corporate strategy

1. Corporate Strategy
Strategy: originates from Greek word Strategia
meaning directing the military;
As per Porter, a strategy
- Is related to activities which move organization
from its current position to desired future state
- Is concerned with the resources necessary for
implementation of a plan
Thus Strategy is:
 a game plan to oust the competition
 to scan external & internal environment
 to make a choice for markets to compete
 what is our business & what should it be
 what are our products & the markets

2. Corporate Strategy
• Nature of Business Strategy:
i) Study of functions & responsibilities
of senior management
ii) Determining future course of action
iii)To define what needs to be done to
improve identity of the organization
iv) Mobilization of resources

3. Importance of Business Strategy
It acts as guide for executive development
program for middle level managers who
aim to occupy top positions
4 areas where Business Strategy beneficial
i) For understanding the Organization
ii) Understanding business environment
iii) For personal development
iv) To integrate knowledge & experience

4. Scope of Strategy
-To integrate Intuition & Analysis
-Adaptation to changes in external & internal
environment, by answering following
questions:
-What kind of business should we become
-Are we in the right field
-Should we reshape our business
-In what area new competitors are entering

5. Purpose of Corporate Strategy
- To exploit & create new & different
opportunities for tomorrow
- To integrate knowledge gained in various
other functional areas
- To adopt a clear approach towards problem
solving
- To understand complexities among Internal
& External environment

6. Objectives of Corporate Strategy
i) In terms of knowledge:
-Gain experience to find unique solution
Gain information to determine Mission & Strategy
ii) In terms of Skills:
-To sharpen the skills of middle level
-To develop analytical ability thro’ cases
iii) In terms of Attitude:
-To do away Dogmatism approach

7. LEVELS of Strategy
3 levels at which Strategy Operates:
1) Corporate Level: A strategy for all of its
businesses covering functions of SBUs as
well to ensure coordination main objective
2) Business (SBU) level: Plan for each SBU
aim at Resource allocation among various
functional areas & ensuring achieve
corporate objectives
3) Functional Level: A plan for each specific
functional unit within a SBU i.e. Mktg
strategy, Finance & Production

8. Strategic Management
 Refers to analysis, formulation ,
implementation of a specific Strategy
 Art & science of formulating, implementing
& evaluating decisions for the organization
to achieve its objectives to ensure success
over all the operations
Strategic Management used synonymously
with Strategic Planning, whereas latter
refers to formulation of strategy only

9. Strategist & Roles
A strategist : an individual or group of individuals
responsible for success or failure of organization
Strategists are usually occupants in higher hierarchy &
generally take decisions
10 major types of Strategists:
1) Board of Directors:
 Appointed & elected by stake holders responsible for
Acquisitions, Mergers, Collaborations
2) Chief Executive Officer: (CEO)
 Carries different names such as President, MD, or
Executive Director, many roles to perform including
defining the Mission & objectives, interacting with
external environment
 To provide a direction to organization

10. Strategists & Roles
3) Chief Operating Officer (COO)
 Leader & Spokesman
 Monitor
 Disseminator
 Resource Allocator
4) Entrepreneurs: The one who sets up business, runs it
successfully & consolidates it into a big entity, always
proactive & look for change continuously
5) Role of Senior Management: mainly for implementation
& evaluation but also for formulation of a strategy
6) SBU level Executives: SBU is organized, independent
unit of a multi product firm, is often called as Profit
Centre Head & operates with complete autonomy.

11. Strategists & Roles
7) Middle Managers: Attached with heads of functional
deptts. to implement strategies & to learn skills for a future
strategists thro’ execution of policies
8) Corporate Level Planning Staff: Support staff who provide
valuable information, that has been collected through
competitor’s strategies & environmental feed back to the
strategists for decision making, implementation, evaluation
or even re-formulating the strategies
9) Consultants: These are individual or group of individuals
from outside the firm who provide unbiased strategic feed
back on SWOT, Technical matters, Future trends & Project
evaluations for strategic decision making.
10) Executive Assistants: Secrecy & confidentiality of the
information being top responsibility

12. Strategic Decision Making
It is to make a specific choice from different
strategic alternatives that help the Co. to achieve
its objectives & realize its Mission
It is the domain of Senior management
5 phases of Strategic Decision Making:
1) Establish Hierarchy of Strategic Intent
2) Formulation of Strategies
3) Implementation of Strategies
4) Strategic Evaluation
5) Strategic Control

13. Phase 1: The Strategic Intent
• It specifies what to do in future and a
commitment to gain competitive
advantage to become leader by toppling
existing ones & to sustain respected
status & desired leadership
3 elements of Strategic Intent:
• Vision
• Mission
• Objectives & Goals

14. Strategic Intent: VISION
• Vision: Thoughts that needs to be translated
into words & then to action than day to day
accomplishments
Vision talks about position that Co. wishes to
attain in future by defining the path
Elements of Strategic Vision:
- One line statement to arouse commitment
-To convey ‘Who we are’ ‘Where are we
now’ “Where we will be in future”
-To answer “What do we want to become”

15. Strategic Mission
It is statement of purpose, beliefs & reasons for
existence of firm
Characteristics of Mission:
-Statement not to be vague
-To provide high degree of motivation
-To be dynamic allowing addition & modification
Components of Mission Statements:
i) Customers (who are our customers)
ii) Products (what are our main products)
iii) Markets (where do we compete)
iv) Philosophy (Beliefs, values & Ethics)
v) Concern for employees

16. Strategic Intent: Mission
How to develop Mission Statements:
• Common & widely accepted approach
is to involve all Managers followed by
appointing a Facilitator to prepare
Mission
• Other common method is to use
discussion groups of Managers
• Seeking unbiased advice from outside
agencies or Consultants

17. Strategic Intent: Objectives/Goals
• Objectives: close ended statements & not
stereo type statements, often the end result of
an activity or the end of planning,
highlighting what is to be achieved by when
& how much of what
• Goals: open ended statements often used
interchangeably with objectives, laying no
time frame for completion of a task or what
is desired to achieve with no measurement of
what is to be achieved

18. Objectives vs. Goals
• Objectives Goals
-Are specific -Are Generalized
-Close ended -Open ended
-Quantitative in nature -Qualitative
-Long & Short term -Long term
-Specific time frame -No time frame
-Measurable -Subjective
-To evaluate specific -To evaluate general
performance performance

19. Phase 2: Strategy Formulation
• Environment Scan:
Characteristics of Environment:
- Ever Changing & Dynamic, never static
- Has varying effect (for some it offers an
opportunity & for some threat)
- Is unpredictable & can create chaos
Environment consists of 2 types:
• External (factors outside Co.)
• Internal (factors inside the Co.)

20. External Environment Appraisal
Also known as “External Audit”
• Reveals to Co. key Opportunities to en-cash
& potential Threats to avoid, calling for
study of external factors i.e.
• Economic Factors
• Technological Factors
• Political-Legal- Governmental Factors
• Cultural & Social Factors
• International Business Environment (WTO)
• Supplier Environment

21. External Environment• Opportunity: It is a favorable condition that exists for co. offering
avenues for profitable growth, build up of competitive edge
• Imp. Opportunities are:
- Easy Trade barriers,
- Ability to acquire rival firms,
- Expansion of distribution network,
- Expansion of product lines
- Expansion of customer base
• Threat: An unfavorable condition that causes damage or great risk
to well being of organization.
• Imp. Threats
- Rising Interest Rates
- Fluctuating Foreign Exchange Rates
- Threats of hostile take-over
- New legal policies by change of Govt.
- Introducing better products by competition

22. Internal Environment• It consists of Strengths & Weaknesses
Strengths: skills a co excels or exceeds in
Important Strengths:
-Healthy financial conditions
-Cost Advantage
-Strong Brand Equity
-Wide geographical coverage
-Strong R & D
-Strong Alliances & JV’s
b) Weaknesses: something in which a company lacks or restricts it to
move ahead
Imp. Weaknesses:
-Old & Obsolete technologies
-Very high cost of production
-Product line too thin & too narrow
-High employee content
-Poor Distribution

23. Making SWOT Effective: Convert
SWOT to TOWS
• Focus on Critical Areas: Price, After sales service
• Developing Teams: From cross functional areas
• Focus on customer: knowing perception of co
product
Converting Threats to Opportunities & Overcoming
the Weaknesses & convert them into Strengths
- Identifying which strength to be enhanced &
which Weakness to be reduced
e.g. Dell (Direct Mktg.), Wal Mart(EDLP)

24. Environment Scanning Techniques
• Most widely used techniques range from:
Statistical methods: such as Extrapolation
making use of Historical Trends, Brain
Storming & Delphi Techniques
• Other notable techniques are
-Scenario Writing
-QUEST
-ETOP
-PEST

25. Environment Scanning Techniques
Scenario Writing:
It is most commonly used technique & is presented in the
form of a report based on intuitions & judgments,
compiled by industry experts who are experienced
enough to forecast events correctly.
Quick Environment Scanning (QUEST) Technique:
4 step process, by B. Nanus
-Observing major trends & events in the related industry
-Speculating future impact by Environment scan
-3 to5 scenarios by QUEST director about major issues
-Review of scenarios by Strategists & ranking options
Environment Threat & Opportunity Profile (ETOP):
This was proposed by Gulieck to prepare O &T profile
by splitting environment into different sectors & to make
an analysis of each segment in terms of its impact on the
organization

26. Environment Scanning Techniques
PEST
Economic Factors:
• Money Supply & Inflation rates
• GDP Ratios & Industry Growth rates
• Stock Markets
• Taxations & Monetary Policies
• LPG-Liberalization, Privatization, Globalization
Technological Factors
• Making existing products as obsolete
• Reducing/Eliminating Cost barriers
• Creating new competitive advantages that are
stronger than the existing ones
• Creating new markets & new channels

27. PEST
Political-Legal-Governmental:
Consist of Laws & Regulations influencing co. working
-Form of Government
-Stability of government
-Advertising bans
-Labor laws, ESI & PF
-Environment protection laws
-Children employment
Cultural/Social Factors
- Demographics: Age
- Attitudes & Values: Human Rights, Career, Life style
- Literacy Levels
- Family Formation- Change in Structure