Академический Документы
Профессиональный Документы
Культура Документы
MODULE 1
1
INTRODUCTION & COURSE REVIEW
2
CONCEPT OF STRATEGY & STRATEGIC MANAGEMENT
RULES ( Delivery of pay cheques ,loitering around plant, security Smoking, use of company car etc)
STRATEGY
GREEK WORD STRATEGIA Science of guiding & Directing
COMPLEX PROCESSOF DETERMINING LONG TERM GOALS & COURSE OF ACTIONS NEEDED TO BE CARRIED OUT, ALLOCATION OF RESOURCES FOR CARRYING OUT THESE GOALS. MOVING FROM WHERE YOU ARE TO WHERE YOU WANT TO BE IN NEAR FUTURE THROUGH A SERIES OF DECISIONS AND ACTIONS. PRE DETERMINED COURCE OF ACTION HAS DEFINITE DIRECTION
SUSTAINABLE COMPETITIVE ADVANTAGE: Delivering superior value to target customer at the same cost or delivering equal customer value at lower cost relative to your competitor, on a continuing basis.
STRATEGIC MANAGEMENT
ESTABLISHMENT OF VISION & MISSION statements, Business Definition STRAT. INTENTS Adopting Business Model, Setting Goals & Objectives
FORMULATION of STATEGIES
Conducting SWOT, Formulating CORPORATE & BUSINESS LEVEL Strategies, Strategic Analysis Strategic Choice, Strategic Plan.
IMPLEMENTATION OFSTRATEGIES
Activating Strategies, Designing Structure, Systems& Processes, Behavioral & Functional implementation And Operationalising strategies
REVIEW,EVALUATION Performing Strategic Evaluation, Exercising Strategic CONTROL Control and Reformulating Strategies
STRATEGIC MANAGEMENT
ENVIRONMENT SCANNING STRATEGY FORMATION
MISSION (Reason for existence) OBJECTIVES (What results to accomplish & by when ) STRATEGIES (Plan to achieve Mission&Objectives)
STRATEGY IMPLEMENTATION
EXTERNAL
SOCIETAL
TASK
ENVIRONMETAL
INTERNAL
STRENGTS
WEAKNESSES
structure Culture ( Beliefs, xpectations,Values ) Resourses, Skills, ompetencies,Knowledge
PROGRMS Activities needed To accomplish plans BUDGETS Cost of programs PROCEDURE Sequence of steps needed to do the job PERFORMANCE Actual results
Making)
FEEDBACK / LEARNING
EXPORT TO COUNTRY Y
EXPORT STRATEGY
SUBSIDIARY S3
SUBSIDIARY S2
INTERNATIONAL STRATEGY
SUBSIDIARY S4
GLOBAL STRATEGY
SUBSIDIARY S1 SUBSIDIARY S2
SUBSIDIARY S6
THE CENTRE
SUBSIDIARY S3
SUBSIDIARY S5
SUBSIDIARY S4
4
LEVELS OF STRATEGY & EVOLUTION OF STRATEGIC MANAGEMENT
HIERARCHY OF STRATEGY
CORPORATE STRATEGY
BUSINESS STRATEGY
FUNCTIONAL STRATEGY
I I ORG. . MISSION
. OBJECTIVES .STRATEGIES . POLICIES
II ORG.
CURRENT PERFORM - ANCE.
III REVIEW
BOARD OF DIRECTORS & TOP. MGMT
V
SELECTION OF STRATEGIC FACTORS
VI REVIEW
REDEFINE
. MISSION .OBJECTIVES
VII
GENERATION & EVALUATION OF STRATEGIC ALTERNATIVES
VIII
REWORK AS NEEDED
IX
MONITORING
MODULE 2
RAW MATERIAL
PRIMARY MANUF.
FABRICATION
RETAILER
7
A CORPORATE VALUE CHAIN
FIRM INFRASTRUCTURE ( Gen.Mgmt,Accounting,Finance, Plg) SUPPORT ACTIVITIES
TECHNOLOGY DEVELOPMENT
( R&D,Process & Product Development0
PROFIT MARGIN
PROCUREMENT
PRIMARY ACTIVITIES
PRIMARY ACTIVITIES 1. INBOUND LOGISTICS: Raw mat. Handling and warehousing 2. OPERATIONS: Product manufacturing ( Machining, Assembly & Testing) 3. OUTBOUND LOGISTICS: Warehousing & Distribution 4. MARKETING & SALES: Advertising, Promotion etc.. 5. SERVICE: Installation, Repairs & After sale service
SUPPORT ACTIVITIES 6 FIRMS INFRASTRUCTURE 7 HUMAN RESOURCE DEVELOPMENT 8 TECHNOLOGY DEVELOPMENT: R&D , Product & Process development 9 PROCUREMENT: MP&IC, Purchasing, Outsourcing and Material Handling & Storage Each of the Product line has its distinctive value chain For several products, internal analysis of firm involves analyzing a series of different value chains
EXTERNAL ENVIRONMENT
FEEDBACK
ENVIRONMENT
PEST FACTORS
POLITICAL
TECHNOLOGICAL
ECONOMIC
SOCIAL
PESTLE MATRIX
POLITICAL
CURRENT/FUTURE LEGISLATION REGULATORY BODIES GOVT. POLICIES GOVT. TERM & CHANGE
ECONOMIC
ECONOMY SITUATION & TRENDS TAXATION INTEREST & EXCHANGE RATES MARKET & TRADE CYCLE
SOCIAL
LIFESTYLE TRENDS
DEMOGAPHICS COMPANY ATTITUDES & OPINIONS BRAND,COMPANY ,TECHNOLOGYIMAGE CONSUMER BUYING PATTERNS ETHNIC/RELIGIOUS FACTORS
TECHNOLOGICAL
TECHNOLOGY ACCESS,LICENSING,PATENTS
MATURITY OF TECHNOLOGY REPLACEMENT TECHNOLOGY / SOLUTIONS INNOVATION POTENTIAL MANUFACTURING MATURITY & CAPACITY
LEGAL
INTERNATIONAL LAW
ENVIRONMENTAL
ENVIRONMENTAL IMPACT
EMPLOYMENT LAW COMPETITIOM LAW HEALTH & SAFETY LAW REGIONAL LEGISLATION
MARKETING INTERMEDIARIES
COMPETITION
SUPPLIERS MICROENVIRONMENT
E- COMMERCE
IR CLIMATE
ENVIRONMENTAL CHANGES
WHICH FORCE THE FIRMS TO ADOPT STRATEGIC PERSPECTIVE
CHANGES IN TECHNOLOGY PROLIFERATION OF NEW PRODUCTS FASTER COMMERCIALISATION OF NEW IDEAS EMERGENCE OF GLOBAL FIRMS, MARKETS & BRANDS CHANGING TASTES & PREFERENCES OF CUSTOMERS THE NEW AFFLUENCE OF CONSUMER SOCIO-CULTURAL & POLITICO-LEGAL CHANGES BUSINESS BOUNDRIES GETTING BLURRED ( DUE TO OVERARCHING TECNOLOGIES : FASTER
INTERNET, E-GOVERNANCE & E-COMMERCE COMMUNICATION,
etc )
( It helps avoid haphazard response to environment. Provides best possible fit between the firm & Ext. Env. Helps build sustainable competitive advantage. Prepares the firm to not only face future but even shape the future in its favor. )
INTERNAL ENVIRONMENT
A SWOT CHECKLIST
INTERNAL STRENGTHS: MANY PRODUCT LINES? BROAD MARKET COVERAGE? MANUFACTURING COMPETENCE? GOOD MARKETING SKILLS? GOOD INVENTORY MANAGEMENT? R&D? INFORMATION SYSTEM? GOOD HUMAN RESOURCES? BRAND EQUITY? COST ADVANTAGE? APPROPRIATE ORG. STRUCTURE? APPROPRIATE CONTROL SYSTEMS? ABILITY TO MANAGE STRAT. CHANGE Etc
INTERNAL WEAKNESSES: NARROW PRODUCT LINES? RISING MANUFACTURING COST? POOR MARKETING PLAN? POOR MATERIAL MANAGEMENT? INADEQUATE HUMAN RESOURCES LOSS OF BRAND NAME?LACK OF CORPORATE DIRECTION? LACK OF CORPORATE CONTROL POOR FINANCIAL MANAGEMENT INAPPROPRIATE ORG. STRUCTURE & CONTROL SYSTEMS HIGH CONFLICTS, POLITICS? Etc
SWOT CHECKLIST
POTENTIAL ENV. OPPORTUNITIES . . NEW MARKETA/BUSINESSES?
. COST OF DIFFERENTIATION ADV? . PROFITABLE NEW ACQUISITIONS? . BRAND NAME CAPITAL IN NEW AREAS . R&D SKILLS IN NEW AREAS . VERTICAL INTEGRATION( FORWARD/BACKWARD) . DIVERSIFICATION
. OTHERS?
MACKENZIES 7S MODEL
STRUCTURE STRATEGY SYSTEMS
SHARED VISION
SKILLS
STYLE
STAFF
MODULE 3
VISION,MISSION & BUSINESS DEFINITION
12 STRATEGIC INTENTS
To achieve success, organizations have to primarily focus on hierarchy of strategic intents Vision, Mission, Business Definition, Business Model, Goals Objectives
Framework within which organization operate and adopt a predetermined direction Purposes the organizations strive for.
VISION
Future aspirations that lead to an inspiration Basic & at the top of hierarchy of strategic intents Aspirations expressed as strategic intent should lead to an end. This is what a person or an organization would ultimately like to attain in the near future. A vision is generally more dreamt than it is articulated By its nature it may be as good as a dream, yet it is a powerful motivator to action.
ENVISIONING PROCESS
A Well conceived vision has 2 major components 1. Core Ideology : Defines enduring character of an organization that remains unchangeable . It rests on core values & core purposes. Envisioned Future : A long term, time bound goal and vivid description of what it would be like to achieve that goal.
2.
It is purpose / reason behind existence of any organization Derived from VISION and reflects the corporations philosophy , identity, character and image which helps to achieve the vision. When defined explicitly, provides enlightenment to insiders and outsiders on what the organization stands for. Many strategists/consultants contribute to the building up of mission statements. CHARACTERISTICS OF A MISSION SATEMENTS FEASIBLE PRECISE CLEAR MOTIVATING DISTINCTIVE INDICATES MAJOR COMPONENTS OF STRATEGY INDICATES HOW OBJECTIVES ARE TO BE ACHIEVED HOW MISSION STATEMENTS ARE FRMULATED Derived from particular set of tasks and priorities and reflects corporate philosophy Executive committee is setup to formally discuss Help of consultants also taken for an in-depth analysis of an organization and to suggest an appropriate Mission statement A Mission statement once formulated should serve an organization for many years As the organization grows with time and goes on adding new products, services, technologies and markets, there may even be a need for revising its Mission statements as
MISSION
BUSINESS DEFINITION
Defined along 3 parameters CUSTOMER GROUPS: WHO is being satisfied CUSTOMER FUNCTIONS: WHAT is being satisfied ALTERNATIVE TECHNOLOGIES: HOW the need is being satisfied
Provides powerful insights into understanding and defining business Helpful in Strat. Mgmt in many ways Indicates choice of objectives and helps exercising best choice. A single business firm has simple Business Definition. Company with several businesses has separate BD for each of its business. 3 dimensions provide scope for further activities and facilitates understanding of companys performance areas At corporate level ,BD concerns itself with a wider meaning of 3 dimensions. Each division of highly diversified co.can have more accurate BD at SBUlevel BD offers unique insights to companies operating in a competitive market. where customer is an important stakeholder of the firm.
EXAMPLES
EX: Time Keeping Business: Customer Groups: Individual customers & Industrial Customers Customer Functions: Finding time, Recording time, Using watches as fashionable accessories and gift items. Alternative Technologies: Mechanical. Quartz digital, Quartz Analog EX: MODI XROX Customer Groups: Individual Organization , Govt. departments Customer Functions: Provide communication with ease of reproduction. Alternative Technologies: High quality and state-of-the-art tecnology available with Xrox of US.
OBJECTIVES: - Concrete & specific Make goals operational -Quantitative, measurable & comparable - Short Term
GOALS Generalized
Qualitative
Long Term( Org. translates its purpose into long term goals )
OBJECTIVE SETTING
EX Profit: ROI, Net profit as % of sales, Return on shareholders capital. Marketing: Sales volume, Market segment, Customer service.Promotion Growth: Output, Sales T/O, Investment HR: Training, Welfare IR Social Responsibility: Environment, Community Service, Rural Development etc.. Understandable Concrete & Specific ( Say 10% increase in sales ) Periodicity :Related to time frame. Long Term, Medium & Short term Measurable & Controllable Challenging Diff. Objectives must correlate with each other Should be set within constraints Should cover all aspects of functioning. Verifiability: basis on which to decide whether Objective met or not. Reality: Operational objective not the broad official objectives Quality: Capable enough to provide direction and tangible basis for evaluation.
MODULE 4
INTERNATIONAL STRATEGIES
GLOBAL STRATEGY
( OFFERING STANDARDISED PRODUCTS / SERVICES)
TRANSNATIONAL STRATEGY
(LOCATED IN A DEVELOPED COUNTRY)
INTERNATIONAL STRATEGY
(UNDER DEVELOPED COUNTRIES WHERE PRODUCT/SERVICES NOT AVAILABLE )
MULTIDOMESTIC STRATEGY
( SUITING TO NATIONAL CONDITIONS )
COST DRIVERS
GOVERNMENT DRIVERS
COMPETITIVE DRIVERS
BENEFITS / COSTS
OF GLOBAL STRATEGY
MANAGEMENT AND ORGANISATION FACTORS AFFECTING GLOBAL STRATEGY (GLOBAL ORGANISATION DRIVERS )
ORGANISATION STRUCTURE
. GLOBAL MIS . GLOBAL STRATEGIC PLANNING . GLOBAL BUDGETING . CROSS COUNTRY COORDINATION ( REPORTING RELATIONSHIPS ) . CENTRALISED GLOBAL AUTHORITY . INTERNATIONAL DIVISION . STRONG BUSINESS DIVISION
MANAGEMENT PROCESSES
( PLG,BUDGETING & INFORMATION SYSTEMS )
CULTURE
( VALUES & RULES THAT GUIDE BEHAVIOUR ) . GLOBAL IDENTITY . COMMITMENT TO WORLDWIDE ( VS DOMESTIC ) EMPLOYMENT . INTERDEPENDENCE VS AUTONOMY OF BUSINESSES
.USE OF FOREIGN NATIONALS .MULTICOUNTRY CAREERS .FREQUENT TRVEL .STATEMENTS & ACTIONS OF LEADERS
PEOPLE
( HUMAN RESOURCES OF WORLDWIDE BUSINESS )
GLOBAL CUSTOMERS GROWTH OF GLOBAL & REGIONAL CHANNELS TRANSFERABLE MARKETING PUSH TO DEVELOP GLOBAL
INCREASED TRAVEL CREATING ADVERTISING & ESTABLISHMENT OF WORLD BRANDS
LEAD COUNTRIES
STEEP EXPERIENCE CURVE EFFECT SOURCING EFFICIENCIES FAVOURABLE LOGISTICS DIFFERENCES IN COUNTRY COSTS- WRT TRANSPORTATION,LABOUR & RAW MATERIAL Etc. HIGH PRODUCT DEVELOPMENT COST FAST CHANGING TECHNOLOGY
OTHER DRIVERS
REVOLUTION IN INFORMATION & COMMUNICAION
( PERSONAL COMPUTORS, INTERNET& INTRANET , FSCIMILE MACHINES )
PRODUCT / SERVICE
( EXTENT TO WHICH A WORLDWIDE BUSINESS OFFERS THE SAME OR DIFFERENT PRODUCTS IN DIFFERENT COUNTRIES
MARKETING
( EXTENT TO WHICH WORLDWIDE BUSINESS USES SAME BRAND NAMES,ADVERTISING,AND OTHER MARKETING ELEMENTS IN DIFFERENT COUNTRIES )
COMPETITIVE MOVES
( EXTENT OF COMPETITIVE MOVES IN DIFFERENT COUNTRIES )
I N C R E A S I N G
TYPE OF CUSTOMERS
BUY IN FOREIGN MARKRTS FROM FOREIGN SUPPLIER BUY IN DOMESTIC MARKET FROM FOREIGN SUPPLIER BUY IN DOMESTIC MARKETS FROM DOMESTIC SUPPLIER
I N T E R N A T I O N A L I S A T I O N
FOREIGN CUSTOMER
GLOBAL CUSTOMER
INTERNATIO NAL CUSTOMER
NO HQ INVOLVEME NT
LO
DOG COUNTRIES
LO
MODES OF ENTRY
HIGH
EXPORTING ( Firm produces in home country & markets in overseas markets ) LICENSING ( International co. transfers knowledge, technology Patent for a limited period of time to an overseas co, in return for some form of payment) FRANCHISING
(Right to use a business format, usually Brand Name- exchange programme )
PERCEIVED RISK
LOW
CONTROL
GLOBALISATION
Concerned with degree of standardization of products and practices plus high level of co-ordination and integration of activities in the companys value chain. Offers extensive opportunities for worldwide development and getting integrated to global economy. For developing countries, it offers prospects of integration with rest of developed economy. In economic terms , Its the process of integration of world into one huge market. It is a process not an event. It has no beginning or end. It is fast becoming imperative for modern businessdue to: 1) crumbling trade barriers 2) global flow of capital & technology 3)Information explosion 4) Intensity of global market competition 5) Changing life styles and demand for innovative products etc It offers free flow of information, goods, capital & people across political and economic boundaries and is a process by which enterprises become interdependent and interlinked globally.
GLOBALISATION
BENEFITS: Cost benefits: Economies of scale due to standardization & Logistics management Timing benefits: Coordinated approach in product launching and implementation strategies Learning benefits: Coordinated transfer of information, best practices and people across subsidiaries. Arbitrage benefits: using resources in one country for the benefit of another country. SOCIAL BENEFITS Creates overall wealth for all nations as specialization increases trade. Reduces inflation due to cost efficiencies Benefits customers: quality products at competitive price. Better allocation of financial ,material and Human resources Reduces corruption due to free market trade. OTHER BENEFITS: Leads to economic integration and globalized economy. Transition from multinational to global competitiveness
MODULE 5
PORTERS MODEL
BARGAINING POWER
POTENTIAL ENTRANTS Economies of scale Absolute cost advantage Switching cost Access to distribution Govt. policy THREAT OF NEW ENTRANTS
SUPPLIERS
Supp.concentration No. of buyers Switching cost Substitute raw mat. Threat of forward integration
BARGAINING POWER OF
SUPPLIERS
SUBSTITUTES
Functional similarity Price/Performance trend Product identity
BUYERS Buyers concentration No of suppliers Switching cost Substitute products Threat of backward Integration
ETOP
( ENVIRONMENTAL THREAT & OPPORTUNITY PROFILE 0
ENVIRONMENTAL SECTOR MARKET TECHNOLOGICAL SUPPLIER ECONOMIC NATURE OF IMPACT IMPACT OF EACH SECTOR
REGULATORY
POLITICO LEGA SOCIO CULTURAL INTERNATIONAL
SAP
( STRATEGIC ADVANTAGE PROFILE ) CAPABILITY FACTOR
1 2 3 4 5 6 FINANCE MARKETING 0PERATIONSP PERSONNEL INFORMATION GENERAL MANAGEMENT
NATURE OF IMPACT
QUADRANT 2
TURNAROUND STRATEGY
QUADERANT 1
AGGRESSIVE STRATEGY
QUADERANT 4 QUADERANT 3
DEFENSIVE STRATEGY THREATS WEAKNESSES STREGTHS DIVERSIFICATION STRATEGY
OPPORTUNITY MATRIX
HIGH HIGH ATTRACTIONS
MODERATE ATTRACTIONS
LOW ATTRACTIONS
HIGH Occurrence
LOW
THREAT MATRIX
MAJOR THREATS MODERATE THREATS
HIGH
IMPACT OF THREATS
LOW
MODERATE THREATS
MINOR THREATS
HIGH OCCURENCE
LOW
TOWs MATRIX
SAP ETOP 1 2 3 4 1 2 3 4
1 2 3 4
1 2 3 4
S OS
Turnaround Strategies
OW
Aggressive Strategies Take advantage of (Use strengths to take (Opportunities by overcoming advantage Of opportunities) Weaknesses)
TW
Defensive Strategies
( To minimize weaknesses & avoid Threats )
TS
Diversification strategies
(Consider corporations strengths To avoid threats)
HIGH
10
8 6 CASH COWS 4 2 0 10 8 1.5 1 6 4 2 Relative market share 0.8 0.5 0.1 DOGS
LOW
GE 9 CELL MATRIX
G
INDUSTRY ATTRACTIVENESS HIGH
G
QUESTION MARKS
G
MEDIUM
Y
AVERAGE BUSINESS
LOW
PROFIT PRODUCER
ZONE AVERAGE WEAK GREEN G INVEST/EXPAND STRONG BUSINESS STREGTH / COMPETITIVE POSITION YELLOW Y SELECT/EARN RED R HARVEST/DIVEST
HOFERS MODEL
MODULE 6
GENERIC STRATEGIES
Below Corporate Level Strategies, the strategies to be used by individual businesses HOW GENERIC STRATEGIES EMERGE As humans function with their limbs; corporations operate through their business strategies .At business level most competitive interaction occurs; where competitive advantage is either won or lost. Corporate strategies lay down the framework in which business strategies operate. COST LEADERSHIP Vigorous cost reduction programmers and make all possible attempts to achieve the lowest cost. Achieve efficiency at all levels for lowering costs. Cumulative cost across the value chain is lower than competitor Analyze cost drivers and optimization of costs Commanding high price by introducing innovative product and by building brand loyalty. Other initiatives: Accurate Demand Forecasting, Capacity utilization Economies of scale, Cost saving technologies. BENEFITS Threat of cheaper substitutes offset to some extent by lowering price, Effective entry barrier for potential entrants, Leas at affected by bargaining power of supplier a firm can adopt price increase to some extent though operational effectiveness. RISKS Competitors imitate cost reduction quickly, Not a market friendly approach if customers interest is ignored Low cost leadership doesnt always work;
DIFFERENTIATION
Providing unique characteristics/special features to product/service demanded by customers, who are willing to pay. Customers prefer differentiated products/services which offers them a utility they value. Such products and services stand apart in the market and attract customers due to its special featured attributes. A differentiated firm can charge a premium price & commands customer loyalty. Creating value at every point by providing special features and attributes. Features that raise performance at lower cost, enhance buyer satisfaction, maintain/enhance quality. Innovative ability of firm is important. strong R&D base required Adopted when customers needs preferences are diversified and market is too large to be satisfied by standardized products BENEFITS Firm can charge a premium price, Reduces competitive rivalry Creates brand loyal customers, Barrier for new entrants Risks Long-term perceived uniqueness difficult to maintain, Several differentiators adopting similar differentiation, Fails if not valued by customer.
GRAND STRATEGIES
Basic framework of master strategies, classifies broadly various rules of business Provide guidance for major actions for meeting long term objectives and basic direction for strategic action Blueprints for action. Use of single or combination of 2 or more depends upon multiplicity and complexities of business. Corporate level strategies indicating the choice of direction a firm adopts for achieving its vision. Corp. Strategies Also tell about decisions relating to allocation of resources among different businesses, managing & nurturing diff. businesses in portfolio. Grand strategies revolve around one basic question : Whether to continue or change business to improve efficiency and effectiveness.
STABILITY STRATEGIES
Adopted by an organization when it attempts an incremental improvement of functional performance. 1. NO CHANGE STRATEGY: Conscious decision to do nothing new. Continue with present business PROFIT STRATEGY: Reduce investments, cut costs , Increase productivity wrt external factors like: Economic recession, Govts attitude, Industry downturn and competitive pressures for sustaining profitability by whatever means till situation improves. PAUSE/ PROCEED WITH CAUTION : Consolidation before a firm goes for expansion.
EXPANSION STRATEGIES
Most popular corp. strategies as growth is the way of life. All progressive organizations plan for substantial growth due to increasing economy, markets & customer needs. Followed when companies aim at high growth, broadening the scope of its business for improving overall performance. .
CONCENTRATION STRATEGIES Simple 1st level expansion strategy, aims at convergence of resources Focus on Intensification / Specialization Rely on where you are best at ie focusing on limited areas Creating a separate niche/ identity in selective areas by investing money, time, energy & effort in specific areas INTEGATION STRATEGIES Combining activities relating to present activities of firm Widening scope of business Vertical Integration : Going up & down the value chain Going for forward or backward integration or both at a time. Horizontal integration : Same type of products