A presentation that will give an insight on Strategy and its Formulation. Every Manager should know the art of Carving Strategies.

1. UNDERSTANDING STRATEGIES
 Strategy:
Strategy is a well thought out systematic plan of action
for survival & success, formulated by due
consideration of the possible position and defensive &
effective moves of the competitors.
 Different strategies require different task
priorities, different key success factors (KSF’s) &
different skills, perspectives & behaviors.
 Definition: Strategies describe the general direction
in which an organization plans to go to attain its goals.

2. STRATEGY FORMULATION/
DEVELOPMENT OF STRATEGY
ENVIRONMENTAL ANALYSIS
Competitors
Customer
Supplier
Government
Social
Political
INTERNAL ANALYSIS
Technology knowhow
Mfg. knowhow
Marketing knowhow
Distribution knowhow
OPPORTUNITIES & THREATS
Identify Opportunities
STRENGTHS & WEAKNESSES
Identify core competencies
FIT INTERNAL COMPETENCIES WITH EXTERNAL OPPORTUNITIES
FIRMS STRATEGY

3. LEVELS OF STRATEGY
There are mainly two (2) Levels of strategies
viz.-
 Corporate level strategy &
 Business unit level strategy

4. CORPORATE LEVEL STRATEGY
Corporate level strategy decides about-
a) Right mix of businesses,
b) Type of businesses one should enter into,
c) Corporate Mission etc.

5. BUSINESS UNIT LEVEL STRATEGY
Business unit level strategy takes decisions about-
a) Mission of the organization,
b) Competitive advantage (How it should compete in
order to accomplish its objectives?)
BCG matrix helps in deciding Mission of the
organization.
Michael Porters five forces model helps in deciding
Competitive advantage.

6. TWO LEVELS OF STRATEGY
Strategy Level Key Strategic issues Generic Strategic options
Corporate level
strategy
Are we in the right mix of
businesses?
What sort of businesses we
should enter into?
What should be the mission?
Single business
 Related diversification
 Unrelated
diversification
Business unit level
strategy
What should be the mission? Build
Hold
Harvest
Divest
How it should compete to
accomplish its mission?
Cost competitiveness
Product differentiation.

7. SUMMARY OF THREE GENERIC STRATEGIES
Type of Corporate
strategy
Single business firm Related Diversified
firm
Unrelated
diversified firm
Pictorial
Representation
Identifying features Competes in only
one product
market
Sharing of core
competencies
across businesses
Totally
autonomous
businesses in very
different markets
Example Apple Computers
McDonalds
Sanjivani Rural
Education Society,
Samsung, AT & T,
Gillette.
Tata House,
Hindustan
UniLever, Reliance

8. BCG Matrix
 It is a 2*2 Matrix drawn on XY plane by taking Relative
market share on X axis & Industry growth rate on Y axis.
 According to BCG Model every business can be placed in
one of the four categories viz.
a) Question Mark; b) Star; c) Cash cow; d) Dog.
 Following are the Mission statements according to
different phases-
a) Question Mark- Mission is “Build.”
b) Star- Mission is “Hold.”
c) Cash cow- Mission is “Harvest.”
d) Dog- Mission is “Divest.”

9. BCG Matrix
STAR
“HOLD”
QUESTION MARK
“BUILD”
CASH COW
“HARVEST”
DOG
“DIVEST”
I
N
D
U
S
T
R
Y
G
R
O
w
T
H
R
A
T
E
R E L A T I V E M A R K E T S H A R E
High
Low
High
High
Low
Low
Low
High

10. MICHAEL PORTERS FIVE FORCES MODEL
It helps in predicting business unit level competitive
advantage.
NEW ENTRANTS THREAT
S
U
P
P
L
I
E
R
C
U
S
T
O
M
E
R
SUBSTITUTE
INDUSTRY
COMPETITION

11. GAINING COMPETITIVE ADVANTAGE
 One can get competitive advantage from one of the following five
strategies-
a) Low cost strategy:
Through Economies of scale, Experience curve effect, Tight cost control,
Lean concept etc.
b) Broad differentiation strategy:
Through Brand loyalty, Superior customer service, Dealer network,
Product design, Product features etc.
c) Best cost provider strategy:
Through high product value in low cost.
d) Niche market low cost strategy:
e) Niche market differentiation strategy:

12. VALUE CHAIN ANALYSIS
Value chain analysis is a continuous process aimed at
achieving enhancement in customer value & cost
minimization.
VCA analyzes all the processes starting from raw
material purchase to after sale service in order to check
the justification of consumption of resources & addition
of value.
VCA helps in achieving product differentiation & cost
competitiveness.

13. VALUE CHAIN ANALYSIS
Support Activities: Finance, Human Resources, Marketing, Information
Technology etc.
Product
developm
ent
Manufac
turing
Marketing
& Sales
Service/
Logistics