1 Explain the following (a) Functions of Business strategy (b) Strategic Analysis

Functions of Business strategy: Business people often hear the term "strategy" discussed
in meetings with co-workers, clients and other stakeholders. Yet there is considerable confusion
about the meaning of the word and how the development of a business strategy can be used to
guide the company forward. A business strategy helps marshal all of the company's resources
toward a common goal.

Competitive Distinctions

A business strategy is usually a short document, no longer than a page or so, that
sets out the one or two key elements that distinguish a company from its
competition, and are most likely to contribute to the company's long-term success.
For example, an upscale clothier might decide its strategy is to be the premier
destination for women seeking designer wardrobes, exemplary customer service and
the quickest alterations against its competition. Once the strategy is developed, it
should be communicated to employees frequently so that the business focus is
maintained.

Functional Strategies

Once the overall strategy is decided, functional strategies need to be developed as

well. These strategies focus on the broad picture for different departments within a
company. If the overall strategy is to increase market share by 15 percent,
departments within the business will have their own set of strategies. Human
resources, for example, might have a strategy for increasing the technical sales force
to meet anticipated sales levels. The finance department might have a strategy for
securing new loans to fund necessary increases in manufacturing capacity. These
strategies, just like the overall strategy, serve to keep various departments focused
on the essentials.

Operational Strategies
Operational strategies are narrower than functional strategies and focus on the day-to-day
operations of a business. Operational strategies focus on the details of how to get a job
done. While the finance department's functional strategy might be to find additional seed
money, an operational strategy might be to research various sources of capital. Operational
strategies support functional strategies and when used together, provide a method for
keeping the entire company on track to meet its overall strategic goal.

Strategy as Management Tool

The development of a company-wide overall strategy, and its functional and operational
subsets allows key management to see if all departments will act in concert with each other.
The strategy development at all levels is used as a management tool to determine if the
company is poised to reach its goals in the most efficient and effective manner. For example,
the upscale clothier may find that additional equipment that the finance department is
recommending will not do the complex alterations required for the store's clientele.

Willingness to Change Course

The competitive environment can change quickly and this can require a change in strategy.
The company with no enunciated strategy to review will often not change to reflect current
realities. This often puts a company in jeopardy for lost profits and market share. A written
business strategy is easier to review and change, should that be necessary and again
becomes a vital management tool.

Strategic Analysis: ndustry analysis begins with a definition of products and markets,

skills and competitors contained within the industry, followed by industry structural
analysis, and concluded with the identification of the key success factors for the
industry.
Business strategy analysis begins with a description of the strategic goals and
business strategy of the firm. It's implementation is then analyzed in terms of the
firm's functional and operational capabilities and the resulting financial and
competitive performance.
Strategic evaluation or SWOT analysis encompasses the internal and external factors
that affect the company's business strategy. The business strategy is compared against
the industry's key success factors and competitive resource requirements and the
firm's internal capabilities and resources.
Critical issues & Recommendations seek to identify the critical issues that the
company needs to address. The analysis concludes with recommendations that address
the critical issues and result in changes of product-market strategy or functional
implementation.
Q- 2 Define strategic management. What are the causes for failure of Strategic
Management?
Definition of Strategic Management Causes for failure of Strategic
Management:
Strategic management involves the formulation and implementation of the major goals and
initiatives taken by a company's top management on behalf of owners, based on

consideration of resources and an assessment of the internal and external environments in

which the organization competes.[1]
Strategic management provides overall direction to the enterprise and involves specifying
the organization's objectives, developing policies and plans designed to achieve these
objectives, and then allocating resources to implement the plans. Academics and practicing
managers have developed numerous models and frameworks to assist in strategic decision
making in the context of complex environments and competitive dynamics. [2]Strategic
management is not static in nature; the models often include a feedback loop to monitor
execution and inform the next round of planning.

If youve read this blog before, you already know we cant say enough about how important
strategic plans are to a companys success.

Understanding the value of and need for a strategic plan is a great place to start, but just wanting
something, isnt enough. If it were, wed all be famous actors in Hollywood. Developing a
strategic plan takes discipline, foresight, and a lot of honesty. Regardless how well you prepare,
youre bound to encounter challenges along the way.

Here are 10 reasons why plans fail. Avoid these traps and youll be closer to your goal of
implementing a strategic plan that actually achieves results and improves your business.

1. Having a plan simply for plans sake. Some organizations go through the motions of
developing a plan simply because common sense says every good organization must have a
plan. Dont do this. Just like most everything in life, you get out of a plan what you put in. If youre
going to take the time to do it, do it right.

2. Not understanding the environment or focusing on results. Planning teams must pay
attention to changes in the business environment, set meaningful priorities, and understand the
need to pursue results.

3. Partial commitment. Business owners/CEOs/presidents must be fully committed and fully

understand how a strategic plan can improve their enterprise. Without this knowledge, its tough
to stay committed to the process.

4. Not having the right people involved. Those charged with executing the plan should be
involved from the onset. Those involved in creating the plan will be committed to seeing it
through execution.

5. Writing the plan and putting it on the shelf. This is as bad as not writing a plan at all. If a
plan is to be an effective management tool, it must be used and reviewed continually. Unlike
Twinkies or a fine vino, strategic plans dont have a good shelf life.

6. Unwillingness or inability to change. Your company and your strategic plan must be nimble
and able to adapt as market conditions change.

7. Having the wrong people in leadership positions. Management must be willing to make the
tough decisions to ensure the right individuals are in the right leadership positions. The right
individuals include those who will advocate for and champion the strategic plan and keep the
company on track.

Q-3 Write short notes on the following: a) Core competencies and their importance b) Strategic
leadership.

Core competencies and their importance :

Core Competencies
What They Are and How to use Them
Richard J. Naylor
Core competencies, however, are characteristics of the organization
as a whole. Libraries can utilize core competencies as a tool to
develop and provide superior services. A description and review of
the concepts of core competencies are included and a framework for
their development and use is given.
The concept of core competencies was developed in the management field.
Prahalad and Hamel (1990) introduced the concept in a Harvard Business
Review article. They wrote that a core competency is "an area of specialized
expertise that is the result of harmonizing complex streams of technology and work
activity." As an example they gave Honda's expertise in engines. Honda was able
to exploit this core competency to develop a variety of quality products from lawn
mowers and snow blowers to trucks and automobiles.
It is important to distinguish between individual competencies or capabilities and
core competencies. Individual capabilities stand alone and are generally considered
in isolation. Gallon, Stillman, and Coates (1995) made it explicit that core
competencies are more than the traits of individuals. They defined core
competencies as "aggregates of capabilities, where synergy is created that has
sustainable value and broad applicability." That synergy needs to be sustained in

the face of potential competition and, as in the case of engines, must not be
specific to one product or market. So according to this definition, core
competencies are harmonized, intentional constructions.
Coyne, Hall, and Clifford (1997) proposed that "a core competence is a
combination of complementary skills and knowledge bases embedded in a group or
team that results in the ability to execute one or more critical processes to a world
class standard." Two ideas are especially important here. The skills or knowledge
must be complementary, and taken together they should make it possible to
provide a superior product."
The Characteristics of Core Competencies
The characteristics of core competencies are as follows:
1. They rpovide a set of unifying principles for the organization and they are
pervasive in all strategies.
2. They provide access to a variety of markets.
3. They are critical in producing end products.
4. They are rare or difficult to imitate.
Let's consider each of these characteristics in turn:
Core competencies provide a set of unifying principles for the organization. Such
principles are not necessasrily evident to the consumer but they are to
management. Consumers recognize that Honda makes high-quality engines, but
from a managerial perspective, the skills and technologies behind engine
manufacturing are woven into the fabric of the company. Unless competencies are
pervasive they are at best potential core competencies. However, in an
organization that has not defined itself, identifying potential core competencies is
an important step.
Core competencies also are pervasive in all strategies. For Honda, when
management decisions are made, the technology behind engine production is ever
present. With such a unifying principle, strategic planning is facilitated. It is much
harder to plot strategy when goals are diffuse, fragmented, or contradictory. In the
case of libraries, providing information and insuring that patrons have the ability to
access information are pervasive principles.
Core competencies must provide access to a variety of markets. With change a
constant factor in today's marketplace, successful organizations must be able to
provide value in a number of markets. Should markets change, companies not
dependent on a single market can adapt more easily. For example, while public
libraries face competition from mega book stores, their information services and
programs for children have continued to be relatively stable areas of service. Also,
the business community, students, home gardeners, and many other groups can
be served in a variety of ways. Patrons are served with reference and information

services as well as popular and practical circulating materials. Preschool children

attend reading programs while their parents use materials in the parent-teacher
collection, and so on.
Another feature of core competencies is that they can be exploited to produce a
variety of products. Knowledge of library materials and other information sources
supports the information and youth services function of public libraries. The ability
to negotiate informational questions helps librarians assist readers of popular
fiction, as well as business people and students, in locating needed reading
materials.
Core competencies are critical in producing end products. Without a strong
knowledge of library materials, librarians could not provide patrons with readers
advisory services. Without a classification system and other retrieval tools, patrons
would not be able to find appropriate materials. Preschool programs also continue
to attract many parents to the library for reading motivation and education
programs. Librarians are able to use a special type of "performance reading" to
fascinate even three-year-olds. In this sense, it is not any one feature that makes
a library capable of producing a valuable service, but the sum of many small parts
put together.
Many capabilites are common to a variety of products, however, without being a
critical part of them. For example, the ability to produce security strips is not
essential to the running of a library. On the other hand, a knowledge of books and
information sources could be considered fundamental to library services. In this
light, the outsourcing of acquisitions systems could be seen as giving away a
source of librarian expertise.
Core comeptencies must be rare or difficult to imitate. While a bookkeeping system
is necessary for any company, it is not rare and might be outsourced without
giving up any proprietary advantage. Systems and expertise that are easily copied
provide little competitive advantage. If capabilities are not difficult to imitate,
barriers to market entry are low and the value proided by the product is low, since
something else easily can be substituted. In the past, the informational services of
libraries were quite difficult to imitate. However, as patrons are getting better and
better at finding their own answers via the Internet, basic library services are
facing a threat. Libraries can respond by improving their service so that patrons
clearly know when and why they should turn to the library for help with their
information needs.
In a positive sense, libraries should be able to embrace the concept of core
competencies very easily, since they have always defined themselves in broad
terms. Rather than identifying with the medium, libraries have preferred to identify
with the message. It has not made a difference whether the message was on
papyrus, paper, magnetic tape, or silicone. But there is a negative viewpoint.
Internal strengths are successful only when they are perceived by the public as
valuable. As Barney (1995) explained, "one of the most important responsibilities
of strategic managers is to constantly evaluate whether or not their firm's
resources and capabilities continue to add value, despite changes in the
competitive environment."

Attributes such as value and excellence are essential to core competencies. Value
separates potential core competencies from actual ones. Excellence is present in
the most successful libraries. To the extent that patrons can get the same services
elsewhere -- or easily can substitute another type of service -- a library's strategic
advantage is low. The imporvement of capabilities and the increase of synergy is
the goal of a core competency-based strategy.
The pursuit of excellence is related to the idea of quality, as in quality of
control andquality circles. However, when striving for excellence, it is important to
consider the entire product or service. The goal is not to limit our scope to
perfecting current processes. The pursuit of excellence means exceeding patron
expectations by meeting needs in new and better ways. For example, in the hotel
industry, excellent service does not necessarily start at the door, it may start at
the airport, or perhaps even before the guest leaves home. The idea of
improvement brings us to the next part of this discssion, the building and
improvement of core competencies.

Strategic leadership : Strategic leadership refers to a managers potential to express a strategic

vision for the organization, or a part of the organization, and to motivate and persuade others
to acquire that vision. Strategic leadership can also be defined as utilizing strategy in the
management of employees. It is the potential to influence organizational members and to execute
organizational change. Strategic leaders create organizational structure, allocate resources and
express strategic vision. Strategic leaders work in an ambiguous environment on very difficult issues
that influence and are influenced by occasions and organizations external to their own.
The main objective of strategic leadership is strategic productivity. Another aim of strategic
leadership is to develop an environment in which employees forecast the organizations needs in
context of their own job. Strategic leaders encourage the employees in an organization to follow their
own ideas. Strategic leaders make greater use of reward and incentive system for encouraging
productive and quality employees to show much better performance for their organization.
Functional strategic leadership is about inventiveness, perception, and planning to assist an
individual in realizing his objectives and goals.
Strategic leadership requires the potential to foresee and comprehend the work environment. It
requires objectivity and potential to look at the broader picture.
A few main traits / characteristics / features / qualities of effective strategic leaders that do lead to
superior performance are as follows:
Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their words
and actions.
Keeping them updated- Efficient and effective leaders keep themselves updated about what is
happening within their organization. They have various formal and informal sources of

information in the organization.

Judicious use of power- Strategic leaders makes a very wise use of their power. They must
play the power game skillfully and try to develop consent for their ideas rather than forcing their
ideas upon others. They must push their ideas gradually.
Have wider perspective/outlook- Strategic leaders just dont have skills in their narrow
specialty but they have a little knowledge about a lot of things.
Motivation- Strategic leaders must have a zeal for work that goes beyond money and power
and also they should have an inclination to achieve goals with energy and determination.
Compassion- Strategic leaders must understand the views and feelings of their subordinates,
and make decisions after considering them.
Self-control- Strategic leaders must have the potential to control distracting/disturbing moods
and desires, i.e., they must think before acting.
Social skills- Strategic leaders must be friendly and social.
Self-awareness- Strategic leaders must have the potential to understand their own moods and
emotions, as well as their impact on others.
Readiness to delegate and authorize- Effective leaders are proficient at delegation. They are
well aware of the fact that delegation will avoid overloading of responsibilities on the leaders.
They also recognize the fact that authorizing the subordinates to make decisions will motivate
them a lot.
Articulacy- Strong leaders are articulate enough to communicate the vision(vision of where the
organization should head) to the organizational members in terms that boost those members.
Constancy/ Reliability- Strategic leaders constantly convey their vision until it becomes a
component of organizational culture.
To conclude, Strategic leaders can create vision, express vision, passionately possess vision and
persistently drive it to accomplishment