2 strategic models


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2 strategic models

  1. 1. 1 Dr.L.Prakash Sai The East India Company Establishment: 1600 (by Queen Elizabeth) Entitlement: Monopoly over the East Indies trade until 1783 Dissolution: 1874. Bengal Famine East India Docks, London Robert Clive Warren Hastings The East Offering Her riches to Britannia (1778)
  2. 2. 2 T A R G E T STRATEGIC ADVANTAGE Low Cost Market Segment Unique All Customers Cost Leadership Differentiation Cost Focus Differentiation Focus Porter : Generic Strategies Automobiles: Generic Strategies
  3. 3. 3 T A R G E T STRATEGIC ADVANTAGE Cost-Centered Services Market Segment Unique Service Offerings All Customers Cost Leadership Differentiation Cost Focus Differentiation Focus IT Industry: Generic Strategies Prahalad‟s Core Competence Strategic Intent CORE COMPETENCE STRATEGIC ARCHITECTURE Honda: Engines Black & Decker: 200-600W electric motors
  4. 4. 4 Value Disciplines Operational Excellence Product Leadership Customer Intimacy Dell Fedex Wal-Mart South West Airlines 3M Disney Microsoft Sony IBM Home Depot Nordstorm Four Seasons Hotel Product Differentiation Operational Competence Customer Responsive “Best Total Cost” “Best Total Solution” “Best Product” Business Ecosystem Competing Organizations having shared product and service attributes, business processes, and organizational arrangements Stakeholders, including Investors and Owners, Trade Associations, Labor Unions Govt.Agencies and other Regulatory Organizations CORE CONTRI- BUTIONS Direct Suppliers Distribution Channels Suppliers of Complementary Products and Services Direct Customers Suppliers of My Suppliers Standards Bodies Customers of My Customers EXTENDED ENTERPRISE BUSINESS ECOSYSTEM CORE BUSINESS
  5. 5. 5 The Value Net COMPETITORS CUSTOMERS COMPANY COMPLEMENTORS SUPPLIERS South West Airlines American Airlines Delta Hertz (rental car) MCI (telecom) Boeing Peanuts Business Travelers Leisure Travelers Strategy is the art of creating value.  It provides the intellectual frameworks, conceptual models, and governing ideas that allow a company‟s managers to identify opportunities for bringing value to customers and for delivering that value at a profit.  In this respect, strategy is the way a company defines its business and links together the only resources that really matter in today‟s economy: knowledge and relationships or an organization‟s competencies and customers. Source Normann, R. and Ramirez, R., “From Value Chain to Value Constellation: Designing Interactive Strategy,” Harvard Business Review, July-August 1993, p.65.
  6. 6. 6 TOP 25 MANAGEMENT TOOLS * Added in 2013 Source: Bain & Company, 2013 TOP 10 MANAGEMENT TOOLS (comparison) Source: Bain & Company, 2013
  7. 7. 7 Source: Bain & Company, 2013 “What is your organization‟s most important priority over the next three years?” Top 10 Management Tools most used) Source: Bain & Company, 2013 *(t) tied
  8. 8. 8 Usage and Satisfaction (on a scale of 1 to 5) Source: Bain & Company, 2013 Source: Bain & Company, 2013 Tool Usage & Overall Satisfaction Change Management Strategic Planning Mission and Vision CRM
  9. 9. 9 Survey Insights Source: Bain & Company, 2013 Bain research has provided a number of important insights:  Overall satisfaction with tools is moderately positive, but the rates of usage, ease of implementation, effectiveness, strengths and weaknesses vary widely  Management tools are much more effective when they are part of a major organization effort  Managers who bounce randomly from tool to tool undermine employees‟ confidence  Hyperbole surrounding the trendiest of tools often leads to unrealistic expectations and disappointing results  Decision makers achieve better results by championing realistic strategies and viewing tools simply as a means to a strategic goal  No tool is a cure-all „Root-Branch‟ Corporate Strategy Framework Rajnish Karki, “Corporate Strategy of Indian Organizations: The „Root- Branch‟ Framework”, Vikalpa, Vol. 29, No. 3, July – September, 2004.
  10. 10. 10  Reliance became the first „Fortune Global 500‟ Indian private sector company in 2002. Founded by Dhirubhai Ambani, the company started as a manufacturer of synthetic textiles in 1966 and integrated backward first into yarn and fibre manufacture.  All the capacities were of globally efficient scale and the trend continued with facilities for commodity plastics like PVC, polypropylene, and polyethylene; petrochemical cracker complex; and, finally, the 27 MT oil refinery.  From an earlier strategy of backward integration till mid-1990s, Reliance started moving into related and unrelated areas in newly opened sectors and will continue to diversify in the coming decade by leveraging its standing and resources. “It continues to be more of a task-based organization, an anomaly given the size, and will need to evolve into a role-based organization and further on into an institution.” Reliance IndustriesIndia Diversified Reliance Industries - An update Antilla ($2Bn.)
  11. 11. 11  India‟s private sector leader in telecommunications industry.  Incorporated in 1985 by Sunil Bharti Mittal, to manufacture electronic push button phones.  Bharti Cellular formed in 1992 to offer cellular services and, in 1998, it became the first private fixed-line service provider in India.  In the 1990s, Bharti focused on the deregulated telecom sector and formed joint ventures with foreign firms for finances and technology but got out of all of them over the years and then mobilized finances from international investors in late 1990s onwards and from IPO in mid-2002.  “In the coming decade, Bharti will continue to focus on telecom as there is a lot of ground yet to be covered. And from being driven by entrepreneurs, it will move further in its efforts to build an organization and institution.” Bharti TelecomIndia Focused Bharti Telecom - An Update Airtel across 20 countries  Pioneered business strategy of outsourcing all of its business operations except marketing, sales and finance  Its network - base stations, microwave links, etc. - is maintained by Ericsson and Nokia Siemens Network  Business support is provided by IBM,  Transmission towers are maintained by another company (Bharti Infratel)  Built the 'minutes factory' model of low cost and high volumes.  Ericsson agreed for the first time to be paid by the minute for installation and maintenance of their equipment rather than being paid up front, which allowed Airtel to provide low call rates of 1/minute
  12. 12. 12  Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. India‟s largest pharmaceutical company and ranks among world‟s top 100 with overseas sales more than 70 per cent.  It was incorporated in 1961 by Dr.Parvinder Singh. Its initial technology orientation was born out of necessity when its long-term distributor agreement for an Italian pharmaceuticals company was cancelled and it was forced to manufacture its own products and develop process expertise.  In 1993, it committed itself to becoming a truly international research-based pharmaceutical company and started to focus on international markets and on developing new chemical entities.  “The vision and approach of the founder continue to guide the company which will continue its globalization process in the coming decade.” RanbaxyGlobal Focused Ranbaxy - An update  Japanese pharmaceutical company Daiichi Sankyo acquired a controlling share in 2008 (with a deal valued at about US$4.6 bn.).  Ranbaxy exports its products to 125 countries with ground operations in 43 and manufacturing facilities in 8 countries.  In 1998, Ranbaxy entered USA, and now it is the biggest market for Ranbaxy, accounting for 28% of sales in 2005.  During 2004-2005, Dinesh Thakur and Rajinder Kumar, two Indian employees of Ranbaxy, blew the whistle on Ranbaxy's fabrication of drug test reports. Thakur contacted the FDA in USA, which started investigating his claims.  In May 2013 the US fined the company US$500 million after found guilty of misrepresenting clinical generic drug data and selling adulterated drugs to USA. Malvinder Singh, CEO (2004)
  13. 13. 13 Corporate Foresight “Maturity levels of corporate foresight systems” by Hans Georg, Rene Rohrbeck and Katharina (2009). Corporate Foresight Model “Maturity levels of corporate foresight systems” by Hans Georg, Rene Rohrbeck and Katharina (2009).
  14. 14. 14 “Maturity levels of corporate foresight systems” by Hans Georg, Rene Rohrbeck and Katharina (2009). There are three kinds of companies: those who make things happen; those who watch things happen; and those who wonder what’s happened. - Anonymous “Strategic Management and Business Policy” Thomas Wheelen and David Hunger “Strategic Management: Theory & Applications” Adrian Haberberg and Alison Rieple