and actions that firms devise to compete in a

given product/market scope or setting.

Addresses the question- “How do we compete

within an industry?”

Strategic Business Unit (SBU) (A profit centre)


SBUsSBU is an autonomous division in the organization which deals

with specific business concerns.

It has its own set of competitors and a manager, who has

responsibility for strategic planning and implementation, and

who has control over the resources and profit-influencing

factors.Manufacturing

Showroom

Service Centre

SBU 1

SBU 2

SBU 3

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Functional strategy

Strategy related to a single functional operation.

Tactical in Nature.

Marketing Strategy

Promotion Strategy Sales Strategy Pricing

Strategy


Scenario Based Question

Ramesh Sharma has fifteen stores selling consumer durables in Delhi Region. Four of these stores were opened in last three years. He believes in managing strategically and enjoyed significant sales of refrigerator, televisions, washing machines, air conditioners and like till four years back. With shift to the purchases to online strores, the sales of his stores came down to about seventy per cent in last four years. Required: Analyse the position of Ramesh Sharma in light of limitations of strategic management. For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in

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“Fitness Mantra” is a charitable organisation promoting healthy lifestyle amongst all the sections of the society. It organises programmes to encourage and guide people on matters related to fitness, stress relief, yoga, exercises, healthy diet, weight management, work-life balance and so on. Many business organisations and resident welfare associations take services of “Fitness Mantra”. Its daily yoga sessions are very popular in some of the big companies across the country. The “Fitness Mantra” has no commercial interest and does not charge any fees for its services. However, the organisation is able to get good charities and has sufficient funds to meet its routine expenses.

Required: Do you think the concepts of strategic management are relevant for “Fitness Mantra”? Discuss.For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in Copyright © 2020 Om Trivedi, All rights reserved.


‘Kidz Care’ is a not-for-profit organization based in northern India working towards childcare. ‘Kidz Care’ educates people towards immunization, sanitation and works in coordination with local hospitals or medical centers. Recently, a new team has taken over the management of its activities. Required: Explain whether tools of strategic Management are relevant for ‘Kidz Care’.


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CHAPTER 2

DYNAMICS OF

COMPETITIVE STRATEGY

By: OM TRIVEDICopyright © 2020 Om Trivedi, All rights reserved.

CompetitionCompetition is a

contest between

Organisms,

Animals,

Individuals,

Groups, etc.


Competitors A company in the same industry or a similar

industry which offers a similar product or

service.

Example:

Coca-Cola and Pepsi

Wal-Mart and Target

McDonald’s and Burger KingCopyright © 2020 Om Trivedi, All rights reserved.

How to Deal with Competition?

Who are the competitors?

What are their product and services?

What are their market shares?

What are their financial positions?

What gives them cost and price advantage?

What are they likely to do next?

How strong is their distribution network?

What are their manpower strengths?


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Competitive Landscape

A business analysis which identifies

competitors.

Permits the comparison of their

mission, vision, core values, niche

market, strengths and weaknesses.


Steps to UnderstandCompetitive Landscape

I. Identify the competition

II. Understand the competition

III. Determine the Strengths of the

competition

IV. Determine the Weaknesses of the

competition

V. Put all the Things Together


Competitive Strategy

Competitive strategy is designed to help firms

achieve Competitive Advantage.

A competitive strategy consists of moves to

• Attract customers

• Face Competition

• Beat Competition

• Strengthen an organization’s market positionCopyright © 2020 Om Trivedi, All rights reserved.

Value Creation

Providing products and services to the customers with more worth.

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It allows a firm to gain an edge over rivals when competing.

The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.


Tangible Resources?



Intangible Resources?


Role of Resources, Capabilities and Value Creation is Achieving Competitive

Advantages

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Characteristics of Resources that Provide Sustainable Competitive

Advantages

I. Imitability

II. Durability

III. Transferability

IV. AppropriabilityCopyright © 2020 Om Trivedi, All rights reserved.

What is Core Competencies?

Core Competencies are created by superior integration of technological, physical and human resources.

They represent distinctive skills as well as intangible, invisible, intellectual assets and cultural capabilities.

It also refers to the strengths of an organization that provide competitive advantage and value to it.


What is Core Competencies?

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C K Prahlad and Gary Hamel’s View on Core Competence

Three competencies that can be termed CC:

A.Competitor differentiation or CA

B.Customer value or Value creation

C.Application of competencies


Tools to identify and build CC

Four criteria of sustainable competitive advantage (Capabilities that are Core Competencies)

Value Chain Analysis


Capabilities that are Core Competencies

Valuable

Non-substitutable

Costly to Imitate

Rare




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Company Valuation Ratio

Colgate-Palmolive 20.8

Glaxo 13.4

eBay 11.2

Yahoo 10.7

Dell 10.0

P&G 8.4

Unilever 8.1

Company Brand Value

Coca-Cola 66.7

IBM 59.0

Microsoft 59.0

GE 53.1

Toyota 34.1

Intel 31.3

McDonald’s 31.0


VRIO Analysis



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Cost

Value Created

Price Offered

CM

FM

Pro

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Value Chain Analysis Value Analysis

It is an accounting analysis to understand the ‘value added’ of separate activities in a complex manufacturing process, in order to determine where cost improvement could be made and/or value creation improved.

Value AddedCreation of a competitive advantage by bundling, combining, or packaging features and benefits that result in greater customer acceptance.


Value Chain Framework of Porter (1990)


Managing Linkages

Internal Linkages

• Between Primary Activities

• Primary and Support Activities

• Between Support Activities

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Managing Linkages

External Linkages

1. Vertical Linkages

• Involving suppliers while finalizing

specifications for raw-material.

• Involving distributors at the design

stage of a product.

2. Horizontal Linkages Copyright © 2020 Om Trivedi, All rights reserved.

CC to Competitive Advantages, How is it possible?


Strategic

Analysis


What is Strategic Analysis?

Strategic analysis seeks to determine • alternative course of action

that could best enable the firm -

• to achieve its mission and objectives.

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Strategic Analysis


Why Strategic Analysis?

Strategic analysis tries to find out:

i. How effective has the present

strategy been?

ii. How effective will that strategy be in

the future?

iii. How effective will the selected

alternative strategy be in the future?


Issues to be Considered for Strategic Analysis

Strategy evolves over a period of

time (Result of a series of small Decisions)

Balance (Balance between the internal and external

factors)

Strategic Risk (Analyzing risk involved and

consequences thereon)


Strategy evolves over a period of time

Strategy is the result of a series of small decisions taken over an extended period of time.

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Balance Resources

Capabilities

Competencies

Strengths

Weaknesses

Events

Trends

Influences

Constraints

Opportunities


What is Risk?

Certainty UncertaintyRisk


Strategic Risks


Situational Analysis

A systematic approach for

identifying and analyzing

macro-environmental factors

external to the organization and

matching them with the firm’s

capabilities.

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Important Factors Considered while doing a Situation Analysis

Product Situation

Market Situation

Competitive Situation

Distribution Situation

Environmental Factors

Opportunity and Threat analysisCopyright © 2020 Om Trivedi, All rights reserved.

Strategic AnalysisFramework

Strategic Analysis

Internal AnalysisExternal Analysis

Customer Analysis Competitor AnalysisMarket AnalysisMacro-Environment Analysis

Performance AnalysisDeterminates Analysis

Opportunities, threats, trends, and strategic uncertainties

Strengths, Weaknesses, trends, and strategic uncertainties

Strategy Identification and Selectioni. Identify Strategic Alternativesii. Select Strategyiii. Implement the Operating Planiv. Review Strategies


Industry and Competitive Analysis

Industries differ widely in their -• Economic characteristics,

• Technological situation,

• Competitive situations, and

• Future profit prospects.


Methods of Industry and Competitive Analysis

D ominant Economic Features of Industry

I ntensity of Competition

D rivers of Change

I dentifying Companies in Strongest and Weakest Position

S trategic or Competitive Moves of Rivals

E xamine Key Factors for Competitive Success

E valuate Financial Attractiveness of Industry

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Dominant Economic Features of the Industry

Market size

Competitors and competition

Industry Size and Growth

Capital Requirement

Rate of Return

Customer Segments

Pace of Technological Change

Distribution Channels

EOS, LC and EC

Entry and Exit Barriers

Product Differentiation

Vertical IntegrationsCopyright © 2020 Om Trivedi, All rights reserved.

Intensity of Competition


Drivers of Change Decreasing cost or price

Globalization

Number of players

Innovations

Entry of firms

Exit of firms

Availability of funds

Internet and E-commerce Copyright © 2020 Om Trivedi, All rights reserved.

Identifying Companies in Strongest and Weakest Position

Strategic Groups

Strategic Group Mapping


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Strategic Groups Product Line Breadth

USP, Services offered and Quality Range

Price Range

Technological Approach

Segment Targeted

Distribution Channel

Geographical Coverage



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Examine Key Factors for Competitive Success

Key Success Factors (KSFs)KSFs are the Elements that affect the ability of the

firms in an Industry to prosper.


Evaluate Financial Attractiveness of Industry


Portfolio Analysis

Business Portfolio: A business portfolio is a collection of businesses and products that make up the company.

Portfolio Analysis: A set of techniques that help strategists in taking strategic decisions with regard to individual products or businesses in a firm’s portfolio.

http://www.ril.com/ https://www.itcportal.com/

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Strategic Business Unit (SBU)

SBU is an autonomous division in the

organization which deals with specific

business concerns.

It has its own set of competitors and a

manager, who has responsibility for strategic

planning and implementation, and who has

control over the resources and profit-

influencing factors.Copyright © 2020 Om Trivedi, All rights reserved.

Experience Curve

Experience curve shows the relationship between production cost and cumulative production quantity.


EOSAdam Smith (1776)


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Learning Curve Herman Ebbinghaus (1885)

A German Psychologist


Experience Curve

Experience curve shows the relationship between production cost and cumulative production quantity.


Cumulative Production


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Product Life Cycle (PLC)

Copyright © 2020 Om Trivedi, All rights reserved.For PD/GD/Online Lectures – Student’s Help Desk: 9953922272 or Visit www.eissmpendrive.in


Boston Consulting Group Growth-Share Matrix (BCG Matrix)

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Question Mark




Star



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Cash Cow




Dog


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Four strategies Based on BCG Matrix

Build

Hold/Protect

Harvest

DivestCopyright © 2020 Om Trivedi, All rights reserved.

Grand Strategies/Directional Strategies


Ansoff’s Product Market Growth Matrix


Expansion through Intensification

Intensification refers to growth by working with its current businesses more strongly.

Intensification include:• Market penetration

• Market Development

• Product Development

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Market Penetration Enter markets with their

existing products.

Take partly or all of a

competitor’s market share.

Find new customers.

Get current customers to use

more of your products.

Low Risk



Product Development

New products into Existing

markets.

Even if the new products

need not be new to the

market, they remain new to

the business.

Mod. Risk


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Market Development Existing products into new markets.

Current product can be changed, improved

and marketed.

Target another segment.

New geographical markets, new product

dimensions or packaging, new distribution

channels or different pricing policies.

Mod. Risk


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Expansion through Diversification

New products into new

markets.

Starting up or acquiring

businesses outside the

company’s current products

and markets.

High Risk



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ADL Matrix(Arthur D Little)

The ADL Matrix is a two dimensional 4*5

matrix

Based on the Product Life Cycle (PLC) and

Competitive positioning.

Matrix Positioning Base

• Industry Maturity

• Competitive PositionCopyright © 2020 Om Trivedi, All rights reserved.

Industry Maturity

Embryonic

Growth

Mature

Aging


Competitive Position

Dominant

Strong

Favourable

Tenable

Weak Copyright © 2020 Om Trivedi, All rights reserved.

ADL Matrix

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The General Electric Model


Factors that Affect Market Attractiveness

Market Size

Market growth

Market profitability

Pricing trends

Competitive intensity

Overall risk of returns in the industry

Opportunity to differentiate products

Segmentation

Distribution structure


Factors that Affect Competitive Strength

Strength of assets and competencies

Relative brand strength

Market share

Customer loyalty

Structure the cost as compared with the competitors (Relative cost position)

Distribution strength

Record of technological or other innovation

Access to financial and other investment resources


The General Electric Model


101 102

103 104

27


SWOT Analysis

©South-Western College Publishing

S

W

O

T

Things the company does well.

Things the company does not do well.

Conditions in the external environment that favor strengths.

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

Internal

External


SWOT Analysis

Strengths •Financial resources•Broad product line•No debt•Committed employees•Technology

Weaknesses•Huge debts •High employee turnover•Wastage of raw materials•Obsolete Machinery

Strengths and

WeaknessesINTERNAL


SWOT Analysis

OpportunitiesAnd

ThreatsEXTERNAL

Opportunities • Emerging markets• Population changes• Government policies• FDI in retail• Changes in Interest Rates

Threats• Changing technology• Price wars • Reduction in industry profits• Recession

105 106

107 108

28


Significance of SWOT Analysis

Provides a Logical Framework

• Presents a Comparative Analysis

• Guides strategist in Strategy Identification


SWOT Analysis Framework


TOWS Matrix(Heinz Weihrich)


GLOBAL ENVIRONMENT


109 110

111 112

29


Global Environment Factors

I. Positive and negative impact of significant

international events

II. Emerging global markets

III. Changing global markets

IV. Cultural attributes of individual global

markets.

V. Institutional attributes of individual global

markets. Copyright © 2020 Om Trivedi, All rights reserved.

Factors that influence globalization

Sports Meets

Terrorist Attacks

Natural Disasters

Emerging new market

The culture and attributes towards

change


Globalization

Globalization refers to the linkage between markets that exist across national borders.

These linkages may be economic, financial, social or political.


The Indicators of Globalization

International trade in goods and

services.

The transfer of money capital from one

country to another.

The movement of people across

national borders.

113 114

115 116

30


Types ofGlobal Companies


Characteristics of a Global Company

Common ownership

Common pool of resources

Common strategy



Reasons why Companies go Global

Domestic markets are no longer enough to absorb whatever is produced

Foreign markets have grown enough to justify foreign investment

Availability of cheaper and reliable resources in other countries

Reduction in transportation cost for export to remote countries

Rapid shrinking of time and distance across the globe


Importance of Globalization

Proper use of Resources

Multiple choices

Foreign Exchange

Government incentives

Creates Employment

Technology

Spreading of Risk of Loss

Benefit to the consumers

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119 120

31


Chapter 3Strategic Management Process


Motivational Quote

“Vision is the art of seeing

things invisible.”

- Jonathan Swift


VISION

Health for all

Peace on earth

Being human

Education for all

Everyday low prices


Vision

Vision represents an IDEA, IMAGINATION,

DREAM and DNA about:

• What an organization is today?

• What it wants to be tomorrow?

• What kind of company it wants to create?

It is a macro-view of an organization’s

philosophy.

Organization’s roadmap to future.

121 122

123 124

32


Strategic Vision

Strategic Vision is a road map of a company’s future – providing specifics about ........

• technology and customer focus,

• the geographic and product markets to be

pursued,

• the capabilities it plans to develop, and

• the kind of company that management is

trying to create.Copyright © 2020 Om Trivedi, All rights reserved.

Elements of a strategic vision

Who we are and Where we are now?

Where we are going?

Clear communication of vision in

the organization.



How to Develop a Strategic Vision?

Creativity

Intelligence

Direction Change

Shared Vision

Direction SettingCopyright © 2020 Om Trivedi, All rights reserved.

www.amazon.com

“Our [Amazon’s] vision is to be

earth’s most customer centric

company; to build a place where

people can come to find and

discover anything they might want

to buy online.”

125 126

127 128

33


Hair Salon


Hair Salon


Hair Salon

“Our salon will change the way you

think about a haircut. Full service

comfort, friendly staff, a relaxing

atmosphere, and the best prices in town

give you an experience that will leave

you glowing both inside and out.”


Mission

“Purpose” of being there.

• Why the firm exists?

• What it does?

• How it does?

• For whom it does?

It is an action mode to achieve vision.

It helps in deciding priorities.

129 130

131 132

34


Mission

A company’s Mission statement is typically focused

on its present business scope – “who we are and

what we do”

Mission statements broadly describe an

organizations present capabilities, customer focus,

activities, and business makeup.

Drucker (1995)A mission statement is the same as asking the question:

What business are we in?Copyright © 2020 Om Trivedi, All rights reserved.

Components of a Mission Statement

Customers

Products or Services

Technology

Self-concept

Markets

Image of Firm

Philosophy

Concern for employees

Concern for survival, growth and profitability


Useful points while writing the mission of a company

Give the organization its own special identity,

business emphasis and path for development.

Customer groups it is targeting,

Technologies and competencies, it uses.

Activities it performs to satisfy own needs.

Indicate the boundaries on business operation.

Highly personalized and unique to the

organization. Copyright © 2020 Om Trivedi, All rights reserved.

Dell Mission Statement

Dell’s mission is to be the most successfulcomputer company in the world at delivering thebest customer experience in markets we serve. Indoing so, Dell will meet customer expectations of:

• Highest quality

• Leading technology

• Competitive pricing

• Individual and company accountability

• Best-in-class service and support

• Flexible customization capability

• Superior corporate citizenship

• Financial stability

133 134

135 136

35


Pantaloons

Vision

To Deliver everything, everywhere, every time for every Indian consumer in the most profitable manner.

Mission

It will be trendsetter in delivery formals, creating retail realities, making consumption affordable for all.

It will infuse Indian brands with confidence.

It will be efficient, cost conscious and committed to quality.


Tata Sky

Vision

To be at every television home.

Empowering every television viewer and revolutionizing home entertainment.

Mission

Revolutionizing Home entertainment by offering:

• Super Digital Versatile Disk

• HD Quality Pictures and Sounds


ICICI Bank

Vision

To be a leading provider of Financial Services in India and a major Global Bank.

Mission Customer’s First Choice by:

• Delivery of high quality, world

class products and services.

• Expand the frontiers of business

globally.

• Maintain healthy financial profile.

• Diversify earnings across

businesses and geographies.

• Create value for our stakeholders


137 138

139 140

36


Goal: 20% Revenue Growth

Ob

j. 3

: In

trod

uce

Wee

kday

s O

ffer

s


Difference between objectives and goals.

The goals are broad while objectives are

specific.

The goals are set for a relatively longer period

of time.

Goals are more influenced by external

environment.

Goals are not quantified while objectives are

quantified.


Characteristics of Objectives

Define the organization’s relationship with its environment.

Facilitative towards achievement of mission.

Provide the basis for strategic decision-making.

Provide standards for performance appraisal.

Understandable.

Concrete and specific.

Related to a time frame.

Measurable and controllable.

Challenging.

Correlate with other objectivesCopyright © 2020 Om Trivedi, All rights reserved.

Business Definition

Explain the business undertaken by

the firm, with respect to the customer

needs, target audience, and

alternative technologies.

Corporate restructuring also depends

upon the business definition.


141 142

143 144

37


Business Model

A strategic choice for the effective

operation of the business, ascertaining

sources of income, desired customer

base, and financing details.

Different firms adopt different

business models.


Strategic Planning

Strategic Planning is a process which deals with one or more of these key questions:

• Why do we exist?

• What are we doing?

• What are the major goals?

• For whom do we do it?

• How to improve and excel?

• What resources do we need?

• Who will be our customers?


Approaches for Strategic Planning

TOP

DOWN

UP

BOTTOM


Strategic Uncertainty

The strategic uncertainty is

represented by a future trend or event

that has inherent unpredictability.

It can be judged by Scenario Analysis.

145 146

147 148

38


Ways to deal with strategic uncertainty

Strategic Grouping of Uncertainty

Scenario Analysis

Strategic Flexibility in Organization.



CHAPTER 4Corporate Level Strategy


Strategic Alternatives


149 150

151 152

39


Glueck and Jauch Generic Strategic Alternative

Stability Strategy

Expansion Strategy

Retrenchment Strategy

Combinations StrategyCopyright © 2020 Om Trivedi, All rights reserved.

Grand Strategies/Directional Strategies


Stability Strategy

Frequency

Resources

Investment

Definition

Growth

Efficiency

RiskCopyright © 2020 Om Trivedi, All rights reserved.

Why Stability Strategy?

Stable Environment

Less Risky

Less Threatening

Consolidation

153 154

155 156

40


Expansion Strategy

Frequency

Resources

Investment

Definition

Growth

Efficiency

RiskCopyright © 2020 Om Trivedi, All rights reserved.

Why Expansion Strategy?

Growth

Advantage over Competition

Market Share and Position

Environmental Demand


Expansion Strategy


Expansion through Intensification

Intensification refers to growth by working with its current businesses more strongly.

Intensification include:• Market penetration

• Market Development

• Product Development

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159 160

41






Market Penetration Enter markets with their

existing products.

Take partly or all of a

competitor’s market share.

Find new customers.

Get current customers to use

more of your products.

Low Risk


161 162

163 164

42


Product Development

New products into Existing

markets.

Even if the new products

need not be new to the

market, they remain new to

the business.

Mod. Risk



Market Development Existing products into new markets.

Current product can be changed, improved

and marketed.

Target another segment.

New geographical markets, new product

dimensions or packaging, new distribution

channels or different pricing policies.

Mod. Risk

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167 168

43



Expansion through Diversification

New products into new

markets.

Starting up or acquiring

businesses outside the

company’s current products

and markets.

High Risk


169 170

171 172

44



Technological Innovation

Capacity Utilisation

Synergy

Reasons for Diversification

173 174

175 176

45


Related and Unrelated Diversification

Related Diversification: It is when a business adds or expands its existing product lines or markets.

Vodafone Purchasing Hutch

Unrelated Diversification: It is when a business adds

new,

or unrelated product lines

or markets.Copyright © 2020 Om Trivedi, All rights reserved.

Types of Related and Unrelated Diversification

Vertical Integration (Related)

Horizontal Integration (Related)

Concentric Diversification (Related)

Conglomerate Diversification (Unrelated)


Reasons for Related Diversification

To share competencies by exploiting

brand name, marketing-skills, sales and

distribution capacity, manufacturing

skills, R & D and new product capacity.

To achieve economies of scale.


Vertical Integration

Firm engages in businesses that are

related to its existing business.

It remains vertically within the same

product-process chain.

177 178

179 180

46



Paper Manufactures

Publisher

Book Distributor

Paper Manufactures

Publisher

Book Distributor

Backward Integration

Forward Integration


Horizontal Integration Diversification

This involves addition or acquisition of one or

more similar businesses at the same stage of

the production marketing chain through:

• Entering into Repairs and servicing of products

• Taking over Competitors’ products

• Production of Complementary products

• Sale of By-products




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183 184

47




Concentric Diversification

Extends the firm’s distinctive

competence to the other lines of

business that are similar to the firm’s

initial base through:

• Process

• Technology

• Marketing.


Concentric Diversification


Conglomerate Diversification

It is a strategy that expands the firm’s

operation into industries and markets that

are not similar or related to the firm’s

initial base.

It does not involve sharing the firm’s

distinctive competence across different

lines of business.

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187 188

48


Reasons for Unrelated Diversification

To manage and allocate cash flow.

To obtain high ROI.

To obtain a bargain price.

To reduce risk by operating in multiple product

markets.

To obtain tax benefits.

To obtain liquid assets.

To achieve vertical integration. Copyright © 2020 Om Trivedi, All rights reserved.

Conglomerate Diversification



Expansion through Strategic Alliance

A strategic alliance is an agreement

between

Two or more companies

To share:

Knowledge or resources

To their mutual benefit.


Types of Strategic Alliance

Intra-industry

Inter-industry


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191 192

49


Why Strategic Alliance?

To create Synergy

To Avoid barriers to entry

To gain Access to new markets

To Reduce/share risk

To gain Access raw materials

To Undertake development projects that are

too big for a single company to fund.


Advantages ofStrategic Alliance?

Political

Organizational

Strategic

Economical


Disadvantages ofStrategic Alliance?

Sharing

Trade Secrets

Competition


Retrenchment Strategy

Frequency

Resources

Investment

Definition

Growth

Efficiency

Risk

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195 196

50


Ways ofRetrenchment Strategy

Cutting back on capital and revenue expenditure.

Reduction in operation.

Withdrawal of some products and offices.

Disposal of plant and product divisions.

Retirement from production/marketing stage.

Offering itself for takeover.

Seeking liquidation or winding up.


Types ofRetrenchment Strategy

InternalInternal

Turnaround

ExternalExternal

Divestment

Liquidation


Why Retrenchment Strategy?

Obsolescence of product/process.

High competition

Industry overcapacity

Management non-willingness continue

Continuous losses

Unavailability of resources

Unmanageable threats

Reallocation of resources to profitable businesses

Situation of strategic failure. Copyright © 2020 Om Trivedi, All rights reserved.

Turnaround

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199 200

51


Why Turnaround Strategy?

Mismanagement.

Negative cash flow and profits

Declining market value

Deterioration in physical facilities

Over manning

High turnover of employees and low morale

Uncompetitive products or servicesCopyright © 2020 Om Trivedi, All rights reserved.

Turnaround Action Plan

Stage 1• Assessment of Current Problem

Stage 2 • Analyze the Situation and Develop a Strategic Plan

Stage 3 • Implement an Emergency Action Plan

Stage 4 • Restructure the Business

Stage 5• Return to Normal


Divestment Strategy

Divestment Strategy involves the sale or

liquidation of a portion of business, or a

major division, profit centre or SBU.


Liquidation Strategy

A liquidation strategy involves closing down a firm and selling off all its assets and paying off its liabilities.


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52


Combination Strategy

We adopt different strategies for different units or products of an organization.

Combination = Stability + Expansion + Retrenchment


Expansion through Mergers and Acquisitions

To meet the basic business urge to grow.

To achieve synergy between the parent and the acquired enterprises.



Merger

A combination where two or more than two

companies combine into one company.

It is also defined as Amalgamation,

especially in Indian law.

Merger or Amalgamation may take two

forms:

• Merger through Absorption and

• Merger through Consolidation.


Absorption and Consolidation

Absorption• Absorption is a combination of two or more than two companies

into an existing company.

Consolidation• The fusion of two or more than two company into a new company

in which all the existing companies are legally dissolved and a new entity or company is created.

A Limited

C Limited New Company

B Limited

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53


Merger Process

A Limited B Limited


Amalgamation

The merger of one or more companies with another

company

Or,

The merger of two or more companies to form a new

company

In such a way that all assets and liabilities of the

amalgamated company become assets and liabilities of

the amalgamating company and shareholders holding

not less than nine-tenths in the value of the shares in

the amalgamating company or companies become

shareholders of the amalgamated company.


Acquisitions

The acquisition of assets by

one company from another

company.

Both companies may continue

to exist in acquisitions.

An acquisition is also known

as a takeover.

It may be friendly or hostile.


Types of Mergers and Acquisitions

Horizontal

• A merger of two competing firms which are engaged in

the production of similar products or services.

• It helps to obtain economies of scale in production by

• Eliminating duplication of facilities,

• Widening the product line, reduction in investment,

• Elimination of competition in product market,

• Increase market share,

• Reduction in advertising costs etc.


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54



Vertical

When two or more companies involved in

different stages of activities like production or

distribution combine with each other the

combination is called Vertical merger.

Two types of vertical combinations

• Forward Integration

• Backward IntegrationCopyright © 2020 Om Trivedi, All rights reserved.


Circular Combination

Companies engaged in the production of different products

seek combination to share common distribution and

research facilities in order to obtain economies by

elimination of duplication of cost.

Examples :

• STANDARD EQUITY FUND merged with DR. REDDY'S LABORATORIES.

• KARNATAKA SCOOTERS merges with BROOKE BOND (INDIA) LTD.



Conglomerate

• It is the combination of companies engaged in

unrelated businesses.

• Such a combination helps in

• Lowering of cost of capital,

• Optimum utilization of financial resources

• Enlarging debt capacity.


“

”Thanx


213 214

215 216

55


BUSINESS

LEVEL

STRATEGIES

CHAPTER – 5NEW

By: OM TRIVEDICopyright © 2020 Om Trivedi, All rights reserved.

Overall competitiveenvironment


Competitive Environment

The competitive environment is the dynamic

system in which the business competes.

Competitive Environmental Variables-

• New Entrants

• Suppliers

• Buyers

• Direct Competitors

• Indirect Competitors/Potential substitutesCopyright © 2020 Om Trivedi, All rights reserved.

Porter’s Five Forces Model -Competitive Analysis

217 218

219 220

56


New Entrants

+

Firm’s Value Creation Grid

Threat from New Entrants


Capital Requirements


Capital Requirements


Economies of Scale, EC and LC


221 222

223 224

57









225 226

227 228

58






Brand Identity


Brand Identity

229 230

231 232

59


Brand Identity


Brand Identity


Brand Identity


Brand Identity

233 234

235 236

60


Switching Costs


Distribution Channels


Aggressive Retaliation


Substitutes

=


Threat from Indirect Competitors

237 238

239 240

61








Suppliers

+


Bargaining Power of Suppliers

241 242

243 244

62


Factors that Influence Supplier’s Bargaining Power

Purchase Size

Product Function

Supplier’s Concentration



Switching Cost


Buyers

+


Bargaining Power of Buyers


Factors that Influence Buyer’s Bargaining Power

Buyer’s Knowledge

Purchase Size

Product Function

Buyer’s Concentration



Switching CostCopyright © 2020 Om Trivedi, All rights reserved.

Direct Competitors

+


+

Threat from Direct Competitors

245 246

247 248

63


Factors that Influence Barriers to Entry

Industry Leader

Number of Competitors

Type of Competition

Entry Barrier and Exit Barrier

Fixed Cost


Industry Growth RateCopyright © 2020 Om Trivedi, All rights reserved.

Michael Porter’s Generic Strategies

Cost Leadership

Differentiation

Focus

• Focussed Low Cost

• Focussed Differentiation


249 250

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64



253 254

255 256

65



257 258

259 260

66





261 262

263 264

67





265 266

267 268

68


Brand Identity



269 270

271 272

69


Best-Cost Provider Strategy



CHAPTER 6Functional Level Strategy


Functional

Strategy

UNIT- I

273 274

275 276

70


Learning Outcome

What is Functional Strategy?

Marketing Strategy Formulation

What is Marketing?

Marketing Strategy

Marketing Process

Marketing Mix

Marketing Analysis

Marketing Strategy Techniques


Functional Strategies

Known as tactical strategies.

Functional strategies operate below business-

level strategies.

Functional strategies are made within the

higher level strategies.

There might be several sub-functional areas.



What is Functional Strategy?

Functional Strategy

Finance

Marketing

Production

Logistics


Marketing Strategy

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279 280

71


What is Marketing?

Kotler

Marketing is an organizational function

A set of processes for creating, communicating, and delivering value to customers

For managing customer relationships in ways that benefit the organization and its stakeholders.


Concept of Exchange


Value Delivery Network


Delivering Value to Customers

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283 284

72


Delivering Value to Customers

a. Offer product and service benefits to the customers.

b. Evaluate its impact on them.

c. What is their interpretation of value of that product and services.

d. Does your value delivery match their expectations.

e. Have you delivered your promises in past and ready for future.


Marketing Strategy

DevelopingProducts

PricingProducts

DistributingProducts

Promoting Products

Customer


Marketing Strategy Issues

Customers

Distribution network

Warranty

Remuneration and incentives

Advertising

Pricing


The Marketing Process


285 286

287 288

73


Segmentation

The breaking down or

building up of

potential buyers into

groups called

Market Segments

Organization

Market


Targeting

Organization

Market

Evaluate the

segments identified

in the

segmentation

process; select

target market(s).


Major Steps in Segmentation & Targeting

1.Break

market down

2.Group into

segments

TARGET MARKET

3.Choosetarget market


Positioning

Designing strategies for

profitably serving chosen

segments better than the

competition is called as

Market Positioning.

289 290

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74


Marketing Mix

The Marketing mix is a set of four decisions which need to be taken before launching any new product.

Product (Customer Solution)

Price (Customer Cost)

Place (Convenience)

Promotion (Communication)


Marketing Analysis


Marketing Planning

Marketing planning starts with the

analysis of the marketing environment.

It involves decisions on marketing

strategies that will help the company

attain its overall strategic objectives.



Social Marketing

Augmented Marketing

Direct Marketing

Relationship Marketing ATMTelecom

Pizza HutFree Home Delivery

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295 296

75



Service Marketing

Person Marketing

Organization Marketing

Place Marketing



Differential Marketing

Concentrated Marketing

Synchro Marketing

De-marketing

Enlightened Marketing


Other

Functional

Strategy

UNIT- II


Learning Outcome

Financial Strategy

Evaluating the Worth of a Business

Production Strategy Formulation

Logistics Strategy

Research and Development Strategy

Human Resource Strategy Formulation

297 298

299 300

76


Financial Strategy

The strategies related to several financial

aspects of a business like acquiring

capital, sources of fund, developing

projected financial statements/budgets,

management and usage of funds and

evaluating the worth of a business etc. are

called financial strategies.


IMPORTANT FINANCIAL STRATEGYDECISIONS

To raise capital.

To lease or buy fixed assets.

To determine an appropriate dividend

payout ratio.

To define the credit policy.

To define the discount policy.

To determine the amount of cash in hand.


Financial Strategy Formulation andImplementation Areas

Acquiring funds from different sources

Preparing budgets and Projected financial statements

Management and usage of funds




Net Worth Method

Capitalisation of Earnings

Market Price Method


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77


Production Strategy Formulation

The strategies related to various aspects of production system, operational planning and control are called Production strategy.


Logistics Strategy

Ensures that the right materials are available – at the right place,

– at the right time,

– of the right quality, and

– at the right cost.

Motor Rail

Air

Pipeline

Water


Importance of Logistics Strategy

Cost savings

Reduced inventory levels

Reduced inventory wastages

Improved delivery time

Customer satisfaction

Competitive advantageCopyright © 2020 Om Trivedi, All rights reserved.

Logistics Management Vs. Supply Chain Management

Logistics

Component parts & Raw material In-process inventory Finished goods

Supply Chain

Finished Goods In-process inventory Warehouse/Distributors

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307 308

78


Research and Development Strategy

There are only TWO important functions in business :

Marketing

Innovation

The rest is cost and details

Peter Drucker

Ignore

Ridicule

Attack

Copy

Steal


Research and Development (R&D) Strategies

Research and development (R&D) strategies are the strategies related to development of new products and processes and improvement of the old ones.


Decision to Develop R&D Expertise

Technical Progress

Market Growth

R&DDecision

Slow Moderate Develop in-house

Slow Quick Outsource

Quick Quick Buy


Three Major R&D Approaches

Market New Technological Products

Imitate others

Cost Leadership

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79


Human Resource Management

Assessing the Staffing

Needs

Recruitment

Selection

Training

Employees’ Healthcare

Compensation


Human Resource Strategy Formulation

Human Resource

Management

Strategic Goals and

Objectives

Strategic Human

Resource Management



HR Areas of Strategic Focus

Pre-selection practices

Selection practices

Post-selection practices


Areas where the HR Manager can playStrategic Role in Managing HR

Providing purposeful direction

Creating competitive atmosphere

Facilitation of change

Diversity of workforce

Empowerment of human resources

Building core competency

Development of work ethics and culture

313 314

315 316

80


“

”Thanx


CHAPTER 7 and 8


Strategy

Formulation

and Implementation

UNIT- I


Basic Model of Strategic Management Process

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319 320

81


A Summary Model of the Elements of Strategic Management


Strategy Formulation

Strategy formulation refers to-• the process of choosing the most

appropriate course of action

• for the realization of organizational goals and objectives and

• thereby achieving the organizational vision.


Strategy Implementation

Strategy implementation is-

• the translation of chosen strategy

into organizational action so as

• to achieve strategic goals and

objectives.


Strategy Formulation Vs. Strategy Implementation

321 322

323 324

82


Strategy Formulation and Implementation Matrix


Results of Strategy Formulation and Implementation Matrix


Efficiency Vs Effectiveness

Efficiency Operational in nature

To do the things right

Defines relationship between inputs and outputs

Links with internal environment

Responsibility for efficiency lies with operational managers

Implementation viewpoint

Effectiveness Strategic in nature

To do the right things

Concerned with the attainment of goals

Links with external environment

Responsibility for effectiveness lies with top managers

Formulation viewpoint


Principal Combinations of Efficiency and Effectiveness

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327 328

83


Results of Principal Combinations of Efficiency and Effectiveness

Operational Management/ Strategy Implementation

Strategic Management/ Strategy Formulation

Cell Efficiency Effectiveness Results

1 Efficient Effective Thrive

2 Efficient Ineffective Die Slowly

3 Inefficient Effective Survive

4 Inefficient Ineffective Die Quickly


Forward Linkages Vs Backward Linkages



Organizational Structure

and

Strategy Implementation

UNIT- II


Organization Structure

Organizational structure is typically hierarchical arrangement of

• Lines of authority

• Communications

• Rights and duties of an organization.

Organizational Structure

DecentralizedCentralized

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331 332

84


More Facts about Organizational Structure

Small Firms

Medium Firms

Large Firms

Functional Structure (Centralized)

Divisional Structure(Decentralized)

SBU and Matrix Structure


Chandler’s Strategy-Structure Relationship

Changes in strategy

Leads to Changes in Structure

Structures follow the growth strategies

Growth strategies follow certain patterns

Patterns that lead the organizations to achieve Goals


Chandler’s Strategy-Structure Relationship


Types of Organizational Structure

Organizational

Structure

Functional Divisional SBU Matrix Network


333 334

335 336

85


Functional Structure


Divisional Structure


Strategic Business Unit Structure(SBU)


Matrix Structure

337 338

339 340

86


Network Structure

Core Company

(Hub)

Design Company (Australia)

Accounts Processing

(India)

Distribution

Company (Europe)

Manufacturing

Company (China)

Transportation

Company (Korea)


Hourglass Structure


Strategic Leadership,

Change

and

Control

UNIT- III


Strategic Leadership

Strategic leaders are those at the top of

the company, the CEO, the members of

the board of directors, the top

management team, and division general

managers.

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87


Responsibilities of Strategic Leader

Managing human capital


Sustaining high performance over time.

Willing to make courageous decisions.

Seeking feedback through face-to-face

communications.Copyright © 2020 Om Trivedi, All rights reserved.

Leadership Roles of Managers

Monitoring Execution Progress

Promoting High Performance culture

Change Management

Focus on CC and CA

Corporate Ethics

Corrective actions to ensure Strategic

Success


Leadership Style

TransformationalUses charisma and enthusiasm to inspire people to exert them for the good of the organization.

TransactionalFocuses more on designing systems and controlling the organization’s activities and are more likely to be associated with improving the current situation.

Leadership Style


Strategic Change


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Strategic Change

Steps to Initiate Strategic Change

Step-I - Recognize the need for change.

Step-II - Create a shared vision to manage change

Step-III - Institutionalize the change


Kurt Lewin’s Phases of Strategic Change

PHASE I: Unfreezing the Situation

PHASE I: Changing to new Situation

PHASE I: Refreezing

• Compliance

• Identification

• Internalization


Strategic Control


Strategic Control

The control function involves

• monitoring the activity

• measuring results against pre-

established standards,

• analyzing and correcting deviations as

necessary and

• maintaining/adapting the system.

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Types of Control


Strategic Control

Management efforts to

• Track a strategy as it is being

implemented,

• Detect problems or changes in its

underlying premises, and

• Make necessary adjustments.


Types of Strategic Control


What is Corporate Culture?

Corporate culture refers to a • company’s values,

• beliefs,

• business principles,

• traditions,

• ways of operating, and

• internal work environment.


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Strategy Audit

“A strategic audit is an examination

and evaluation of areas affected by

the operation of a strategic

management process within an

organization”.Copyright © 2020 Om Trivedi, All rights reserved.

Strategy Audit

How well is the current strategy working?

How well will the current strategy be

working in future?

How can this be evaluated in present and

future?

How urgent is there a need to change the

strategy?


Richard Rumelt’s Criteria for Strategy Audit

Consistency

Consonance

Feasibility

Advantages


Motivational Quote

The new source of power is not

money in the hands of a few, but

information in the hands of many.

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Modern Strategies

to Gain


UNIT- I


Learning Outcome

Business Process Reengineering

Benchmarking


Business Process

A set of processes or activities

That you and the people providing services perform

To complete the transaction.


Reengineering

The complete rethinking, reinventing

and redesigning of how a business or

set of activities operate.

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Why BPR?

For operational excellence

To be a customer-focussed organization

To manage processes

For continuous improvement as per industry standards

For Dramatic improvement in performance

To answer- How to compete?


What is (BPR)?

“Fundamental revision and radical

redesign of processes to reach

spectacular improvements in critical and

contemporary measurements of

efficiency, such as costs, quality,

service and quickness.”


Business processes of a firm that need redesigning

Development and delivery of product(s) and/or services

Interaction(s) with customers

Management activities


Steps Involved in Implementing BPR

Step 1: Determining objectives and framework

Step 2: Identify customers and determine needs.

Step 3: Develop a flowchart

Step 4: Simplify the process

Step 5: Evaluate each activity and finalize automation requirements

Step 6: Redesign a structure

Step 7: Implement the redesign.

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The Role of Information Technology in BPR


Customer Time Cycle



Benchmarking

Benchmark: A standard or a point of reference against which things may be compared and by which something can be measured and judged.

Benchmarking: The continuous activity of identifying, understanding and adapting best practice and processes that will lead to superior performance.


Summary of Benchmarking Concept (Us Vs. Them)


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The Benchmarking Process

Evaluation

Preparing a report and Implementing the steps necessary to close the performance gap

Comparing own processes and performance with others

Identifying best processes

Understanding existing business processes

Identifying the need for benchmarking and planning


“

”Thanx

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