HOME ASSIGNMENT: I STRATEGIC MANAGEMENT

Submitted To:
Balram Chapagain Faculty, Strategic Management Uniglobe College, Pokhara University

Submitted By:
Bibek Khadgi Roll No. 1 MBA (Finance) Trimester VI

Date: June 21, 2012

1. What is strategic management? Explain the various components of strategic management model.

Ans: Strategic management is all about gaining and maintaining competitive advantage. It can be defined as anything that a firm does especially well compare to rival firms. When a firm can do something that rival firms cannot do, or owns something that rival firms desire, that can represent a competitive advantage. Literally, Strategy means a long run approach to the business so that the business is able to stay ahead of the competitors and realize its mission, vision and goals within anticipated environmental setting along with satisfying the customer needs. Thus, strategic management deals with formulating, evaluating and implementing strategies that are derived with detail environmental analysis in order to gain competitive advantages. Fred R. David defines strategic management as Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives. This definition implies that strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success. According to Pearce II and Robinson, strategic management is The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a companys objectives. Strategic management consists of the analysis, formulation, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. The strategic management of an organization entails four ongoing processes: analysis, formulation, decisions, and actions. That is, strategic management is concerned with the analysis of strategic goals (vision, mission, and strategic objectives) along with the analysis of the internal and external environment of the organization. Based on the environmental analysis and identifying the strength, weakness, opportunities and threats, different sets and level of strategies should be formulated. Next, leaders must make strategic decisions. Decisions on which set of strategies should be implemented in order to meet the strategic goals. These decisions address two basic questions: What industries
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should we compete in? How should we compete in those industries? Last are the actions that must be taken in order to implement the best set of strategies. Decisions are of little use unless they are implemented properly. Firms must take the necessary actions to implement their strategies. This requires leaders to allocate the necessary resources and to design the organization to bring the intended strategies to reality. Analysis of external and internal environment, strategy formulation, decisions, implementation, and evaluation activities occur at three hierarchical levels in organization i.e. corporate, divisional or strategic business unit, and functional level. By fostering communication and interaction among managers and employees across hierarchical levels, strategic management helps a firm function as a competitive team. Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence (rather than just respond to) activitiesand thus to exert control over its own destiny. The principal benefit of strategic management is to help organizations formulate better strategies through the use of a more systematic, logical, and rational approach to strategic choice. Communication is a key benefit of strategic management. Through involvement in the process, in other words, through dialogue and participation, managers and employees become committed to supporting the organization. A major aim of the process is to achieve the understanding of and commitment from all managers and employees. Understanding may be the most important benefit of strategic management, followed by commitment. When managers and employees understand what the organization is doing and why, they often feel they are a part of the firm and become committed to assisting it. This is especially true when employees also understand linkages between their own compensation and organizational performance. Managers and employees become surprisingly creative and innovative when they understand and support the firms mission, objectives, and strategies. A great benefit of strategic management, then, is the opportunity that the process provides to empower individuals and finally achieving its strategic objectives efficiently in best possible ways. Research indicates that organizations using strategic-management concepts are more profitable and successful than those that do not. Businesses using strategic-management concepts show significant improvement in sales, profitability, and productivity compared
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to firms without systematic planning activities. High-performing firms tend to do systematic planning to prepare for future fluctuations in their external and internal environments. Firms with planning systems more closely resembling strategicmanagement theory generally exhibit superior long-term financial performance relative to their industry. Besides helping firms avoid financial demise, strategic management offers non financial benefits, such as an enhanced awareness of external threats, an improved understanding of competitors strategies, increased employee productivity, reduced resistance to change, and a clearer understanding of performancereward relationships. Strategic management enhances the problem-prevention capabilities of organizations because it promotes interaction among manager at all divisional and functional levels. Strategic management is key to outperform competitors. Strategic management is important simply because managers need to determine how a firm is to compete so that it can obtain advantages that are sustainable over a lengthy period of time. That means focusing on two fundamental questions i.e. How should we compete in order to create competitive advantages in the marketplace? For example, managers need to determine if the firm should position itself as the low-cost producer, or develop products and services that are unique which will enable the firm to charge premium prices-or some combination of both. Managers must also ask how to make such advantages sustainable, instead of highly temporary, in the marketplace. That is: How can we create competitive advantages in the marketplace that are not only unique and valuable but also difficult for competitors to copy or substitute?

Strategic Management Model Strategic management model illustrates the practical approach for formulating, implementing and evaluating strategies. It indicates what should be the specific and general course of actions that should be followed when an organization seeks to prepare strategic plans and implement it. The strategic management model can be illustrated in following diagram.

Continuous monitoring, evaluation, learning and changing

Identify Goals, Formulate Strategies and Draft Action Plans

Strategy Implementation

Strategy Evaluation and Control

The relationship between the components of the strategic management model is clearly shown in above figure which visibly indicates the three main questions like Where are we now? Where do we want to go? How are we going there?

Thus components of the strategic management model are very important in directing the business organization in future where it can withstand with the competition. The major components are discussed below: Internal Environment: Firms internal environment consists of factors and forces within the boundary of an organization. Internal environment has basically three factors i.e. human resource, firms structure and nature of firms products or services which put together defines the strength and weakness of the firm. The major components of the internal environment are employees, corporate culture and structure, shareholders, financial & physical resources etc Before the process of strategic management, any

Continuous monitoring, evaluation, learning and changing

External Environment Analysis

Set the Context: Establish or revise mission, vision and values.

Internal Environment Analysis

organization big or small needs to assess its internal environment in order to identify where lies its strength and where are weaknesses.

External Environment: It is set of factors around business that influence business activities and its ability to attain desired or stated goals. External environment consists of such environmental forces that resides outside the organization but which significantly affects the business and its operations. External environment consist of general and task environment which may provide opportunities to organization or may pose threats. Political, legal, economic, technological, demographics, socio cultural and global environment are general or macro environmental forces while customers, suppliers, governments, special interest group, media are some factors of task environment. Thus, scanning, monitoring, identifying and adapting to the external environment of business are very crucial in strategic management process in order to stay ahead in competition. These environmental factors do not come under direct control of an organization however, organizations can identify it and adapt to it in proper way that opportunities are explored and threats are discarded.

Establish or Revise Mission, Vision and Values: Even though the mission, vision and values tends to be longer term approach, it is somehow impossible to stick to same mission and vision for long time in such a dynamic business environment. Thus, mission, vision and values should be flexible in nature that can be revised or re-established timely as per the need of changing environment and competition. Strategies are means to achieve competitive edge over rivals which in fact is not possible without cooperation of employees of an organization. Thus, establishment or revision of mission, vision and values will help the employees to know where to go, what to do and how to do. It will enable an organization to implement the strategies in smooth manner and also help realize the objectives of the strategies. For example if there is price competition in market, firm should persuade their customer either through quality products or services or through some price strategy. It is very important to communicate such information to the customers and mission statement can be best alternative to make customers informed.

Identify Goals; Formulate Strategies and Draft Action Plans: Every organization has to set certain goals in order to assess whether the strategies are in place or not. Such goals can be either quantitative or qualitative. So, the organization should identify what will be its goals in the competitive market place. Accordingly, the strategies that best help to attain such goals should be formulated. However, strategies formulation is not an easy job. 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. It is known that strategy is generally a medium for realization of organizational goals. Goals stress the state of being there whereas Strategy stresses upon the process of reaching there. Finally based on the strategies detailed action plans or the framework of who should do what work need to finalized. The job description and contributions to be made by each department or division or product category within the organization is identified and accordingly strategic planning is done for each sub-unit. This is the ultimate step in Strategy Formulation. Strategy Implementation: The best course of action is actually chosen after considering organizational goals, organizational strengths, potential and limitations as well as the external opportunities. Strategy implementation involves all those means related to executing the strategic plans and managing forces during the action. Strategy implementation is mainly an administrative task based on strategic and operational decisions. Strategy Implementation is basically an operational process and emphasizes on efficiency. Strategies are of little use unless they are implemented properly. Firms must take the necessary actions to implement their strategies. This requires leaders to allocate the necessary resources and to design the organization to bring the intended strategies to reality. Strategy implementation requires co-ordination among many individuals and requires specific motivational and leadership traits. Strategy Evaluation and Control: The significance of strategy evaluation lies in its capacity to co-ordinate the task performed by managers, groups, departments etc, through control of performance. Strategic Evaluation is required because of various factors such as - developing inputs for new strategic planning, the urge for feedback, appraisal and reward, development of the strategic management process, judging the validity of
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strategic choice etc. Some steps of strategy evaluation and control are fixing benchmark of performance, measurement of performance, analyzing variance and taking corrective actions. While fixing the benchmark, strategists encounter questions such as - what benchmarks to set, how to set them and how to express them. The standard performance is a bench mark with which the actual performance is to be compared. While measuring the actual performance and comparing it with standard performance there may be variances which must be analyzed. The strategists must mention the degree of tolerance limits between which the variance between actual and standard performance may be accepted. Once the deviation in performance is identified, it is essential to plan for a corrective action. If the performance is consistently less than the desired performance, the strategists must carry a detailed analysis of the factors responsible for such performance.

2. State and briefly explain the various essential elements/components of mission statement. Evaluate the following mission statement in the light of essentials of mission statement. Ans: What is our business? is synonymous with asking the question What is our mission? An enduring statement of purpose that distinguishes one organization from other similar enterprises, the mission statement is a declaration of an organizations reason for being. It answers the pivotal question What is our business? A clear mission statement is essential for effectively establishing objectives and formulating strategies. Sometimes called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, a statement of business principles, or a statement defining our business, a mission statement reveals what an organization wants to be and whom it wants to serve what will it do to accomplish. All organizations have a reason for being, even if strategists have not consciously transformed this reason into writing. A business mission is the foundation for priorities, strategies, plans, and work assignments. It is the starting point for the design of managerial jobs and, above all, for the design of managerial structures. Nothing may seem simpler or more obvious than to know what a companys business is. When employees and managers together shape or fashion the

vision and mission statements for a firm, the resultant documents can reflect the personal visions that managers and employees have in their hearts and minds about their own futures. Shared vision creates a commonality of interests that can lift workers out of the monotony of daily work and put them into a new world of opportunity and challenge. As indicated in the strategic-management model, clear vision and mission statements are needed before alternative strategies can be formulated and implemented. As many managers as possible should be involved in the process of developing these statements because through involvement, people become committed to an organization. A good mission statement reveals an organizations customers; products or services; markets; technology; concern for survival, growth, and profitability; philosophy; selfconcept; concern for public image; and concern for employees. These nine basic components serve as a practical framework for evaluating and writing mission statements. As the first step in strategic management, the vision and mission statements provide direction for all planning activities. Well-designed vision and mission statements are essential for formulating, implementing, and evaluating strategy. Developing and communicating a clear business vision and mission are the most commonly overlooked tasks in strategic management. Without clear statements of vision and mission, a firms short-term actions can be counterproductive to long-term interests. Vision and mission statements always should be subject to revision, but, if carefully prepared, they will require infrequent major changes. Organizations usually reexamine their vision and mission statements annually. Effective mission statements stand the test of time.

Characteristics of a Mission Statement There is no globally accepted format of the mission statements; however, a well formulated mission statement should contain certain characteristics and components. Mission statements can and do vary in length, content, format, and specificity. Most practitioners and academicians of strategic management feel that an effective statement should include nine components. Because a mission statement is often the most visible and public part of the strategic-management process, it is important that it includes the nine characteristics.
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 Broad in scope; do not include monetary amounts, numbers, percentages, ratios, or objectives Less than 250 words in length Inspiring Identify the utility of a firms products Reveal that the firm is socially responsible Reveal that the firm is environmentally responsible Include nine components: customers, products or services, markets, technology, concern for survival/growth/ profits, philosophy, self-concept, concern for public image, concern for employees Reconciliatory Enduring

Mission Statement Components 1. CustomersWho are the firms customers? 2. Products or servicesWhat are the firms major products or services? 3. MarketsGeographically, where does the firm compete? 4. TechnologyIs the firm technologically current? 5. Concern for survival, growth, and profitabilityIs the firm committed to growth and financial soundness? 6. PhilosophyWhat are the basic beliefs, values, aspirations, and ethical priorities of the firm? 7. Self-conceptWhat is the firms distinctive competence or major competitive advantage? 8. Concern for public imageIs the firm responsive to social, community, and environmental concerns? 9. Concern for employeesAre employees a valuable asset of the firm?

Ben & Jerrys mission is to make, distribute, and sell the finest quality all-natural ice cream and related products. To operate the company on a sound financial basis of profitable growth, increasing value for our shareholders, and creating career opportunities and financial rewards for our employees. To operate the company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad community local, national, and international. (Yes) / x (No) x x x x x (Yes) / x (No) x x x x

Characteristics Broad in scope Less than 250 words Inspiring Utility of firms Product Social responsibility Environmental responsibility All nine components Reconciliatory Enduring

Components Customers Products or services Markets Technology Survival & growth Philosophy Self concept Public image Concern for employees

Mission statement of Ben & Jerrys is broad in scope for two reasons because the alternative objectives and strategies can be generated and reconciliation of differences among stakeholders can be made. However, it can be done without affecting the managerial creativity is not visible just through mission statement. The mission statement is not too lengthy and is inspiring in sense that Ben & Jerry is able to arouse positive feelings on quality of the products. Likewise the quote all natural ice cream is quite motivating to customers to try the products. However, the utility of product is not clearly stated and environmental concern is silent. Broad concern towards social responsibility is given all in local, national and international level. Some of the components of good mission statement are missing but the long term strategic approach can be seen from statement of profitable growth.

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Analysis of basic components of Ben & Jerrys mission statement, it can be seen that the mission statement lacks concern towards customers, technology, markets and self concept. The mission statement has not mentioned anticipations of the customers or customer demographics. In addition, the geographical market and sort of technologies to produce finest quality products has not been included. Moreover, the statement clearly lacks the self concept or what the competitive advantage of company is not mentioned which is crucial in strategic management. However, the mission statement has given concern towards their employees in better way by not just focusing on financial means but also in a way to create career opportunities. Likewise survival and profitable growth is well mentioned and philosophy of increased value to shareholders. But, it would have been better if mission statement includes stakeholders rather than shareholders. Further, the company has shown its concern for public image by quoting its social responsibility in improving quality of life of broad community in various levels. In conclusion, it can be said that the mission statement of Ben & Jerrys is of moderate type which is nether to good nor too bad since some characteristics and components are mission and some others are mentioned. However, it lacks major two components of good mission statement i.e. customers and markets which in fact is very crucial in present day business. Ultimately the success of business not fully but majorly depends upon the customer and market it serves.

3. Give the concept of general/remote environment. Which one of the various components of general environment, at this point of time, do you think is most challenging/ threatening for Nepalese businesses? Why? Ans: General environment also known as remote or macro environment is composed of factors that are outside the organizations operating system such as political, economic, legal, socio cultural, technological and global. Even though they remain outside the organization, they affect organization more than the internal factors actually do. They are uncontrollable factors to which organization generally respond or adapt to. General environment presents opportunities or threats to the organizations thus it is very

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necessary to monitor it and respond or adapt to it accordingly. Some of the factors or components of the general or remote environment are as follows:

Economic environment: What economic policies and system is adopted by the country largely affects the economic environment. Economic Systems (Capitalist, Socialist and Mixed), Economic Policies (Fiscal policy, Monetary policy, Industrial policy), Economic Dimensions (Per capita income, labor costs, saving, productivity), Business Cycle, Capital Market, Regional and Global Economic Integrations are some factors within economic environment. This factor can be said as preliminary factors that helps organization whether or not to operate in specific country. For example, a country has planned economic system, in such scenario private sectors are not motivated to do business which possesses constraint to the business. In contrast, mixed and free economy allows private sector to get involve in business which can be taken as favorable economic environment. Economic environment however depends upon the political system of the country since political ideologies of political groups in government do have powers to formulate the economic policies of the country.

Political environment: Some factors of political environment are constitution, political parties, legislative, executive and judiciary, government-business relations, political risk factors, international political events, laws (labor laws, consumer laws, competition laws etc.). Political environment consists of political structure, power sharing, composition of bureaucracies, ideology of ruling government, political stability etcPolitical stability and ideologies are much more important than any other factors because ideologies shape which kind of economic system to follow and stability promotes growth of private sector business. Unless organizations are sure about the political stability in country the decision of investment hardly comes. Thus, the degree of political risks existing in a country determines the investment climate in that country.

Socio cultural environment: Some components of socio cultural environment are demographic factors (such as migration, aging population etc.), religion, language, education, attitudes (evaluative judgments), beliefs (viewpoints) and values (firmly held
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beliefs/ philosophical priorities), family structure and social class vigilance of social organizations. Influence exercised by social and cultural factors, not within the control of business, is known as Socio-Cultural Environment. Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. Social class and caste of a person goes a long way in deciding the business activities in relation to its production and marketing activities. Tradition, customs and social attitudes have changed the attitude and beliefs of the persons which have their effect on organizational environment. Class and caste are influencing the purchasing pattern. Socio-cultural environment may include expectations of the society from business, attitudes of society towards business and its management, views towards achievement of work, views towards structure, responsibility and organizational positions, views towards customs, traditional and conventional, class structure and labor mobility and level of education.

Legal environment: The legal environment refers to the framework of laws, regulations and court decisions intended to encourage, guide and control business activities. Some are designed to protect workers, consumers and communities. Others designed to regulate the behavior of managers and their subordinates in business and other enterprises. Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service). Legal environment consist legal policies and regulations related to labor law, industrial policy, environmental policy etc

Technological environment: In order to survive in today's competitive world, a business has to adapt technological changes from time to time. Level of technology (high tech vs. low tech), pace of technological change, technology transfer, science and technology policy, R&D budget are some components of technological environment. New technologies create new products and new processes. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products. The developments in technologies not only present enormous opportunities for business in terms of enhanced effectiveness but
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also place heavy demands on them in ever increasing competitive markets. Technologies do have risks to be obsolete soon. Thus, it is very important that firms adapt to new technology in order to maintain the competitive edge against rivals.

Global Environment: Global forces are outcomes of changes in international relationships. International developments have their effects in domestic business. It is particularly important for industries directly depending on import or exports. The factors that affect the business are: globalization, liberalization, foreign business policies and cultural exchange. International business units like world trade organizations facilitates global trading. The agreements made between several countries in such platforms also shape the global environment which either creates opportunities or threats.

Natural Environment: Climate change, natural calamities, increased awareness about environment protection, government policy on environment (e.g., cleaner production, recycling, energy efficient production). Every business unit must look for these factors before choosing the location for their business. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.

General Environment Scenario in Nepal Among various components of general or remote environment, some components are favorable while some others are still hindering the domestic business and also the multinational businesses to enter inside the country. For instance, socio culturally Nepal has been an attractive destination for most of the business since Nepalese demographics is changing in line with global trends. Entry of KFC, Pizzahut, BigCinemas etc is signaling to new lifestyle of the Nepalese. Likewise Nepal accession to WTO and
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regional trade agreements like SAFTA & BIMSTEC has foster the business opportunities in Nepal even if there lies some lacking in proper implementations. In some extent, technological environment and legal environment also seems favorable. In my opinion the most distractive factor of general environment in Nepal is Political environment. It is because within the period of 22 years after first mass movements in 1990, almost 20 governments were formed which shows very high degree of political instability. Political parties of the country are with different ideologies which is natural but there behavior of forcing country to padlock behind there ideologies is not desirable. Most of the governments in the country enforced economic system according to their political ideologies. For instance, Congress government stresses towards higher participation of private sector while communist government comes with threats to private sector. Such irregularities and uncertainty has caused the business environment vulnerable to various risks. In addition, internal conflict for about 10 years in country has set back country some 30 years behind in terms of developments during which most of the infrastructures were destructed and new were hardly built. It is not only the case related to internal conflict because it signaled negative image of country to international arena that has led to barriers for foreign investment to enter inside. Moreover, political environment highly affects economic and legal environments due to which business environment is much more constrained and ruined.

4. Banking industry has been one of the fastest growing industries in Nepal. However in recent years it is experiencing a sort of turmoil. Draw a strategic group map depicting major names in the industry based on your own judgment and explain the implications of this map. Ans: After liberalization of financial sector in mid 1980s, Nepalese financial sector saw immense increase of its services and players. Onset of liberalization joint ventures bank started operation in Nepal indicating Nepal as new potential market for the banks. It was triggered with even more after establishment of democracy in 1990. Not only joint ventures but Nepalese private sector banks came into operation making banking sector
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competitive which once were ruled by state owned banks like NBL, RBBL and ADBL. Currently, 32 commercial banks are in operation which has shown a sign of saturation in market commercial banks. With increased risk taking behavior of banks and lower base of capital, institutions like IMF has directed NRB to issue directives on merger and acquisitions between banks so that number are reduced, risk minimized and increased capital that is enough to cushion against risks like that in United states and Europe.

A strategic group is a group of firms in same industry following the same or a similar strategy along the same strategic dimensions and competing with each other under different dimensions. Strategic dimensions can be price, quality, breadth of product line, i.e., range of products, customer served, and innovation. Strategic group map is graph that shows the level of competition among firms in same industry under different dimensions and also indicates the market share of such firms. It is useful in analyzing the competitive advantage of firms in industry and how industry trend changes and affects the competition. The strategic group map of 32 commercial banks of Nepal is shown below:

High
MEGA JANATA CIVIL CENTURY SANIMA

4.

Interest on Customer Deposits

GLOBAL CITIZENS KUMARI SIDDHARTHA

2.

SCBNL NABIL NIBL EBL

1.

ADBL NBL RBBL

3.

Low Low 16 Human Resource Quality High

Here, human resource quality or base of intellectual capital and interest rate offered by banks in customer deposits has been taken as two dimensions in which banks compete with each other. The strategic group map shows four groups of bank that lies in different sections of the graph. State owned banks like ADBL, NBL and RBBL do have low quality human resource and they offer nominal interest in customer deposits. It is due to faith of customers in state owned banks that have made this bank to compete advantageously for deposits even with such low interest rates. However, intellectual capital is not that strong. In terms of deposits and total assets these banks eventually occupy large market share compared to other banks. Likewise, Global, Citizens, Kumari, Siddhartha banks do have moderate quality of human resource and moderate of interest rates offered in deposits. There competition is with banks like standard chartered and NABIL. In contrast, banks like standard chartered, NABIL, Everest, Nepal Investment employs good quality human resource and offers moderate rates of interest to their customers. In fact these banks are among the top performers in Nepalese banking market and they have been able to make clear and separate identity among customers. However, there are few banks in this strategic group. Thus, the market share is not that large compared to others. Finally, newcomer banks like Mega, Janata, Civil, Century, Sanima has offered higher rates of interest to attract the customers. Doing this has decreased their interest spread a major source of income. So, they have invested relatively low amount of capital in acquiring high quality human resource. Likewise money spent in training and development of human resource is quite low compared to other.

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We can have several implications of above depicted strategic group map. First it can be seen that banks in group 1 and group 2 are in direct competition. Banks in group 2 will have strategy to develop their human resource through training and development and produce high quality human capital. At same time group 2 and 1 both tends to offer higher interest rate so they would have competitive advantage in both high quality human resource and high interest rates. Second, it will be very difficult to banks in group 3 to compete along with other banks in group 1 & 2 since their human resource quality is very low and interest offered are also low. In addition, it is a deal of problem to banks in group 4 to compete with banks in group 1 and 2 in terms of intellectual capital. Third a market trend in banking industry shows that banks now are competing more in interest rates offered. Interest rates are low from 3% to 16% per year. Thus, mangers are now should formulate the strategy that will help their organization to sustain in market in terms of return offered to their customers.

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