This document discusses strategic analysis and choice as important components of strategic management implementation. It provides an overview of strategic analysis, which involves evaluating internal strengths and external environmental factors. Key techniques for strategic analysis mentioned include ETOP (Environmental Threat and Opportunity Profile) analysis and Porter's Five Forces model. The document then covers strategic choice, which involves understanding stakeholder expectations, identifying strategic options, and selecting the optimal choice. Factors considered in strategic analysis and choice include both internal capabilities and external political, economic, technological, and competitive landscapes. Overall, the document outlines frameworks and techniques used to conduct strategic analysis that informs strategic choice and implementation.
Class 1, 2, 3 Module I Corporate Strategy.pptxsnehasis891
This document discusses key concepts in corporate strategy including:
- Definitions of strategy, strategic management, internal environment, external environment, and the differences between them.
- Components of a Strategic Advantage Profile (SAP) and Environmental Threat and Opportunity Profile (ETOP) and how they are used to analyze strengths/weaknesses and opportunities/threats.
- Explanations of SWOC analysis and the conceptual framework for strategic management, outlining the stages of defining vision/mission, strategy formulation through analysis and goal setting, and strategy implementation.
This document provides an overview of strategic and operational management strategies for educational institutions. It discusses strategic management processes like strategic planning, implementation, evaluation and decision making. It also covers operational management techniques and decision making. Specific topics summarized include the strategic management process, SWOT analysis, benefits of strategic management, strategic decision making and the 7 steps of operational decision making.
1 1 1 Answers for theses question with little notes anAbbyWhyte974
1
1
1
Answers for theses question with little notes ant bullet point on power points. Two ppt is enough.
4.
Who supports the change? Who is resisting the change? Why?
5. What’s your communication objective? (Raise awareness, change behavior, change attitudes, build support, neutralize critics). Why?
Environmental Scanning for Google Inc. Introduction
Environmental scanning is a procedure that methodically inspects and interprets the relevant information to point out the external threats and opportunities that can influence future decisions. It is the consistent tracking of events, occurrences, and trends in the firm's internal and external environment that bear on its present and future endeavors. (Terry, 2020). Environmental scanning is related to SWOT analysis and should be integrated into the strategic planning process. An excellent environmental scanning process looks into both qualitative and quantitative changes. Ultimately, you should create a set of environmental indicators (external, internal, quantitative, and qualitative) that you think are the most important and could potentially impact the analysis you are performing.
The components of environmental scanning that should be analyzed include the following:
· Trends: What are the ongoing trends in the industry or marketplace that could impact your organization either positively or negatively.
· Competition: How are your competitors operating? What are they doing? Which of your competitor's weaknesses can you exploit?
· Technology: What are the developments in technology that could affect your business in the short or long term? Are there any existing technologies that could increase the efficiency of your organization?
· Customers: What is affecting your capability to offer top-notch customer service? How dynamic is your customer base?
· Economy: What is the present pattern of the economy, and how could it affect the future of the business?
· Labor Supply: How are the labor market and environment in your areas of operation?
How will you ensure there is ready access to workers with high demand?
· Academic interests: Employment interests and the famous fields of the prospective students together with their families.
· Research: Funding from private, governmental, and foundation sources and changes in
interests.
· Philanthropy: The changes in the available funding and donors' interests, attitudes, and approaches.
· Legislative/Political environment: Are there any impending legislation that will affect your business in the future? What impacts will the election results have on your organization?
("TOPPR", 2021A and "TOPPR", 2021B)
Every firm should identify the external factor with the most impact to make environmental scanning a helpful tool. The next step should be to perform an internal scan of the firm. Perform a review of the organization's mission, strategic plan, and vision. Examine the organization's weaknesses and strengths. Look at the ...
1
1
1
Answers for theses question with little notes ant bullet point on power points. Two ppt is enough.
4.
Who supports the change? Who is resisting the change? Why?
5. What’s your communication objective? (Raise awareness, change behavior, change attitudes, build support, neutralize critics). Why?
Environmental Scanning for Google Inc. Introduction
Environmental scanning is a procedure that methodically inspects and interprets the relevant information to point out the external threats and opportunities that can influence future decisions. It is the consistent tracking of events, occurrences, and trends in the firm's internal and external environment that bear on its present and future endeavors. (Terry, 2020). Environmental scanning is related to SWOT analysis and should be integrated into the strategic planning process. An excellent environmental scanning process looks into both qualitative and quantitative changes. Ultimately, you should create a set of environmental indicators (external, internal, quantitative, and qualitative) that you think are the most important and could potentially impact the analysis you are performing.
The components of environmental scanning that should be analyzed include the following:
· Trends: What are the ongoing trends in the industry or marketplace that could impact your organization either positively or negatively.
· Competition: How are your competitors operating? What are they doing? Which of your competitor's weaknesses can you exploit?
· Technology: What are the developments in technology that could affect your business in the short or long term? Are there any existing technologies that could increase the efficiency of your organization?
· Customers: What is affecting your capability to offer top-notch customer service? How dynamic is your customer base?
· Economy: What is the present pattern of the economy, and how could it affect the future of the business?
· Labor Supply: How are the labor market and environment in your areas of operation?
How will you ensure there is ready access to workers with high demand?
· Academic interests: Employment interests and the famous fields of the prospective students together with their families.
· Research: Funding from private, governmental, and foundation sources and changes in
interests.
· Philanthropy: The changes in the available funding and donors' interests, attitudes, and approaches.
· Legislative/Political environment: Are there any impending legislation that will affect your business in the future? What impacts will the election results have on your organization?
("TOPPR", 2021A and "TOPPR", 2021B)
Every firm should identify the external factor with the most impact to make environmental scanning a helpful tool. The next step should be to perform an internal scan of the firm. Perform a review of the organization's mission, strategic plan, and vision. Examine the organization's weaknesses and strengths. Look at the ...
Strategic human resource management and strategic management processVARUN SHARMA
This document discusses strategic human resource management and the strategic management process. It defines strategic human resource management as organizational systems designed to achieve competitive advantage through people. The strategic management process focuses on developing organizational strategies and involves environmental scanning, strategy formulation, implementation, and evaluation/control. Environmental scanning monitors internal/external factors. Strategy formulation develops long-term plans. Implementation executes selected strategies. Evaluation assesses performance and controls the process. The document provides details on each step and importance/limitations of strategic management.
1. The document discusses PESTLE analysis, a framework used to analyze the political, economic, social, technological, legal, and environmental factors that may impact an organization.
2. PESTLE analysis involves examining external influences from these six dimensions to identify opportunities and threats to an organization. It is used for strategic planning and environmental scanning.
3. The document provides details on each dimension of PESTLE analysis and explains how it can help organizations understand their environment, identify changes, and develop effective strategies.
Strategy is the action taken by strategists to achieve the goals of the organization.
It deals with long term development rather than routine operations like: new product development, capturing new customers , occupying new geographic location, adaptability of technology & focusing on creativity & innovativeness.
It ca be defined as a general direction set for the company & its various components to achieve a desirable state in future.
Strategy plays a significant role in forecasting future uncertainties by scanning the environment.
The main aim of Strategic Management (SM) is to help the organization to operate successfully in the dynamic environment which is complex by nature.
It helps the business to be less bureaucratic & more flexible.
It provides competitive advantage to the organization.
It demands that the company should be a learning organization which creates, acquires and transfers knowledge.
Strategic management process consists of four stages. These are
Environmental scanning
Formulation of Strategy
Implementation of the Strategy
Evaluation & Control of the Strategy.
Environmental scanning is the systematic process of monitoring, evaluating and disseminating information from the external & internal environments to key people within the organization.
The external environment consists of opportunities & threats that are outside of the organization whereas internal environment consists of strength & weakness that are within the organization itself.
The internal environment includes the management, employees, structure, culture and resource of the organization.
The environmental scanning is done through SWOT analysis.
Strategy Formulation is the development of long-range plans for the effective management of environmental opportunities & threats in light of corporate strength & weaknesses.
It includes defining the corporate mission, specifying achievable objectives, developing strategies & setting policy guidelines.
In this step the organization must practically fix the quantitative target values for some of the organizational objectives.
Strategy Implementation is the process by which strategies & policies are put into action through the development of programs, budgets & procedures.
This process might involve changes within the culture, structure, system of the organization.
Most of the times, strategy implementation is carried out by middle & lower level managers with the review by the top management.
Sometimes referred to as operational planning, strategy implementation often involves day-to-days in resource allocation.
It includes programs, budgets & procedures.
Evaluation of Strategy is the process in which corporate activities & performance are monitored so that the actual performance can be compared with desired performance.
Managers at all levels use the resulting information to take corrective action & resolve problems.
A critical evaluation must be done on the basis of the organization’s past performance.
This document provides an overview of strategic management concepts including definitions, models, and frameworks. It defines strategic management as identifying and executing a company's strategic plan by matching capabilities with environmental demands. Several strategic management models and frameworks are described in detail, including Porter's 5 Forces model, the GE planning grid, McKinsey's 7S framework, and Boston Consulting Group's growth-share matrix. The levels of strategy and process of strategic management are also outlined.
Class 1, 2, 3 Module I Corporate Strategy.pptxsnehasis891
This document discusses key concepts in corporate strategy including:
- Definitions of strategy, strategic management, internal environment, external environment, and the differences between them.
- Components of a Strategic Advantage Profile (SAP) and Environmental Threat and Opportunity Profile (ETOP) and how they are used to analyze strengths/weaknesses and opportunities/threats.
- Explanations of SWOC analysis and the conceptual framework for strategic management, outlining the stages of defining vision/mission, strategy formulation through analysis and goal setting, and strategy implementation.
This document provides an overview of strategic and operational management strategies for educational institutions. It discusses strategic management processes like strategic planning, implementation, evaluation and decision making. It also covers operational management techniques and decision making. Specific topics summarized include the strategic management process, SWOT analysis, benefits of strategic management, strategic decision making and the 7 steps of operational decision making.
1 1 1 Answers for theses question with little notes anAbbyWhyte974
1
1
1
Answers for theses question with little notes ant bullet point on power points. Two ppt is enough.
4.
Who supports the change? Who is resisting the change? Why?
5. What’s your communication objective? (Raise awareness, change behavior, change attitudes, build support, neutralize critics). Why?
Environmental Scanning for Google Inc. Introduction
Environmental scanning is a procedure that methodically inspects and interprets the relevant information to point out the external threats and opportunities that can influence future decisions. It is the consistent tracking of events, occurrences, and trends in the firm's internal and external environment that bear on its present and future endeavors. (Terry, 2020). Environmental scanning is related to SWOT analysis and should be integrated into the strategic planning process. An excellent environmental scanning process looks into both qualitative and quantitative changes. Ultimately, you should create a set of environmental indicators (external, internal, quantitative, and qualitative) that you think are the most important and could potentially impact the analysis you are performing.
The components of environmental scanning that should be analyzed include the following:
· Trends: What are the ongoing trends in the industry or marketplace that could impact your organization either positively or negatively.
· Competition: How are your competitors operating? What are they doing? Which of your competitor's weaknesses can you exploit?
· Technology: What are the developments in technology that could affect your business in the short or long term? Are there any existing technologies that could increase the efficiency of your organization?
· Customers: What is affecting your capability to offer top-notch customer service? How dynamic is your customer base?
· Economy: What is the present pattern of the economy, and how could it affect the future of the business?
· Labor Supply: How are the labor market and environment in your areas of operation?
How will you ensure there is ready access to workers with high demand?
· Academic interests: Employment interests and the famous fields of the prospective students together with their families.
· Research: Funding from private, governmental, and foundation sources and changes in
interests.
· Philanthropy: The changes in the available funding and donors' interests, attitudes, and approaches.
· Legislative/Political environment: Are there any impending legislation that will affect your business in the future? What impacts will the election results have on your organization?
("TOPPR", 2021A and "TOPPR", 2021B)
Every firm should identify the external factor with the most impact to make environmental scanning a helpful tool. The next step should be to perform an internal scan of the firm. Perform a review of the organization's mission, strategic plan, and vision. Examine the organization's weaknesses and strengths. Look at the ...
1
1
1
Answers for theses question with little notes ant bullet point on power points. Two ppt is enough.
4.
Who supports the change? Who is resisting the change? Why?
5. What’s your communication objective? (Raise awareness, change behavior, change attitudes, build support, neutralize critics). Why?
Environmental Scanning for Google Inc. Introduction
Environmental scanning is a procedure that methodically inspects and interprets the relevant information to point out the external threats and opportunities that can influence future decisions. It is the consistent tracking of events, occurrences, and trends in the firm's internal and external environment that bear on its present and future endeavors. (Terry, 2020). Environmental scanning is related to SWOT analysis and should be integrated into the strategic planning process. An excellent environmental scanning process looks into both qualitative and quantitative changes. Ultimately, you should create a set of environmental indicators (external, internal, quantitative, and qualitative) that you think are the most important and could potentially impact the analysis you are performing.
The components of environmental scanning that should be analyzed include the following:
· Trends: What are the ongoing trends in the industry or marketplace that could impact your organization either positively or negatively.
· Competition: How are your competitors operating? What are they doing? Which of your competitor's weaknesses can you exploit?
· Technology: What are the developments in technology that could affect your business in the short or long term? Are there any existing technologies that could increase the efficiency of your organization?
· Customers: What is affecting your capability to offer top-notch customer service? How dynamic is your customer base?
· Economy: What is the present pattern of the economy, and how could it affect the future of the business?
· Labor Supply: How are the labor market and environment in your areas of operation?
How will you ensure there is ready access to workers with high demand?
· Academic interests: Employment interests and the famous fields of the prospective students together with their families.
· Research: Funding from private, governmental, and foundation sources and changes in
interests.
· Philanthropy: The changes in the available funding and donors' interests, attitudes, and approaches.
· Legislative/Political environment: Are there any impending legislation that will affect your business in the future? What impacts will the election results have on your organization?
("TOPPR", 2021A and "TOPPR", 2021B)
Every firm should identify the external factor with the most impact to make environmental scanning a helpful tool. The next step should be to perform an internal scan of the firm. Perform a review of the organization's mission, strategic plan, and vision. Examine the organization's weaknesses and strengths. Look at the ...
Strategic human resource management and strategic management processVARUN SHARMA
This document discusses strategic human resource management and the strategic management process. It defines strategic human resource management as organizational systems designed to achieve competitive advantage through people. The strategic management process focuses on developing organizational strategies and involves environmental scanning, strategy formulation, implementation, and evaluation/control. Environmental scanning monitors internal/external factors. Strategy formulation develops long-term plans. Implementation executes selected strategies. Evaluation assesses performance and controls the process. The document provides details on each step and importance/limitations of strategic management.
1. The document discusses PESTLE analysis, a framework used to analyze the political, economic, social, technological, legal, and environmental factors that may impact an organization.
2. PESTLE analysis involves examining external influences from these six dimensions to identify opportunities and threats to an organization. It is used for strategic planning and environmental scanning.
3. The document provides details on each dimension of PESTLE analysis and explains how it can help organizations understand their environment, identify changes, and develop effective strategies.
Strategy is the action taken by strategists to achieve the goals of the organization.
It deals with long term development rather than routine operations like: new product development, capturing new customers , occupying new geographic location, adaptability of technology & focusing on creativity & innovativeness.
It ca be defined as a general direction set for the company & its various components to achieve a desirable state in future.
Strategy plays a significant role in forecasting future uncertainties by scanning the environment.
The main aim of Strategic Management (SM) is to help the organization to operate successfully in the dynamic environment which is complex by nature.
It helps the business to be less bureaucratic & more flexible.
It provides competitive advantage to the organization.
It demands that the company should be a learning organization which creates, acquires and transfers knowledge.
Strategic management process consists of four stages. These are
Environmental scanning
Formulation of Strategy
Implementation of the Strategy
Evaluation & Control of the Strategy.
Environmental scanning is the systematic process of monitoring, evaluating and disseminating information from the external & internal environments to key people within the organization.
The external environment consists of opportunities & threats that are outside of the organization whereas internal environment consists of strength & weakness that are within the organization itself.
The internal environment includes the management, employees, structure, culture and resource of the organization.
The environmental scanning is done through SWOT analysis.
Strategy Formulation is the development of long-range plans for the effective management of environmental opportunities & threats in light of corporate strength & weaknesses.
It includes defining the corporate mission, specifying achievable objectives, developing strategies & setting policy guidelines.
In this step the organization must practically fix the quantitative target values for some of the organizational objectives.
Strategy Implementation is the process by which strategies & policies are put into action through the development of programs, budgets & procedures.
This process might involve changes within the culture, structure, system of the organization.
Most of the times, strategy implementation is carried out by middle & lower level managers with the review by the top management.
Sometimes referred to as operational planning, strategy implementation often involves day-to-days in resource allocation.
It includes programs, budgets & procedures.
Evaluation of Strategy is the process in which corporate activities & performance are monitored so that the actual performance can be compared with desired performance.
Managers at all levels use the resulting information to take corrective action & resolve problems.
A critical evaluation must be done on the basis of the organization’s past performance.
This document provides an overview of strategic management concepts including definitions, models, and frameworks. It defines strategic management as identifying and executing a company's strategic plan by matching capabilities with environmental demands. Several strategic management models and frameworks are described in detail, including Porter's 5 Forces model, the GE planning grid, McKinsey's 7S framework, and Boston Consulting Group's growth-share matrix. The levels of strategy and process of strategic management are also outlined.
This document provides an overview of using a SWOT analysis for career development at an individual level. It begins by outlining the typical strategic planning process used in businesses, which involves establishing goals and vision, analyzing internal strengths and weaknesses as well as external opportunities and threats. A SWOT analysis specifically examines these four areas. The document then discusses how individuals can apply the same SWOT framework to their own career development by self-assessing their personal strengths, weaknesses, opportunities, and threats in order to develop strategies that maximize opportunities and minimize threats. Templates are provided to guide individuals through this personal SWOT analysis.
The document discusses organizational analysis and strategy. It begins by explaining that organizational analysis is the process of reviewing an organization's external and internal environment. It should be done periodically to understand strengths and weaknesses. Various models of analysis are described, including SWOT, McKinsey 7S, and rational models. Strategic management processes involve environmental scanning, strategy formulation, implementation, and evaluation. An example is provided of how Nokia analyzed its environment using various forces and realigned its culture and structure to its technological environment to achieve strategic success.
This document provides an overview of strategic management. It defines key terms like strategy, strategic management, objectives and policies. It discusses the three main processes of strategic management: formulation, implementation, and evaluation. It also outlines internal and external factors to consider in strategic analysis and identifies benefits of strategic management like prioritizing opportunities and effective resource allocation. Finally, it stresses the importance of business ethics in strategic decision making.
This document provides a summary of the book "Essentials of Strategic Management" by David Hunger and Thomas Wheelen. It discusses key concepts in strategic management including environmental scanning, strategy formulation, implementation, and evaluation. Some of the main topics covered include Michael Porter's industry analysis framework, the importance of being a learning organization, and the roles and responsibilities of corporate boards in strategic decision making.
This document provides a summary of the book "Essentials of Strategic Management" by David Hunger and Thomas Wheelen. It discusses key concepts in strategic management including environmental scanning, strategy formulation, implementation, and evaluation. Some of the main topics covered include Michael Porter's industry analysis, strategic decision making processes, the roles of corporate governance and social responsibility, and methods for analyzing a company's external environment and internal strengths and weaknesses.
This document provides a summary of the book "The Essentials of Strategic Management" by David Hunger and Thomas Wheelen. It discusses key concepts in strategic management including environmental scanning, strategy formation, implementation, and evaluation. Some of the main topics covered include Michael Porter's industry analysis framework, strategic decision making models, the evolution of strategic management, and the importance of organizations becoming learning entities. The review provides an overview of the essential elements and processes in strategic management discussed in the source book.
Strategic management and Business policy
unit 1 ( BBA 3RD year 6th sem)
Prepared by - Dipankar Dutta
Faculty, Dev Bhoomi Group of Institution Saharanpur
email- dipankarpharma1@gmail.com
ETOP is a technique of strategic analysis and choice which is helpful for the organizations to sustain in competitive environment.
Gluck has developed ETOP technique which involves to divide the environment into different sectors and then analyze the impact of each sector on the organization. Therefore, the strategist can draw a clear picture of different factors providing favorable impact on the organization.
ETOP helps the strategist to prepares profile of the environment by scanning the environment with its threats and opportunities and then formulate the strategy.
ETOP helps organization to identify O-T
It consolidates and strengthens organization’s position
It provides the information to the strategist regarding which sectors have favourable impact on the organization.
It helps organizations to know where it stand with respect to its environment.
It helps in formulating appropriate strategy.
It helps in formulating SWOT analysis
To prepare ETOP it is important to divide the entire organization into different sectors.
Analysing the impact of each sector on the organization.
Subdividing each environmental sector into sub factor.
Impact of each sub factor on organization in the form of a statement.
ETOP is a technique of environmental analysis which helps the organizations to make a profile of their external environment.
ETOP analysis provides information about environment threats & opportunities & their impact on strategic opportunities for the company.
The profile contains mainly 3 issues, they are-Forecasting, Verbal - Written information & Management Information System (MIS)
Forecasting:- Forecasting means predicting the future events & analysing their impact on present plans of business organizations and it helps to analyse the environment.
Verbal Written information:- Verbal information is oral information but written information is collected by reading articles, journals, newspaper, newsletters etc.., common sources of information are radio, television, workforce, outsiders. It informs changes in the environment & prepares business organizations to incorporate their business plans & strategies.
Management Information System [MIS]:- It is a formal method of availability of accurate & timely information which is necessary to facilitate the decision making process. It enables the organization to plan & control & operational functions to be carried out effectively with MIS. It helps in making decisions based on future environment analysis.
) Political & Legal Environment: political system & structure, international trade, taxation policy, employment policy, health & safety policy etc.
2)Economic Environment: interest rates, exchange rates, national income, inflation, unemployment, Stock Market etc.
3) Socio-cultural Environment: ageing population, attitudes to work, income distribution, traditions, norms, education, awareness etc.
4)Technological Environment: innovation, new product development, rate of tech.
This step involves bringing together analysis carried out on the basis of subjective and objective factors. Successive iterative steps of analyzing different alternatives lie at the heart of such evaluation.
Strategic choice is the process of selecting a strategy from among alternatives to best meet an organization's objectives. The process involves four steps: 1) focusing on strategic alternatives, 2) analyzing the alternatives, 3) evaluating the alternatives using objective and subjective factors, and 4) choosing among the alternatives. Subjective factors that influence strategic choice include a strategist's commitment to past actions, decision-making style, consideration of internal politics, government policies, and corporate social responsibility obligations.
This document provides an overview of corporate strategy and general management. It discusses:
1. The definition and importance of business policy and corporate strategy in achieving organizational goals and responding to the external environment.
2. The roles and responsibilities of general managers in supervising operations, planning, coordinating functions, and making personal contributions to organizational success.
3. Key aspects of formulating and implementing corporate strategy, including identifying opportunities/threats, assessing strengths/weaknesses, and aligning strategy with personal and societal values.
4. The importance of effective organizational structure, processes, leadership, and strategy implementation for accomplishing organizational purposes.
Strategic leadership involves three key elements: strategic thinking, acting, and influence. It is concerned with creating sustainable competitive advantage for an organization over the long term. Strategic leadership differs from general leadership in that it has a broad scope that impacts the entire organization, its impact is felt over long periods of time, and it often involves significant organizational change. Strategic leaders are primarily concerned with higher levels of the organization and ensuring its future competitiveness through developing and implementing effective strategies. Strategic decision making is an important part of strategic leadership, as strategic decisions are rare, consequential, and directive for the organization.
ETOP is a technique of strategic analysis and choice which is helpful for the organizations to sustain in competitive environment.
Gluck has developed ETOP technique which involves to divide the environment into different sectors and then analyze the impact of each sector on the organization. Therefore, the strategist can draw a clear picture of different factors providing favorable impact on the organization.
ETOP helps the strategist to prepares profile of the environment by scanning the environment with its threats and opportunities and then formulate the strategy.
ETOP helps organization to identify O-T
It consolidates and strengthens organization’s position
It provides the information to the strategist regarding which sectors have favourable impact on the organization.
It helps organizations to know where it stand with respect to its environment.
It helps in formulating appropriate strategy.
It helps in formulating SWOT analysis
To prepare ETOP it is important to divide the entire organization into different sectors.
Analysing the impact of each sector on the organization.
Subdividing each environmental sector into sub factor.
Impact of each sub factor on organization in the form of a statement.
ETOP analysis provides information about environment threats & opportunities & their impact on strategic opportunities for the company.
The profile contains mainly 3 issues, they are-Forecasting, Verbal - Written information & Management Information System (MIS)
1 introduction- concepts in strategic management.Naganandini Devi
Strategic management involves 4 key processes: 1) environmental scanning to analyze internal/external factors, 2) strategy formulation to develop long-term plans, 3) strategy implementation through programs/budgets, and 4) evaluation and control to assess performance and make adjustments. These cyclical processes integrate functions like marketing, finance, and HR to help organizations adapt to changing environments and gain competitive advantages.
Using established business models as investigative tools and linking them together to enhance their analytical value is proposed in this paper as a method of progressing from strategic situation analysis to competitive advantage. Moreover, internal analyses that result in the identification of distinctive competencies and external investigations that uncover industry key success factors give strategists the means to develop strategies that may achieve competitive advantage.
The document discusses strategic management, which includes environmental scanning, strategy formulation, strategy implementation, and evaluation and control. It aims to integrate management functions to achieve organizational success. Key aspects covered include performing SWOT and PEST analyses to assess internal/external factors, identifying the organization's mission, objectives, and strategies, and implementing programs and budgets to execute the strategy.
The document discusses strategic evaluation and its importance. Strategic evaluation involves collecting information to assess how well a strategic plan is progressing against its goals. It examines the bases of a firm's strategy, compares expected to actual results, and identifies corrective actions. Strategic evaluation is beneficial for organizations of all sizes as it provides feedback for future decisions and assesses performance relative to goals. Common techniques for strategic evaluation include gap analysis, SWOT analysis, PEST analysis, and benchmarking.
Strategic management is the process of planning, monitoring, and assessing all activities needed to achieve organizational goals. It involves identifying strategies to gain a competitive advantage, such as higher profitability than industry peers. Strategic management provides employees a comprehensive understanding of how their roles fit into and relate to organizational objectives. The key steps in strategic management are environmental scanning, strategy formulation, strategy implementation, and strategy evaluation.
Customer Experience is not only for B2C and big box brands. Embark on a transformative journey into the realm of B2B customer experience with our masterclass. In this dynamic session, we'll delve into the intricacies of designing and implementing seamless customer journeys that leave a lasting impression. Explore proven strategies and best practices tailored specifically for the B2B landscape, learning how to navigate complex decision-making processes and cultivate meaningful relationships with clients. From initial engagement to post-sale support, discover how to optimize every touchpoint to deliver exceptional experiences that drive loyalty and revenue growth. Join us and unlock the keys to unparalleled success in the B2B arena.
Key Takeaways:
1. Identify your customer journey and growth areas
2. Build a three-step customer experience strategy
3. Put your CX data to use and drive action in your organization
This document provides an overview of using a SWOT analysis for career development at an individual level. It begins by outlining the typical strategic planning process used in businesses, which involves establishing goals and vision, analyzing internal strengths and weaknesses as well as external opportunities and threats. A SWOT analysis specifically examines these four areas. The document then discusses how individuals can apply the same SWOT framework to their own career development by self-assessing their personal strengths, weaknesses, opportunities, and threats in order to develop strategies that maximize opportunities and minimize threats. Templates are provided to guide individuals through this personal SWOT analysis.
The document discusses organizational analysis and strategy. It begins by explaining that organizational analysis is the process of reviewing an organization's external and internal environment. It should be done periodically to understand strengths and weaknesses. Various models of analysis are described, including SWOT, McKinsey 7S, and rational models. Strategic management processes involve environmental scanning, strategy formulation, implementation, and evaluation. An example is provided of how Nokia analyzed its environment using various forces and realigned its culture and structure to its technological environment to achieve strategic success.
This document provides an overview of strategic management. It defines key terms like strategy, strategic management, objectives and policies. It discusses the three main processes of strategic management: formulation, implementation, and evaluation. It also outlines internal and external factors to consider in strategic analysis and identifies benefits of strategic management like prioritizing opportunities and effective resource allocation. Finally, it stresses the importance of business ethics in strategic decision making.
This document provides a summary of the book "Essentials of Strategic Management" by David Hunger and Thomas Wheelen. It discusses key concepts in strategic management including environmental scanning, strategy formulation, implementation, and evaluation. Some of the main topics covered include Michael Porter's industry analysis framework, the importance of being a learning organization, and the roles and responsibilities of corporate boards in strategic decision making.
This document provides a summary of the book "Essentials of Strategic Management" by David Hunger and Thomas Wheelen. It discusses key concepts in strategic management including environmental scanning, strategy formulation, implementation, and evaluation. Some of the main topics covered include Michael Porter's industry analysis, strategic decision making processes, the roles of corporate governance and social responsibility, and methods for analyzing a company's external environment and internal strengths and weaknesses.
This document provides a summary of the book "The Essentials of Strategic Management" by David Hunger and Thomas Wheelen. It discusses key concepts in strategic management including environmental scanning, strategy formation, implementation, and evaluation. Some of the main topics covered include Michael Porter's industry analysis framework, strategic decision making models, the evolution of strategic management, and the importance of organizations becoming learning entities. The review provides an overview of the essential elements and processes in strategic management discussed in the source book.
Strategic management and Business policy
unit 1 ( BBA 3RD year 6th sem)
Prepared by - Dipankar Dutta
Faculty, Dev Bhoomi Group of Institution Saharanpur
email- dipankarpharma1@gmail.com
ETOP is a technique of strategic analysis and choice which is helpful for the organizations to sustain in competitive environment.
Gluck has developed ETOP technique which involves to divide the environment into different sectors and then analyze the impact of each sector on the organization. Therefore, the strategist can draw a clear picture of different factors providing favorable impact on the organization.
ETOP helps the strategist to prepares profile of the environment by scanning the environment with its threats and opportunities and then formulate the strategy.
ETOP helps organization to identify O-T
It consolidates and strengthens organization’s position
It provides the information to the strategist regarding which sectors have favourable impact on the organization.
It helps organizations to know where it stand with respect to its environment.
It helps in formulating appropriate strategy.
It helps in formulating SWOT analysis
To prepare ETOP it is important to divide the entire organization into different sectors.
Analysing the impact of each sector on the organization.
Subdividing each environmental sector into sub factor.
Impact of each sub factor on organization in the form of a statement.
ETOP is a technique of environmental analysis which helps the organizations to make a profile of their external environment.
ETOP analysis provides information about environment threats & opportunities & their impact on strategic opportunities for the company.
The profile contains mainly 3 issues, they are-Forecasting, Verbal - Written information & Management Information System (MIS)
Forecasting:- Forecasting means predicting the future events & analysing their impact on present plans of business organizations and it helps to analyse the environment.
Verbal Written information:- Verbal information is oral information but written information is collected by reading articles, journals, newspaper, newsletters etc.., common sources of information are radio, television, workforce, outsiders. It informs changes in the environment & prepares business organizations to incorporate their business plans & strategies.
Management Information System [MIS]:- It is a formal method of availability of accurate & timely information which is necessary to facilitate the decision making process. It enables the organization to plan & control & operational functions to be carried out effectively with MIS. It helps in making decisions based on future environment analysis.
) Political & Legal Environment: political system & structure, international trade, taxation policy, employment policy, health & safety policy etc.
2)Economic Environment: interest rates, exchange rates, national income, inflation, unemployment, Stock Market etc.
3) Socio-cultural Environment: ageing population, attitudes to work, income distribution, traditions, norms, education, awareness etc.
4)Technological Environment: innovation, new product development, rate of tech.
This step involves bringing together analysis carried out on the basis of subjective and objective factors. Successive iterative steps of analyzing different alternatives lie at the heart of such evaluation.
Strategic choice is the process of selecting a strategy from among alternatives to best meet an organization's objectives. The process involves four steps: 1) focusing on strategic alternatives, 2) analyzing the alternatives, 3) evaluating the alternatives using objective and subjective factors, and 4) choosing among the alternatives. Subjective factors that influence strategic choice include a strategist's commitment to past actions, decision-making style, consideration of internal politics, government policies, and corporate social responsibility obligations.
This document provides an overview of corporate strategy and general management. It discusses:
1. The definition and importance of business policy and corporate strategy in achieving organizational goals and responding to the external environment.
2. The roles and responsibilities of general managers in supervising operations, planning, coordinating functions, and making personal contributions to organizational success.
3. Key aspects of formulating and implementing corporate strategy, including identifying opportunities/threats, assessing strengths/weaknesses, and aligning strategy with personal and societal values.
4. The importance of effective organizational structure, processes, leadership, and strategy implementation for accomplishing organizational purposes.
Strategic leadership involves three key elements: strategic thinking, acting, and influence. It is concerned with creating sustainable competitive advantage for an organization over the long term. Strategic leadership differs from general leadership in that it has a broad scope that impacts the entire organization, its impact is felt over long periods of time, and it often involves significant organizational change. Strategic leaders are primarily concerned with higher levels of the organization and ensuring its future competitiveness through developing and implementing effective strategies. Strategic decision making is an important part of strategic leadership, as strategic decisions are rare, consequential, and directive for the organization.
ETOP is a technique of strategic analysis and choice which is helpful for the organizations to sustain in competitive environment.
Gluck has developed ETOP technique which involves to divide the environment into different sectors and then analyze the impact of each sector on the organization. Therefore, the strategist can draw a clear picture of different factors providing favorable impact on the organization.
ETOP helps the strategist to prepares profile of the environment by scanning the environment with its threats and opportunities and then formulate the strategy.
ETOP helps organization to identify O-T
It consolidates and strengthens organization’s position
It provides the information to the strategist regarding which sectors have favourable impact on the organization.
It helps organizations to know where it stand with respect to its environment.
It helps in formulating appropriate strategy.
It helps in formulating SWOT analysis
To prepare ETOP it is important to divide the entire organization into different sectors.
Analysing the impact of each sector on the organization.
Subdividing each environmental sector into sub factor.
Impact of each sub factor on organization in the form of a statement.
ETOP analysis provides information about environment threats & opportunities & their impact on strategic opportunities for the company.
The profile contains mainly 3 issues, they are-Forecasting, Verbal - Written information & Management Information System (MIS)
1 introduction- concepts in strategic management.Naganandini Devi
Strategic management involves 4 key processes: 1) environmental scanning to analyze internal/external factors, 2) strategy formulation to develop long-term plans, 3) strategy implementation through programs/budgets, and 4) evaluation and control to assess performance and make adjustments. These cyclical processes integrate functions like marketing, finance, and HR to help organizations adapt to changing environments and gain competitive advantages.
Using established business models as investigative tools and linking them together to enhance their analytical value is proposed in this paper as a method of progressing from strategic situation analysis to competitive advantage. Moreover, internal analyses that result in the identification of distinctive competencies and external investigations that uncover industry key success factors give strategists the means to develop strategies that may achieve competitive advantage.
The document discusses strategic management, which includes environmental scanning, strategy formulation, strategy implementation, and evaluation and control. It aims to integrate management functions to achieve organizational success. Key aspects covered include performing SWOT and PEST analyses to assess internal/external factors, identifying the organization's mission, objectives, and strategies, and implementing programs and budgets to execute the strategy.
The document discusses strategic evaluation and its importance. Strategic evaluation involves collecting information to assess how well a strategic plan is progressing against its goals. It examines the bases of a firm's strategy, compares expected to actual results, and identifies corrective actions. Strategic evaluation is beneficial for organizations of all sizes as it provides feedback for future decisions and assesses performance relative to goals. Common techniques for strategic evaluation include gap analysis, SWOT analysis, PEST analysis, and benchmarking.
Strategic management is the process of planning, monitoring, and assessing all activities needed to achieve organizational goals. It involves identifying strategies to gain a competitive advantage, such as higher profitability than industry peers. Strategic management provides employees a comprehensive understanding of how their roles fit into and relate to organizational objectives. The key steps in strategic management are environmental scanning, strategy formulation, strategy implementation, and strategy evaluation.
Customer Experience is not only for B2C and big box brands. Embark on a transformative journey into the realm of B2B customer experience with our masterclass. In this dynamic session, we'll delve into the intricacies of designing and implementing seamless customer journeys that leave a lasting impression. Explore proven strategies and best practices tailored specifically for the B2B landscape, learning how to navigate complex decision-making processes and cultivate meaningful relationships with clients. From initial engagement to post-sale support, discover how to optimize every touchpoint to deliver exceptional experiences that drive loyalty and revenue growth. Join us and unlock the keys to unparalleled success in the B2B arena.
Key Takeaways:
1. Identify your customer journey and growth areas
2. Build a three-step customer experience strategy
3. Put your CX data to use and drive action in your organization
2024 Trend Updates: What Really Works In SEO & Content MarketingSearch Engine Journal
The future of SEO is trending toward a more human-first and user-centric approach, powered by AI intelligence and collaboration. Are you ready?
Watch as we explore which SEO trends to prioritize to achieve sustainable growth and deliver reliable results. We’ll dive into best practices to adapt your strategy around industry-wide disruptions like SGE, how to navigate the top challenges SEO professionals are facing, and proven tactics for prioritizing quality and building trust.
You’ll hear:
- The top SEO trends to prioritize in 2024 to achieve long-term success.
- Predictions for SGE’s impact, and how to adapt.
- What E-E-A-T really means, and how to implement it holistically (hint: it’s never been more important).
With Zack Kadish and Alex Carchietta, we’ll show you which SEO trends to ignore and which to focus on, along with the solution to overcoming rapid, significant and disruptive Google algorithm updates.
If you’re looking to cut through the noise of constant SEO and content trends to drive success, you won’t want to miss this webinar.
Conferences like DigiMarCon provide ample opportunities to improve our own marketing programs by learning from others. But just because everyone is jumping on board with the latest idea/tool/metric doesn’t mean it works – or does it? This session will examine the value of today’s hottest digital marketing topics – including AI, paid ads, and social metrics – and the truth about what these shiny objects might be distracting you from.
Key Takeaways:
- How NOT to shoot your digital program in the foot by using flashy but ineffective resources
- The best ways to think about AI in connection with digital marketing
- How to cut through self-serving marketing advice and engage in channels that truly grow your business
Embark on style journeys Indian clothing store denver guide.pptxOmnama Fashions
Finding the perfect "Indian Clothing Store Denver" is essential for those seeking vibrant, authentic, and culturally rich attire in the heart of Colorado. Denver, a city known for its diverse culture and eclectic fashion scene, offers a variety of options for those in search of traditional and contemporary Indian clothing. Whether you're preparing for a wedding, festival, or cultural event, or simply wish to incorporate the elegance and beauty of Indian fashion into your wardrobe, discovering the right store can make all the difference.
AI Best Practices for Marketing HUG June 2024Amanda Farrell
During this presentation, the Nextiny marketing team reviews best practices when adopting generative AI into content creation. Join our HUG community to register for more events https://events.hubspot.com/sarasota/
Breaking Silos To Break Bank: Shattering The Divide Between Search And SocialNavah Hopkins
At Mozcon 2024 I shared this deck on bridging the divide between search and social. We began by acknowledging that search-first marketers are used to different rules of engagement than social marketers. We also looked at how both channels treat creative, audiences, bidding/budgeting, and AI. We finished by going through how they can win together including UTM audits, harvesting comments from both to inform creative, and allowing for non-login forums to be part of your marketing strategy.
I themed this deck using Baldur's Gate 3 characters: Gale as Search and Astarion as Social
Top Strategies for Building High-Quality Backlinks in 2024 PPT.pdf1Solutions Pvt. Ltd.
As we move into 2024, the methods for building high-quality backlinks continue to evolve, demanding more sophisticated and strategic approaches. This presentation aims to explore the latest trends and proven strategies for acquiring high-quality backlinks that can elevate your SEO efforts.
Visit:- https://www.1solutions.biz/link-building-packages/
Unlock the secrets to creating a standout trade show booth with our comprehensive guide from Blue Atlas Marketing! This presentation is packed with essential tips and innovative strategies to ensure your booth attracts attention, engages visitors, and drives business success. Whether you're a seasoned exhibitor or a first-timer, these expert insights will help you maximize your impact and make a memorable impression in a crowded exhibition hall. Learn how to:
Design an eye-catching and inviting booth
Incorporate interactive elements that engage visitors
Use effective branding and visuals to reinforce your message
Plan your booth layout for maximum traffic flow
Implement technology to enhance the visitor experience
Create memorable experiences that leave a lasting impression
Transform your trade show presence with these proven tactics and ensure your booth stands out from the competition. Download the PDF now and start planning your next successful exhibit!
THE STORY COMMUNICATION Credential 2024.pptxhuyenngo62
The Story Communication là công ty quảng cáo truyền thông tích hợp (IMC) được xây dựng trên thế mạnh về Digital & Performance.
#Assemble #Integrity #Transformation #Initiative
Empowering Influencers: The New Center of Brand-Consumer Dynamics
In the current market landscape, establishing genuine connections with consumers is crucial. This presentation, "Empowering Influencers: The New Center of Brand-Consumer Dynamics," explores how influencers have become pivotal in shaping brand-consumer relationships. We will examine the strategic use of influencers to create authentic, engaging narratives that resonate deeply with target audiences, driving success in the evolved purchase funnel.
Meta Revolutionizes Product Promotion with Automated Video Catalog Ads.pptxprovidenceadworks416
As a digital marketer, I am thrilled to see Meta revolutionizing product promotion with its new automated video catalog ads. This innovative feature allows anyone to seamlessly integrate dynamic video content into my catalog product ads, enhancing the visual appeal and engagement of campaigns. By leveraging Meta's advanced AI and machine learning capabilities, one can automatically deliver tailored video ads to the most interested users, boosting traffic and conversions. This new approach not only simplifies the ad creation process but also significantly improves performance and ROI.
Title: Making Money the Easy Way: A Quick Guide to Generating IncomeWilliamZinsmeister
Welcome to "Making Money the Easy Way: A Quick Guide to Generating Income." This book is designed to provide you with practical, actionable strategies to generate income with minimal effort. Whether you’re looking to supplement your current income or create a full-time revenue stream, this guide covers a variety of methods to help you achieve your financial goals. We will explore opportunities available online, various investment strategies, profitable side hustles, creative approaches, and essential financial tips to ensure sustainable income growth.
Evaluating the Effectiveness of Women-Focused MarketingHighViz PR
Women centric marketing is a vital part in reaching one of the most influential groups of consumers. Here is a guide to know and measure the impact of women-centric marketing efforts-
In this humorous and data-heavy Master Class, join us in a joyous celebration of life honoring the long list of SEO tactics and concepts we lost this year. Remember fondly the beautiful time you shared with defunct ideas like link building, keyword cannibalization, search volume as a value indicator, and even our most cherished of friends: the funnel. Make peace with their loss as you embrace a new paradigm for organic content: Pillar-Based Marketing. Along the way, discover that the results that old SEO and all its trappings brought you weren’t really very good at all, actually.
In this respectful and life-affirming service—erm, session—join Ryan Brock (Chief Solution Officer at DemandJump and author of Pillar-Based Marketing: A Data-Driven Methodology for SEO and Content that Actually Works) and leave with:
• Clear and compelling evidence that most legacy SEO metrics and tactics have slim to no impact on SEO outcomes
• A major mindset shift that eliminates most of the metrics and tactics associated with SEO in favor of a single metric that defines and drives organic ranking success
• Practical, step-by-step methodology for choosing SEO pillar topics and publishing content quickly that ranks fast
INTRODUCTION TO SEARCH ENGINE OPTIMIZATION (SEO).pptxGiorgio Chiesa
This presentation is recommended for those who want to know more about SEO. It explains the main theoretical and practical aspects that influence the positioning of websites in search engines.
Can you kickstart content marketing when you have a small team or even a team of one? Why yes, you can! Dennis Shiao, founder of marketing agency Attention Retention will detail how to draw insights from subject matter experts (SMEs) and turn them into articles, bylines, blog posts, social media posts and more. He’ll also share tips on content licensing and how to establish a webinar program. Attend this session to learn how to make an impact with content marketing even when you have a small team and limited resources.
Key Takeaways:
- You don't need a large team to start a content marketing program
- A webinar program yields a "one-to-many" approach to content creation
- Use partnerships and licensing to create new content assets
From Subreddits To Search: Maximizing Your Brand's Impact On RedditSearch Engine Journal
The search landscape is undergoing a seismic shift, and Reddit is at the epicenter. Google's Helpful Content Update and its $60 million deal with Reddit, coupled with OpenAI's partnership, have catapulted Reddit's real-time content to unprecedented heights.
Check out this insightful webinar exploring the newfound importance of Reddit in the digital marketing landscape. Learn how these changes make Reddit an essential platform for getting your brand and content in front of evolving search audiences.
You’ll hear:
- The evolution of Reddit as a major influencer on SERPS over the years.
- The impact of recent changes and partnerships on Reddit’s place in search.
- A comprehensive look at Reddit, how it works, and how to approach it.
- Unique engagement opportunities presented by Reddit.
With Brent Csutoras, a Reddit expert with over 18 years of experience on the platform, we’ll delve into the intricacies of Reddit's communities, known as Subreddits, and how to leverage their power without compromising authenticity or violating community guidelines in the age of AI-driven search experiences.
Don't miss this opportunity to stay ahead of the curve and leverage Reddit for your brand's success.
Mindfulness Techniques Cultivating Calm in a Chaotic World.pptxelizabethella096
In today’s fast-paced world, stress and anxiety have become common companions for many. With constant connectivity and an unending stream of information, finding moments of peace can seem like an insurmountable challenge. However, mindfulness techniques offer a beacon of calm amidst the chaos, helping individuals to center themselves and find balance. These practices, rooted in ancient traditions and supported by modern science, are accessible to everyone and can profoundly impact mental and emotional well-being.
Mindfulness Techniques Cultivating Calm in a Chaotic World.pptx
S.Mgt-unit-2.pdf
1. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 1
NAME & DEPT SARASWATHI, ASST . PROFESSOR
PG DEPT, JSS COLLEGE FOR WOMEN, KOLLEGALA
SUBJECT COMMERCE
PAPER TITLE STRATEGIC MANAGEMENT
MODULE NO & TITLE 2 - STRATEGIC ANALYSIS AND CHOICE
CONTENTS
➢ Environmental Threat and Opportunity Profile (ETOP)
➢ Organizational Capability Profile
➢ Strategic Advantage Profile
➢ Corporate Portfolio Analysis
➢ SWOT Analysis
➢ Synergy and Dysergy
➢ GAP Analysis
➢ Porter's Five Forces Model of competition
➢ Mc Kinsey's 7s Framework
➢ GE 9 Cell Model
➢ Distinctive competitiveness
➢ Selection of matrix.
2. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 2
STRATEGIC ANALYSIS AND CHOICE
As environment changes, companies need to change their strategies to adapt to the environment not
only to prosper but also to survive. Based on the multiple strategic choices, each choice is analyze and the best
one is selected and implemented. Strategic analysis and choice largely involve making subjective
decisions based on objective information.
Strategies are to be chosen at the corporate level, business level and functional level. A strategic
choice has to be made from among these alternatives. Strategic choice is a decision making process.
Strategic analysis and choice are two important components of the implementation stage of the
strategic management plan. These two components are crucial links in the strategic management
implementation procedure. This report introduces important concepts that can help strategists
generate feasible alternatives, evaluate those alternatives, and choose a specific course of action.
The strategic management process has three main components as shown below
STRATEGIC ANALYSIS
It is all about analyzing the strength of businesses’ position and understanding the important external
factors that may influence that position. Strategic analysis refers to the process of conducting research on a
company and its operating environment to formulate a strategy.
Strategic analysis is essential to formulate strategic planning for decision making and smooth working of
that organization. With the help of strategic planning, the objective or goals that are set by the organization can
be fulfilled.
The definition of strategic analysis may differ from an academic or business perspective, but the process
involves several common factors:
1. Identifying and evaluating data relevant to the company’s strategy
2. Defining the internal and external environments to be analyzed
3. Using several analytic methods
Strengths of Strategic Analysis
1. It allows you to have clarity of the internal positive attributes of the organization that are under control.
2. It helps identify strength of both internal as well as external resources, such that it leads to an increasing
competitive advantage.
3. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 3
3. It offers you the internal components that add value or offer a competitive advantage to your business.
Weaknesses of Strategic Analysis
1. Strategic analysis can generate too many ideas, but doesn’t help to choose which one is the best.
2. Sometimes too much time is spent on existential problem solving, such that there is little or no time left
for innovating new products or making service level changes at the organizational level.
STRATEGIC CHOICE
It involves understanding the nature of stakeholder’s expectations, identifying the strategic option and
evaluating and selecting the best/optimal choice amongst all. Strategic choice is a systemic theory of strategy.
This theory is built on a notion of interaction in which organizations adapt to their environment in a self-
regulating, negative-feedback (cybernetic) manner so as to achieve their goals.
Strategic choice is a part of the strategic process and involves elements like the identification and
evaluation of alternatives which then leads to a choice. Once you have conducted the external and internal
analyses the different alternatives available to you should be clear.
Competition is seen as the main factor that influences strategic choices. However, other factors
like organization structure, leadership, culture, pressure from donors, slow economic growth, increased
diversification and technological advances influence choices made by organizations.
Process of strategic choice
There are four steps in the process of strategic choice as enumerated below:
✓ Focusing on strategic alternatives
✓ Analyzing the strategic alternatives
✓ Evaluating the strategic alternatives
✓ Choosing from among the strategic alternatives
STRATEGIC IMPLEMENTATION
It is the penultimate stage of strategic management and strategic analysis and choice are two significant
constituents of that process.
Characteristics of Strategic Analysis and Choice
Following are the features of strategic analysis and choice:
✓ Establishment of long term goals
✓ Producing strategy options
✓ Choosing strategies to act on
✓ Selecting the best option and accomplishing mission and goals.
At the time of performing strategic analysis and arriving at strategic choices, long term goals are fixed
and different types of strategies are chosen that are most appropriate for the mission of the company and the
variable conditions.
Factors taken into consideration for Strategic Analysis and Choice
Key Internal Factors
✓ Marketing
✓ Management
✓ Operations/Production
✓ Accounting/Finance
4. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 4
✓ Computer Information Systems
✓ Research and Development
Key External Factors
✓ Political/Governmental/Legal
✓ Economy
✓ Technological
✓ Social/Demographic/Cultural/Environmental
✓ Competitive
✓ Techniques Used in Strategic Analysis
THE FOLLOWING DEVICES OR TECHNIQUES ARE USED IN THE PROCEDURE OF
STRATEGIC ANALYSIS & CHOICE, THEY ARE –
Strategic analysis and choice of strategies are done with the help of a number of techniques. If the
appropriate strategy is chosen, a company would become more efficient to establish sustainability in
competitive advantage and maximize firm valuation.
They are -
ENVIRONMENTAL THREAT AND OPPORTUNITY PROFILE [ETOP]
There are many techniques available for environmental appraisal (assessment), one such technique
suggested by Glueck is ETOP the preparation of ETOP involves dividing the environment into different
sectors & then analyzing the impact of each sector on the organization. The preparation of an ETOP provides
a clear picture to the strategists about which sectors & the different factors in each sector have a favorable
impact on the organization.
By the means of an ETOP, the organization knows where it ne stands with respect to its environment.
Obviously, such an understanding can be of a great help to an organizations in formulating strategies to take
advantage of the opportunities & counter the threats in its environment.
MEANING
ETOP is a device that considers environmental information & determines the relative impact of threats
& opportunities for the systematic evaluation of environmental scanning.
ETOP is an environmental analysis results in a mass of information expectations. Structuring of
environmental issues is necessary to make them meaning full of strategy related to forces in the environment.
They deal with events, trends, issues & formulation. In short, it is a technique to structure environmental
issues.
It is the process by which organizations monitor their relevant environment to identify opportunities &
threats affecting their business for p purpose of taking strategic decision.
WHY ETOP?
✓ Helps organization to identify O-T
✓ To consolidate and strengthen organization’s position
✓ Provides the strategists of which sectors have a favorable impact on the organization.
✓ Helps organization knows where its stands with respect to its environment.
✓ Helps in formulating appropriate strategy.
✓ Helps in formulating SWOT analysis.
PREPARING ETOP
✓ Dividing the environment in different sector.
5. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 5
✓ Analyzing the impact of each sector on the organization.
✓ Subdividing each environmental sector into sub factor.
✓ Impact of each sub sector on organization in form of a statement.
ETOP, PROFILE INVOLVES:-
The profile is a technique of environment analysis was organizations make of profile of their external
environment. ETOP analysis provides information about environment threats & opportunities & their impact
on strategic opportunities for the company. The profile contains mainly 3 issues, they are-
1] Forecasting:-
Forecasting means predicting the future events & analyzing their impact on present plans business
organizations analyze the environment but applying various techniques to forecast government is used to
formulate business plans & strategies.
2] Verbal Written information:-
Verbal information is collected but hearing & written information is collected by reading articles,
journals, newspaper, newsletters etc.., common sources of information are radio, television, workforce,
outsiders. It informs changes in the environment & prepares business organization to incorporate than in their
business plans & strategies.
3] Management Information System [MIS]:-
It is a formal method of making available to management to management the accurate & timely
information necessary to facilitate the decision making proceeds & enable the organization planning, control
& operational functions to be carried out effectively. It helps in making decisions based on future
environment.
The profile involves,- Environment, Threats & Opportunities Profile
A] ENVIRONMENTAL FACTORS
It presents the impact of each environmental factor like economic, political & social on the
organization. The important factors are as follows,-
1] Economic factors:
✓ General economic condition.
✓ Rate of inflation.
✓ Interest rate/Exchange rate
2] Technological factors:
✓ Source of technology.
✓ Technological development.
✓ Impact of technology
3] Socio cultural factors:
✓ Demographic characteristics.
✓ Social attitudes.
✓ Education level, awareness, and
consciousness of rights.
4] Environmental factors:
✓ Weather change
✓ Climatic change.
✓ Demand related factors.
✓ Suppliers related factors.
5] Political factors:
✓ Political system.
✓ Political structure, its goals and stability.
✓ Government policies , degree of intervention
6] Legal factors:
✓ Policies related to licensing , monopolies.
✓ Policies related to export and import.
✓ Policies related to distribution and pricing.
6. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 6
Sl.No FACTORS COULD INVLOVE
1 Political international trade taxation policy
2 Economic interest rates, exchange rates, national income, inflation, unemployment, Stock
Market
3 Social ageing population, attitudes to work,
income distribution
4 Technological innovation, new product development, rate of technological obsolescence
5 Environmental global warming, environmental issues
6 Legal competition law, health and safety, employment law
B] THREAT MATRIX
The threats restrain them from entering into new business lines.
C] OPPURINITY MATRIX
The opportunity of the firm indicates new lines of the business.
HIGH
LOW
HIGH
LOW
ATTRACTIVENESS
PROBABILITY OF OCCURRENCE
ATTRACTIVENESS
HIGH
HIGH
LOW
LOW
PROBABILITY OF OCCURRENCE
7. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 7
ETOP: PROS AND CONS or ADVANTAGES / DISADVANTAGES
Pros
✓ Help to determine the key factor of threats and opportunities.
✓ Good tool to qualify the factors related to company’s strategy.
✓ Can consider many factors for each special case.
✓ It provides a clear of which sector & subsectors have favorable impact on the organization.
✓ It helps to interpret the result of environmental analysis.
✓ The organization can assess its competitive position.
✓ Appropriate strategies can be formulated to take advantage of opportunities & counter the threat.
Cons
✓ It doesn’t show the interaction between the factors.
✓ It can’t reflect the dynamic environment.
✓ It’s a subjective analysis tool
EXAMPLE : MILLIPORE COMPANY LTD, India
ABOUT MILLIPORE
Millipore is a multinational company, high technology, Bioscience Company that provides technologies,
tools and services for the development and production of new therapeutic drugs. The company, headquartered
in Bedford, England. It serves the worldwide life science research, biotechnology and pharmaceutical
industries. In India its subsidiary company was located in Bangalore.
MILLIPORE PRODUCT LINE
Life science, Drug discovery, Sample preparations, Lab water, Process development, Bio production, &
Process monitoring.
ETOP – Profile of the company
A] Environmental factor
Sl.no Factors Nature of
Impact
Impact of each sector
1 Economic •Fluctuation in exchange rate
•Increasing rate of inflation
•Worsening economic conditions
2 Technological •Market Leaders
Strong R&D program
•Better solution providers
•New “ Intergral”-2008
3 Political No significant change.
4 Legal Following FCPA (Foreign corrupt practices act).
Strict IPR laws – No poaching
5 Socio cultural No significance change
8. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 8
6 Competitive Competition particularly from low priced products.
7 Demand related Downfall in demand due to low priced products.
Containment of rising healthcare cost.
8 Governmental policies No excise duty, only vat for product manufactured in
India
- up arrows indicate favorable impact
- horizontal arrows indicate a neutral impact
- Down arrows indicate unfavorable impacts
B] Threat Matrix
1} Competition particularly from low priced
products.
2} Concentration majorly on big Fishes.
1} IPR laws are not so strong in INDIA.
2} Switching over form process patent to product
patent
3} Patent law not well defined
1} Expensive products.
2} Bad rapport with customers (unsatisfied
customer).
1} Lack of geographical division (remote areas).
2} Poor dealer network.
3} Low investment in marketing.
C] Opportunity Matrix
1} Market leaders – brand value and brand
awareness.
2} Special offers with OEM’s. (Agilent).
1} Provide customized protocol support.
2} Dedicated service team. (Toll Free numbers).
1} Large installation base.
2} New low budget product lines.
1} Saturation point of market is far away
2} New markets are opening
ORGANIZATIONAL CAPABILITY PROFILE [OCP]
Organizational capacity is the inherent capacity or potential of an organization to use its strength and
overcome its weakness in order to exploit opportunities and face threats its external environment. It is a
potential or capacity to perform better without capabilities resources are of no value.
Organizational capacity factors are strategic strengths and weaknesses existing in different functional
areas within an organization, which are of crucial importance to strategy formulation and implementation.
Any advantage a company has over its competitor - it can do something which they cannot or can do
better Opportunity for an organization to capitalize - low cost, Superior Quality, R&D skills etc
9. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 9
The OCP describes the skills, knowledge & resources that enable your company to an provide quality
products or services to customers. The profile provides useful background information for your marketing &
corporate communications you can also use it as part of a formal bid document to win conterentiate.
Organization capability:
✓ Capacity & ability to use unique competencies to excel in a particular field.
✓ Ability to use its ‘S’ & ‘W’ to exploit ‘O’ & face ‘T’ in its external environment.
✓ Organsational capabilities produces strategic advantage
✓ Strength & Weakness provides organizational competencies, S & W depends upon 2 factors:-
(a) Organization resources
• The resources are tangible & intangible resources
• Physical & human cost, availability - strength / weakness
(b) Organization behavior:
Identity & character of an organization leadership, Mgt. Philosophy, values, culture, Quality of work
environment, Organization climate, organization politics etc.
Resource Behavior
Distinctive competence
The organization into six largely accepted and commonly understood functional areas. These are:
i. Finance
ii. Marketing
iii. Operations
iv. Personnel
v. Information and
vi. General management
Strategic advantage
Organizational Resources
Organizational capability
Competencies
Synergistic effects
Strength & Weakness
Organizational Behaviors
10. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 10
1] Financial capacity:
The factors relate to the availability, usages & management of funds & all allied aspects that have a
bearing on an organization’s capacity to implement its strategies.
(a) Sources of funds
(b) Usage of funds
(c) Management of funds
Some of important factors which influence the financial capacity of any organization are as follow:
✓ Factors related to usage of funds capital structure, procurement of capital, controllership, financing and
relationship with leaders, bankers and financial institutions.
✓ Factors related to management of funds financial, accounting and budgeting systems; management
control system, state of financial health, cash, inflation, credit, return and risk management; cost
reduction and control and tax planning and advantages
2] Marketing capacity
Marketing capability factors relate to the pricing, promotion and distribution of products or services,
and all the allied aspects that have a bearing on an organization's capacity and ability to implement its
strategies.
(a) Product related
(b) Price related
(c) Promotion related
(d) Integrative & Systematic
Some of the important factors which influence the marketing capacity of any organization are as follows.
✓ Product related factors: Variety, lit differentiation, mix quality, positioning, advantages, etc..
✓ Price related factors: pricing objective, policies, changes, protection, advantages, etc..
✓ Place related factors: distribution, transportation ad logistics, marketing channels , marketing
intermediaries, etc..
✓ Promotion related factors: Promotional tools, sales promotion, advertising public relations, etc.
✓ Integrative and systemic factors: marketing mix, market standing, company image, marketing
organization, marketing system, marketing management information system etc..
3] Operation capacity:
Operations capacity factors relate to the production of products or services, use of material resources
and all allied aspects that have a bearing on an organization's capacity and ability to implement its strategies.
(a) Production system
(b) Operation & Control system
(c) R&D system
Some of the important factors which influence the operations capacity of an organization are as follows:
✓ Production system: capacity, location, layout product or service design, work systems, degree of
automation, extent of vertical integration, etc..
✓ Operations and control system: aggregate production planning, material supply, inventory, cost and
quality control, maintenance systems and procedures etc..
4] Personal capacity:
Personal capacity factors relate to the existence and use of human resources and skill, and all
organization’s capacity and ability to implement its strategies.
(a) Personnel system
(b) Organization & employee characteristics
11. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 11
(c) Industrial Relations
Some of the important factors which influence the personal capacity of any organization are as follows.
✓ The personal system: systems for manpower planning, selection, development, compensation,
communication and appraisal, position of the personnel department within the organization, procedures
and standards etc..
✓ Organizational and employees characteristics: Corporate image, quality of managers, staff and
workers perception about and image of the organization as an employer, availability of developmental
opportunities for employees, working conditions, etc..
✓ Industrial relations: union management relationship, collective bargaining, safety, welfare and
security, employee satisfaction and morale, etc..
5] Information management capacity:
Information management capacity factor relate to the design and management of the flow of
information from outside into, and within an organization for the purpose of decision-making and all allied
aspects that have a hearing on an organizations capacity and ability to compliment its strategies.
(a) General Management Systems
(b) External Relations
(c) Organization climate
Some of the important factors which influence the Information management capacity of any organization are
as follows.
✓ Acquisition and retention of information
✓ Processing and synthesis of information
✓ Retrieval and usage of information
✓ Transmission and dissemination
6] General Management capacity:
General management capacity relates to the integration, coordination and direction of the functional
capabilities towards common goals and all allied aspects that have a bearing on an organization capacity and
ability to implement its strategies.
Some of the important factors which influence the general management capacity of any organization are as
follows.
✓ General management system
✓ General managers
✓ External relationship
PROFILE OF OCP
The OCP is drawn in the form of a chart, the strategists are required to systematically assess the
various functional areas & subjectively assign values to different functional capacity factored & sub factor as
long a scale ranging from values of -5 to +5.
You to draft the profile, 1st
identify the capability that are important to your customer & that
differentiates you from competitors & then incorporate them in a presentation or document.
1] Customer focus:-
Your capability profile must incorporate the information customers & prospects need, when
they are evaluating your company as a potential supplier or business partnered customers need to know about
your current capability current capability & your future direction. They want to know that you have the
technical expertise & market understanding to supply quality products that meet their performance
requirement.
12. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 12
2] People:-
The skills & knowledge of your people represent an important part of your organizational
capability. Describe the qualifications & experience of key staff, together with any outstanding achievement
such as awards for innovation, involvement with industry associations or leadership in a particular discipline,
the skills of your business partners also contribute to your capability.
3] Resources:-
Many other assets contribute to your organizational capability, including patents, products
manufacturing facilities, information systems & distribution network. Those assets differentiate you from
competitors, particularly if they are hard to match, customize the assets to your customers needs a customer
with sites in a number of different countries.
4] Stability:-
Stability is an important aspect of organizational capacity, you can build confidence in your
customers by demonstrating that you have a stable management team capable of managing your business
effectively.
METHODS & TECHNIQUES
Inclusive, long term:
✓ Financial Analysis - Ratio Analysis, EVA, ABC
✓ Key factor rating - Rating of different factors through different questions
✓ Value chain analysis
✓ VRIO framework
✓ BCG, GE Matrix , PIMS, McKinsey7S
✓ Balanced Scorecard
✓ Competitive Advantage Profile
✓ Strategic Advantage profile
✓ Internal Factor Analysis Summary
[A] FINANCIAL ANALYSIS
✓ Ratio Analysis
✓ Economic value added[ EVA]
o NOPAT (Net Operating Profit After Tax)
o WACC (Weighted Average Cost Of Capital )
✓ Activity Based Costing[ABC]
o activity in Value chain
o specific activities
[B] VRIO FRAMEWORK
A resource is an asset, skill, competency or knowledge controlled by the corporation. A resource is
strength if it provides competitive advantage e.g. patents, brand name, economies of scale, idea-driven,
standardized mass production. It is an analytical technique brilliant for the evaluation of company’s resources &
thus the competitive advantage.
e.g. patents, brand name,
✓ Value: Does it provide competitive advantage?
✓ Rarity: Do other competitors possess it?
✓ Imitability: Is it costly for others to reproduce?
✓ Organization: Is the firm organized to exploit the resource?
13. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 13
VRIO - STEPS
1. Identify: firms resources- S&W.
2. Combine: firm’s strength into specific capabilities.
3. Appraise- profit potential, sustainable competitive advantage, ability to convert it to a profitable
proposition
4. Select strategy - firm’s resources& capability relative to external opportunity.
5. Identify: resource gaps and invest in upgrading weaknesses
[C] PIMS {BCG, GE Matrix, McKinsey7S – Refer below}
The Profit Impact of Market Strategies (PIMS) is a comprehensive, long-term study of the performance
of strategic business units (SBUs) in thousands of companies in all major industries.
The PIMS project began at General Electric in the mid-1960s. It was continued at Harvard University in
the early 1970s, and then was taken over by the Strategic Planning Institute (SPI) in 1975. Since then, SPI
researchers and consultants have continued working on the development and application of PIMS data.
According to the SPI, the PIMS database is- "a collection of statistically documented experiences drawn
from thousands of businesses, designed to help understand what kinds of strategies (e.g. quality, pricing,
vertical integration, innovation, advertising) work best in what kinds of business environments.
The data constitute a key resource for such critical management tasks as evaluating business
performance, analyzing new business opportunities, evaluating and reality testing new strategies, and screening
business portfolios.”
The main function of PIMS is to highlight the relationship between a business's key strategic decisions
and its results.
Analyzed correctly, the data can help managers gain a better understanding of their business
environment, identify critical factors in improving the position of their company, and develop strategies that
will enable them to create a sustainable advantage.
PIMS principles are taught in business schools, and the data are widely used in academic research. As a
result, PIMS has influenced business strategy in companies around the world
TOWS Matrix or Analysis
A TOWS analysis involves the same basic process of listing strengths, weaknesses, opportunities and
threats as a SWOT analysis, but with a TOWS analysis, threats and opportunities are examined first and
weaknesses and strengths are examined last. After creating a list of threats, opportunistic, weaknesses and
strengths, managers examine ways the company can take advantage of opportunities and minimize threats by
exploiting strengths and overcoming weaknesses.
[D] BALANCED SCORECARD
It has been proposed & popularized by Robert. S. Kaplan & David. P. Norton. It is a performance tool
which “provides executives with a comprehensive framework that translates a company’s strategic objectives
into a coherent set of performance measures”
The scorecard consists of 4 different perspective performance measures such as,-
✓ Financial perspective
✓ Customer perspective
✓ Internal business perspective
✓ Innovation & learning perspective
14. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 14
(1) Financial perspective
✓ Return on capital employed
✓ Cash flow
✓ Project profitability
✓ Profit forecast reliability
✓ Sales backlog
(2) Customer perspective
✓ Pricing index
✓ Customer satisfaction index
✓ Customer ranking survey
✓ Market share
(3) Internal business perspective
✓ Hours with customers on tender
success rate
✓ Rework
✓ Safety incident index
✓ Project performance index
✓ Project close out cycle
(4) Innovation & learning perspective
✓ % revenue from new services
✓ Rate of improvement index
✓ Staff attitude survey
✓ Employee suggestions
✓ Revenue per employee
PROBLEMS OF BALANCED SCORE CARD SOLVES
✓ Unclarified vision & strategy
✓ Non – alignment of long term & short term goals
✓ Measurement issues
✓ Communication gap
✓ Excessive focus on financial parameters
✓ Non availability of feedback
[E] COMPETITIVE ADVANTAGE PROFILE
The competitive profile matrix is a strategic analysis that allows you to compare your company to your
competitors, in such a way as to reveal your relative strengths & weaknesses. Inform your strategic decision
making. It compares a company & its rivals. The matrix reveals strengths & weaknesses for each company, &
critical success factors show areas of success or areas for improvement.
A superiority gained by an organization when it can provide the same value as its competitors but at a
lower price, or can charge higher prices by providing greater value through differentiation. Competitive
advantage results from matching core competencies to the opportunities. It is the reason behind loyalty, & why
you prefer one product or service over another.
There are 3 different types of competitive advantages that companies can actually use.
✓ Cost differentiation
✓ Product/Service differentiation
✓ Niche strategies
Advantages Disadvantages
✓ Forces organization to look ahead
✓ Improved fit with the environment
✓ Better use of resources
✓ Provides a direction/ vision
✓ Helps monitor progress
✓ Ensures goal congruence
✓ It can be time consuming & expensive
✓ It may be difficult in rapidly changing
markets
✓ It can become a straight jacket
✓ Some unplanned for opportunities
maybe missed
✓ It can become bureaucratic
✓ It is less relevant in a crisis.
[F] STRATEGIC ADVANTAGE PROFILE {Refer below}
15. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 15
[G] INTERNAL FACTOR ANALYSIS SUMMARY
It means Internal Factor Evaluation matrix, is a popular strategic management tool for auditing or
evaluating major internal strengths & internal weaknesses in functional areas of an organization or a business. It
also provides a basis for identifying or evaluating relationships among those areas.
An internal analysis is an exploration of your organizations competency, cost position & competitive viability in
the market place. Conducting an internal analysis often incorporates measures that provide useful information
about your organizations a SWOT analysis.
EXAMPLES OF ORGANIZATIONAL CAPABILITY PROFILE
1] Financial Capability
Bajaj - Cash Management
LIC - Centralized payment, decentralized collection
Reliance - high investor confidence
Escorts - Amicable relation with FIS (world's top-ranked technology provider to the banking industry)
2] Marketing Capability
Hindustan Lever - Distribution Channel
IDBI/ICICI Bank -Wide variety of products
Tata - Company / Product Image
3] Operations Capability
Lakshmi machine works - absorb imported technology
Balmer & Lawrie - R&D - New specialty chemicals
4] Personnel Capability
Apollo tyres - Industrial relations problem
5] General management capability
Malayalam Manaroma - largest selling newspaper
Unchallenged leadership - Unified, stable Best edited & most professionally produced
STRATEGIC ADVANTAGE PROFILE [SAP]
It is also known as SAP. It shows strength & weaknesses of an organization. Preparation of SAP is
very similar process to the ETOP.
SAP is a summary statement which provides an overview of the advantages & disadvantages in key
areas likely to affect future operations of a firm. It is a total for making systematic evaluation of strategic
advantage factors which are significant for the company in its environment.
SAP is the technique of analyzing the internal factor of the organization by preparing a critical picture
of different capacity factors. It is a relative strength of the company over its competitors.
Every firm has strategic advantage and disadvantages for,
Example
Large firm have financial strength but they tent to move slowly, compared to smaller firms, and often
cannot react to change quickly. No firm is equally strong in all its functions. In other words, every firm has
strength as well as weakness.
The strategists must be aware of the strategic advantages or strengths of the firm to be able to choose
of the best opportunity for the firm. On the other hand they must regularly analyze their strategic
disadvantages or weaknesses in order to face environmental threats effectively.
Example
16. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 16
The strategist should look to see if the firm is stronger in these factors than its competitors. When a
firm is strong in the market, it has a strategic advantage in launching new products or services & increasing
market share of present products & services.
There are generally 5 functional areas in most of the organizations. These areas are:-
✓ Marketing and Distribution
✓ R & D and Engineering
✓ Production and Operations management
✓ Corporate resources and personnel
✓ Finance and Accounting
1] Strategic advantage factors: Marketing and Distribution
1. Efficient and effective market research system
2. The product service mix: quality of product and service and service
3. Strong new - product and new- service leadership
4. Patent protection (or equivalent legal protection for life)
5. Positive feeling about the firm and its products and services on the part of the ultimate consumer
6. Efficient and effective packaging of products (or the equivalent for service)
7. Effective pricing strategy for products and services
8. Efficient and effective marketing promotion activities other than advertising
9. Efficient and effective service after purchase
10. Efficient and effective channel of distribution and geographical coverage, including internal efforts.
2] Strategic advantage factors: R & D and Engineering
1. Basic research capabilities within the firm
2. Excellence in product design
3. Excellence in process design and improvement
4. Superior packaging development being created
5. Improvement in the use of old or new materials
6. Ability to meet design goals and customer requirements
7. Trained and experienced technicians and scientists
8. Work environment suited to creativity and innovation
9. Well – equipped laboratories and testing facilities
3] Production and Operations management
4] Corporate resources and personnel [ 3, 4 & 5 refer OCP]
5] Finance and Accounting
DIFFERENT APPROACHES
The different approaches are there to develop as competitive advantage. In each of these approaches
the principal point is to avoid doing the same thing as the competition on the same bottle ground. So the
analyst needs to decide which of these approaches might be pursued to develop a sustainable distinctive
competence.
1] Key Success Factors (KFS):-
It is to compete based on existing strengths. The form can gain strategic advantage if it focuses
resources on one crucial point.
17. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 17
2] Avoids head – on competition:-
The 2nd
approach is still based on existing strengths but avoids head on competition. The firm
must look at its own strength which are different or superior to that of the competition & exploit this relative
superiority to the fullest.
Ex- makes use of the technology; sales network & so on of those of its products which are not directly
competing with the products of competitors.
3] Unconventional Approach:-
To compute directly with a competitor, it is used for well established, stagnant industry. It may
be needed to upset the key factors for success that the competitor has used to build on advantage. The starting
point is to challenge accepted assumption about the way business is done & gain a novel advantage by
creating new success factors.
4] Means of Innovations:-
It can obtain by means of innovation which open new markets or result in new products. This
approach avoids head on competition but requires the firm to find new & creative strengths. Innovation often
involves market segmentation & finding new ways of satisfying the customer’s utility function.
PROFILE OF SAP
It shows in way of chart of each organizations strength & weaknesses on the basis of its different
factors. Here we prepare a profile about hoe our company is superior in comparison to other companies. Here
we are looking at the environmental aspects & preparing the strategy which can relate our strengths to our
opportunities. It enables us to focus on our competencies (strengths) & how to use them.
FUNCTIONAL AREA CORE FACTORS ( + ) or ( - )
Production & operation Good production facilities
Old plant & machinery
( + )
( - )
Personal factors Young & motivated force
Poor union relation
( + )
( - )
Finance & Accounting Tax holiday
Costly finance
( + )
( - )
Marketing operations Effective communication mix
Costly employees
Rich experiences in market
( + )
( - )
( + )
R & D & Engineering No design protection
Well developed laboratory
Highly qualified research staff
( - )
( + )
( + )
Organization system High tech MIS
Effective delegation & decentralization
No. MBE
( + )
( + )
( - )
EXAMPLE OF SAP
A picture of the more critical areas which can have a relationship of the strategic posture of the firm in
future of TATA DOCOMO
CAPABILITY
FACTORS
NATURE OF
IMPACT
COMPETITIVE STRENGTH / WEAKNESS
Marketing 1st
to launch 1paise/per second & applicable for both postpaid
& prepaid. Leveraging Tata indicom’s distribution channels.
Launched popular advertisement campaign “Keep it Simple
Silly” & hired Ranbir Kapoor as brand mascot.
18. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 18
Operations Rated congestion free, Innovative tariff plans, first to introduce
3G, bilateral agreement with different operators to share
network.
Personal Set up an institute in record 6 years, PMS was designed, won
various HR awards for its HR policies
General High quality experienced top management take proactive
Finance 11% market share, 4th
largest in India. EBITDA for each
customer was around R.75 which was much less than industry
average of 110-120. Recently increased its tariff rates.
R & D Invested about 9700 crore in the past two years for GSM
network rollout across the country. NTT Docomo is planning to
add a R&D centre in India to produce value added services. A
M&A’s could also be on the cards for Tata Docomo. Business
line reported it may choose inorganic growth. First to launch
3G & 1st
to Conduct physical 4G trails in India.
CORPORATE PORTFOLIO ANALYSIS
When the company is in more than one business, it can select more than one strategic alternative
depending upon demand of the situation prevailing in the different portfolios. It is necessary to analyze the
position of different business of the business house which is done by corporate portfolio analysis.
Portfolio Analysis:-
Harry Markoulifz 1st
developed portfolio analysis in his 1952, in article “portfolio selection” published
in “The Journal of Finance”. Subsequently, his ideas were further developed by researchers throughout the
latter half of the 20th
century.
Portfolio analysis is an analytical tool which views a corporation as a basket or portfolio of products or
business units to be managed for the best possible returns.
When an organization has a number of products in its portfolio, it is quite likely that they will be in
different stages of development. Some will be relatively new & some much older. Many organizations will not
wish to risk having all their products at the same stage of development. It is useful to have some products with
limited growth but producing profits steadily, & some products with real growth potential but may still be in
the introductory stage. Indeed, the products that are earning steadily may be used to fund the development of
those that will provide the growth & profits in the future.
So the key strategy is to produce a balanced portfolio of products, some with low risk but dull growth
& some with high risk but great potential for growth & profits. This is what we call as portfolio analysis.
Set of techniques that help strategists in taking strategic decisions with regard to individual products or
businesses in a firm’s portfolio. It is primarily used for competitive analysis and strategic planning in multi-
product and multi business firms. Adopting a portfolio analysis, resources could be targeted at the corporate
level to those business that posses the greatest potential for creating competitive advantage.
AIM OF PORTFOLIO ANALYSIS
✓ To analyze its current business portfolio & decide which businesses should receive more or less
investment.
✓ To develop growth strategies, for adding new businesses to the portfolio.
✓ To decide which business should not longer be retained
19. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 19
BALANCING THE PORTFOLIO
Balancing the portfolio means that he different products or businesses in the portfolio have to be
balanced with respect to 4 basic aspects-
✓ Profitability
✓ Cash flow
✓ Growth
✓ Risk
This analysis can be done by any of the following technologies, they are –
1] BCG MATRIX
2] GE 9 CELL MATRIX
[A] BCG MATRIX [BOSTON CONSULTING GROUP]
BCG means Boston Consulting Group, Matrix is developed by Bruce Henderson of the Boston
Consulting Group in the early 1970’s. It is also called as the “Growth Share Matrix”. This is the most popular &
simplest matrix to describe the corporation’s portfolio of businesses or products.
According to this technique, business or products are classified as low or high performance depending
upon their market growth rate & relative market share.
The BCG matrix helps to determine priorities in a portfolio in a product portfolio. Its basic purpose is to
invest where there is growth from which the firm can benefit, & divest those businesses that have low market &
low growth prospects.
✓ Enhances multi-divisional firm in formulating strategies
✓ Autonomous divisions = business portfolio
✓ Divisions may compete in different industries
✓ Focus on market-share position & industry growth rate
To understand the Boston Matrix you need to understand how market share & market growth
interrelated. Each of the products or business units is plotted on a two dimensional matrix consisting of -
✓ Relative Market Share (RMS)
✓ Market Growth Rate (MGR)
1] Market Share
Market share is the percentage of the total market that is being serviced by your company measured
either in the revenue terms or unit volume terms. It is ratio of the market share of the concerned product or
business unit in the industry divided by the share of the market leader. The higher your market share, the higher
proportion of the market you control.
Business Unit Sales this year
RMS = --------------------------------------
Leading rival sales this year
2] Market Growth Rate
Market Growth is used as a measure of a market’s attractiveness. It is the percentage of market growth,
by which sales of a particular product or business unit has increased. Markets experiencing high growth are
ones where the total market share available is expanding & there is plenty of opportunity for everyone to make
money.
20. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 20
Individual Sales this year – Individual sales last year
MGR = -------------------------------------------------------------------
Individual Sales last year
WHY BCG MATRIX
To asses
✓ Profile of product /business
✓ Cash demands of products
✓ The development cycle of product
✓ Resource allocation & divestment decisions
MAIN STEPS OF BCG MATRIX
✓ Identifying & dividing a company into SBU
✓ Assessing & comparing the prospects of each SBU according to two criteria
1) SBU’s relative market share
2) Growth rate of SBU’s industry
✓ Classifying the SBU’s on the basis of BCG matrix
✓ Developing strategic objective for each SBU
ANALYSIS OF THE BCG MATRIX
It is portfolio planning model which is based on the observation that company’s business unit can be
classified in to four categories. It is based on the combination of market growth & market share relative to the
next based competitor. BCG matrix is thus a snapshot of an organization at a given point of time & does not
reflect businesses growing over time.
The matrix reflects the contribution of the products or business units to its cash flow. Based on this
analysis, the products or business units are classified as -
✓ Stars
✓ Cash cows
✓ Question Marks
✓ Dogs
21. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 21
1) STARS (HIGH MARKET GROWTH, HIGH MARKET SHARE)
Stars are products that enjoy a relatively high market share in a strongly growing market. They are
potentially profitable & may grow further to become an important product or category for the company. The
firm should focus on & invest in these products or business units.
✓ High market growth rate means they need heavy investment
✓ High market share means they have economics of scale & generate large amount of cash but they need
more cash than they generate
The general features of stars are –
✓ Stars are leader in business
✓ They also require heavy investment to maintain its large market share.
✓ It leads to large amount of cash consumption & cash generation.
✓ Attempts should be made to hold the market share otherwise the star will become a cash cow.
STRATEGIC CHOICES: Vertical integration, horizontal integration, market penetration, market
development, product development
2) CASH COWS ( LOW MARKET GROWTH, HIGH MARKET SHARE)
These are the product areas that have high relative market share but exist in low growth markets. The
business is mature & it is assumed that lower levels of investment will be required. On this basis, it is therefore
likely that they will be able to generate both cash & profits. Such profits could then be transferred to support the
stars. If it lose market share it may become as dogs
✓ Low market growth rate means market is no longer growing, no efforts or investments are necessary to
maintain the status quo.
✓ High market share means may have a relatively high market share & bring in healthy profits.
The general features of cash cows are -
✓ They are foundation of the company & often the stars of yesterday.
22. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 22
✓ They generate more cash & profits than required
✓ The business is mature & needs lower levels of investment.
✓ Profits are transferred to support stars/ question marks.
✓ They extract the profits by investing as little cash as possible
✓ They are located in an industry that is mature not growing or declining
✓ The danger is that cash cows may become under supported & begin to lose their market.
STRATEGIC CHOICES: Product development, diversification, divestiture, retrenchment
3) QUESTION MARKS (HIGH MARKET GROWTH, LOW MARKET SHARE)
It is also called as Problem Children or Wild Cats. These are products with low relative market share in
high growth markets. These businesses are called question marks because the organization must decide whether
to strengthen them or to sell them.
✓ High market growth rate means that considerable investment may still be required.
✓ The low market share will mean that such products will have difficulty in generating substantial cash &
compete in high growth industry. The decision to strengthen (intensive strategies) or divest.
The general features of Question Marks are -
✓ Cash needs are high
✓ Cash generation is low
✓ Most business start of as question marks
✓ They will absorb great amount of cash if the market share remains unchanged (low)
✓ Question marks have potential to become star & evenly cash cow but can also become dog.
✓ Investment should be high for question marks.
STRATEGIC CHOICES: Market penetration, market development, product development, divestiture
4) DOGS (LOW MARKET GROWTH, LOW MARKET SHARE)
These products are that have low market shares in low growth businesses. These products will need low
investment but they are unlikely to be major profit earners. In practice, they may actually absorb cash required
to hold their position. They are often regarded as unattractive for the long term & recommended for disposal.
Turnaround can be one of the strategies to pursue because many dogs have bounced back & become viable
& profitable after asset & cost reduction. The suggested strategy is to drop or divest the dogs when they are not
profitable.
✓ Low market growth rate means market is no longer growth & regarded as unattractive for the long term
disposal & they tries to absorb cash.
✓ The low market share means products will have decline in generating substantial cash.
The general features of Dogs are -
✓ Dogs are the cash traps
✓ Dogs do not have potential to bring
✓ High cost – Low quality
✓ Business is situated at a declining stage
✓ They are not profit earners
STRATEGIC CHOICES: Retrenchment, liquidation, divestiture
BENEFITS
✓ BCG matrix is simple, easy to perform & easy to understand
23. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 23
✓ It is quantifiable
✓ It draws attention to the cash flows
✓ It draws attention to the investment needs
✓ It helps to quickly & simply screen the opportunity open to you, & help you think about how you can
make the most of them.
✓ It is used to identify how corporate cash resources can best be used to maximize company’s future
growth & profitability.
✓ Helps to understand the strategic positions of business portfolio.
✓ It’s a good starting point for further more thorough analysis.
LIMITATION
✓ BCG matrix uses only two dimensions relative market share & market growth rate.
✓ It is too simplistic
✓ Problem of getting data on market share & market growth is not strong
✓ High market share does not mean profits all time.
✓ Business with market share can be profitable too.
✓ Business can only be classified to four quadrants;
✓ Does not include other external factors that may change the situation completely.
✓ It denies that synergies between different units exist.
EXAMPLE : Hindustan Uni Lever Ltd
24. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 24
[B] GE 9 CELL MODEL
GE means General Electric nine cell matrix. This matrix was developed in 1970’s by General Electric
Company with the assistance of the consulting firm, Mckinsey & Co, USA. This is also called GE
multifactor portfolio matrix or Directional policy matrix. The GE matrix has been developed to overcome the
obvious limitations of BCG matrix.
It is a tool used in brand marketing & product management to decide what products to add to the
portfolio. It identifies the optimum business portfolio as one that fits perfectly to the company’s strengths &
helps to explore the most attractive industry sectors or markets.
It identifies the optimum business portfolio as one that fits perfectly to the company’s strengths &
helps to explore the most attractive industry sectors or markets. The objective of the analysis is to position
each SBU on the chart depending on the SBU’s strength & the attractiveness of the industry sector or market
on which it is focused.
This matrix consists of nine cells [3*3] matrix used to perform business portfolio analysis as a step in
the strategic planning process & is based on 2 key variables:
✓ Business strength
✓ Industry attractiveness
1] Business strength:-
It is a competitive strength replaces market share as the dimension by which the competitive position
of each SBU is assessed.
The business strength is measured by considering such factors as:
Relative market share, Profit margins, Ability to compete on price & quality, Knowledge of customer
& market, Competitive strengths & weaknesses, Technological capacity, Caliber of management, Brand
image, Corporate image, Production capacity, R&D performance, Promotional effectiveness etc.,
2] Industry attractiveness:-
It replaces market growth as the dimension of industry attractiveness & includes a boarder range of
factor other than just the market growth rate.
The business strength is measured by considering such factors as:
Market size & growth rate, Industry profit margin, Competitive intensity, Economics of scale,
Technology, Social, environment, legal & human aspects, Current size of market, Market structure & market
rivalry, Demand variability, Global opportunities etc.,
SPOTLIGHT STRATEGY
The 9 cells of the GE matrix represent various degrees of industry attractiveness (high, medium & low)
& business strength (strong, average & weak). After plotting each product line or business unit on the nine cell
matrix, strategic choices are made depending on their position in the matrix.
GE matrix is also called “Spotlight” strategy matrix because the 3 zones are like Green, Yellow & red
of Traffic lights.
25. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 25
1] Green – Grow
It indicates invest / expand. If the product falls in green zone, the business strength is strong & industry
is at least medium in attractiveness, the strategic decision should be to expand, to invest & to grow.
2] Yellow – Hold
It indicates select / earn. If the product falls in yellow zone, the business strength is low but industry
attractiveness is high, it needs caution & managerial discretion for making the strategic choice.
3] Red – Harvest
It indicates divest / harvest. If the product falls in the red zone, the business strength is average or weak
& attractiveness is also low or medium, the appropriate strategy should be divestment.
High Medium Low
LEADER TRY HARDER DOUBLE OR
QUIT
GROWTH PROCEED
WITH CARE
PHASED
WITHDRAWAL
CASH
GENERATOR
PHASED
WITHDRAWAL
DIVESTMENT
BUSINESS STRENGTH
26. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 26
The horizontal axis represents business strength & the vertical axis represents industry attractiveness.
Thus products or business units in the green zone are almost equivalent to stars or cash cows, yellow zone
are like question marks & red zone are similar to dogs.
ADVANTAGES
✓It used 9 cells instead of 4 cells of BCG
✓It considers many variables & does not lead to simplistic conclusions
✓High/Medium/Low & Strong/ Average/ Low classification enables a finer distinction among business
portfolio
✓It uses multiple factors to assess industry attractiveness & business strength, which aloe users to select
criteria appropriate to their situation.
✓It allows intermediate ratings between high & low & b/w strong & weak
✓It helps in channeling the corporate resources to business & achieving competitive advantage &
superior performance.
✓It helps in better strategic decision making & better understanding of business scope.
DISADVANTAGES
✓It can get quite complicated & cumbersome with the increase in businesses
✓Though industry attractiveness & business strength appear to be objective, they are in reality subjective
judgments that may vary from one person to another.
✓ It cannot effectively depict the position of new business units in developing industry
✓It only provides broad strategic prescriptions rather than specifies of business policy.
✓It tends to obscure business that are become to winners because their industries are entering at exist
stage
✓Assessment of business in terms of two factors is not fair.
DIFFERENCE BETWEEN BCG & GE MATRIX
BCG GE MATRIX
✓ It consists of 4 cells
✓ Business unit is rated against relative
market share & industry growth rate
✓ The matrix uses single measure to
assess growth & market share
✓ The matrix uses 2 types of
classification i,e high & low
✓ Has many limitations
✓ It involves multi products
✓ It is primary tools
✓ It consists of 9 cells
✓ Business unit is rated against business
strength & industry attractiveness
✓ The matrix used multiple measures to
assess business strength & attractiveness
✓ The matrix uses 3 types of classification
i,e high/medium/low & strong/ average /
weak
✓ Overcomes many limitations of BCG &
is an improvement over it.
✓ It involves multi business units
✓ It is secondary tools
EXAMPLE – MARUTI SUZUKI COMPANY
✓Founded in 1981.
✓Maruti 800, Omni, Alto, SX4, Swift desire, Swift, A-star, GPSY, Wagon R, Ritz, etc
27. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 27
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
COMPETITIVE
STRENGTH
HIGH
MEDIUM
LOW
SWIFT
OMNI
BALENO
A - STAR
ALTO
SWIFT
DEZIRE
WAGAN
R
VERSA
SX4
MARKET ATTRACTIVENESS BUSINESS STRENGTH
✓ Size
✓ Growth
✓ Competitive rivalry
✓ Profit levels
✓ Ability to differentiate
✓ Cyclicality
✓ Market diversity
✓ Structure
✓ Market share
✓ Size/ scale
✓ Quality
✓ Technology
✓ Cost base
✓ Brand strength
✓ Customer loyalty
✓ Image, people
SWOT ANALYSIS
INTRODUCTION
A scan of the internal & external environment is an important part of strategic planning process.
Environmental factors internal to the firm usually can be classified as strengths [S] or weakness [W] & those
external to the firm can be classified as opportunities [O] or threats [T]. Such analysis of the strategic
environment is referred to as a SWOT analysis.
It involves the collection & portrayal of information about internal & external factors which have or may
be have, an impact on business.
MEANING
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a business. It involves specifying the objective of the business and
identifying the internal and external factors that are favorable and unfavorable to achieve that objective.
28. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 28
Technique is credited to Albert Humphrey, who lends a research project at Stanford University in 1960’s &
1970’s.
It is a non-financial planning tool. It links the analysis in terms of advantages and disadvantages; and the
internal and external business environment (in a matrix format). The Strengths and Weaknesses are defined by
measures such as market share, loyal customers, level of customer satisfaction and product quality.
Opportunities are new potential areas for business in the future, such as new markets, or new conditions in
existing markets. Threats describe how the competition, new technology, or other factors in the business
environment may affect the business's development.
A technique that enables a group or individual to move from everyday problems and traditional
strategies to a fresh prospective. SWOT analysis looks at your strengths and weaknesses, and the opportunities
and threats your business faces.
The SWOT Analysis framework is a very important and useful tool to use in marketing Management
and other business applications. As a basic tool its mastery is a fundamental requirement for the marketer,
entrepreneur or business person. A clear understanding of SWOT is required for business majors.
It is used as framework for organizing & using data & information gained from situation analysis of
internal & external environment.
AIM OF SWOT ANALYSIS
✓ To help decision makers share & compare ideas
✓ To bring a clearer common purpose & understanding of factors for success
✓ To organize important factors linked to success & failure in the business world
✓ To provide linearity to decision making process allowing complex ideas to be presented systematically.
WHO NEEDS SWOT ANALYSIS?
They are -
1] JOB HOLDER
✓ When supervisor has issues with work output
✓ Assigned to a new job
✓ New financial year – fresh targets
✓ Job holder seeks to improve performance on the job
2] BUSINESS
✓ When the team has not met its targets
✓ Customer service can be better
✓ Launching a new business unit to pursue a new business
✓ New team leader is appointed
3] COMPANY
✓ When revenue, cost & expense targets are not being achieved
✓ Market share is declining
✓ Industry conditions are unfavorable
✓ Launching a new business venture
THREE STAGES OF A SWOT ANALYSIS
1. Identify.
2. Draw conclusions.
3. Translate into strategic action.
29. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 29
HOW TO USE THE TOOL
To carry out a SWOT analysis, write down answers to the following questions where appropriate, use
similar questions & whenever possible, consider your answers from your own point of view & from the point
of view of the people you deal with.
Strengths:
✓ What advantages does your company have?
✓ What do you do better than anyone else?
✓ What unique or lowest-cost resources do you have access to?
✓ What do people in your market see as your strengths?
✓ What factors mean that you "get the sale"?
Weaknesses:
✓ What could you improve?
✓ What should you avoid?
✓ What are people in your market likely to see as weaknesses?
✓ What factors lose you sales?
Opportunities:
✓ Where are the good opportunities facing you?
✓ What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
✓ Changes in technology and markets on both a broad and narrow scale.
✓ Changes in government policy related to your field.
✓ Changes in social patterns, population profiles, lifestyle changes.
✓ Local events.
Threats:
✓ What obstacles do you face?
✓ What is your competition doing that you should be worried about?
✓ Are the required specifications for your job, products or services changing?
✓ Is changing technology threatening your position?
✓ Do you have bad debt or cash-flow problems?
✓ Could any of your weaknesses seriously threaten your business?
Therefore, finally carrying out this analysis will often be illuminating both in terms of pointing out what
needs to be done & in putting what we might see as a problem into perspective. You can then use a simple
matrix.
FACTORS POSITIVE NEGATIVE
INTERNAL
EXTERNAL
STRENGTH WEAKNESS
OPPOTUNITIES THREATS
30. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 30
SWOT MATRIX
1] STRENGTH
The factors that give an edge for the company over it’s competition. It may contribute includes the
availability of resources & their performance ability. It maintenance of persistent market growth & the ability to
produce or enter new markets.
2] WEAKNESSES
The factors that can be harmful if used against the firm by its competitors. The organization weaknesses
are established through failures, losses & the incapability to respond to market changes. Analysis of weaknesses
will determine the management strategy to develop & implement the remedial measures.
3] OPPORTUNITIES
The favorable situations which an bring a competitive advantage opportunities are normally ample.
However, a plan needs to be developed to use these opportunities efficiently & at the appropriate time.
4] THREATS
The unfavorable situations which can negatively affect the business. The threats occur from economic,
social, political or technological reasons. Technological advancements may render the organization technology
as obsolete.
The SWOT matrix identifies the Strength, Weaknesses, Threats & Opportunities of a business firm. This
formation can be used by the company in many ways in evolving its options for the future. In genral, the
company should attempt to:-
✓ Build its strength
✓ Reverse its weaknesses
31. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 31
✓ Maximize its response to opportunities
✓ Overcome to its threats.
FACTORS POSITIVE NEGATIVE
INTERNAL
EXTERNAL
STRENGTH
✓ Patents, Good reputation
✓ Strong brandname
✓ Cost advantages from proprietary,
know – how
✓ Exclusive access to high grade
natural resources
✓ Favourable access to distribution
networks.
WEAKNESS
✓ Lack of patent protection
✓ A weak brand name
✓ Poor reputation among customers
✓ High cost structure
✓ Lack of access to the best natural
resources
✓ Lack of access to key distribution
channels.
OPPOTUNITIES
✓ An unfulfilled customer needs
✓ Arrival of new technologies
✓ Loosering of regulations
✓ Removal of international trade
barriers.
THREATS
✓ Shifts in consumer tastes away
from the firms product
✓ Emergences of substitute
products
✓ New regulation
✓ Increased trade business.
ADVANTAGES
✓ Consolidate strengths
✓ Minimizes Weaknesses
✓ Helps to Grab Opportunities
✓ Minimizes Threats
✓ Facilitates Planning
✓ Facilitates Alternative Choices
✓ Helps to Innovate
✓ Ensure Survival & Success
DISADVANTAGES
✓ It does not show has to achieve a competitive advantage
✓ Provides a static assessment in time
✓ May lead the firm to over emphasize single internal or external factors in formulating strategies.
EXAMPLE OF APPLE, Inc.
It is a computer company founded in 1976. Its main headquarter is located at 1 infinite Loop, Silicon
Valley, California.
FACTORS POSITIVE NEGATIVE
INTERNAL
STRENGTH
✓ Retail store
✓ Products / Branding
✓ Steve jobs
✓ Marketing / advertising
WEAKNESS
✓ Non compatibility
✓ Price
✓ proprietary
32. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 32
EXTERNAL
✓ Innovation
OPPOTUNITIES
✓ Stock investments
✓ Jobs moving up
THREATS
✓ Copy cat products
✓ Market share – PC’s
✓ Too board
✓ Steve jobs health
SYNERGY AND DYSERGY
SYNERGISTIC EFFECTS
Synergistic effects may be negative or positive we can say it either synergy or dysergy based on its
effect an idea that is greater or lesser or lesser than that sum common parts. It helps to develop competencies.
Synergistic effects – 2+ 2 = 5 (or 3?)
2 or more strengths –Synergy
2 or more weaknesses – Dysergy
Ex:
Samsung mobiles – good product range, reasonable price, good promotion & good distribution
Ambassador – poor product range & substandard promotion.
SYNERGY [ 2 + 2 = 5 ]
According to American Heritage Dictionary, the Term “Synergy” is derived from the Greek word
“SUNERGOS”, meaning “Working together” or “joint work”
Synergy is the creation of a greater than simple than simple sum of its parts. A dynamic state in which
combined action is formed over the difference of individual component actions. It also called as “positive
synergy”.
Synergy means behavior of whole system unpredicted by the behavior of heir parts taken separately”. It
is a concept that the whole is greater than the sum of the parts.
Synergy is the interaction of multiple elements in a system to produce an effect different from or greater
than the sum of their individual’s effects.
Synergy definition:
Interaction of elements that when combined produce a total effect that is greater than the sum of the
individual elements This equation is showing us that if you combine something with another factor the final
outcome will be much bigger & more significant.
EX:
Working together
Combined action + Operation
= Greater advantage
This assumes that the collective advantage to be gained by joining forces is greater than the separate
existence of each organization.
The basic concept of synergy can be explained through this mathematical formula; 2+2=5
The 2+2=5 effect means that operating independently; each subsystem can produce only 2 units of
output. However, by combining their efforts & working together effectively, the 2 subsystems can produce 5
units of output.
33. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 33
It refers to the combined effects produced by 2 or more parts, elements or individuals. Simply, synergy
results when the whole is greater than the sum parts of the parts.
It is an advantage to a firm gained by having existing resources which are compatible with new
products or markets that the company is developing.
If the firm is broken into smaller units performing the same function, this would lead to a reduced
output or ultimately increase the costs.
Example:
Suppose there are 2 persons in the company to carry some load, if each person carries 10kg of material
easily from one place to another but unable to carry 15 kg of material. If we combine these both persons
working together & effectively, they can carry more than 20 kgs of material from one place to another. This
is the synergistic effect where the sum of two is greater than the individuals.
WHOM TO COMMUNICATE YOUR SYNERGIES?
✓Employees
✓Shareholders
✓Suppliers and distributors
✓Creditors
FEATURES OF SYNERGY
✓Greater capability for organization by combining resources properly (as compared to individual work)
✓Synergy can help organization to work in team to achieve goal effectively with reduction in cost.
✓There will be an optimization of resources which can lead to increased productivity.
✓The whole organization would be greater in capability than the sum of its individual parts.
✓Individual parts may consists of people & units of the organization
✓It will help the firms to work as a team to achieve their goals with increase in their output & reduction
in the cost.
TYPES OF SYNERGY
✓ Market synergy: Extending products to new markets. Mutually advantageous collaboration of forces to
create an enhanced combined result.
✓ Cost synergy: Savings from combinations of common base operations, resources, and facilities
✓ Technological synergy: The transfer and application of technologies to new markets
✓ Management synergy: Complementary skills that make for more effective overall management. It is
advantage to be gained where management skills concerning current operations are easily transferred to
new operations because of the similarity of same problems in the 2 industries.
✓ Sales synergy: it is used for a product which is obtained through use of common marketing facilities
such as distribution channels, sales staff & administration & warehousing.
✓ Operating synergy: it arises from the better use of operational facilities & personnel, bulk, purchasing,
a greater spread of fixed costs & the advantages of common learning where the experience gained by
employees in making one product can be transferred to making new products.
✓ Investment Synergy: it can be achieved from the joint use of plant, common raw materials stocks,
transfer of R & D from one product to another, I .e from the wider use of a common investments in a
fixed assets or working capital or research.
SYNERGY IS AN IMPORTANT CONCEPT FOR MANAGERS
✓ Reinforces the need to work together in a co operative manner
✓ Organizational units tend to be more successful working together than working alone.
34. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 34
✓ Synergy is applied to marketing for measuring overall effectiveness through the coordinated operation
of many implements
✓ Greater the synergy a firm can manage to achieve through its selection of products & markets, the more
flexible will be its competitive position.
DIFFERENT ELEMENTS OF SYSTEMS
✓ Drug synergy
✓ Biological science synergy
✓ Pest synergy
✓ Toxicological synergy
✓ Human synergy
ADVANTAGES OF SYNERGY
✓ Increase in market share
✓ Gain efficiency
✓ Political stability
✓ Competitive advantage to firm
✓ Risk reduction
✓ Economics of scale
✓ Greater outcomes
✓ Cooperation by M & A’s or any other strategy
✓ It is created when the combination of buyer & seller eliminations.
✓ Financial benefits – cah stack, debt capacity , tax benefit.
DISADVANTAGES OF SYNERGY
✓ Easy theory, practically difficult
✓ Thinking problems due to different groups
✓ Sometimes cost may high
✓ Lack of clarity of roles and responsibilities may lead ambiguity and conflicts
✓ Loss in jobs
✓ Increased number of persons or authorities, longer decision time, increased work
EXAMPLE WALT DISNEY COMPANY
The Walt Disney Company, benefits greatly from synergy. The company’s movies, theme parks,
television programs & merchandising licensing programs all benefit from one another.
Its famous movie the Lion King earned over $300 million in box office revenues. In addition Disney
earned hundreds of millions more from the sale of licensed Lion King Toys, Clothing & video games.
The Lion King stage show at Disney world attracts more guests to the park and the video sold $20
million copies during the 1st
week of its release in India.
SIMPLE LIST OF SYNERGY CRITERIA
CRITERIA YARDSTICK/ MEASURMENT TOOLS
✓ Start up synergy ✓ Skills critical to success, common management skills, common
organizational capacities, common equipments & factory timing
advantage.
35. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 35
✓ Operating synergy ✓ Potential for new joint products.
DYSERGY [ 2 + 2 = 3]
It is also called as negative synergy & it is opposite of synergy. These are the combined negative attitude
or results. These are the combined negative attitude or results. The idea that combined parts have properties that
are more or less than the sum of the parts it is called called as dysergy, learning synergy to mean only beneficial
effects.
2+2=3 (two plus two is equal to three) less than the sum of the parts, the negative sum of version &
leaving synergy to mean only beneficial effects.
Not all synergy is positive. The combined negative attitudes & argue over small things of dissatisfied
group members can add up to greater trouble than any of the members could have caused individually in any
organizations. Mostly sick companies suffer from this negative synergy.
Negative synergy
It means the combination of efforts results in less output; it can result from due to following reasons,
✓ Inefficient committees
✓ Business units that lack strategic fit &
✓ From other poorly functioning joint efforts.
Negative synergy occurs in groups, committees, & other joint efforts for a number of reasons. Groups
commonly experience negative synergy because group decisions are often reached more than individual
decisions. Negative synergy can also occur in group decisions if an individual is allowed to dominate &
control the group decision.
The combination of people or business does not necessarily that it will lead to better outcomes,
it can also resulting lack of harmony or coordination which can lead to negative synergy. Downsizing &
the divestment / cutback of businesses are the part of negative synergy.
GAP ANALYSIS
The evaluation of the difference between a desired outcome and an actual outcome, this difference is
called a gap. In the management literature “GAP Analysis is the comparison of actual performance with
potential performance”. Thus it identifies gap b/w the optimized allocation & integration of the inputs
(resources) & the current allocation level.
GAP analysis in a formal study of what a business is doing currently and where it wants to go in the
future. This reveals areas that can be improved. Gap analysis involves determining, documenting &
approving the variance b/w business requirements & current capabilities. It is a technique of determining the
steps taken to move from the current state to desired future state.
Strategic gap analysis attempts to determine what a company should do differently to achieve a
particular goal by looking at the time frame, management, budget and other factors to determine where
shortcomings lay. After conducting this analysis, the company should develop an implementation plan to
eliminate the gaps.
GAP analysis provides foundation for measuring investment of time, money and Human resources
required to achieve particular outcome. Gap analysis naturally flow from Benchmarking & form other
assessment.
Once the general expectation of performance in the industry in understand it is possible to compare
that expectation with the company’s current level of performance. This comparison becomes the gap
analysis. Such analysis can be performed at strategic or operational level of an organization.
36. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 36
Gap Analysis has also been used as means of classifying how well a product or solution meets a
targeted need or set of requirements. In this case, “GAP” can be used as a ranking of “Good”, “Average” &
“Poor”.
GAP Analysis. Good, Average & Poor
GAP analysis can identify gaps in the market. Thus comparing forecast to desired profits to reveals the
planning Gap. This represents a goal for new activities in general & new products in particular.
The planning Gap can be divided into 3 main elements-
1] Usage Gap:
It is the gap b/w the total potential for the market & actual current usage by all consumer in the market.
It is most important for brand leaders.
2]Existing Usage:
It makes up the total current market from which market shares, for examples are calculated. It usually
derives from marketing research most accurately from panel research, but also from adhoc work.
Usage Gap = Market potential – Existing usage.
3]Product Gap:
It also called as segment or positioning gap. It is the part of the market a particular origination is
excluded from because of the product or service characteristics. This may be because the market is
segmented & the organization does not have offerings in some segments, in a way that effectively excludes
certain potential consumer because competitive offerings are much better placed for these consumers.
The product gap may be the main element of the planning gap where an organization can be
product inputs hence the emphasis on the importance of correct positioning.
37. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 37
FUNDAMENTALS OF GAP ANALYSIS
1.Identifying the Current and Future States
✓Current State: The current or present state of an organization be it the total production of
organization, resources of the organization etc.
✓Desired future State: The expected state where the organization as reached optimum output and has
maximum resources.
2.Describing the GAP:
✓First analyze whether there is a GAP between the current state and desired future state.
✓If there is any GAP found identify the constituents of GAP and the factors contributing for it.
✓Describe the reasons which are actually causing the GAP, by looking at the company’s objectives and
strategies.
3.Bridging the GAP:
✓It should list all the possible solutions that can be implemented to fill the GAP between current state
and desired future state.
✓The solutions with respect to GAP should be specific and also reflect the objectives of the
organization.
HOW TO CONDUCT GAP ANALYSIS?
There are 10 steps to analysis the gap analysis, they are
1st Step: Establish specific target objectives by looking at the company’s mission statement, strategic goals
and objectives.
2nd Step: Analyze the current business process by collecting the relevant data, this includes the basic
performance at all levels.
3rd Step: Describe the existing business process. This includes all process of the organization
4th Step: Define the desired future performance position.
5th Step: Measure current performance.
6th Step: Recognize the GAP between current state and desired future state.
7th Step: Design the strategies and methods that are required to attain the desired future state by keeping
company’s objectives and mission in mind.
8th Step: Execute the strategies and methods mentioned in the 7th step.
38. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 38
9th Step: Accept the feedback of the GAP analysis process. As, this helps in proper reviewing of additional
GAP’s if any.
10th Step: Monitor and report the progress achieved.
ADVANTAGES
✓It is a diagnostic tool, to improve the performance of the organization.
✓This can also be used to compare the results of the past and future states.
DISADVANTAGES
✓The desired state becomes unrealistic at certain times.
✓The external environment is overlooked.
DIFFERENT METHODS TO CONDUCT GAP ANALYSIS
There are mainly 4 types, they are:-
✓ SERVQUAL
✓ ISO 9001:2000
✓ SAGA(Self Assessment Gap Analysis)
✓ Two Dimensional Analysis
1] SERVQUAL
This Method of GAP Analysis consists of set of Questions Divided in Five categories.
WHAT DO WE DO WITH THIS SURVEY?
Administer the survey to customer and the company. The results will show difference in perceptions between
✓Customers
✓Employees
✓Management
Assurance
Empathy
39. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 39
2] ISO 9001:2000
ISO (International Organization for Standardization) is the world's largest developer and publisher of
International Standards. Identifying the GAPS with reference to the Standards provided by ISO and
Finding out solutions To Fill them. The ISO 9000 family of standards relate to quality management systems.
3] SAGA(Self Assessment Gap Analysis)
Rather than sending out a survey as in SERVQUAL, SAGA is a process used to take a close look at an
organization’s operations. In SAGA a Company/Process/Approach is Analysed using the Baldrige criteria
and the Gaps are found out.
What is Baldrige Criteria?
Recipients are selected based on achievement & improvement in 7 areas, known as the Baldrige
criteria for performance excellence. Leadership: how upper management leads the organisation, & how the
organization leads within the community.
4] Two Dimensional Gap Analysis
The maintenance of biodiversity requires a wise combination of protection, management, and
restoration of habitats at several scales. The solution lies in integration of natural and social sciences in the
form of two-dimensional gap analysis, as an efficient tool for biodiversity policies.
APPLICATIONS WHERE THE GAP ANALYSIS ARE USED
It is used in many areas such as.,
✓Production Industry
✓Sales Forecast
✓Fiscal policies
✓Performance of an individual & HRM
✓Quality assurance & Cost control
✓Financial performance
✓Market competitiveness & Management skills
EXAMPLE FOR GAP ANALYSIS
A] If a small mom and pop restaurant wanted to become a top tourist destination but currently only
served locals, a strategic gap analysis would look at the changes required for the restaurant to meet its goals.
These changes might include relocating to an area with more tourists, altering the menu to appeal to out-of-
town visitors, hiring more staff so the restaurant's hours become more convenient for travelers, and so on.
The analysis would also determine how to make these changes happen. If a business doesn't know where it
stands in relation to its goals, it is not likely to achieve them.
B] A telecom company performs a gap analysis to understand why a number of orders have been
delivered late to customers. They map out the current process and identify manual steps, redundant work,
overly complex dependences, bottlenecks, technology pain points and process risk and document them as
gaps, The Gap analysis also produces an optimized target state process that cuts days from order
provisioning time, reduces cost and mitigates risks.
40. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 40
PORTER'S FIVE FORCES MODEL OF COMPETITION
Michael E. Porter. Born in 1947. He is the Professors in Harvard Business School. Porter's introduced
the 5 Forces Model. He has Written 18 books & over 125 Articles. He is called as “Guru of modern day
business strategy”.
The Five Forces model of Porter is an outside-in business unit strategy tool that is used to make an
analysis of the attractiveness (value...) of an industry structure. It captures the key elements of industry
competition. It is one of the most recognized frameworks for the analysis of business strategy. It is used as
theoretical framework derived from Industrial Organization [IO] economics to derive five forces which
determine the competitive intensity & therefore attractiveness of a market.
This theoretical framework is based on 5 forces, describes the attributes of an attractive industry &
thus suggests when opportunities will be greater & threats are less, in these of industries.
✓ Attractiveness in this context refers to overall industry profitability & also reflects upon the
profitability of the firm under analysis.
✓ An “Unattractive” industry is one where the combination of forces acts to drive down overall
profitability.
✓ A “Very Unattractive” industry would be one approaching “pure competition”, from the perspective of
pure industrial economics theory.
Porter’s model is based on the insight that a corporate strategy should meet the opportunities & threats
in the organizations external environment. This model supports analysis of the driving forces in an industry.
It helps to decide how to influence or to exploit particular characteristics of their industry.
IMPORTANCE OF 5 FORCES
✓ What strategy to use?
✓ Basic knowledge of business strategy & forces that influence the decision making
✓ Industry analysis [Industry relevance, Industry players, Industry structure, Future changes]
✓ Strategize [Competitive advantage, Cost advantage, Market dominance, New product development,
Contraction / Diversification, Price leadership, Global, Re-engineering, Downsizing, De-layering,
Restructuring.
✓ Measure and monitor strategy effectiveness
The purpose of Five-Forces Analysis
The five forces are environmental forces that impact on a company’s ability to compete in a
given market.
The purpose of five-force analysis is to diagnose the principal competitive pressures in a
market and assess how strong and important each one is.
41. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 41
[1] Threat of New Entrants
This force determines how easy it is to enter a particular industry. If an industry it is a profitable are
few barriers to enter, rivalry soon intensifies. When more organization compete for same market shares, profit
start to fall. It is essential existing organization to create high barriers to enter to deter new entrants.
The easier it is for new companies to enter the industry, the more cutthroat competition there will be.
Factors that can limit the threat of new entrants are:
✓ Economies of Scale
✓ Product Differentiation
✓ Capital Requirements
✓ Customer Switching Costs
✓ Access to Distribution Channels
✓ Government Policy
✓ Expected Retaliation
[2] Bargaining Power of Suppliers
The term suppliers comprise all sources for inputs that are needed in order to provide goods &
services. The bargaining power of supplier is also described as the market of inputs. Suppliers of raw material,
components, labor, and services to the firm can be a source of power over the firm when there are few
substitutes. If you’re making biscuits and there is only one person who sells flour, you have no alternative but
to buy it from them. Supplier may refuse to work with the firm or charge excessively high prices for unique
resources. Suppliers are likely to be powerful if:
✓ Supplier industry is dominated by a few firms
✓ Suppliers’ products have few substitutes
✓ Buyer is not an important customer to supplier
✓ Suppliers’ product is an important input to buyers’ product
✓ Suppliers’ products are differentiated
✓ Suppliers’ products have high switching costs
42. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 42
[3] Bargaining Power of Buyers
The bargaining power of customers determines how much customers can impose pressure on margins
& volumes. The bargaining power of customer of is also described as the market of outputs. The ability of
customer to put them firm under pressure, which also affects the customer’s sensitivity to price changes. Firms
can take to measures to reduce buyer power, such as implementing a loyalty program. The buyer power is high
if the buyer has many alternatives. The buyer power is low if they act independently. Their power is likely to
be high. Buyer groups are likely to be powerful if:
✓ Buyers are concentrated Purchase accounts for a significant fraction of supplier’s sales
✓ Products are undifferentiated
✓ Buyers face few switching costs
✓ Buyer presents a credible threat of backward integration
✓ Buyer has full information
[4] Threat of Substitute Products
Threats of Substitute in the Porter’s theory actually mean goods and services that do similar functions.
When there is one product successful, it also leads to the creation of other products that can perform the
same functions as the product of the same industry. The existence of product outside of the realm of the
common product boundaries increase the propensity of customer to switch to attractiveness.
✓ Keys to evaluate substitute products:
✓ Products with improving
✓ price/performance tradeoffs
✓ relative to present industry products
[5] Rivalry Among Existing Competitors
For most industries the intensity of competitive rivalry is the major determinant of the competitiveness
of the industry. Intense rivalry often plays out in the following ways:
✓ Using price competition
✓ Staging advertising battles
✓ Making new product introductions
✓ Increasing consumer warranties or service
Occurs when a firm is pressured or sees an opportunity
✓ Price competition often leaves the entire industry worse off
✓ Advertising battles may increase total industry demand, but may be costly to smaller competitors
ADVANTAGES
✓ To create a defendable position in an industry, in order to cope successfully with competitive
forces.
✓ It provides as Cost leadership (low cost advantage)
✓ It creates differentiation in market or product
✓ The model is strong tool for competitive analysis at industry level.
✓ It provides useful input for performing a SWOT analysis.
DISADVANTAGES
✓ Inside-out strategy is ignored (core competence)
✓ It does not cope with synergies and interdependencies of large corporations
43. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 43
✓ The environments which are characterized by rapid, it requires more flexible, dynamic or emergent
approaches
✓ Sometimes it may be possible to create completely new markets instead of selecting from existing
ones (blue ocean strategy) [blue ocean strategy: - it refers to a market for a product where there is
no competition or very less competition.
EXAMPLE COCO COLA
[1] New entrants: New “look-a-like” manufacturers
[2] Substitute products: Fashionable new drinks, milk drinks, coffee, beer, .
[3] Suppliers: Price and availability of ingredients on world market, Quality speed safety, traceability,
flexibility of supply chain.
[4] Buyers/consumers: High as a result of intense competition both among branded and unbranded
products. Combined purchase power of shops, bars, supermarkets, soda shop, vending machine,
restaurants & food stores, convenience store.
[5] Traditional competition: Prices of Pepsi, local brands, Market share, Promotional actions of
competition
MC KINSEY'S 7’S FRAMEWORK
It was first mentioned in “The Art of Japanese Management” by Richard Pascal & Anthony Athos in
1981. They have been investigating how Japanese Industry has been so successful. At around the same time
that Tom Peters & Robert Waterman were exploring what made a company excellent. The 7s model was born
at a meeting of these four authors. It was introduced in Mckinsey’s company
HOW TO USE THE MODEL
✓ You can use the 7S model to help analyze the current situation (Point A), a proposed future
situation (Point B) and to identify gaps and inconsistencies between them.
✓ It's then a question of adjusting and tuning the elements of the 7S model to ensure that your
organization works effectively and well once you reach the desired endpoint.
The 7-s framework of McKinney’s is the value based management model that describes 7 factors to
organize a company in a holistic and effective way. Together these factors determine the way in which the
corporation operates. Large or small, the strategies are all interdependent, so if you fail to pay proper
attention to one of them, this may affect all others as well.
The most common uses of the frame work are:
✓ To facilitate organizational framework
✓ Examine the likely effects of structure of future changes within a company
✓ To identify how each area may change in future
✓ To facilitate the merger of an organisation.
✓ Organizational Analysis Tool
✓ Monitor Changes in the Internal Situation of the Organization
✓ It’s a management model that describes 7 factors to organize a company in an holistic & effective way.
✓ Together these factors determine the way in which a corporation operates.
44. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 44
✓ Managers should take into account all 7 of these factors, to be sure of successful implementation of a
strategy.
✓ It is used b/w each of the S’s one can identify strengths & weaknesses of an organisation.
REASONS WHY TO USE
THE 7S FRAMEWORK
The model is most often used as a tool to assess and monitor changes in the internal situation of an
organization.
THE 7S ELEMENTS
The seven interdependent factors are categorized as either "hard" or "soft" elements.
A] Hard Elements:
"Hard" elements are easier to define or identify Management can directly influence them.
These are,-
✓ Strategy
✓ Structure &
✓ Systems
B] Soft Elements:
"Soft" elements, on the other hand, can be more difficult to describe. They are less tangible and more
influenced by culture. These soft elements are as important as the hard elements if the organization is going to
be successful.
These are,-
✓ Shared Values,
✓ Skills,
✓ Style &
✓ Staff
45. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 45
[1] Strategy:
Purpose of the business and the way the organization seeks to enhance its competitive advantage. The
plan devised to maintain and build competitive advantage over the competition.
[2] Systems:
The daily activities and procedures that staff members engage in to get the job done.
[3] Structure:
The way the organization is structured and its units related to each other and who reports to whom.
[4] Shared Values:
These are also called as "super ordinate goals" when the model was first developed. These are the core
values of the company that are evidenced in the corporate culture and the general work ethic. Values and
beliefs of the company what an organization wants to achieve, what its purpose, vision, mission, central
beliefs & attitude.
[5] Skills:
The actual skills and competencies of the employees working for the company
[6] Style:
The style of leadership adopted.
[7] Staff:
The company's people resources and how they are developed, trained and motivated
OBJECTIVES / ADVANTAGES
✓ Improve the performance of A company
✓ Examine the likely effects of future changes within A company
46. Saraswathi S. Asst Professor, JSS College for Women, Kollegal 46
✓ Align departments and processes during A merger or acquisition
✓ Determine how best to implement A proposed strategy
DISADVANTAGES
✓ What type of analysis is this? Or what is the action triggered after putting your organization into this
drill?
✓ Does this give you real guidelines as to how to proceed further, after the analysis is completed?
✓ Do we treat this as a guideline or checklist and proceed with using other techniques to formulate
further steps?
✓ There are been other techniques in vogue which have to be used arrive at actionable points.
✓ The above seems abstract list of generic elements in any organization, to improve the each business
process, such as marketing, finance, manufacturing etc.
EXAMPLE : INFOSYS
It Was Co-founded In 1981. It is an Indian Multinational Corporation that provides Business
Consulting, information Technology, software Engineering and Outsourcing Services. It is the Third Largest
India Based It Services Company By 2014 Revenues and The Fifth Largest Employer. The Market
Capitalization Is $31.11 Billion Making It India’s Fifth Largest Publicly Traded Company.
The 7’s elements are:-
[1] STRATEGY:
✓ What is the strategy?
✓ How to intend to achieve the objectives?
✓ How to deal with competitive pressure?
✓ How are changes in customer demands dealt with?
✓ How is strategy adjusted for environmental issues?
STRATEGY FOLLOWED BY INFOSYS:
✓ Client focused strategy to achieve growth
✓ Increase business from existing and new clients
✓ Expand geographically
✓ Enhance solution set
✓ Develop deep industry knowledge
✓ Enhance brand visibility
✓ Pursue alliances and strategic acquisitions
[2] ORGANISATION STRUCTURE:
✓ How is the company/team divided?
✓ What is the hierarchy?
✓ How do various departments coordinate activities?
✓ How do the team members organize and align themselves?
✓ Is decision making and controlling centralized or decentralized?
ORGANISATION STRUCTURE AT INFOSYS:
✓ Adopted a free organization devoid of hierarchies.
✓ Everyone is known as associates of his position in the company.
✓ Software development is undertaken through teams and the constitution of teams is based on the
principle of flexibility.