We welcome you all to the 1st session of Business Strategy. This session talks about fundamental blocks of Business Strategy.

1. Introduction to Strategic Management &
Strategic Management as a Process

2. 2
Building Strategy & Driving Superior Performance
Profitability
(ROIC)
Profit
Growth
Effectiveness of
Strategies
Shareholder’s
Value
Strategy Strategic Leadership
Strategy Formulation Strategy Implementation
© Anik Saha

3. 3
Competitive Advantage & Business Model
SUSTAINED COMPETITIVE ADVANTAGE (SCA)
BUSINESS MODEL
Identify Customer Define Offerings
Create Value
Understand &
Create Value Services
Produce Goods&
Services
in Ecosystem
Organize Activities
in Ecosystem
Deliver Solutions Lower Costs &
Build Resources
Acquire & Nurture
Customers
Profitability
Achieve & Sustain
Profitability over time
Grow Business
over time
Profitability & Profit Growth
> Avg. Profitability & Profit
Growth of Competition
addressing similar segment
Maintain Above-avg growth
performance over longer
period
© Anik Saha

4. 4
ROI Across Industries: Per Forbes
http://www.forbes.com/sites/sageworks/2015/02/01/the-10-highest-return-industries-by-roe/#6b5a42d7d7c8
© Anik Saha

5. 5
ROI Across Industries: Per Forbes
Corporate Layer
Business Layer
Functional
Layer
• Translate corporate directions to business
strategies
• Set Business Directions & strategies for
specific BU
• Build strategy specific to BU business goals
• Overall Corporate Vision/Mission
• Connect with Shareholders & Protect interest
• Build strategies to grow overall Profitability
• Communicate overall Strategy across BUs
• Execute specific strategies
• Overview operations of function
• Ensure alignment to strategy
devised
© Anik Saha

6. 6
Strategic Management As A Process
Market Sensing
Set Corporate
Mission & Goals
Analyse
Competition,
Externalities,
Strength/
Weakness
Build Strategies
Implement
Strategies
Review
Performance
© Anik Saha

7. 7
Mission / Vision/ Values
Mission
Vision
Values
• Define what Organization does
• Customer centric mission rather than product-centric
• Captures customer need
• Helps anticipating demand shift and redefine business model
• Depicts futuristic state
• What organization wants to achieve
• Conduct / Culture of Org.
• Values/Norms/Standards/Control systems etc.
• Type of Org to be built
• Approach towards business
© Anik Saha

8. 8
BUSINESS GOALS
Measurable
Challenging/ Realistic
Important or Crucial
Time bound
• Compare performance
against benchmark
• Revise Goals
• Motivate to achieve
• Unrealistic goals will
deter from attempting
• Deadlines create urgency
• Comparable against market
• Chose parameters that matter
• Indicators that assesses
performance
Short Term Goals: Qtr Revenue/GP, Cost cutting Caution: Lack of Innovation/Planning
Long Term Goals: Shareholders’ Return, Sustained GP, CSAT Caution: Market Presence
© Anik Saha

9. 9
External & Internal Analysis
External: To Identify Strategic Opportunities & Threats, Customers, Market Shift, Competition
Internal: To Identify strength and weakness of organization
Local or National
Environment
Socio/ Macro Economic
Conditions (GDP/ IIP,
Inflations, Consumer
behaviors etc.)
Market & Competitive
Study, e.g Potential,
Competition, Positioning
Resources Capabilities Competencies
© Anik Saha

10. 10
SWOT Analysis & Business Model
S W
O T
• Strength to be leveraged
• Understand & Create
Value around Strength
• Fix or Improve Gaps
• Build contingency plan
• Build counter strategy
• Market Opportunities
Growing
• Externalities supporting
strength
• Market shift supporting
weakness/ gap/ competition
• Identify shift and complement
Leverage SWOT to Identify Strategies to create SCA
Functional Strategy
• Operational effectiveness
• Improve Manufacturing, Marketing,
Operations, customer Services
Business Strategy
• Positioning against competition
• Revenue/GP growth
• Cost Leadership, differentiation, segments
• Geographic Expansion
• Leverage competitive advantage
globally
Corporate Strategy
• Generate Shareholders’ return
• Grow profitability in long run
Global Strategy
© Anik Saha

11. 11
Intended & Emergent Strategies
• Recognize the process to identify potentially good emergent strategies
• Evaluate emergent strategies with Org’s goals, SWOT
• Synergy with org’s capabilities and needs (customer’s/org’s)
• Encouraging Corporate culture to emerging strategies
• Combination of both results successful strategies & execution
• Emerges without prior planning
• In response to unforeseen situations
• Grows wherever capacity to learn and resources to support
Emergent Strategies
Identify & Leverage Emergent Strategies
https://opentextbc.ca/strategicmanagement/chapter/intended-emergent-and-realized-strategies/
© Anik Saha

12. 12
Planning by Scenarios and Decentralized Decision
Planning by Situations Decentralized Planning
• Flexibility to change per situation
• Factor what-if situations
• Build contingency plans, investments
against other possible situations
• Involve resources closure to execution
in decision making
• Synergy with field executions
important for success
• Leadership from external resources
impacts trust
• Grow decision makers within Org
© Anik Saha

13. 13
Decision Making Errors
Prior Hypothesis Bias
Cognitive Bias
Escalating Commitment
Reasoning by Analogy
Representativeness
The Illusion of Control
Stick to beliefs despite strong counter evidences
Continue investment in spite of negative feedback
Usage of simple but inappropriate analogy for complex problem
Generalize hypothesis based on success of small sample
Overconfidence on self ability leads to poor acquisitions
The Availability Error Assume probability of an outcome based on easiness of imagination
© Anik Saha

14. 14
Strategic Leadership
Important Qualities of Good Strategic Leader
Vision, Eloquence,
Consistency
Articulation of Biz Model
Commitment Be well informed
Delegation &
Empowerment
Astute use of Power
Emotional
Intelligence
© Anik Saha

15. 15
Jet Airways Example: Corporate Goals
Source: www.jetairways.com
© Anik Saha

16. 16
Source: http://wap.business-standard.com/article/companies/jet-airways-trying-new-strategies-yet-to-deliver-114100100393_1.html
Jet Airways Example: Business Strategy
© Anik Saha

17. Jet Airways Example: Marketing Strategy
1. Positioning As Hospitality with a class/aristocracy or Privileged
2. Corporate Tie ups, Branding as International carrier with flights to US/Europe etc.
3. Skimmed Pricing Strategy to not getting classified as 'Low Cost' Airlines; Attempt to come out of the clutter of
other airlines
4. Special Hospitality Care with 'Jet Privileged' members like Premier Lounge, Free Snacks, Priority Check-in counters
etc.
5. Business Class segment focus and hence the team on field also has professional looks/outfits
© Anik Saha

18. 18
Acknowledgement
Strategic Management by Charles W. L. Hill/ Gareth R.
Jones, Published by CENGAGE Learning
© Anik Saha