This presentation is meant for training purposes only and shall not be used for any commercial purpose. Data contained her...
A CEO’s Dilemma
                                                    Operational
                                          ...
CEO’s Options

                    Market
                   Opportuni
                     ties




                  Act...
Phases of Growth
      Small & medium sized companies
      • Growth comes from entrepreneurship
      • Strategic compone...
Transformation Phase of a Company
Due to entrepreneurial growth, some where down the line, the
company grows in to a corpo...
Influencing Factors in a Business



There is a constant need to :
 • Scan these influencing factors
   for changes
 • Ass...
Strategic Roles of different Positions in an Organization

                              CEO          Corporate Strategy

...
Steps & Tools used

Strategy Formulation



                     ©Pinaki Bhadury   8
Understanding the Value Chain




                     Understanding the                  Creating a Product    Production...
What Is Segmentation?
A process for dividing the market into groups of consumers that are similar across key
dimensions
 •...
Market Segmentation

                                                  Usage
                              Demography
    ...
Market Segmentation - Examples

South America                                  South East
     3%              Russia Chin...
Analysis of Market Segments

                                          High   5


    Strategic    Low   Neutral   High
at...
THE BCG Matrix


• A Matrix to compare relative                                       High

  position and performance of ...
BCG Analysis




Inconclusive Diagrams




                          ©Pinaki Bhadury   15
Modified BCG Analysis


                         Rel. Mkt Share =      Business Revenue
                                  ...
Porter’s Five Forces of Competitive Position
                                     New Market Entrants, eg:
               ...
Application of Porter’s Five Forces
                                                  Indian Boiler Industry
             ...
Market Research

• Market Size
• Growth Potential
• Customer Needs
   – Buying Behaviour
   – Preferences
• Competitive In...
SWOT Analysis

Strengths (Internal)                     Opportunity (External)
•    S1                                  • ...
SWOT Analysis


                       Threats


                                       Confront                          ...
SWOT – Business A


Strengths                         Opportunity
  Industry Application               Worldwide fuel sh...
SWOT – Business B

Strengths                              Opportunity
  In-house design Capabilities &             Fuel ...
SWOT – Few Typical Examples


           Strengths                              Opportunities
           • Engineering    ...
SPACE (Strategy & Policy Analysis Collaborative)
                                              Analysis
                  ...
SPACE Analysis

 Factors Menu

Financial Strength             Env. Stability                 Industry Attractiveness.   Co...
Strategic Options
                        • Existing Markets
                          • Increase Market Reach
Market Expa...
Strategic Options
              •   Credit Policy
              •   Develop Retail Outlets
Financial     •   Pricing
     ...
Key Elements in Strategy Formulation

                   Vision



     Analysis                     Mission




    Segme...
For further details contact:
pbhadury@yahoo.com




          ©Pinaki Bhadury      30
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Strategic planning process in companies

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Strategic planning process in companies

  1. 1. This presentation is meant for training purposes only and shall not be used for any commercial purpose. Data contained here are proprietary and can not be disclosed to any third party either in writing or any other means without the written consent of the rightful owners. All rights reserved by the respective authors and owners.
  2. 2. A CEO’s Dilemma Operational Efficiency Financial Existing Management Products Increase Increase Profit Sales Decrease Cost New Products Survive De-risk Competitive the Pressures Business ©Pinaki Bhadury 2
  3. 3. CEO’s Options Market Opportuni ties Actions Decrease Utilize Skill Gaps to be strengths taken Uses of Resources This is all about Strategic Management ©Pinaki Bhadury 3
  4. 4. Phases of Growth Small & medium sized companies • Growth comes from entrepreneurship • Strategic component is low Medium to large sized companies • As an organization grows, it becomes unwieldy to manage growth Unplanned Growth Strategic Growth • Look for opportunities • Recognize strengths & • Interesting ideas weaknesses • Set up business to market the • Focus on Core Competencies idea • Looks for opportunities in line • Acquires skills & capabilities with Strengths & Weaknesses • Analyzes opportunities, capabilities & strengths to devise growth plans ©Pinaki Bhadury 4
  5. 5. Transformation Phase of a Company Due to entrepreneurial growth, some where down the line, the company grows in to a corporation • It assumes a distinct flavour of its own • Characteristics and typical behavourial patterns set in. • Silos get developed • People become emotional about their business A CEO struggles to achieve growth and profit from his business It is time to adopt Strategy Management at this point So where does he start? ©Pinaki Bhadury 5
  6. 6. Influencing Factors in a Business There is a constant need to : • Scan these influencing factors for changes • Assess risks • Changing attributes • Take appropriate action to align business based on these changes ©Pinaki Bhadury 6
  7. 7. Strategic Roles of different Positions in an Organization CEO Corporate Strategy Strategic Business Plans Business Heads Strategic Imperative & Options Senior Managers Scenario Building Middle Level Managers Analysis Junior Level Managers Research Senior Executives Data Aggregation Data Collection Executives Market Inputs ©Pinaki Bhadury 7
  8. 8. Steps & Tools used Strategy Formulation ©Pinaki Bhadury 8
  9. 9. Understanding the Value Chain Understanding the Creating a Product Production (or Identify Need Market or a Service Acquire) Relationship Delivering Services Satisfy Need Delivery Management to Customer • Determine your business’ position in the value chain • How far are you from his actual need? • How many steps behind are you from your customer’s market ©Pinaki Bhadury 9
  10. 10. What Is Segmentation? A process for dividing the market into groups of consumers that are similar across key dimensions • What products are used • How products are used • When products are used • Why products are used Classify customers and prospective customers according to segmentation scheme • Government • Industrial • Retail • Institution Identify segments of high value that are underserved • Rural • Urban high net worth • Students Use common elements to develop targeted products and focused communication ©Pinaki Bhadury 10
  11. 11. Market Segmentation Usage Demography Occasion Geography Loyalty Countries Attitudes Where does your Consumers Satisfaction business come from? Basically it consists of breaking down your business in to various reasons for success ©Pinaki Bhadury 11
  12. 12. Market Segmentation - Examples South America South East 3% Russia China Others Asia Africa 3% 4% 1% 16% North 8% SAARC America 10% 11% Europe 7% Middle East 37% FERROUS METALS 9% Sugar TEXTILE POWER 4% 8% GENERATION 11% CEMENT 37% REFINERY & PETROCHEMICAL CHEMICAL 15% 16% ©Pinaki Bhadury 12
  13. 13. Analysis of Market Segments High 5 Strategic Low Neutral High attractiveness 4 Invest or drop Excel in process Scoop Volume Growth Competition 3 Cross-selling … Be 2 Drop Cash-out opportunistic Low 1 Define customer segments based on 1 2 3 4 5 Low High strategic attractiveness and current organisational capabilities Organisational capabilities Low Neutral High Technological/functional fit References Industry understanding … ©Pinaki Bhadury 13
  14. 14. THE BCG Matrix • A Matrix to compare relative High position and performance of a segment with others Market Growth Rate • Helps in taking decisions on Problem Child Stars various types of products / businesses – Products / Businesses to invest – Products / Businesses to divest Dogs Cows • Popularly used for Product Low High Portfolio Analysis Relative Market Share • Difficult to use in practice • Needs modification ©Pinaki Bhadury 14
  15. 15. BCG Analysis Inconclusive Diagrams ©Pinaki Bhadury 15
  16. 16. Modified BCG Analysis Rel. Mkt Share = Business Revenue Nearest Competitor’s Rev. Relative Growth = Business Growth Capital goods Ind. Growth ( Past=14% Present=16%) ©Pinaki Bhadury 16
  17. 17. Porter’s Five Forces of Competitive Position New Market Entrants, eg:  entry ease/barriers  geographical factors  incumbents resistance  new entrant strategy  routes to market Supplier Power, eg: Competitive Rivalry, eg: Buyer Power, eg:  brand reputation  number and size of firms  buyer choice  geographical coverage  industry size and trends  buyers size/number  product/service level quality  fixed v variable cost bases  change cost/frequency  relationships with customers  product/service ranges  product/service importance  bidding processes/capabilities  differentiation, strategy  volumes, JIT scheduling Product and Technology Development, eg:  alternatives price/quality  market distribution changes  fashion and trends  legislative effects ©Pinaki Bhadury 17
  18. 18. Application of Porter’s Five Forces Indian Boiler Industry New Market Entrants, eg: Medium  entry ease/barriers • High investment • Fixed routes to market  geographical factors  incumbents resistance High  new entrant strategy • High brand reputation  routes to market • High product quality • High relationship with customers Supplier Power, eg: Competitive Rivalry, eg: Buyer Power, eg:  brand reputation  number and size of firms  buyer choice  geographical coverage  industry size and trends  buyers size/number  product/service level quality  fixed v variable cost bases  change cost/frequency  relationships with customers  product/service ranges  product/service importance  bidding processes/capabilities  differentiation, strategy  volumes, JIT scheduling Low • Many buyers • Few choices Product and Technology • High Product Importance Development, eg: • Low volumes Low  alternatives price/quality • No alternatives  market distribution changes • Strong legislative controls  fashion and trends  legislative effects ©Pinaki Bhadury 18
  19. 19. Market Research • Market Size • Growth Potential • Customer Needs – Buying Behaviour – Preferences • Competitive Intelligence ©Pinaki Bhadury 19
  20. 20. SWOT Analysis Strengths (Internal) Opportunity (External) • S1 • O1 (supplier position) • S2 • O2 • S3 • O3 • S4 • O4 (Market opportunity) • S5 Weakness (Internal) Threats (External) • W1 • T1 • W2 • T2 • W3 • T3 • W4 • T4 • S1, S2, S3 & S4 are Core Strengths – Competencies • W1, W2 & W4 are weaknesses of concern – to be eliminated • T1 & T2 are the main threats to be addressed. ©Pinaki Bhadury 20
  21. 21. SWOT Analysis Threats Confront Avoid External Environment Opportunities Exploit Search Strengths Weaknesses Internal Factors ©Pinaki Bhadury 21
  22. 22. SWOT – Business A Strengths Opportunity  Industry Application  Worldwide fuel shift to Knowledge Agro-waste  Expertise in solid & Agro-  CHPC movement waste combustion  Manufacturing bases of  Cost competitive customized MNCs shifting to non- solutions western countries. Weakness Threats  Inadequate reach in overseas  Cost pressures in domestic markets market from local  Project Management in competition overseas market  Regional Trade pacts –  Absence of exclusive tie-up NAFTA, COMESA, AFTA, EU for Incidental power. ©Pinaki Bhadury 22
  23. 23. SWOT – Business B Strengths Opportunity  In-house design Capabilities &  Fuel Shift due to rising electricity Customise. & oil/gas prices  Strong International Exposure.  CDM (Clean Development  Capability to search/address new Mechanism) applications  Energy Efficiency measures in  Strong synergy with Steam Process Industry. Generators / waste heat & related applications Weakness Threats  Lack of competence to address  Low Cost Chinese Competition HVAC Heating Ventilation and  Mega Privatised Power Projects – Air Conditioning) markets. Power Costs may be lowered  Entry Barriers in matured  Efficiency Improvement of markets. Competing Products.  Volatilatiy dependent on Gas & Power prices  Niche Market worldwide ©Pinaki Bhadury 23
  24. 24. SWOT – Few Typical Examples Strengths Opportunities • Engineering • New Markets • Manufacturing • New Applications • Innovation • Emerging Consumer • Financial Preferences • Marketing • Regulatory • Human Resources • Legal Weakness Threats • Engineering • Competition • Manufacturing • Substitutes • Cost • Changing Preferences • Human Resources • Economic • Financial • Social • Marketing • Political • Identification of True Strengths, Weaknesses, Opportunities & Threats is the Key • Often these get repeated in different areas creating confusion ©Pinaki Bhadury 24
  25. 25. SPACE (Strategy & Policy Analysis Collaborative) Analysis 6 Financial Performance / Strength 5 Conservative 4.3 3.8 4 3.7 Aggressive 3 2 1 Market / Product Competitive Position Attractiveness -3.5 -3.0 2.3 3.0 4.3 0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 -1.8 -1 -1.3 -2 -3 FUTURE PRESENT -3 Defensive PAST -3.7 -4 -5 Competitive External Environment -6 ©Pinaki Bhadury 25
  26. 26. SPACE Analysis Factors Menu Financial Strength Env. Stability Industry Attractiveness. Competitive advantage ROI Social trends Growth rate Market share ROS Economic Climate Profit Trend Relative product quality Cash Flow Political Climate Price cost trend Cost Liquidity Technical Changes Life cycle Stage Relative Delivery capability Capital reqd /avl. Demand Variability Competitor concentration Customer Loyalty (Repeat) Ease of exit Entry Barriers. Ease of entry Customer Spread Risk involved in dealing Cost Price Balance Differentiation Realised Price with this product, country Competitive pressure Customer concentration. Relative Value position or ind vertical. Legal Compliance. Technology (simp/ hard) Relative tech know how Rel Perf. Of business Ecological Changes Capital intensity. Customer spread. • Total score for each dim/no of dim. Average score space plot • Identify critical factors and their strategic implications ©Pinaki Bhadury 26
  27. 27. Strategic Options • Existing Markets • Increase Market Reach Market Expansion • New Markets • Organic • Inorganic • New Businesses Portfolio Expansion • New Products • Product Innovation • Application • Process ©Pinaki Bhadury 27
  28. 28. Strategic Options • Credit Policy • Develop Retail Outlets Financial • Pricing • Buy over competition • Investments in Assets • Web based Sales • ERP IT • KM • Lower Cost of Operations • Training • Compensation HR • Capability Building • Employee Engagement • Rewards & Recognition ©Pinaki Bhadury 28
  29. 29. Key Elements in Strategy Formulation Vision Analysis Mission Segmenta Market tion Research SWOT ©Pinaki Bhadury 29
  30. 30. For further details contact: pbhadury@yahoo.com ©Pinaki Bhadury 30

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