Introductory Session on

Strategic Management
Prof. Mona N. Shah (PhD,
MBA, DHL)
NICMAR, Pune

A M Naik, CMD, L&T.

1) All along the past decade, India has blown the opportunity to make natural gas
a key axis of its energy policy
2) They (L&T Technology Services) would be among the top five standalone
engineering services providers
3) Well, the biggest threat is finding the leadership talent which can make things
happen internationally.
4) We have a very strong focus on quality. We are a stickler for making sure that
safety, security and quality are not compromised and, obviously, that includes
timely delivery. That cannot happen unless you have a robust supply chain and
that, in turn, depends on having an outstanding relationship with each supplier
5) When I took over in 1999 I realised that L&T was defocused. So, we closed our
undercarriage parts business because there were no buyers. We sold medical,
we sold petrol pumps, we sold a joint venture on paper machines. These were all
small businesses. We sold Ready Mix and cement which were at least big
businesses, but they were not at our core. Our engineering business remained
but was very tiny at $20m, $40m, $50m.
6) At the same time we launched our new power and infotech groups, which were
$1bn, $2bn, $3bn initiatives. So this has been happening continuously over the
last decade. In the past 18 months we have sold four or five small businesses,
and we have acquired three companies: two very small ones and one mid-sized.
They were necessary acquisitions because what we want to focus on needs a lot
of international integration or design and development to make it a truly large
business. Our definition of a large business is a value of $2bn by 2016. Today it
is almost $1bn so we are well on our way.

Azim Premji Chairman, Wipro

1) We believe this combination
of excellence in operations
and strong execution of our
strategy is critical to achieve
our vision. We will continue to
focus on both in future as
well.
2) Looking ahead, the prospects
for growth looks exciting, ... We
exited
the
quarter
ended
September 2005 with the strong
tailwind of business momentum.
The challenge we have is to
sustain and build upon it.
3) The dividend payouts will be
more generous than in the past
two years and will be broadly in
line with what we told investors
in the last quarter,
4) People are the key to success
or extraordinary success

6) The global IT business

sustained
its
momentum
recording double-digit volume
growth sequentially resulting in
revenues (from the information
technology business alone) for
the quarter being 430.7 million
dollars against our guidance of
422 million dollars.
7) Inflation is taking up the
poverty line, and poverty is not
just economic but defined by
way of health and education
8) If the United States wants
access to Chinese, Indian or
Vietnamese markets, we must
get access to theirs. U.S.
protectionism is very subtle but
it is very much there

Mukesh Ambani, CMD, Reliance Industrie

1) The organizational architecture is really that a

centipede walks on hundred legs and one or two
don't count. So if I lose one or two legs, the process
will go on, the organization will go on, the growth
will go on.
2) If it is Asia today, then the African continent cannot
be far behind.
3) Give it 10 or 12 years, then it will serve the Indian
economy. on KG Basin 6
4) I think that our fundamental belief is that for us
growth is a way of life and we have to grow at all
times.

Indra Nooyi, CMD, PepsiCo

Bill Gates, Microsoft

1) I'm a great believer that any
tool that enhances
communication has profound
effects in terms of how people
can learn from each other, and
how they can achieve the kind
of freedoms that they're
interested in.
2) At Microsoft there are lots of
brilliant ideas but the image is
that they all come from the
top - I'm afraid that's not quite
right
3) We always overestimate the
change that will occur in the
next two years and

1) Anything that's done to

address unemployment in
terms of massive stimulus
spending is going to
exacerbate deficits. And
anything that's done to
address deficits in the shortterm is going to exacerbate
unemployment.
2) The distance between
number one and number two is
always a constant. If you want
to improve the organization,
you have to improve yourself
and the organization gets
pulled up with you.
3) The one thing I have learned
as a CEO is that leadership at
various levels is vastly
different. When I was leading a

Dhirubhai Ambani, ex- CMD, Reliance

1) Mainly I tell them, do
your work without
1. "Growth has no limit at
E.return
Shreedharan
expectingDr.
any
out
Reliance. I keep revising my
of it. It is called
vision. Only when you
Asangathvaa. You do it
dream it you can do it.
for the sake of the
2. "Give the youth a proper
society, of the
environment. Motivate
organization you work
them. Extend them the
for.
support they need. Each one
2) Developing allied
of them has infinite source
transport modes and
of energy. They will deliver."
integrating them with
3. "Between my past, the
the metro will ensure
present and the future,
sound economic rate of
there is one common factor:
return. KMRLs initiative
Relationship and Trust. This
is aimed at improving
is the foundation of our
positive externalities,
growth."
together with the metro.
4) "You do not require an
This is crucial for the
invitation to make profits.
investment for the metro
5) "Meeting the deadlines is

Nicholas Moore
CEO - MacQuarie
1) Our decision to combine
has been driven by the
recognition that our clients
require seamless global
support.
2) We like reliable income
streams, be it airports or
radio stations. We will
always be doing deals.
3) I find that my greatest
difficulty and the really
most painful and difficult
part of my work is draining
and ridding my mind of that
burden of meanings which
I've absorbed through the
culture-things that seem to
have something to do with
art but don't have anything
to do with art at all.

Ajit Gulabchand,
CMD- HCC Ltd
1) Because of project
delays, companies
have seen cost
escalations both in
terms of fixed cost
and as well as
material costs like
steel, oil and
others.
2) We should ensure
that there is a
balance between
the interests of
agriculturists whose
land is acquired,
and the interests of
infrastructure and
industry ... Some

Strategic Management scope

and perspectives

What is environment?
What is competition?
Is a firm and an individual similar?
In what way are they different?
What is an advantage?
What is a competitive advantage?
How and why do firms outperform
others?

Introduction to SM
SM consists of the analysis, decisions and
actions an organisation undertakes in order
to create and sustain competitive advantages
Key attributes of SM
1. SM is directed towards overall organisational goals
2. Includes multiple stakeholders
3. Incorporates short-term as well long term
perspectives
4. Recognises trade-offs between effectiveness and
efficiency

SM Processes
The 3 major processes of involved in
SM are
1. Strategy analysis
2. Strategy formulation
3. Strategy implementation
The above are simultaneously used to
analyse, decisions, actions

Characteristics of Strategy

 An intended strategy has the following

characteristics
- It presents long-term guidelines
- It is relevant for the company as a whole or for
important parts of the company
- It is normally determined by top management
- It should guarantee the permanent
accomplishment of the companys overriding goals
and objectives

SM Process
1) Strategic Intent

2) Strategy Formulation

3) Strategy Implementation

4) Strategic Monitoring and Control

5) Strategic Evaluation

Linking Strategy to Operations

initial strategic and annual

operating process

Levels of Strategy
The work being carried out at all levels in an
organisation is nothing but a result of strategic
thinking on the part of some persons (or the lack
of it!)
Strategic planning happens at all levelsCorporate/Strategic Business
Unit/Programme/Project
C.
S
SBU
Breakthroug
h
Programme
Project

Factors associated with Successful

Strategies
1. Strategic
managers
thoroughly
understand
the
competitive environment in which the organization
competes.
2. The mission and goals of the organization are simple and
consistent with the strategy.
3. Strategic managers understand the organization's
resources and how they translate into strengths and
weaknesses.
4. Plans for putting the strategy into action are designed with
specificity before it is implemented.
5. Possible future changes in the proposed strategy (i.e.,
strategic control) are evaluated before the strategy is
adopted.

1.

2.
3.

4.

5.
6.

7.
8.

Theoretical Perspectives of a Firms

Performance
Industrial Organization (IO) - A view based in microeconomic
theory which states that firm profitability is most closely associated
with industry structure.
Resource-based theory - The perspective that views performance
primarily as a function of a firm's ability to utilize its resources.
Distinctive Competence - Unique resources, skills, and capabilities
that enable a firm to distinguish itself from its competitors and
create competitive advantage.
Contingency Theory - A view which states that the most profitable
firms are likely to be the ones that develop the best fit with their
environment.
Sustained competitive advantage - A firm's ability to enjoy strategic
benefits over an extended period of time.
Top management team - A team of top-level executives - headed by
the CEO-all of whom play instrumental roles in the strategic
management process.
Business model - The economic mechanism by which a business
hopes to sell its goods or services and generate a profit.
Partnership - A contractual relationship with an enterprise outside
the organization.

 End