Business Plan - Multi Purpose Bicycles

Business Plan – multi purpose bicycles
by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
sivakamu veterinary hospital road
bikaner 334001 rajasthan, india
www.afterschoool.tk
mobile : 91+9414430763
5 DECEMBER 09 www.afterschoool.tk 1
What is an SBU?
Strategic business unit – a unit which has

independent decision making power withing
overall corporate strategy of the corporation. It
can take strategic decisions like product,
market, technology, etc. An SBU is an
independent unit within the corporate umbrella.
What is a strategy ?
A strategy is a unified corporate action plan for

the achievement of overall organisational goals
and purpose within the resources of the
comapny. It is based on analysis of
environment, resources and competencies of
the company
Evolution of strategic
planning ????
Strategic planning evolves in the minds of
strategic planners. The top management, the
board of directors, and analysts together work
to frame the strategies of the company. The
process is as follows : 1. frame strategic intent,
mission and objectives 2. decide about core
competency, 3. study environment and prepare
SWOT, 4. identify options 5. finalise stratgy, 6.
evaluate it and implement it 7. review it.
PORTFOLIO
RESTRUCTURING
Portfolio is a collection of various investments.

When a company has invested in many SBUs
then this collection is also called portfolio. The
purpose of portfolio is to change its structure
and contents as per the changing time.
What is restructuring ?
Changing the composition and structure is

called restructuring – it can be used in many
contexts like organisational restructuring,
portfolio restructuring, etc.
What are the different portfolios ?
As per BCG matrix analysis : we have 4

options : Cash Cow, Dog, Star, Question Mark
Cash : high market share but low growth rate
Dog : low market share and low growth rate
Star : high growth rate and high market share
Question mark : high growth rate but low
market share
What is portfolio restructuring?
We have to allocate funds across different

portfolios. We shall try to transfer funds from
cash cow to question mark and star. We shall
divest our business from dog and invest in star
and question mark.
Thus restructuring means changing the
structure and content of your portfolio and
changing your investment.
Why is portfolio restructuring
carried out ?
Some businesses can give us better rewards

and more growth. We therefore invest in those
businesses which can give us higher returns.
We try to draw out money from those business
segments, which are not able to give us
adequate returns.
Strategic alternatives...
We have many alternatives : grow, divest, invest,

expand, diversify, etc.
We have 4 options in terms of combinations of
products and markets :
new products and new markets
new products old markets (product development)
old products, new markets (market development)
old products, old markets
How to choose strategic options...
There are 4 grand strategies : 1. expansion 2.

stability 3. divestment 4. combination
expand : grow, diversify etc.
Stability : improve your performance
combination: use a combination of all these
strategies
Three strategies..
Companies adopt 3 strategies for growth,

survival and progress :
1. focus
2. differentiation
3. cost leadership
Opportunities in emerging
markets?
Emerging markets are those which are having

very high growth rates and having relatively
underdeveloped infrastructure, set up and
facilities. Some of the countries are having
double digit growth rate. Emerging markets
offer huge opportunities for companies to
enter, expand and diversify
How to enter into emerging
markets?
Look for government rules, policies,

guidelines, and framework.
Look out for new opportunities, opening up of
the sectors, technology etc.
Identify areas where you have superior
technology, processes, capabilities, skills,
goodwill and performance orientation
Options in emerging markets...
You may enter as branch, franchisee, licensee,

business tie-up, joint venture, SPV,exports,
etc.
Cautions and precautions...
Do consider local culture, belief system and

practices, dont disturb them
be local in your performance, (GLOCAL)
involve local people in product design,
delivery and management
involve local people in processes like market
survey, survey etc
Strategies in declining
markets ???
Study the market forces and take corrective
actions (modify / adapt / change your
products / services)
declining markets and declining industry give
you time and opportunity to exit, so exit and
divest your resources in high growth, high
opportunity segments.
Strategies in mature markets???
Mature markets have almost 0% growth, so try

to treat them as support for entering to other
markets. They provide you good back up. Dont
invest any more money in these markets. Invest
in emering markets, but use the knowledge and
skills acquired in mature markets in developing
the products / services for emerging markets
Functions of strategic
management
— provides a framework for thinking about the business;

— creates a fit between the organization and its external
environment;
— provides a process of coping with change and
organizational renewal;
— fosters anticipation, innovation, and excellence;
— facilitates consistent decision making;
— creates organizational focus; and
— facilitates the process of organizational leadership.
Knowledge management
The globalised competitive environment requires the firms to quickly respond
to the customer’s needs and problems for which they need enough
knowledge and that is precisely what requires quality knowledge and
strategic management. Knowledge management is a process which helps
the enterprises to identify, select, arrange, extend and transfer important
information and specialised knowledge. In simple terms, its objective is to
deliver relevant knowledge to relevant people at the right time. Knowledge
management is based on the production, storage and use of knowledge.
Knowledge categorisation and codification allows for successful and efficient
problem solutions, dynamic learning, strategic planning and decision-making.
Thus, knowledge management is creation, distribution and utilization of
knowledge at the individual, group, organizational and community levels
through harnessing of people, process and technology for the benefits of
those involved and affected by it.
What is competitive strategy ???
Every firm has to evolve a strategy for its

growth and development. This is called
competitive strategy. Competitive strategy is
the overall framework which guide and
develop the organisation.
How to build superior competitive
advantage?
Identify market niche, which has not yet been
served by any company
develop unique products / processes /
technologies / services
build core competencies
build superior linkages between products and
benefits offered, product positioning, brand
image and value perceptions
What is core competency?
Some special capability, which make you

distinct, unique, superior and better in
comparison to other companies in the industry.
It is achieved by having some unique business
skills, capabilities, resources and knowledge
base.
What is competitive advantage?
If you are able to make / deliver superior

products / services in comparison to your
competitors, you have competitive advantage
Diversification and its scope ???
Diversification means new products, new

markets and new technology, it is risky – but if
reward is very high, it is better to diversify.
While diversifying, look out for possible risk
and try to manage risk.
Diversify into those segments, which offer
high growth and offer high development
possibilities.
Diversification as an option...
When we are unable to have high growth in

our existing business definition, we have to
redefine it and we may decide to redefine it
completely, we have decide to diversify in
order to grow. Our objective here is to expand,
grow and take first mover advantage in a new
segment.
Why diversify ? ?
Generally there is no synergy in diversification, but

we diversify for the followign reasons :
1. lack of growth in existing products / services
2. lack of proper market share in the existing
products / services
3. far greater opportunities in new segments
4. availability of a strategic partner for diversification
THANKS....
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Business Plan – multi purpose bicycles

Strategic business unit – a unit which has

A strategy is a unified corporate action plan for

Portfolio is a collection of various investments.

Changing the composition and structure is

As per BCG matrix analysis : we have 4

We have to allocate funds across different

Some businesses can give us better rewards

We have many alternatives : grow, divest, invest,

There are 4 grand strategies : 1. expansion 2.

Companies adopt 3 strategies for growth,

Emerging markets are those which are having

Look for government rules, policies,

You may enter as branch, franchisee, licensee,

Do consider local culture, belief system and

Mature markets have almost 0% growth, so try

— provides a framework for thinking about the business;

Every firm has to evolve a strategy for its

Some special capability, which make you

If you are able to make / deliver superior

Diversification means new products, new

When we are unable to have high growth in

Generally there is no synergy in diversification, but

GIVE YOUR SUGGESTIONS AND JOIN

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