This document discusses strategic management and strategic alternatives. It defines key terms like strategic business unit (SBU) and strategy. It describes the evolution of strategic planning and discusses portfolio restructuring, strategic options like growth, divestment, and investment. It also covers strategies for declining, mature and emerging markets, as well as competitive strategy, core competencies, competitive advantages, diversification, knowledge management, and reasons for diversifying.

1. STRATEGIC MANAGEMENT AND STRATEGIC ALTERNATIVES by : DR. T.K. JAIN AFTERSCHO ☺ OL centre for social entrepreneurship sivakamu veterinary hospital road bikaner 334001 rajasthan, india www.afterschoool.tk mobile : 91+9414430763

2. What is an SBU? Strategic business unit – a unit which has independent decision making power withing overall corporate strategy of the corporation. It can take strategic decisions like product, market, technology, etc. An SBU is an independent unit within the corporate umbrella.

3. What is a strategy ? A strategy is a unified corporate action plan for the achievement of overall organisational goals and purpose within the resources of the comapny. It is based on analysis of environment, resources and competencies of the company

4. Evolution of strategic planning ???? Strategic planning evolves in the minds of strategic planners. The top management, the board of directors, and analysts together work to frame the strategies of the company. The process is as follows : 1. frame strategic intent, mission and objectives 2. decide about core competency, 3. study environment and prepare SWOT, 4. identify options 5. finalise stratgy, 6. evaluate it and implement it 7. review it.

5. PORTFOLIO RESTRUCTURING Portfolio is a collection of various investments. When a company has invested in many SBUs then this collection is also called portfolio. The purpose of portfolio is to change its structure and contents as per the changing time.

6. What is restructuring ? Changing the composition and structure is called restructuring – it can be used in many contexts like organisational restructuring, portfolio restructuring, etc.

7. What are the different portfolios ? As per BCG matrix analysis : we have 4 options : Cash Cow, Dog, Star, Question Mark Cash : high market share but low growth rate Dog : low market share and low growth rate Star : high growth rate and high market share Question mark : high growth rate but low market share

8. What is portfolio restructuring? We have to allocate funds across different portfolios. We shall try to transfer funds from cash cow to question mark and star. We shall divest our business from dog and invest in star and question mark. Thus restructuring means changing the structure and content of your portfolio and changing your investment.

9. Why is portfolio restructuring carried out ? Some businesses can give us better rewards and more growth. We therefore invest in those businesses which can give us higher returns. We try to draw out money from those business segments, which are not able to give us adequate returns.

10. Strategic alternatives... We have many alternatives : grow, divest, invest, expand, diversify, etc. We have 4 options in terms of combinations of products and markets : new products and new markets new products old markets (product development) old products, new markets (market development) old products, old markets

11. How to choose strategic options... There are 4 grand strategies : 1. expansion 2. stability 3. divestment 4. combination expand : grow, diversify etc. Stability : improve your performance combination: use a combination of all these strategies

12. Three strategies.. Companies adopt 3 strategies for growth, survival and progress : 1. focus 2. differentiation 3. cost leadership

13. Opportunities in emerging markets? Emerging markets are those which are having very high growth rates and having relatively underdeveloped infrastructure, set up and facilities. Some of the countries are having double digit growth rate. Emerging markets offer huge opportunities for companies to enter, expand and diversify

14. How to enter into emerging markets? Look for government rules, policies, guidelines, and framework. Look out for new opportunities, opening up of the sectors, technology etc. Identify areas where you have superior technology, processes, capabilities, skills, goodwill and performance orientation

15. Options in emerging markets... You may enter as branch, franchisee, licensee, business tie-up, joint venture, SPV,exports, etc.

16. Cautions and precautions... Do consider local culture, belief system and practices, dont disturb them be local in your performance, (GLOCAL) involve local people in product design, delivery and management involve local people in processes like market survey, survey etc

17. Strategies in declining markets ??? Study the market forces and take corrective actions (modify / adapt / change your products / services) declining markets and declining industry give you time and opportunity to exit, so exit and divest your resources in high growth, high opportunity segments.

18. Strategies in mature markets??? Mature markets have almost 0% growth, so try to treat them as support for entering to other markets. They provide you good back up. Dont invest any more money in these markets. Invest in emering markets, but use the knowledge and skills acquired in mature markets in developing the products / services for emerging markets

19. Functions of strategic management — provides a framework for thinking about the business; — creates a fit between the organization and its external environment; — provides a process of coping with change and organizational renewal; — fosters anticipation, innovation, and excellence; — facilitates consistent decision making; — creates organizational focus; and — facilitates the process of organizational leadership.

20. Knowledge management The globalised competitive environment requires the firms to quickly respond to the customer’s needs and problems for which they need enough knowledge and that is precisely what requires quality knowledge and strategic management. Knowledge management is a process which helps the enterprises to identify, select, arrange, extend and transfer important information and specialised knowledge. In simple terms, its objective is to deliver relevant knowledge to relevant people at the right time. Knowledge management is based on the production, storage and use of knowledge. Knowledge categorisation and codification allows for successful and efficient problem solutions, dynamic learning, strategic planning and decision-making. Thus, knowledge management is creation, distribution and utilization of knowledge at the individual, group, organizational and community levels through harnessing of people, process and technology for the benefits of those involved and affected by it .

21. What is competitive strategy ??? Every firm has to evolve a strategy for its growth and development. This is called competitive strategy. Competitive strategy is the overall framework which guide and develop the organisation.

22. How to build superior competitive advantage? Identify market niche, which has not yet been served by any company develop unique products / processes / technologies / services build core competencies build superior linkages between products and benefits offered, product positioning, brand image and value perceptions

23. What is core competency? Some special capability, which make you distinct, unique, superior and better in comparison to other companies in the industry. It is achieved by having some unique business skills, capabilities, resources and knowledge base.

24. What is competitive advantage? If you are able to make / deliver superior products / services in comparison to your competitors, you have competitive advantage

25. Diversification and its scope ??? Diversification means new products, new markets and new technology, it is risky – but if reward is very high, it is better to diversify. While diversifying, look out for possible risk and try to manage risk. Diversify into those segments, which offer high growth and offer high development possibilities.

26. Diversification as an option... When we are unable to have high growth in our existing business definition, we have to redefine it and we may decide to redefine it completely, we have decide to diversify in order to grow. Our objective here is to expand, grow and take first mover advantage in a new segment.

27. Why diversify ? ? Generally there is no synergy in diversification, but we diversify for the followign reasons : 1. lack of growth in existing products / services 2. lack of proper market share in the existing products / services 3. far greater opportunities in new segments 4. availability of a strategic partner for diversification

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