Академический Документы
Профессиональный Документы
Культура Документы
SET 1
1. Explain the different circumstances under which a suitable
growth strategy should be selected by any company to improve its
You may select an example of your choice to substantiate your views
Sol:
Strategies to Improve Sales
There are three alternatives to improve the sales performance of a business unit, to fill the gap
between actual sales and targeted sales:
a) Intensive growth
b) Integrative growth
c) Diversification growth
a) Intensive Growth:
It refers to the process of identifying opportunities to achieve further growth within the
company’s current businesses. To achieve intensive growth, the management should first
evaluate the available opportunities to improve the performance of its existing current businesses.
It may find three options:
· To penetrate into existing markets
· To develop new markets
· To develop new products
At times, it may be possible to gain more market share with the current products in their current
markets through a market penetration strategy. For instance, SONY introduced TV sets with
Trinitron picture tubes into the market in 1996 priced at a premium of Rs.10,000 and above over
the market through a niche market capture strategy. They gradually lowered the prices to market
levels. However, it also simultaneously launched higher-end products (high-technology products)
to maintain its global image as a technology leader. By lowering the prices of TVs with Trinitron
picture tubes, the company could successfully penetrate into the markets to add new customers to
its customer base.
Market Development Strategy is to explore the possibility to find or develop new markets for its
current products (from the northern region to the eastern region etc.). Most multinational
companies have been entering Indian markets with this strategy, to develop markets globally.
However, care should be taken to ensure that these new markets are not low density or saturated
markets, which could lead to price pressures.
Product Development Strategy involves consideration of new products of potential interest to its
current markets (e.g. Gramaphone Records to Musical Productions to CDs)– as part of a
Diversification strategy.
Study the following example to understand what Product Development Strategy is.
MICROSOFT’s New Strategy
It is called PC-plus. It has three elements:
a) Providing computer power to the most commonly used devices such as cell phone, personal
computer, toaster oven, dishwasher, refrigerator, washing machines and so on.
b) Developing software to allow these devices to communicate.
c) Investing heavily to help build wireless and high-speed internet access throughout the world
this debt. Include all pertinent financial worksheets in this section: annual income projections, a
break-even worksheet, projected cash flow statements and a balance sheet.
Management Section
Outline your organizational structure and management team here. Include the legal structure of
your business whether it is a partnership, corporation or limited liability corporation.
Include resumes and biographies of key players on your management team. Show staffing
projection data for the next few years.
By now you're probably thinking that you don't need Business Plan just yet. Well you do, and
there is business plan building software that can help you through this immense project. These
software packages are easy to use and affordable. Use one today and produce a professional-
quality Business Plan - including all critical components - tomorrow!
1. Idea Researching
In this stage, you are researching your idea. The object of your research is to find out who
is marketing the same product or service in your area, and how successful the marketer
has been. You can accomplish this by a Google search on the Internet, launching a test-
marketing campaign, or conducting surveys. Also, you are attempting to find what the
level of interest is in the products (or services) you wish to market.
Here as the main goal is to start a company that manufactures the auto components, we
are to make a research on all the auto companies which are procuring the spares from the
outside vendors. And also the competitors who are all marketing that, their existence and
also how successful they are.
As part of the initial research process, it is important to consider the legal requirements of
selling your product or service. According to the Biz Ed website, examine the legal
ramifications of your business. Know the tax laws governing your business. If insurance
is a requirement, prepare to budget for it. Also, be aware of any safety laws governing
you as an employer. Hence we are also to make a research on the feasible area where we
can start our organization and licenses that we need to take keeping in mind the
environmental factors as well.
2. Business Plan Formulation
You must write a business plan. As Pendrith points out, this is crucial if you want
funding, such as a small business loan or grant, or if you wish to lease a building. At this
stage, Pendrith advises, you need to consult with an attorney or business adviser for
assistance.
In the business plan you typically include following heads:
i) Executive Summary
ii) Company and Product Description
iii) Market Description
iv) Equipment and Materials
v) Operations
vi) Management and Ownership
vii) Financial Information and Start-Up Timeline
viii) Risks and Their Mitigation
3. Financial Planning
Financial planning involves thinking about the financial costs of starting and maintaining
your business. According to the Biz Ed website, you should consider such issues as the
costs of running the business; the prices you wish to charge your customers; cash flow
control; and how you wish to set up financial reserves in case of an emergency or an
event causing significant loss to the business. This includes the planning of whether to
take any loans or make personal investments in the company.
4. Advertising Campaign
Decide how you will market your product. Consider your budget and your target
audience. Make up business cards with your logo on it, your name and the name of your
business. Make sure that they are of the most professional quality. Utilizing print, the
newspaper, the Internet, radio or TV is also wise, considering, of course, the size of your
advertising budget.
Here in this case more than TV, a better advertising media will be road side sign boards
placed close to the auto companies for getting the deals to manufacture their spares. As
TV is useful only to reach the common man and he is not our target customer. Hence
sign boards is the feasible solution and also pamphlets circulated across the pioneers.
This apart personal marketing is much more suggested.
5. Preparing for Launch
Advertise for employees. This also requires adequate planning. Think about what you
look for in an employee. Be specific about the requisite skills and experience you are
seeking. Then begin requesting resumes and setting up interviews, making hiring
decisions based on the standards you have set.
In this case we will be looking for a few candidates in managerial position who must be
good in managing things apart from minimal technical knowledge.
Lower level people at the shopfloor people. They need to have real time experience in
the shop floor activities.
The employees apart, one needs to plan on the plant and machinery as well.
Thus these are all the stages that I would consider performing if incase I plan to start a
manufacturing unit producing automobile components.
· Independent advice from patent attorneys on issues such as patent ownership, patent validity
and scope of patent claims;
· Checks on employment contracts, confidentiality arrangements, and contracts with other parties
that may interfere with the exercise of IP rights;
· Details of the patent prosecution such as examiners’ reports and other opinions;
· Details of any legal challenges to the patent, and the way the proceedings were resolved;
· Checks on laboratory notebooks in the event that the validity of US patents is of concern to the
commercial partner (this also provides reassurance as to claims of ownership of the patent);
· Surveys of the activity of competitors and owners of competing technology, and possibilities of
conflict; and
· Analysis of freedom to operate issues.
In preparing to licence your technology, you should consider in advance these kind of due
diligence issues. If you can anticipate and provide comprehensive answers to these questions,
you will be able more effectively to reassure your commercial partner, and you will be in a
stronger negotiating position in negotiating licence terms. It should also speed up the licensing
negotiations, and ultimately the commercialization of your intellectual property.
In the increasingly conscience-focused marketplaces of the 21st century, the demand for more
ethical business processes and actions (known as ethicism) is increasing. Simultaneously,
pressure is applied on industry to improve business ethics through new public initiatives and laws
(e.g. higher UK road tax for higher-emission vehicles).
Business ethics can be both a normative and a descriptive discipline. As a corporate practice and
a career specialization, the field is primarily normative. In academia, descriptive approaches are
also taken. The range and quantity of business ethical issues reflects the degree to which business
is perceived to be at odds with non-economic social values. Historically, interest in business
ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and
within academia. For example, today most major corporate websites lay emphasis on
commitment to promoting non-economic social values under a variety of headings (e.g. ethics
codes, social responsibility charters). In some cases, corporations have re-branded their core
values in the light of business ethical considerations (e.g. BP's "beyond petroleum"
environmental tilt).
The term "CSR" came in to common use in the early 1970s, after many multinational
corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those
on whom an organization's activities have an impact, was used to describe corporate owners
beyond shareholders as a result of an influential book by R Freeman in 1984.[2]
ISO 26000 is the recognized international standard for CSR (currently a Draft International
Standard). Public sector organizations (the United Nations for example) adhere to the triple
bottom line (TBL). It is widely accepted that CSR adheres to similar principles but with no
formal act of legislation. The UN has developed the Principles for Responsible Investment as
guidelines for investing entities.
Potential business benefits
The scale and nature of the benefits of CSR for an organization can vary depending on the nature
of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting
business to adopt measures beyond financial ones (e.g., Deming's Fourteen Points, balanced
scorecards). Orlitzky, Schmidt, and Rynes found a correlation between social/environmental
performance and financial performance. However, businesses may not be looking at short-run
financial returns when developing their CSR strategy.
The definition of CSR used within an organization can vary from the strict "stakeholder impacts"
definition used by many CSR advocates and will often include charitable efforts and
volunteering. CSR may be based within the human resources, business development or public
relations departments of an organization,[11] or may be given a separate unit reporting to the CEO
or in some cases directly to the board. Some companies may implement CSR-type values without
a clearly defined team or program.
The business case for CSR within a company will likely rest on one or more of these arguments:
Human resources
A CSR program can be an aid to recruitment and retention,[12] particularly within the competitive
graduate student market. Potential recruits often ask about a firm's CSR policy during an
interview, and having a comprehensive policy can give an advantage. CSR can also help improve
the perception of a company among its staff, particularly when staff can become involved
through payroll giving, fundraising activities or community volunteering. See also Corporate
Social Entrepreneurship, whereby CSR can also be driven by employees' personal values, in
addition to the more obvious economic and governmental drivers.
Risk management
Managing risk is a central part of many corporate strategies. Reputations that take decades to
build up can be ruined in hours through incidents such as corruption scandals or environmental
accidents. These can also draw unwanted attention from regulators, courts, governments and
media. Building a genuine culture of 'doing the right thing' within a corporation can offset these
risks.[13]
Brand differentiation
In crowded marketplaces, companies strive for a unique selling proposition that can separate
them from the competition in the minds of consumers. CSR can play a role in building customer
loyalty based on distinctive ethical values.[14] Several major brands, such as The Co-operative
Group, The Body Shop and American Apparel[15] are built on ethical values. Business service
organizations can benefit too from building a reputation for integrity and best practice.
License to operate
Corporations are keen to avoid interference in their business through taxation or regulations. By
taking substantive voluntary steps, they can persuade governments and the wider public that they
are taking issues such as health and safety, diversity, or the environment seriously as good
corporate citizens with respect to labour standards and impacts on the environment
Stakeholder priorities
Increasingly, corporations are motivated to become more socially responsible because their most
important stakeholders expect them to understand and address the social and community issues
that are relevant to them. Understanding what causes are important to employees is usually the
first priority because of the many interrelated business benefits that can be derived from
increased employee engagement (i.e. more loyalty, improved recruitment, increased retention,
higher productivity, and so on). Key external stakeholders include customers, consumers,
investors (particularly institutional investors), communities in the areas where the corporation
operates its facilities, regulators, academics, and the media.
Thus, two classes of investors emerged. One type supplied firms with capital. The other type
supplied them with know-how, technology, management skills, marketing techniques,
intellectual property, clientele and a vision, a sense of direction.
In many cases, the strategic investor also provided the necessary funding. But, more and more, a
separation was maintained. Venture capital and risk capital funds, for instance, are purely
financial investors. So are, to a growing extent, investment banks and other financial institutions.
The financial investor represents the past. Its money is the result of past - right and wrong -
decisions. Its orientation is short term: an "exit strategy" is sought as soon as feasible. For "exit
strategy" read quick profits. The financial investor is always on the lookout, searching for willing
buyers for his stake. The stock exchange is a popular exit strategy. The financial investor has
little interest in the company's management. Optimally, his money buys for him not only a good
product and a good market, but also a good management. But his interpretation of the rolls and
functions of "good management" are very different to that offered by the strategic investor. The
financial investor is satisfied with a management team which maximizes value. The price of his
shares is the most important indication of success. This is "bottom line" short termism which also
characterizes operators in the capital markets. Invested in so many ventures and companies, the
financial investor has no interest, nor the resources to get seriously involved in any one of them.
Micro-management is left to others - but, in many cases, so is macro-management. The financial
investor participates in quarterly or annual general shareholders meetings. This is the extent of its
involvement.
The strategic investor, on the other hand, represents the real long term accumulator of value.
Paradoxically, it is the strategic investor that has the greater influence on the value of the
company's shares. The quality of management, the rate of the introduction of new products, the
success or failure of marketing strategies, the level of customer satisfaction, the education of the
workforce - all depend on the strategic investor. That there is a strong relationship between the
quality and decisions of the strategic investor and the share price is small wonder. The strategic
investor represents a discounted future in the same manner that shares do. Indeed, gradually, the
balance between financial investors and strategic investors is shifting in favour of the latter.
People understand that money is abundant and what is in short supply is good management.
Given the ability to create a brand, to generate profits, to issue new products and to acquire new
clients - money is abundant.
2. To implement continuous financial audit and control systems to monitor the performance
of the firm, its flow of funds, the adherence to the budget, the expenditures, the income,
the cost of sales and other budgetary items.
3. To timely, regularly and duly prepare and present to the Board of Directors financial
statements and reports as required by all pertinent laws and regulations in the territories
of the operations of the firm and as deemed necessary and demanded from time to time
by the Board of Directors of the Firm.
4. To comply with all reporting, accounting and audit requirements imposed by the capital
markets or regulatory bodies of capital markets in which the securities of the firm are
traded or are about to be traded or otherwise listed.
5. To prepare and present for the approval of the Board of Directors an annual budget, other
budgets, financial plans, business plans, feasibility studies, investment memoranda and all
other financial and business documents as may be required from time to time by the
Board of Directors of the Firm.
6. To alert the Board of Directors and to warn it regarding any irregularity, lack of
compliance, lack of adherence, lacunas and problems whether actual or potential
concerning the financial systems, the financial operations, the financing plans, the
accounting, the audits, the budgets and any other matter of a financial nature or which
could or does have a financial implication.
7. To collaborate and coordinate the activities of outside suppliers of financial services hired
or contracted by the firm, including accountants, auditors, financial consultants,
underwriters and brokers, the banking system and other financial venues.
8. To maintain a working relationship and to develop additional relationships with banks,
financial institutions and capital markets with the aim of securing the funds necessary for
the operations of the firm, the attainment of its development plans and its investments.
9. To fully computerize all the above activities in a combined hardware-software and
communications system which will integrate into the systems of other members of the
group of companies.
10. Otherwise, to initiate and engage in all manner of activities, whether financial or of other
nature, conducive to the financial health, the growth prospects and the fulfillment of
investment plans of the firm to the best of his ability and with the appropriate dedication
of the time and efforts required.
5. To collaborate with legal institutions, law enforcement agencies and private collection
firms in assuring the timely flow and payment of all due payments, arrears and overdue
payments and other collectibles.
6. To coordinate an educational campaign to ensure the voluntary collaboration of the
clients, distributors and other debtors in the timely and orderly payment of their dues.
The strategic investor is, usually, put in charge of the following:
7. The strategic investor is also in charge of "vision thinking": new methods of operation,
new marketing ploys, new market niches, predicting the future trends and market needs,
market analyses and research, etc.
The strategic investor typically brings to the firm valuable experience in marketing and sales. It
has numerous off the shelf marketing plans and drawer sales promotion campaigns. It developed
software and personnel capable of analysing any market into effective niches and of creating the
right media (image and PR), advertising and sales promotion drives best suited for it. It has built
large databases with multi-year profiles of the purchasing patterns and demographic data related
to thousands of clients in many countries. It owns libraries of material, images, sounds, paper
clippings, articles, PR and image materials, and proprietary trademarks and brand names. Above
all, it accumulated years of marketing and sales promotion ideas which crystallized into a new
conception of the business.
Technology
1. The planning and implementation of new technological systems up to their fully
operational phase. The strategic partner's engineers are available to plan, implement and
supervise all the stages of the technological side of the business.
2. The planning and implementation of a fully operative computer system (hardware,
software, communication, intranet) to deal with all the aspects of the structure and the
operation of the firm. The strategic investor puts at the disposal of the firm proprietary
software developed by it and specifically tailored to the needs of companies operating in
the firm's market.
3. The encouragement of the development of in-house, proprietary, technological solutions
to the needs of the firm, its clients and suppliers.
4. The planning and the execution of an integration program with new technologies in the
field, in collaboration with other suppliers or market technological leaders.
Education and Training
The strategic investor is responsible to train all the personnel in the firm: operators, customer
services, distributors, vendors, sales personnel. The training is conducted at its sole expense and
includes tours of its facilities abroad.
The entrepreneurs – who sought to introduce the two types of investors, in the first place – are
usually left with the following functions:
Administration and Control
1. To structure the firm in an optimal manner, most conducive to the conduct of its business
and to present the new structure for the Board's approval within 30 days from the date of
the GM's appointment.
2. To run the day to day business of the firm.
3. To oversee the personnel of the firm and to resolve all the personnel issues.
4. To secure the unobstructed flow of relevant information and the protection of confidential
organization.
5. To represent the firm in its contacts, representations and negotiations with other firms,
authorities, or persons.
This is why entrepreneurs find it very hard to cohabitate with investors of any kind.
Entrepreneurs are excellent at identifying the needs of the market and at introducing
technological or service solutions to satisfy such needs. But the very personality traits which
qualify them to become entrepreneurs – also hinder the future development of their firms. Only
the introduction of outside investors can resolve the dilemma. Outside investors are not
emotionally involved. They may be less visionary – but also more experienced.
They are more interested in business results than in dreams. And – being well acquainted with
entrepreneurs – they insist on having unmitigated control of the business, for fear of losing all
their money. These things antagonize the entrepreneurs. They feel that they are losing their
creation to cold-hearted, mean spirited, corporate predators. They rebel and prefer to remain
small or even to close shop than to give up their cherished freedoms. This is where nine out of
ten entrepreneurs fail - in knowing when to let go.