Session on Strategic Management for Management Students, helping them understand basic concepts in the area of strategy formulation for the organizations.
Corporate level strategies are basically about the choice of direction that a firm adopts in order to achieve its objectives.
Corporate strategy is essentially a blueprint for the growth of the firm.
The corporate strategy sets the overall direction for the organization to follow.
It also spells out the extent, pace and timing of the firm’s growth.
Fundamentals of strategy - strategic human resource managementmanumelwin
Fundamentally, strategy is about defining intentions (strategic intent) and achieving strategic fit by allocating or matching resources to opportunities (resource-based strategy).
Corporate level strategies are basically about the choice of direction that a firm adopts in order to achieve its objectives.
Corporate strategy is essentially a blueprint for the growth of the firm.
The corporate strategy sets the overall direction for the organization to follow.
It also spells out the extent, pace and timing of the firm’s growth.
Fundamentals of strategy - strategic human resource managementmanumelwin
Fundamentally, strategy is about defining intentions (strategic intent) and achieving strategic fit by allocating or matching resources to opportunities (resource-based strategy).
Environmental scanning is a concept from business management by which businesses gather information from the environment, to better achieve a sustainable competitive advantage.
Environmental Scanning & Monitoring- Techniques
PEST, SWOT, QUEST
This is the first lecture of 40 lectures planned for Anna University/Anna University of Technology students of 3ed semester MBA. Please provide your comments. The required notes will be uploaded soon.
Competitiveness and GlobalizationChapter 1Strategic Manageme.docxmaxinesmith73660
Competitiveness and Globalization
Chapter 1
Strategic Management
Module 1
In this module, you will develop
definitions for strategy, strategic competitiveness, competitive advantage, and above average returns
an appreciation for the importance of strategy
an ability to recognize strategy
an awareness of the strategic intent of familiar firms
appreciate the importance of strategy to the success of the firm
recognize a strategy
Understanding Strategy
Define Strategy
Understanding Strategy
From the Greek word “strategia” meaning “generalship”
Merriam-Webster
The science and art of employing the political, economic, psychological, and military forces of a nation or group of nations to afford the maximum support to adopted policies in peace or war.
Terms used in regard to strategy
Objectives; Mission; Strengths; Weaknesses
Military strategy assumes conflict
Sun Tsu (544 – 496 BC)
Link between military & strategy
The Art of War
“So it is said that
if you know your enemies and know yourself,
you will not be imperiled in a hundred battles;
if you do not know your enemies but do know yourself,
you will win one and lose one;
if you do not know your enemies nor yourself,
you will be imperiled in every single battle.”
Business Strategy
If military strategy assumes conflict, what does business strategy assume?
Business Strategy
If military strategy assumes conflict, what does business strategy assume?
Competition
Winning
Market Dominance
Number 1
Define business strategy
Strategy Defined
Glueck (1980) defined strategy as: a unified, comprehensive, and integrated plan designed to ensure that the basic objectives of the enterprise are achieved.
Quinn (1980) defined strategy as: the pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole.
Barney (1997) defined strategy as: a pattern of resource allocation that enables firms to maintain or improve their performance.
Strategy Defined
What do these definitions have in common?
Dr. Henry Mintzberg
McGill University
Leading world authority on strategy
Framework for understanding strategy
What is the framework?
Dr. Henry Mintzberg (1987)
strategy is a plan, that is, a consciously intended course of action
strategy is a ploy, that is, a specific maneuver intended to outwit an opponent or competitor
strategy is a pattern, that is, a consistent set of behaviours
strategy is a position, that is, the mediating force between the internal and external environment
strategy is a perspective, that is, an ingrained way of perceiving the world
Apply the framework
Applying Mintzberg's strategy framework to Starbucks:
Plan: open 1800 new stores in 2006
Pattern: predominantly company operated stores
Position: high-traffic, high-visibility locations around the world (37 countries)
Perspective: commitment to coffee producers and the environment
Ploy: third meeting place between home and work
.
Running Head CONDUCTING AN ORGANISATIONAL ASSESSMENT1AN ORGANI.docxtodd271
Running Head: CONDUCTING AN ORGANISATIONAL ASSESSMENT 1
AN ORGANISATIONAL ASSESSMENT 12
LASA 1—Conducting An Organizational Assessment
Sean Markl
Argosy University
Operational Management
September 26, 2018
There are very many issues that determine whether an organization is going to fail or succeed in a given environment. Competition keeps increasing and the dynamics of doing business change with time. Consumer demands and preferences as well as government’s laws and regulations for doing business also change with time. An overall organizational success encompasses the inclusion of all the stakeholders such as employees and shareholders, and the harmonization of its goals and missions. With all these in mind, an organization ought to develop an effective structure, a powerful strategy and a good culture since its success or failure heavily depends on these factors more than anything else.
The Organizational Structure
This is the arrangement or the framework by which different activities are laid out and how individual or team work are coordinated in an organization. To achieve goals and different objectives of the organization all the activities and roles in an organization should be well coordinated, controlled and managed. The organization structure is a tool that should never be neglected. It helps to show who does what and who reports to whom (Thompson, 2018). These reporting relationships are very valuable and result to unity of command.
A good organization structure eases the flow of formal communications within the organization. This is because it outlines the channels of communication and how different actions of the stakeholders are related or linked together. Structure helps different personnel in the organization to work together for a common goal.
There is no structure that can be said to be the best. For example, an organization needs to consider its strategy and have clearly outlined responsibilities and roles, clear communication channels and defined procedures in order to select a good structure. A good structure helps the business to:
· Improve staff morale.
· Avoid excessive meetings
· Make quick and effective decisions
· Reduce conflict among teams and departments
· Have coordination
· Reduce costs
· Be responsive to changes
The Strategy
This is a combination of all the plans, ideas and actions that an organization intends to take in order to achieve set goals. The strategic plans may be for short term, medium term or even long-term goals. The strategy maps the route that the business will take in order to achieve its goals and visions.
With time the strategy of a business can change even if the goals remain the same. It does not have to be inflexible. This allows the business to incorporate changes in the internal and external environment and also take advantage of new opportunities that may arise in the course of running the organization. An organization needs a strategy for various reasons as situations m.
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu.
Running Head MARKETING1MARKETING14P.docxjeanettehully
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu ...
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Safalta Digital marketing institute in Noida, provide complete applications that encompass a huge range of virtual advertising and marketing additives, which includes search engine optimization, virtual communication advertising, pay-per-click on marketing, content material advertising, internet analytics, and greater. These university courses are designed for students who possess a comprehensive understanding of virtual marketing strategies and attributes.Safalta Digital Marketing Institute in Noida is a first choice for young individuals or students who are looking to start their careers in the field of digital advertising. The institute gives specialized courses designed and certification.
for beginners, providing thorough training in areas such as SEO, digital communication marketing, and PPC training in Noida. After finishing the program, students receive the certifications recognised by top different universitie, setting a strong foundation for a successful career in digital marketing.
2. Unit 1Unit 1
• Introduction
–Definition, nature, scope and importance of
strategy and strategic management
–Strategic decision making
• Process of strategic management and levels at
which strategy operates
–Role of strategists
–Defining strategic intent
• Vision, Mission, Business definition, Goals and
objectives
2Harsh Arora
3. In 1958, Phil Knight,
a keen athlete and
an undergraduate at
the University of
Oregon and his
track coach Bill
Bowerman realized
the need for a good
running shoe.The
leading track shoes
of the time were
being produced by
European
companies, adidas
and Puma
Harsh Arora 3
5. IntroductionIntroduction
• Definition, nature, scope and importance of
strategy and strategic management
Strategy refers to the ideas, plans, and support that
firms employ to compete successfully against their
rivals.
Strategy designed to help firms achieve
competitive advantage.
5Harsh Arora
6. FoundationFoundation
In 1934, Prof. G. S. Gause of Moscow
University, known as ‘the father of
mathematical biology’ has published result
of his experiment.
Result: Gause’s Principle of “Competitive
Exclusion”
8. FoundationFoundation
“Evolution determines who survives and who
is crowded out”
--- Henderson D. Bruce, 1989
Some are crowded out naturally, some by
the competitors and some suicide.
Reason: if every business could grow
indefinitely, the total market would grow to
an indefinite size on a finite earth.
9. FoundationFoundation
Today, businesses has learned
“competitive coexistence”
How ???????
They have planned for evolutionary
change and combine various factors in
many different ways to differentiate.
10. Can evolution be planned for inCan evolution be planned for in
business ?business ?
11. In 1971, Knight and
Bowerman decided
to develop a
distinctive
trademark and a
new brand name
'Nike', inspired by
the Greek winged
Goddess ofVictory
'Nike'
Harsh Arora 11
12. DefinitionDefinition
“Strategy is a deliberate search for a plan of
action that will develop a business’s
competitive advantage and compound it.”
---- Henderson, 1989
12Harsh Arora
13. Nature and ScopeNature and Scope
A plan you adopt in order to get something done,
especially in politics, economics or business.
The art of planning where to place armies and
weapons in order to gain the best military
advantage.
The art of planning the best way to achieve
something or to be successful in a particular field.
13Harsh Arora
14. ImportanceImportance
However, even after understanding what
strategy is some fail and some sail !
Ex: in photocopy machine, IBM and East
Man Kodak failed to Xerox, at the same
time Canon survived………
What could be the reason ????
14Harsh Arora
15. Nature, Scope & ImportanceNature, Scope & Importance
Serves as a road map for the corporation
Enables long term decisions concerning
the firm
Ensure optimum utilization of resources
Prepares the firms to face the future
Helps acquiring competitive advantage
16. In the early 1980s,
Nike replaced adidas
as the leading athletic
shoe company in the
American market.
When Nike went
public, Knight became
one of the richest men
in the world. But in
the mid-1980s, after
five years of rapid
growth at an annual
rate of 44%, Nike
failed to anticipate the
emerging market for
aerobic shoes, having
concentrated its
efforts on casual shoes
Harsh Arora 16
17. “He who loves practice without theory is
like a sailor who boards a ship without a
radar and compass and never knows
where he may cast”
Leonardo da Vinci
So, strategy (systematic planning) is a
necessity to start, grow, and sustain
17Harsh Arora
18. Basis of strategyBasis of strategy
The essence of strategy is to match
strengths and distinctive competence
with terrain in such a way that one’s own
business enjoys a competitive advantage
over rivals competing on the same
terrain.
◦ Terrain refers to the environmental setting in
which an engagement with an adversary takes
place.
18Harsh Arora
19. In the 1990s, Nike
made more
acquisitions
includingTetra
Plastic Inc., (1991)
and Sports
Specialties Inc
(1993).Tetra
manufactured
plastic film used in
the manufacture of
Nike's Air-sole
cushioning
components. Sports
Specialties
distributed licensed
headwear
Harsh Arora 19
22. Strategic competencyStrategic competency
Vision competency
◦ Vision
◦ Mission
◦ Goals and objectives
Value creation
competency
◦ Customer focus
◦ Competitor focus
Planning and
administration
competency
◦ Activity fit
◦ Corporate fit
◦ Alliance fit
◦ People fit
◦ Reward system fit
◦ Communication fit
22Harsh Arora
23. Strategic competencyStrategic competency
Global awareness
competency
◦ Opportunities/threats
exist awareness
◦ Different business
practices
◦ Cultural awareness
Leveraging
technology
competency
◦ faster innovation
◦ Big companies act
small
◦ Small companies act
big
Stakeholder
competency
◦ Shareholders
◦ Customers
◦ Employees
◦ Communities
◦ Senior managers
23Harsh Arora
24. Knight, who had detached himself from Nike in
order to travel and pursue other interests,
joined the company back in 1999 after
Bowerman's death, at a time when Nike was
struggling. While addressing employees at a
meeting, Knight admitted that there had been a
management failure. Knight put together a new
executive team that comprised partly a few
Nike's veterans who carried the heritage and
culture of Nike's early years, and some
outsiders. The new executive team sent out
signals that the time had come to solve all the
problems
Harsh Arora 24
25. Strategic management processStrategic management process
A management process designed to
satisfy strategic imperatives for building
competitive advantage is called strategic
management process. It consists of four
major steps
◦ Analysis
◦ Formulation
◦ Implementation
◦ Adjustment/evaluation
25Harsh Arora
26. Strategic management processStrategic management process
Analysis
External
environment
Opportunities, threats
Internal environment Strengths, weaknesses
Formulation
Mission
Customers to be served
Capabilities to be developed
policies
Goals, guidelines for major
activities
Implementation
Organizational structure,
systems, culture etc.
Adjustments/
Evaluation
(Cycle to earlier steps)
26Harsh Arora
27. Strategic decision makingStrategic decision making
Process of strategic management and
levels at which strategy operates
◦ Multi business firm/diversified firm: a firm that
operates more than one line of business.
Multi business firms often operate across
several industries or markets, each with a
separate set of customers and competitive
requirements. Firms can possess many
business units in their corporate portfolio.
27Harsh Arora
28. Strategic decision makingStrategic decision making
◦ Single business firm/undiversified firm: a firm
that operates only one business in one
industry or market
◦ Business strategy: plans and actions that firms
devise to compete in a given product/market
scope or setting; addresses the question
“How do we compete within an industry?”
28Harsh Arora
29. Strategic decision makingStrategic decision making
◦ Corporate Strategy: plans and actions that
firms need to formulate and implement when
managing a portfolio of business; an especially
a critical issue when firms seek to diversify
from their initial activities or operations into
new areas. Corporate strategy issues are key
to extending the firm’s competitive advantage
from one business to another.
29Harsh Arora
31. Multi Business Enterprise (GE)Multi Business Enterprise (GE)
CORPORATE MANAGERS
BUSINESS MANAGERS
31Harsh Arora
32. Role of strategistsRole of strategists
Executives most directly responsible for
strategic decisions are;
◦ Business managers: People in charge of
managing and operating a single line of
business
◦ Corporate managers: people responsible for
overseeing and managing a portfolio of
businesses within the firm
32Harsh Arora
33. Role of strategistsRole of strategists
Role of Board of Directors
Role of C.E.O
Role of Senior Management
Role of SBU – Level Executives
Role of Corporate Planning Staff
Role of Consultant
Role of Middle Level Managers
33Harsh Arora
34. Role of strategistsRole of strategists
Competitive advantage – most important
criterion by which to assess strategic
decisions
Strategic decision must also satisfy the
numerous and often conflicting needs of
various stakeholders;
◦ Shareholders
◦ Customers
◦ Employees
◦ Communities
◦ Top managers
34Harsh Arora
35. Defining strategic intentDefining strategic intent
Vision, Mission, Business definition, Goals and objectives
Vision: the highest aspirations and ideals
of a person or organization; what a firm
wants to be. Vision statements often
describe the firm or organization in lofty,
even romantic or mystical tones.
35Harsh Arora
36. VisionVision
How the organization wants to be
perceived in the future – what success looks
like
An expression of the desired end state
Challenges everyone to reach for
something
significant – inspires a compelling future
Provides a long-term focus for the entire
organization
37. Examples of Vision StatementsExamples of Vision Statements
BHEL: A world class innovative, competitive
and profitable engineering enterprise
providing total business solution.
Colgate-Palmolive: To be company of first
choice in oral and personal hygiene by
continuously caring for consumers and
partners.
HUL: Our vision is to meet the everyday
needs of people everywhere
Harsh Arora 37
38. Defining strategic intentDefining strategic intent
Vision, Mission, Business definition, Goals and objectives
Mission: describe the firm or organization
in terms of its business. Mission
statements answer the questions;
◦ What business are we in?
◦ What do we intend to do to succeed?
Mission statements are somewhat more concrete than
vision statements but still do not specify the goals and
objectives necessary to translate the mission into reality
38Harsh Arora
39. Defining Corporate MissionDefining Corporate Mission
Corporate Mission is the essential purpose that
differentiate one company from others. It clearly
defines the priorities and the purpose of existence
of the company.
It focuses on limited number of goals
Stress the company’s major policies and values
Defines the major competitive spheres within
which the company will operate
40. Examples – Mission StatementsExamples – Mission Statements
To Make People
Happy
To Explore the
Universe and
Search for Life
and to Inspire the
Next Generation
of Explorers
NASA
Walt Disney
Does a good job of expressing the core
values of the organization. Also conveys
unique qualities about the organization.
Too vague and and unclear. Need more
descriptive information about what makes
the organization special.
41. Defining strategic intentDefining strategic intent
Vision, Mission, Business definition, Goals and objectives
Goals and Objectives
◦ Goals: the specific results to be achieved within a
given time period
◦ Objectives: the specific results to be achieved within
a given time period (also known as goals). Objectives
guide the firm or organization in achieving its mission.
41Harsh Arora
42. Goal formulationGoal formulation
Effective goals should be formulated so
that they are:
◦ Arranged hierarchically from broader to
more specific objectives
◦ Stated in quantitative terms
◦ Realistic
◦ Consistent with each other and the company
mission
43. ObjectiveObjective
◦ Relevant - directly supports the goal
◦ Compels the organization into action
◦ Specific enough so we can quantify and measure the
results
◦ Simple and easy to understand
◦ Realistic and attainable
◦ Conveys responsibility and ownership
◦ Acceptable to those who must execute
◦ May need several objectives to meet a goal
44. Goals Vs ObjectiveGoals Vs Objective
Very short
statement, few
words
Broad in scope
Directly relates to
the Mission
Statement
Covers long time
period (such as 10
years)
Longer statement,
more descriptive
Narrow in scope
Indirectly relates to
the Mission
Statement
Covers short time
period (such 1 year
budget cycle)
GOALS OBJECTIVES
45. By September 2004,
Nike's Soccer sales
were nearly $1 billion,
or 25% of the global
market. For the first
time, Nike's share of
the soccer shoe market
in Europe (35%),
exceeded that of adidas
(31%).
Nike had achieved rapid
growth in part by using
the aggressive
marketing tactics that
made it big in the US.
Nike paid the
prestigious Manchester
United club an
unprecedented $450
million over 14 years to
run its merchandising
and uniform operations
Harsh Arora 45
47. Unit 2Unit 2
Environment
◦ Environmental appraisal
Concept of environment, components of environment
(economical, social, political, and technological)
◦ Environmental scanning techniques
ETOP, QUEST and SWOT (TOWS)
◦ Internal appraisal
The internal environment, organizational capabilities in
various functional areas and Strategic Advantage Profile
Methods and techniques used for organizational
appraisal, identification of Critical Success Factor (CSF)
47Harsh Arora
48. Environmental appraisal
Concept of environment, components of environment
(economical, social, political, and technological)
A firm’s environment represents all
external forces, factors or conditions that
exert some degree of impact on the
strategies, decisions, and actions taken by
the firm.
Harsh Arora 48
49. Environmental appraisal
The specific type of environmental forces and
conditions vary from industry to industry
A number of broad environmental forces exert an
impact on the strategies of every firm
Broadly two type of external environments;
The broader macro-environment
Industry specific competitive environment
Environment offers both opportunities and threats to
the company.
Harsh Arora 49
51. Environmental appraisal
Competitive environment
The immediate economic factors – customers, competitors,
suppliers, buyers, and potential substitutes – of direct relevance
to a firm in a given industry
Industry attractiveness: the potential for profitability when
competing in a given industry. An attractive industry has high
profit potential; an unattractive industry has low profit potential.
Industry structure: the interrelationship among the factors in a
firm’s competitive or industry environment; configuration of
economic forces and factors that interrelate to affect the
behavior of firms competing in that industry.
Harsh Arora 51
52. Examining and Responding to the MarketingExamining and Responding to the Marketing
EnvironmentEnvironment
Environmental
Scanning
57. Economic environmentEconomic environment
Business cycle
Buying power
Financial sources
Willingness to spend
◦ GDP, growth, inflation, central bank lending rates,
currency exchange rates, fiscal policies (tax on
corporations and individuals), regional issues like land
process and labor rates, distribution of economic
rewards in the society, freedom to move monies,
stock exchange and money market
58. Social environmentSocial environment
Attitude, values, and beliefs tastes held by
people including ethnic minorities
Culture: attitude to work, savings,
investments, ethics etc.
Demography: Size and structure of
workforce, population shifts, aging
Social structure: class and segmentation
of the market
Harsh Arora 58
59. Political environmentPolitical environment
Supranational (global)
National (domestics)
Local
Government active areas include;
◦ Policies on healthcare, unemployment, exchange rates, inflation,
economic growth
◦ Government employment and the public sector
◦ Fiscal policies on taxation
◦ Government agencies regulating competition, pollution and
industrial relations
◦ Law of various kinds such as those relating to protection of the
environment or the safety of employees in the work place or
those relating to customer protection
60. Technological environmentTechnological environment
These can be internal and external
Software used for quality control and produce
products of varying complexity
Technology includes;
◦ Goods and services
◦ Production process
◦ Information and communication
◦ Transport and distribution
◦ Computing and associated implication for production
◦ Biotechnology and new industries
Harsh Arora 60
61. Environmental scanning techniques
Benefits;
◦ Increasing managerial awareness of environmental
change
◦ Increasing understanding of the context in which
industries and markets functions
◦ Increasing understanding of multinational settings
◦ Improving resource allocation decisions
◦ Facilitating risk management
◦ Focusing attention on primary influences on strategic
change
◦ Acting as an early warning system
Harsh Arora 61
62.
63. SWOT (TOWS) AnalysisSWOT (TOWS) Analysis
Central purpose:
◦ identify strengths that align, fit or match an
organizations resources and capabilities to the
demands of the environment
◦ To build on organizations strength in order to
exploit opportunities and counter threats and
to correct organizational weaknesses
Harsh Arora 63
64. StrengthsStrengths
Strength’s – Those things that you do well, the high
value or performance points
Strengths can be tangible: Loyal customers, efficient
distribution channels, very high quality products,
excellent financial condition
Strengths can be intangible: Good leadership,
strategic insights, customer intelligence, solid
reputation, high skilled workforce
Often considered “Core Competencies” – Best
leverage points for growth without draining your
resources
65. StrengthsStrengths
Core competencies in key
areas
Adequate financial resources
Well thought of by buyers
An acknowledged market
leader
Well conceived functional
area strategies
Access to economies of scale
Insulated (at least somewhat)
from strong competitive
pressures
Proprietary technology
Cost advantages
Better advertising campaigns
Product innovation skills
Proven management
Ahead on experience curve
Better manufacturing
capabilities
Superior technological skills
66. WeaknessWeakness
Weaknesses – Those things that prevent you from
doing what you really need to do
Since weaknesses are internal, they are within your
control
Weaknesses include: Bad leadership, unskilled
workforce, insufficient resources, poor product
quality, slow distribution and delivery channels,
outdated technologies, lack of planning
67. WeaknessWeakness
No clear strategic
direction
Obsolete facilities
Profitability issues
Lack of management
depth and talent
Missing some key skills
and competencies
Poor track record in
implementing problems
Falling behind in R&D
Too narrow in product
line
Weak market image
Weak distribution
network
Below average marketing
skills
Unable to finance
needed changes in
strategy
Higher overall unit costs
relative to key
competitors
68. OpportunitiesOpportunities
Opportunities – Potential areas for growth and higher
performance
External in nature – marketplace, unhappy customers
with competitor’s, better economic conditions, more
open trading policies
Internal opportunities should be classified as Strength’s
Timing may be important for capitalizing on
opportunities
69. OpportunitiesOpportunities
Ability to serve
additional customer
groups or expand into
new markets or
segments
Ways to expand product
line to meet broader
range of customer needs
Ability to transfer skills
or technological know
how to new products or
businesses
Integrating forward or
backward
Falling trade barriers in
attractive foreign
markets
Complacency among
rival firms
Ability to grow rapidly
because of strong
increases in market
demand
Emerging new
technologies
70. ThreatsThreats
Threats – Challenges confronting the organization,
external in nature
Threats can take a wide range – bad press coverage,
shifts in consumer behavior, substitute products, new
regulations, . . .
May be useful to classify or assign probabilities to
threats
The more accurate you are in identifying threats, the
better position you are for dealing with the “sudden
ripples” of change
71. ThreatsThreats
Entry of lower cost
foreign competitors
Rising sales of substitute
products
Slower market growth
Adverse shifts in foreign
exchange rates and trade
policies of foreign
governments
Costly regulatory
requirements
Vulnerability to
recession and business
cycle
Growing bargaining
power of customers or
suppliers
Changing buyers needs
and tastes
Adverse demographic
changes
73. ETOP: Environmental Threat andETOP: Environmental Threat and
Opportunity ProfileOpportunity Profile
It is a process of dividing an environment
into different sectors and than analyzing
the impact of each sector on the
organization
It provides a clear picture to the
strategists about which sectors &
different factors in each sector, have a
favorable impact on the organization
Harsh Arora 73
74. ETOP: Environmental Threat andETOP: Environmental Threat and
Opportunity ProfileOpportunity Profile
Harsh Arora 74
Environmental
Sectors
Nature of
Impact
Impact of each sector
Economic
Growing affluence among urban
consumers, rising disposable
incomes & living standards
Market
Organized sector a virtual
oligopoly with 4 major
manufacturers, buyers, critical &
better informed, overall industry
growth rate not encouraging,
growth rate for niche market, like
sports, trekking etc.
International
Global imports growing but India’s
share shrinking, major importers
are the US & EU but India exports
mainly to Africa
75. ETOP: Environmental Threat andETOP: Environmental Threat and
Opportunity ProfileOpportunity Profile
Harsh Arora 75
Environmental
Sectors
Nature of
Impact
Impact of each sector
Political
Bicycle principle mode of
transport for low and middle
income, industry too small to
draw attention
Regulatory
Parts and components reserved
from SSI, bicycle industry a thrust
area for export.
Social
Environment & health friendly
transport option, wide usage, as
recreation, convenient in traffic,
customer preference.
76. ETOP: Environmental Threat andETOP: Environmental Threat and
Opportunity ProfileOpportunity Profile
Harsh Arora 76
Environmental
Sectors
Nature of
Impact
Impact of each sector
Supplier
Mostly ancillaries in small scale
sector supply parts & components,
rising steel prices, industrial
concentration in Punjab &
Tamilnadu
Technological
Up gradation in progress, import
of machinery simple, product
innovation ongoing like battery
operated & lightweight foldable
cycles
77. QUEST: Quick EnvironmentalQUEST: Quick Environmental
Scanning TechniqueScanning Technique
It is a scanning procedure designed to assist
executives and planners to keep side by side of
change and its implications for the
organizational strategies and policies.
It is develop a quick, inexpensive analysis of the
possible futures of the organization may face
based on the perception, experience,
knowledge, and observations of the senior
executive team
Harsh Arora 77
78. QUEST: Quick EnvironmentalQUEST: Quick Environmental
Scanning TechniqueScanning Technique
The Quest Process
1. Preparation: Selection of participants and compilation of
“intelligence file” containing readily available information on
past trends and future prospects in the particular industry
2. Divergent Planning: Determine the top 10 most significant
events and evaluate cross impact
3. Scenario Development: Analysis of organization’s business
environment and associated performance measures and
develop alternative future scenarios using the identified
critical events
4. Strategic option identification: follow up to prepare Strength
and Weaknesses of the organization
Harsh Arora 78
79. Internal appraisal
All organizations have strengths and weaknesses in the
functional areas of business. No enterprise is equally
strong or weak in all areas. Maytag, for example, is
known for excellent production and product design,
whereas Procter & Gamble is known for superb
marketing. Internal strengths/weaknesses, coupled with
external opportunities/threats and a clear statement of
mission, provide the basis for establishing objectives
and strategies. Objectives and strategies are established
with the intention of capitalizing upon internal strengths
and overcoming weaknesses
Harsh Arora 79
80. Internal appraisal
Organizational capabilities in various
functional areas;
◦ marketing, finance, accounting, management,
management information systems, and
production/operations; there are many
subareas within these functions, such as
customer service, warranties, advertising,
packaging, and pricing under marketing etc.
Harsh Arora 80
81. Internal appraisal
Organizational capabilities in various functional
areas;
◦ A firm’s strengths that cannot be easily matched or imitated by
competitors are called distinctive competencies.
◦ Building competitive advantages involves taking advantage of
distinctive competencies. For example, 3M exploits its
distinctive competence in research and development by
producing a wide range of innovative products.
◦ Strategies are designed in part to improve on a firm’s
weaknesses, turning them into strengths—and maybe even into
distinctive competencies.
Harsh Arora 81
82. Internal appraisal
Strategic Advantage Profile
Strategic advantage profile (SAP) tries to find out
organizational strengths and weaknesses in relation to
certain CSF advantage factors or competence factors)
within a particular industry.
Many industries have relatively small but extremely
important sets of factors that are essential for
successfully gaining and maintaining competitive
advantages. Known as critical success factors (CSFs),
they have a significant bearing on
the overall growth of a firm within an industry.
Harsh Arora 82
83. Internal appraisal
Major sources of Critical Success Factor
(CSF)
Industry characteristics
Competitive positions
General environments
Organizational developments
Harsh Arora 83
84. Unit 3Unit 3
Corporate level and business level
strategies
◦ Corporate level strategies
Stability, expansion, retrenchment and combination
strategy.
Corporate restructuring, concept of synergy,
Mergers & acquisitions, corporate restructuring
◦ Business level strategies
Porter’s framework of competitive strategies;
conditions, risks and benefits of cost leadership,
differentiation and focus strategies, concept,
importance, building and use of core competence
84Harsh Arora
85. Corporate level strategies
Stability strategy
involves maintaining the status quo or growing in a
methodical, but slow, manner.
Organizations might follow a stability strategy for a variety of
reasons:
Why rock the boat?
Why not stop for a while?
Why to swallow risk?
Where are the resources?
Stability strategies would work only when the firm is
doing well and the environment is
not excessively volatile
Harsh Arora 85
86. Corporate level strategies
Expansion strategy
The firm tries to redefine the business, enter new
businesses, that are related or unrelated
or look at its product portfolio more intensely.
Why to pursue growth strategy?
To ensure survival: Ambassador car failed to grow and
forced out of market.
To obtain scale economics.
To stimulate talent.
To reach commanding heights.
Harsh Arora 86
88. Corporate level strategies
Retrenchment strategy.
defensive strategy followed by a firm when its
performance is disappointing or when its survival is at
stake
Economic recessions, production inefficiencies, and
innovative breakthroughs by competitors
Xerox went through a terrible 2-year period in early 1980s
when managers and analysts thought the firm might face
bankruptcy because of crushing attacks from Japanese
competitors like Cannon and Sharp.
Harsh Arora 88
89. Corporate level strategies
Forms of Retrenchment strategy.
Divestment strategy (also called divestiture or spin-
off): It involves the sale of those units or parts of a
business that no longer contribute to or fit the
firm’s distinctive competence. The firm simply gets
out of certain businesses and sells off units or
divisions
Turnaround Strategies: to reverse a negative trend
and bring the organization back to normal health
and profitability.
Liquidation Strategy: Liquidation involves selling or
disposing of all or a part of an organization’s assets.
Harsh Arora 89
90. Corporate level strategies
Forms of Retrenchment strategy.
Bankruptcy: an organization that is unable to pay its
debts can seek court protection from creditors and
from certain contract obligations while it tries to
regain financial health and stability
Combination strategy
Corporate planning aimed at achieving two or
more goals (such as consolidation, growth, stability)
simultaneously
Harsh Arora 90
91. Corporate level strategies
Corporate restructuring
Advances in information technology
To keep smile on the customers’ face every time
to redefine markets and industries
Internally structures, management styles and cultures
to get ahead of its competitors
Peter Drucker, ‘every
organization must prepare to abandon every
thing it does”.
Harsh Arora 91
92. Corporate level strategies
Concept of synergy
Consolidation: If both firms dissolve their
identity to create a new firm, it is called
consolidation
A friendly merger takes place when both firms
agree to combine their might in order to gain
certain synergistic benefits like
Harsh Arora 92
93. Corporate level strategies
Concept of synergy
Marketing synergy- using common distribution
channels, sales force, sales promotion etc.
Operating synergy- better use of facilities
Investment synergy – better uses of resources as in
the case of mergers of banks or financial
institutions.
Management synergy- using existing managerial
talent in a judicious way.
Harsh Arora 93
94. Corporate level strategies
Mergers & acquisitions
A merger occurs when two or more
organizations (usually of roughly similar sizes)
combine to become one through an exchange
of stock or cash or both.
Acquisition is the purchase of a firm that is
considerably larger. The firm that acquires is
called the acquiring firm and other, the
merging firm.
Harsh Arora 94
95. Business level strategies
Porter’s framework of competitive strategies
(Michael Porter’s five forces model)
Awareness of the five forces can help a company
understand the structure of its industry and stake out a
position that is more profitable and less vulnerable to
attack
Harsh Arora 95
97. Threat of entryThreat of entry
New entry to an industry bring in:
◦ New capacity
◦ Desire to gain market share
◦ Puts pressure
on prices
on costs
Rate of investment necessary to compete
Harsh Arora
98. Threat of entryThreat of entry
◦ When new entrant diversify from other
markets, they
Leverage existing capabilities
Cash flow to shake up competition
Pepsi entered into Mineral Water
Microsoft entered into Internet Browser
Apple entered into music distribution
Harsh Arora
99. Threat of entryThreat of entry
When threat is high
◦ Hold down prices
◦ Boost investment
◦ Deter new competitors
Starbucks invest aggressively in
modernizing stores and menus
Harsh Arora
100. Entry barriers
◦ Supply side economies of scale (Intel)
◦ Demand side benefits of scale (IBM, eBay)
◦ Customer switching cost (SAP – ERP software)
◦ Capital requirements (Aviation)
◦ Incumbency advantages independent of size (Wal-
Mart)
◦ Unequal access to distribution channels (Eureka
Forbes)
◦ Restrictive government policy (Ambassador – WB)
Harsh Arora
Threat of entryThreat of entry
101. Powerful suppliers;
◦ Capture more value for themselves
◦ Charge higher prices
◦ Limiting quality or services
◦ Shifting cost to industry participants
Microsoft contributed to the erosion of profitability
among PC makers by raising prices on operating
systems
Harsh Arora
Power of SuppliersPower of Suppliers
102. A supplier group is powerful if;
◦ More concentrated than industry
◦ Does not depend heavily on industry or serve many
industries
◦ Industry participants face switching costs
◦ Suppliers offers products that are differentiated
(pharma)
◦ No substitute for suppliers products
◦ Supplier can threaten to integrate forward
Harsh Arora
Power of SuppliersPower of Suppliers
103. Customer group has negotiating leverage if;
◦ Few buyers, or each one purchases in volumes
◦ Industry’s products are standardized or
undifferentiated
◦ Buyers few switching cost
◦ Buyers can threaten to integrate backward
Well logging companies (which measure below
ground conditions of oil wells)
Harsh Arora
Power of BuyersPower of Buyers
104. Video conferencing ~ travel
Plastic ~ aluminum
E-mail ~ Physical mails
Threat of substitute is high if;
◦ Offers an attractive price performance trade off (phone ~
skype)
◦ Buyers cost of switching is low (generic drugs, technologically
strong plastic ~ steel for automobile cos.)
Harsh Arora
Threat of SubstitutesThreat of Substitutes
105. Rivalry among existing competitorsRivalry among existing competitors
Price discounting
New product introduction
Advertising campaigns
Service improvements
Harsh Arora
106. Rivalry among existing competitorsRivalry among existing competitors
Intensity of rivalry greatest if;
◦ Competitors are numerous or are roughly equal in
size and power
◦ Industry growth is slow
◦ Exit barriers are high
◦ Rivals are highly committed to the business and have
aspirations for leadership
◦ Firms cannot read each other’s signals well because
of lack of familiarity with one another, diverse
approaches to competing, or differing goals
Harsh Arora
107. Case let 3Case let 3
Commercial aviation: it’s one of the least
profitable industries because
◦ all five forces are strong
Established rivals compete intensely on price
Customers are fickle, searching for the best deal regardless of
carrier
Suppliers – plane and engine manufactures, along with unionized
labor forces – bargain away the lion’s share of airline’s profits
New players enter the industry in a constant stream
Substitutes are readily available – such as train or car travel
Harsh Arora
108. Business level strategies
Porter’s framework of competitive strategies: cost
leadership
Cost leadership is a strategy that focuses on
making an organization more competitive by
producing its products more cheaply than
competitors can.
Example: Nirma, Wal-Mart
Harsh Arora 108
109. Business level strategies
Porter’s framework of competitive strategies:
differentiation strategies
It involves attempting to develop products and
services that are viewed as unique in the
industry. Successful differentiation allows the
business to charge premium prices, leading to
above average profits.
Brand image (Rolex)
Technology (Honda)
Customer service (HDFC)
Harsh Arora 109
110. Business level strategies
Porter’s framework of competitive strategies: focus
strategies
It is a strategy that emphasizes making an
organization more competitive by targeting a
specific regional market, product line or
buyer group. The organization can use either
a differentiation or low cost approach, but
only for a narrow target market.
Example: Titan
Harsh Arora 110
111. Unit 4Unit 4
Strategic analysis and choice
◦ Corporate level analysis (BCG, GE Nine cell
Matrix)
◦ Industry level analysis; Porter’s five forces
Model
◦ Qualitative factors in strategic choice
111Harsh Arora
112. Strategic analysis and choiceStrategic analysis and choice
Corporate level analysis : BCG Matrix
Harsh Arora 112
117. Strategic analysis and choiceStrategic analysis and choice
Industry level analysis; Porter’s five forces
Model
(done in the last module)
Qualitative factors in strategic choice
Seymour Tiles identified six qualitative questions that are
useful in evaluating strategies way back in 1963 thus
1. Is the strategy internally consistent?
2. Is the strategy consistent with the environment?
3. Is the strategy appropriate in view of available resources?
4. Does the strategy involve an acceptable degree of risk?
5. Does the strategy have an appropriate time framework?
6. Is the strategy workable? Harsh Arora 117
118. Unit 5Unit 5
Resource allocation, projects and
procedural issues
Organization structure and system in
strategy implementation
Strategic control and operational control,
organizational system and techniques of
strategic evaluation
118Harsh Arora
119. Resource allocation, projects andResource allocation, projects and
procedural issuesprocedural issues
While implementing strategies, the scarce
resources of a firm (financial, physical,
human, technological) need to be
allocated carefully, according to a plan.
◦ Means of resource allocation
Strategic budget: SBU level
Capital budget: for long term profitability
Performance budget: to carry out functions
Zero based budget:
119Harsh Arora
120. Organization structure and systemOrganization structure and system
in strategy implementationin strategy implementation
Strategy implementation is a crucial issue
because any strategy is as good as the effort
behind lit to move it forward. Successful
strategy implementation requires support,
discipline, motivation land hard work from all
managers and employees. More importantly,
it requires a suitable in organization structure
to translate ideas into concrete action plans.
Harsh Arora 120
121. Organization structure and systemOrganization structure and system
in strategy implementationin strategy implementation
Harsh Arora 121
123. Organization structure and systemOrganization structure and system
in strategy implementationin strategy implementation
Behavioral issues in strategy implementation
Influence tactics
Power
Expertise
Charisma
Reward power
Information power
Exchange
Legitimate power
Coercive power
Harsh Arora 123
124. Strategic control and operationalStrategic control and operational
controlcontrol
"Strategic Control' is concerned with
tracking a strategy as it is being
implemented, detecting problems or
changes in its underlying premises, and
making necessary adjustments“
◦ There are four types of strategic control:
1. Premise control.
2. Implementation control.
3. Strategic surveillance.
4. Strategic alert control
Harsh Arora 124
125. Strategic control and operationalStrategic control and operational
controlcontrol
Operational controls provide post-action
evaluation and control over short periods
◦ Evaluation Techniques for Operational
Control
Value Chain Analysis
Quantitative performance measurement
Benchmarking
Balanced score card
Key factor rating
Harsh Arora 125
126. Organizational system andOrganizational system and
techniques of strategic evaluationtechniques of strategic evaluation
Strategy evaluation and control (SEC) is
the final phase of strategic management.
Purpose
◦ to determine the effectiveness of a given
strategy
◦ achieving the organizational objectives
◦ taking appropriate corrective action
whenever required
Harsh Arora 126
127. Organizational system andOrganizational system and
techniques of strategic evaluationtechniques of strategic evaluation
Strategy evaluation generally operates at
two levels
◦ Strategic: examine the consistency of strategy
with environment
◦ Operational: finding how a given strategy is
effectively pursued
Harsh Arora 127
128. Organizational system andOrganizational system and
techniques of strategic evaluationtechniques of strategic evaluation
SEC helps an organization in;
◦ Feedback
◦ Are we moving in the proper direction?
◦ How are we performing?
◦ Reward
◦ Future planning
Harsh Arora 128
In ecology, the competitive exclusion principle, sometimes referred to as Gause's law of competitive exclusion or just Gause's law, is a proposition that states that two species competing for the same resource cannot coexist at constant population values, if other ecological factors remain constant. When one species has even the slightest advantage or edge over another then the one with the advantage will dominate in the long term. One of the two competitors will always overcome the other, leading to either the extinction of this competitor or an evolutionary or behavioral shift toward a different ecological niche. The principle has been paraphrased into the maxim "complete competitors cannot coexist".
A stability strategy involves maintaining the status quo or growing in a methodical, but
slow, manner. The firm follows a safety-oriented, status-quo-type strategy without
effecting any major changes in its present operations. The resources are put on existing
operations to achieve moderate, incremental growth. As such, the primary focus is on
current products, markets and functions, maintaining the same level of effort as at
present. Organisations might follow a stability strategy for a variety of reasons:
- Why rock the boat?
- Why not stop for a while?
- Why to swallow risk?
- Where are the resources?
Organizations generally seek growth in sales, market share or some other measure as a
primary objective. When growth becomes a passion and organizations try to seek sizeable
growth, ( as against slow and steady growth) it takes the shape of an expansion strategy.
The firm tries to redefine the business, enter new businesses, that are related or unrelated
or look at its product portfolio more intensely. The firm can have as many alternatives as
it wants by changing the mix of products, markets and functions.
Retrenchment strategy is a corporate level, defensive strategy followed by a firm when its
performance is disappointing or when its survival is at stake for a variety of reasons.
Economic recessions, production inefficiencies, and innovative breakthroughs by
competitors are only three causes. Managers choose retrenchment when they think that
the firm is neither competitive enough to succeed through a counter attack ( on market
forces affecting its sales negatively) nor nimble enough ( effecting fast changes) to be a
fast follower. However, retrenchment does not mean death knell for every business under
attack. Many healthy companies have faced life – threatening competitive situations in
the past, successfully addressed their weaknesses and restored themselves.
Example: Xerox Company went through a terrible 2-year period in early 1980s when
managers and analysts thought the firm might face bankruptcy because of crushing
attacks from Japanese competitors like Cannon and Sharp. Xerox gave up considerable
market share under this assault. However, it the decade that followed, the firm managed
to fight its way back and regain much of the market share it had lost, by focusing on
customer value and establishing its competitive advantage.
Retrenchment calls for a radical surgery to cut the ‘extra fat’ – say, laying off employees,
dropping items from a production line, eliminating low-margin customer groups,
avoiding elaborate promotional efforts etc. Apart from the above cost reductions,
retrenchment calls for drastic steps to improve cash flows through sale of assets.
Retrenchment strategy, as such, is adopted out of necessity, not by deliberate choice.
In fact retrenchment may take one of the following forms:
With rapid advances in information technology and acute resources constraints across the
globe, the business world has become more complex and fluid in recent times. To survive
and compete, present-day organizations should do away with their existing culture,
policies, structure and start with a clean sheet. They have to put more emphasis on the
business process as a whole (both external and internal focus) and do everything to keep
the smile on the customer’s face. As rightly pointed out by Peter Drucker, ‘every
organization must prepare to abandon every thing it does”. Externally the organisation
must search for new products, new service and new market opportunities, working with
suppliers, distributors and customers to redefine markets and industries. Internally
structures, management styles and cultures must be capable of creating and delivering
these products and services. Strategic awareness, information management and change
are very important if the organisation wants to get ahead of its competitors.