Amity Campus Uttar Pradesh India 201303

ASSIGNMENTS
PROGRAM: BFIA SEMESTER-IV
Subject Name Study COUNTRY Roll Number (Reg. No.) Student Name : Business Policy and Strategic Management : Malawi :BFIA01172009-2012041 :FRANCIS ODALA MTAMBO

Signature : Date : 19TH APRIL 2011

Assignment A

Assignment B

Assignment C

BUSINESS POLICY & STRATEGIC MANAGEMENT Assignment A

Q1. What are the benefits of the concept of strategy ? What are its pitfalls? Answer: BENEFITS OF THE CONCEPT OF STRATEGY The following are the benefits of the concept of strategy:

i) It rationalizes allocation of scarce resources. ii) It motivates employees to shape their work in the context of shared corporate goals. iii) It assists management to meet unanticipated future changes. iv) It ensures organizational effectiveness through implementation and evaluation of the strategy. v) It is a powerful tool to management to deal with the future which is uncertain and hazy in all respects. vi) It improves the capability of management in coping with the volatile external environmental forces. vii) It encourages the management to choose the best course of action to realize the objectives. viii) Strategy planning system provides an objective basis for measuring performance.

PITFALLS OF THE CONCEPT OF STRATEGY The concept of strategy has the following pitfalls: i) It is a complex, cumbersome and complicated to formulate corporate strategy.

ii) Corporate strategies are useful for long range problems. They are not effective to overcome current exigencies.

iii) The corporate strategy formulation process calls for considerable time, money and effort. Developing appropriate corporate strategy is not a simple and economical proposition. For financially weak companies, cost becomes a great hindrance.

iv) As future is uncertain and cannot be predicted accurately, the strategic planning system based on hazy and uncertain estimates are not exact. v) Implementation of corporate strategy is influenced by organizational factors, behavioral factors and motivational factors. The gap between formulation and implementation of corporate strategy does not give desired results to the organization.

Q2Explain the three dimensions of a business definition. Answer: THE THREE DIMENSIONS ALONG WHICH A BUSINESS IS DEFINED Abell came up with the concept of the three dimensions along which a business is defined to enable a decision-maker' to think in a structured manner and systematically move in one or more dimensions generating a number of feasible alternatives. The three dimensions along which a business is defined are customer groups, customer functions and alternate technology.

Business definition is at the core of business strategies. By defining the who, what, and how of a business, a business definition seeks to provide the direction in action has to be taken.

The who of the business definition refers to the customer groups that are targeted by a business. Customer groups are identified based on the needs that they seek to satisfy. The bases for identification popularly used are demographic characteristics, geographic segmentation or lifestyles. Businesses must continuously focus on the needs of the customer group they identify for targeting.

The what of a business definition deals with customer needs. The basic needs of food, clothing are examples of customer needs. There could be higher older need of entertainment, education, securityand social status. Businesses aim at the satisfaction of these needs. Companies must dedicate the necessary time and resources to define customer needs. Products and services are then designed to satisfy these needs. A business earn its revenues from providing customer satisfaction through products and services. Beyond customer satisfaction is the idea of customer delight that aims at providing even more value than what a customer would normally expect.

Businesses seek to enhance their competitive advantage by providing customer value in the form of products and services.

The how of the business definition refers to the alternative technologies used to provide services and products that satisfy the perceived needs of the customer groups identified. Besides technical knowledge, alternative technology refers to the skills and competencies that a business utilizes to provide products and services. The core competencies of a business dwell in its skills base and this is used to provide value to the customer.

As can be concluded from above, business definition lays down the framework within which businesses can operate. It can also provide direction in which businesses can expand or retrench.

Q3 What role do incentives play in strategy implementation? Answer: THE ROLE OF INCENTIVES IN STRATEGY IMPLEMENTATION Incentives motivate employees and determine the way they approach their jobs and even life in general. If organisational culture is geared towards achievement, incentives help to motivate and put their utmost energies for the work. In its absence, high achievement-oriented people develop frustration and desert the organisation Therefore, for implementing strategies, incentives play a very important role and enhances achievement- oriented organisational culture. Q4. What is meant by aligning social responsiveness to strategic management? Answer: SOCIAL GOAL SETTING ALIGNING SOCIAL RESPONSIVENESS TO STRATEGIC MANAGEMENT Social goal setting approach emphasizes on incorporating social concern in the objectives of an organization on a perpetual or periodic basis. A combination of both can also be followed in which some social concerns can be undertaken on perpetual basis while others can be taken on project basis for specific period. Aspects like consumer satisfaction and environmental protection can be taken on perpetual basis whereas special projects for certain specific social causes like eliminating the impact of destruction caused by certain natural calamities can be taken on periodic basis. In attempting to align social responsiveness to strategic management, an

organization can identify the social concerns to be served on the basis of its own environmental analysis and choose those areas in which it believes it can contribute effectively by reducing the social costs or enhancing social benefits.

This approach is helps the organization in defining its social objectives according to the needs and requirements while considering its capability to meet those goals. Thus, it can well be integrated into the strategic management process.

Q5 Explain the basic approach used in strategic control. Answer: When putting the control process in operation, two basic issues are involved: what to control and how to control. The first issue, what to control is related to the identification of those factors on the basis of which degree of business success is determined. The second issue,how to control, involves the use of various control techniques. Thus the basic approach used in strategic control formulates systems aimed at setting targets (what to control), and carrying out measurements and providing feedback (how to control) to senior management regarding organizational operations and activities in line with its objectives. Q6 What do corporate- level strategies deal with? Answer:
Corporate-level strategic analysis treats a corporate entity as constitutmg a portfolio of businesses under a corporate umbrella. The analysis focuses on the question of what should a corporate entity do regarding the several businesses that are there in its portfolio. The strategic alternatives here are basically the grand strategies of stability, expansion, retrenchment, and combination strategies.

Since it considers a corporate entity as constituting a portfolio of businesses, corporate-level strategic analysis is relevant to diversified corporations which have several businesses.

Assignment B
Q1. Congruence and coordination among strategies should take place through vertical and horizontal fit. Explain and discuss this statement. Answer: CONGRUENCE AND COORDINATION AMONG STRATEGIES SHOULD TAKE PLACE THROUGH VERTICAL
AND HORIZONTAL FIT

A key task of strategy implementation is to align or fit the activities and capabilities of an organization with its strategies. Strategies operate at different levels and there has to be congruence and coordination among these levels. Congruence and coordination of strategies among different levels is the vertical fit. There also has to be congruence and coordination among the different activities taking place at the same level. This is called the horizontal fit.

The consideration of vertical fit leads us to define functional strategies in terms of their capability to contribute to the creation of a strategic advantage for the organization. Strategic marketing management, for example, focuses on the alignment of marketing management within an organization with its corporate and business strategies to gain a strategic advantage. Strategic operation management focuses on the alignment of operation management within an organization with its corporate and business strategies to gain competitive advantage.

The consideration of the horizontal fit means that there has to be an integration of the operational activities undertaken to provide a product or service to a customer. These have to take place in the course of operational implementation. Operational implementation is the approach adopted by an organization to achieve operational effectiveness. When an organization performs valuecreating activities optimally and in a way which is better than its competitors, it results in operational effectiveness.

Q2. How can SWOT analysis help in short listing strategic alternatives at the corporate level? Answer: SWOT analysis can be applied to generate feasible strategic alternatives at the corporate level. The socioeconomic factors are found to be supportive; while market opportunities both in the domestic and export markets are also significant. Based on a fortuitous match between the technological and supplier environment on the one hand, and operations-related internal factors on the other, the firm is most likely to be a high-quality producer. These strengths can stand the firm in good stead in its local marketing and export efforts.

General management can take proactive steps in order to sustain marketing efforts. Good personnel may prove to be of value in the various activities that the firm undertakes. Finance is the only problem area and cannot be neglected at any cost. It is quite possible that major investments have been made in plant, equipments, and facilities, and a pay-off may be expected in the long run. In such a case, the financial problems can be assumed to be of transient nature. Should it be true, the firm can hope to overcome its negative financial features, provided it adopts prudent financial policies in the near future.

Expansion strategies, therefore, seem to offer a feasible approach to strategy formulation. Of course, expansion itself could take place through various means. For instance, internal expansion could be possible if the firm is in a position to garner additional financial resources. If this is difficult, then external expansion may be the way out.

Depending on whether other units are available for acquisition, the firm could even contemplate a takeover. But this would again require immediate resources. Expansion strategies could also be preceded by a short period of stability and the financial position can improve in the meantime. The analysis can be continued until the strategists are able to shortlist feasible strategic alternatives. Of course, the line of thought adopted by others may be different from that followed another team. But it can be safely assumed that since the SWOT profiles are the same, different analysts are likely to reach more or less the same set of conclusions. Much would depend on other factors, for instance, the willingness of the management to task risks. A good and meaningful SWOT analysis is likely to bring out a few feasible strategic alternatives.

Q3. Discuss the manner in which an organization can discharge its responsibilities to its businesses as a good corporate parent. Answer: A diversified corporation or a multi-business company is often viewed as consisting of a corporate headquarter or centre with strategic business units acting as satellites.

The manner in which the centre manages and nurtures the individual businesses is known as corporate parenting. The total corporation is viewed in terms of resources and capabilities that can be used to build individual businesses as well as create synergies across these businesses. In this manner, corporate parenting attempts to do away with the one major drawback of the corporate portfolio techniques. While portfolio techniques consider the industry attractiveness of various industries and focus on the cash contributions that individual businesses could make to the overall portfolio businesses, corporate parenting views the organisation in its totality as a diversified corporation and focuses on the value created from the relationship between the parent and its businesses.

Campbell, Goold, and Alexander suggest that the diversified corporation must address these two issues:

(a) What businesses should a diversified corporation own and why?

(b) What organisational structure, management processes, and philosophy will foster superior performance from the corporation's individual business units?

A good corporate parent will therefore endeavor to the search for the appropriate corporate strategy through the following three steps:

i.

Examine each business in terms of its critical success factors.

ii.

Examine each business unit in terms of those areas in which performance can be improved.

iii.

Analyse how well the parent corporation fits with the business unit.

All in all, corporate parenting focuses intensely on the role of the parent in adding value to the individual businesses.

Reference: M Alexander, A Campbell and M Goold, "A new model for reforming -e planning review" in Planning Review, Jan-Feb 1995. CASE STUDY In a market dominated by behemoths like SAIL and TISCO, finding a niche is of crucial importance for a small player. What could a Lloyds do with a meagre annual capacity of making six lakh tonnes of HR coils while SAIL sold over 1,600 lakh tonnes in the same time? Should Lloyds follow the market leader or adopt its own unique approach to its business strategy? It is in the context of such questions that Lloyds' attention came to rest on the manufacturing process. Almost all steel producers adopt the blast furnace technology. In this, the process starts with a clear differentiation among the ultimate products to be manufactured. So, manufacturing batch size has to be large enough to take up customised orders. The raw material, iron ore, has to pass through several complex stages of manufacturing. Lloyds looked for an alternative technology that could suit its requirements. The solution lay in the Electric Arc Furnace technology where the unique feature was that initial manufacturing stages need not differentiate among different products. Such a differentiation came at a much later stage. Translated into a business proposition, what it meant was that Lloyds could operate with a much smaller batch size of, say, 100 tonnes and deliver quickly. For instance, a 1,000tonnes small order of specialised product custom-made to buyer's specification could be delivered in as little as 15 days. Such a quick delivery schedule would not be possible for a large, integrated steel manufacturer. In this manner, analogous to small gunboats that could effectively torpedo a large, slow-moving ship, Lloyds carved out a niche in the highly competitive steel market.

Question: Comment on the nature of the business strategy of Lloyds. What are the conditions in which such a strategy would succeed? Could fail? Answer:

NATURE OF THE BUSINESS STRATEGY OF LLOYDS

The business strategy for Lloyds is twofold. Firstly, as a small player in the industry, Lloyds has created a competitive advantage for itself by employing electric arc furnace technology, it has speeded up the manufacturing process such that customer orders could be met with in less than 15 days. This would increase customer satisfaction and give Lloyds a competitive edge.

With the introduction of the new technology, Lloyds will now be able to meet customer-specific orders in a shorter period of time than the big companies. The manufacturing process has also been made simpler because differentiation is coming in at a later stage. The reduction in the length of the manufacturing process time has also led to the reduction of the work-in-process inventory. This would mean than the company would have funds that would otherwise be tied up in inventory, available for other purposes.

Lloyds looked for an alternative technology that could suit its requirements. The Electric Arc Furnace technology worked well for Lloyds because of the unique feature that initial manufacturing stages need not differentiate among different products. This speeded up the manufacturing process such that Lloyds could now operate with a much smaller batch size of, say, 100 tonnes and deliver quickly.

Referring to the business definition of Abell, that defines business in three dimensions of customer groups, customer function and technology; the customer groups here are customers of steel products who need various differentiated steel products. The case highlights that Lloyds could deliver specified custom-made orders within 15 days thereby highly satisfying its customer function, i.e. what customers need.

This is achieved through the electric arc furnace technology. Thus, Lloyds has redefined its business, according to the three dimensional business definition.

This strategy works and succeeds where there is integrated manufacturing and there are few competitors such as in monopolistic competition as in this case, and is capable of winning customers from the larger companies.

But success in an integrated steel industry means re-organizing the whole value chain to make it more efficient and meet the tight schedules of delivery. This means that extra costs would be incurred which implies reduced unit profit.

Assignment C
Q.1 The marketing strategy emphasises price as the key to good value; operations runs with tight cost control; development focuses on cost reduction. Which of Porter's competitive strategies is illustrated here? A. Divisionalisation B. Differentiation C. Cost Leadership D. Differentiation focus E. Cost Focus

Q.2 in the case where an organization acquires its supplier, this is an example of: A. Horizontal integration B. Forwards horizontal integration C. Backwards vertical integration D. Downstream vertical integration Q.3 McDonalds is deciding whether to expand into manufacturing kitchen equipment in China. At what level is this decision likely to be made? A. Business B. Corporate C. Functional D. International Q.4 Diversification into many unrelated areas is an example of: A. Risk Management B. Good Management C. Uncertainty Reduction D. Sustainability

Q.5 which of the following industries is least likely to follow the conventional life-cycle model? A. Software development B. Coal mining C. Insurance broking D. Hairdressing Q.6 In terms of the PESTLE analysis, the liberalizing of international trade and tariff regimes could go in which section or sections? A. Political B. Legal C. Political and economic and legal D. Political and environmental Q.7 The value chain is subdivided into two main headings. These are primary activities and: A. Peripheral activities B. Support activities C. Secondary activities D. Outsourced activities Q.8 a joint venture can be defined as A. Two firms collaborate together B. One firm licenses its intellectual property to another firm C. Two firms merge together D. Two firms come together to form a third, legally separate firm Q.9 the three stages of strategic management are: A. Strategy formulation, strategy assessment, strategy execution B. Strategy formulation, strategy execution, and strategy assessment C. Strategy formulation, strategy implementation, and strategy evaluation

D. Strategy formulation, strategy execution, and strategy assessment Q.10 which of the following requires a firm to establish annual objectives, device policies, motivate employees, allocate resources for the execution of strategies: A. Strategy formulation B. Strategy estimation C. Strategy implementation A. Strategy estimation Q.11 which type of trend can be exemplified by the increasing numbers of two-income households in the society? A. Social B. Economic C. Political A. Cultural Q.12 Mr.Ghouri assigns a project to be completed by Khalid till the end of the month and then hold periodic meetings with him to review his progress. Which of the management functions Mr.Ghouri is performing? A. Planning B. Leading C. Controlling D. Organizing Q. 13 Value Chain analysis Infrastructure, Human Resources, Technology Development, Procurement are: A. Primary activities B. Secondary activities C. Tertiary activities D. General activities Q.14 _________ is the process by which a firm manages the formulation and implementation of its strategy.

A. Total Quality Management B. Strategic Management C. Micro-Management D. Economic Logic Q. 15 which of the following statements regarding strategy formulation and strategy implementation is the most accurate? A. Neither strategy formulation, nor strategy implementation can succeed without the other. B. Strategy formulation is more important than strategy implementation. C. Strategy implementation is more important than strategy formulation. D. Strategy implementation is more important than strategy formulation. Q. 16 A firms ability to create value in a way that its rivals can't is known as its ____________. A. Business Strategy B. Corporate Strategy C. Competitive advantage D. Dynamic advantage Q. 17 Business strategy refers to the ways in which a firm will compete against present and future rivals within a particular business. a) True b) False Q. 18 Strategy formulation is the process of deciding what to do while strategy implementation is the process of performing all the activities necessary to do what has been planned. a) True

b) False Q. 19 to be effective, strategies must result from rational and methodical planning processes based on analyses of both internal resources and capabilities and the external environment. a) True b) False Q. 20 Elements of strategic management model: A . Environmental Scanning B. Strategy Formulation C. Strategy implementation D. Evaluation and Control 21 In SWOT Analysis, Strengths and Weaknesses is a) External Analysis b) Internal Analysis c) Environmental analysis d) Economic Analysis 22. A strategic vision describes the route a company intends to take in developing and strengthening its business. It lays out the companys strategic course in preparing for the future. a) True b) False 23. The vision statement of a firm focuses on its present business purpose - who we are and what we do a) True b) False

24. Strategic Financial Objectives are as given below. Cross out the ones which are not strategic objectives but are financial objectives a) Winning an X % market share b) Achieving technological leadership c) Profit margins of X % d) Strong bond and credit ratings 25 What are not the Industrys Dominant Economic Traits? a) Market size and growth rate b) Technology development c) Economies of scale d) Socio-cultural factors 26 Four Quadrants of BCG Matrix are a) Stars b) Cash Cows c) Question Marks d) Dogs 27 X and Y axis of BCG Matrix are a) Business Strength b) Market Growth Rate c) Relative Market Position d) Market Attractiveness

28 X and Y axis of GE Model are: a) Business Strength b) Market Growth Rate c) Relative Market Position d) Market Attractiveness

29 Stars are net users of resources a) True b) False 30 Cash Cows are net users of resources a) True b) False 31 SWOT is an acronym to describe: a) Strengths b) Weaknesses c) Opportunities d) Threats 32 The external environment consists of two variables: a) Opportunities b) Threats 33 The internal environment consists of two variables: a) Strengths b) Weaknesses 34 The forces driving industry competition (Porters Five forces are): a) Industry rivalry b) Buyers c) Purchasers d) Potential entrants e) Substitutes Cross out the wrong one or the one which does not belong to five forces 35 Primary activities in corporate value chain are: a) Inbound Logistics b) Operations c) Outbound Logistics d) Marketing and sales e) Services

Fill-in the blanks 36 Support activities in corporate value chain are: a) Human Resource Management b) Firm infrastructure c) Procurement d) Technology development Fill-in the blanks 37 Primary activities in corporate value chain are: a) Inbound Logistics b) Operations c) Technology Development Outbound Logistics d) Marketing and sales e)Procurement Services Cross out the wrong ones and insert the right one 38 Four stages in product Life Cycle are: a) Introduction b) Growth c) Maturity d) Decline

39 Four variables in marketing-mix are: a) Product b) Price c) Place d) Promotion 40 Porters Competitive Strategies are: a) Cost strategy b) Differentiation strategy