Goals and Objectives
• Goals – Denote what an organization
hopes to accomplish in a future period of
time. (Financial and Non Financial)
(Quali...
Role of Objectives
• Provide the basis for Strategic Decision
Making
• Provide the standards for Performance
Appraisal
Characteristics of Objectives
•

Should be understandable

•

Should be concrete and specific

•

Should be related to a t...
Objectives need to be set for
•
•
•
•
•
•
•
•

Market standing
Innovation
Productivity
Physical and Financial Resources
Profitability
Manager performanc...
Types of Objectives
Factors Considered for Objectives Setting

• The Forces in the Environment
• Realities of Enterprise Resources and Interna...
The Balance Scorecard Model
The Model and Map
The approach for the Balance score card
A typical Strategy Map
The concepts of CSF and KPI
CSF
Organizational Appraisal
Framework
for
Development
of
Strategic
Advantage
Organizational Capability factors
“Organizational capability factors are the
strategic strengths and weaknesses
existing in different functional areas withi...
The Factors….
Financial Capability Factors
• Source of Funds
» Financing (External Borrowing, Internal Financing), Capital
Mix Decisions eg. Capital Structure, Procu...
Typical Strengths that support this capability
Marketing Capability Factors
• Product

Quality, features, choice of models, brand names,
packaging etc

• Pricing

Discount, mode of payment, allowanc...
Typical Strengths that support this capability
Operational Capability Factors
• Production System
» Capacity, Location, Layout, product or service design,
work systems, degree of automation, extent of...
Typical Strengths that support this capability
Personnel Capability Factors
• Personnel System
» Manpower Planning, Selection, Development,
Compensation, Communication and appraisal

• Organizationa...
Typical Strengths that support this capability
Information Management Capability
• Factors related to Acquisition and Retention of
Information
» Sources, Quantity, Quality and Timeliness of Information, ...
Typical Strengths that support this capability
General Management Capability
General Management Capability
Typical Strengths that support this capability
Methods and Techniques used
for Organizational appraisal
Internal Analysis
VRIO Framework
• Valuable
• Rare
• Inimitable
• Organised for Usage
How Organizational Capabilities
contribute to strengths and
Weaknesses

Using the VRIO Framework
Value Chain Analysis
Value Chain Analysis
• Primary Activities
–
–
–
–
–

Inbound logistics
Operations
Outbound Logistics
Marketing and Sales
S...
Porters Generic Value Chain
Quantitative Analysis
• Financial Analysis
• Non-Financial Quantitative Analysis
Financial Analysis
• Ratio Analysis
– Assesses Liquidity, Profitability, Leverage and activity
aspects.

• Economic Value ...
Non Financial Analysis
•
•
•
•
•
•
•
•

Employee Turnover
Absenteeism
Market Ranking
Rate of Advertising Recall
Total Cycl...
Comparative Analysis
• Historical Analysis
• Industry Norms
• Benchmarking
Types of Benchmarking
• Performance Benchmarking
• Process Benchmarking
• Strategic Benchmarking
To determine against whom one should compare
• Internal Benchmarking (Between units or departments of
the same organizatio...
Comprehensive Analysis
•
•
•

Key Factor Rating
Business Intelligence Systems
Balance Scorecard
Key Factor Rating
Marketing Capability factors
Business Intelligence
Balance Scorecard
• Customer Perspective : “How do customers see us?”
• Internal Business Perspective : “What must we exce...
The Models
Structuring Environmental Appraisal
ETOP Model
Environment Threat and Opportunity Profile
Structuring Organizational Appraisal

Organizational Capability Profile (OCP)
Strategic Advantage Profile (SAP)
Organizational Capability profile
Strategic Advantage Profile (SAP)
Strategic management tdy
Strategic management tdy
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Strategic management tdy

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Strategic management tdy

  1. 1. Goals and Objectives
  2. 2. • Goals – Denote what an organization hopes to accomplish in a future period of time. (Financial and Non Financial) (Qualitative) • Objectives – Are the ends that state specifically how the goals shall be achieved (Concrete and specific, makes goals operational) (Quantitative)
  3. 3. Role of Objectives • Provide the basis for Strategic Decision Making • Provide the standards for Performance Appraisal
  4. 4. Characteristics of Objectives • Should be understandable • Should be concrete and specific • Should be related to a time frame • Should be measurable and controllable • Should be challenging • Different objectives should correlate with each other • Should be set within constraints
  5. 5. Objectives need to be set for
  6. 6. • • • • • • • • Market standing Innovation Productivity Physical and Financial Resources Profitability Manager performance and development Worker performance and attitude Public responsibility
  7. 7. Types of Objectives
  8. 8. Factors Considered for Objectives Setting • The Forces in the Environment • Realities of Enterprise Resources and Internal Power Relationships • The Value system of the Top Executive • Awareness by the Management
  9. 9. The Balance Scorecard Model The Model and Map
  10. 10. The approach for the Balance score card
  11. 11. A typical Strategy Map
  12. 12. The concepts of CSF and KPI
  13. 13. CSF
  14. 14. Organizational Appraisal
  15. 15. Framework for Development of Strategic Advantage
  16. 16. Organizational Capability factors
  17. 17. “Organizational capability factors are the strategic strengths and weaknesses existing in different functional areas within an organization, which are of crucial importance to strategy formulation and implementation.”
  18. 18. The Factors….
  19. 19. Financial Capability Factors
  20. 20. • Source of Funds » Financing (External Borrowing, Internal Financing), Capital Mix Decisions eg. Capital Structure, Procurement of Capital, working capital borrowings, reserves and surplus as sources of funds ; relationship with lenders, banks and financial institutions. • Usage of Funds » Investment or Asset Mix Decisions e.g. Capital Investment, Fixed asset acquisition, current assets, loans and advances, dividend decisions, relationship with shareholders • Management of Funds » Decisions related to systematic aspects of Financial Management e.g. Systems of Finance, accounting and budgeting, management control system; cash, credit and risk management; cost control and reduction; tax planning and advantages
  21. 21. Typical Strengths that support this capability
  22. 22. Marketing Capability Factors
  23. 23. • Product Quality, features, choice of models, brand names, packaging etc • Pricing Discount, mode of payment, allowances, payment period, credit terms, etc • Place Channels to be used, transportation, logistics and inventory storage management and coverage of markets etc. • Promotion Advertising, Personal Selling, Sales Promotions, Publicity • Integrative and Systemic Factors Marketing Mix, Segmentation, targeting, positioning, market standing, company image, marketing organization, marketing system, marketing management information system etc.
  24. 24. Typical Strengths that support this capability
  25. 25. Operational Capability Factors
  26. 26. • Production System » Capacity, Location, Layout, product or service design, work systems, degree of automation, extent of vertical integration etc. • Operational Planning and control » Aggregate Production Planning, Materials supply; inventory, cost and quality management; and maintenance of plant and equipment. • Research and Development » Product Development, Personnel and facilities, level of technology used, technology transfer and absorption, technological collaboration and support etc.
  27. 27. Typical Strengths that support this capability
  28. 28. Personnel Capability Factors
  29. 29. • Personnel System » Manpower Planning, Selection, Development, Compensation, Communication and appraisal • Organizational and employee characteristics » Corporate image, Quality of Managers, Staff and workers, perception about the image of the organization as an employer, availability of development opportunities for employees, working conditions etc. • Industrial Relations » Union Management Relationships, Collective Bargaining, safety, welfare and security, employee satisfaction and Morale etc.
  30. 30. Typical Strengths that support this capability
  31. 31. Information Management Capability
  32. 32. • Factors related to Acquisition and Retention of Information » Sources, Quantity, Quality and Timeliness of Information, retention capacity and security of information • Factors Related to Processing and Synthesis of Information » Database Management, Computer Systems, Software Capability and the ability to synthesize information • Factors Related to Retrieval and usage of Information » Availability and appropriateness of Information formats and the capacity to assimilate and use information • Factors related to Transmission and Dissemination » Speed, scope, width and depth of coverage of information and with the willingness to accept information • Integrative, Systemic and Supportive Factors » Availability of IT infrastructure, its relevance and compatibility to organizational needs, upgradation of facilities, willingness to invest in state-of-the-art systems, availability of computer professionals and top management support
  33. 33. Typical Strengths that support this capability
  34. 34. General Management Capability
  35. 35. General Management Capability
  36. 36. Typical Strengths that support this capability
  37. 37. Methods and Techniques used for Organizational appraisal
  38. 38. Internal Analysis
  39. 39. VRIO Framework • Valuable • Rare • Inimitable • Organised for Usage
  40. 40. How Organizational Capabilities contribute to strengths and Weaknesses Using the VRIO Framework
  41. 41. Value Chain Analysis
  42. 42. Value Chain Analysis • Primary Activities – – – – – Inbound logistics Operations Outbound Logistics Marketing and Sales Service • Support Activities – – – – Firm Infrastructure Human Resource Management Technology Development Procurement
  43. 43. Porters Generic Value Chain
  44. 44. Quantitative Analysis • Financial Analysis • Non-Financial Quantitative Analysis
  45. 45. Financial Analysis • Ratio Analysis – Assesses Liquidity, Profitability, Leverage and activity aspects. • Economic Value added (EVA) Analysis – To determine wealth of a company : Defines profitability in terms of the returns on capital above the cost of servicing the capital employed.( PAT – Cost of Capital) • Activity based Costing (ABC)
  46. 46. Non Financial Analysis • • • • • • • • Employee Turnover Absenteeism Market Ranking Rate of Advertising Recall Total Cycle time of production Inventory units used per period Service call rate Number of patents registered per period etc.
  47. 47. Comparative Analysis • Historical Analysis • Industry Norms • Benchmarking
  48. 48. Types of Benchmarking • Performance Benchmarking • Process Benchmarking • Strategic Benchmarking
  49. 49. To determine against whom one should compare • Internal Benchmarking (Between units or departments of the same organization) • Competitive Benchmarking (Direct comparison of ones performance against the best competitors) • Functional Benchmarking (Comparison of processes or functions against non competitive organizations within the same sector or technological area) • Generic Benchmarking ( Comparison of own processes against the best practices anywhere, in any type or organization)
  50. 50. Comprehensive Analysis • • • Key Factor Rating Business Intelligence Systems Balance Scorecard
  51. 51. Key Factor Rating
  52. 52. Marketing Capability factors
  53. 53. Business Intelligence
  54. 54. Balance Scorecard • Customer Perspective : “How do customers see us?” • Internal Business Perspective : “What must we excel at?” • Innovation and learning perspective : “Can we continue to improve and create value?” • Financial Perspective : “How do we look at shareholders?”
  55. 55. The Models
  56. 56. Structuring Environmental Appraisal ETOP Model
  57. 57. Environment Threat and Opportunity Profile
  58. 58. Structuring Organizational Appraisal Organizational Capability Profile (OCP) Strategic Advantage Profile (SAP)
  59. 59. Organizational Capability profile
  60. 60. Strategic Advantage Profile (SAP)

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