This presentation discusses strategic management concepts for companies. It covers topics such as a CEO's strategic options, phases of company growth, market segmentation, Porter's five forces analysis, SWOT analysis, and strategic options for market expansion, portfolio expansion, innovation, finance, IT, and human resources. Key elements of strategy formulation like vision, mission, analysis, segmentation, and SWOT are also presented.

1. This presentation is meant for training purposes only and shall not be used for any commercial purpose. Data contained here are
proprietary and can not be disclosed to any third party either in writing or any other means without the written consent of the rightful
owners. All rights reserved by the respective authors and owners.

2. A CEO’s Dilemma
Operational
Efficiency
Financial
Existing
Management
Products Increase
Increase Profit
Sales
Decrease
Cost
New
Products
Survive
De-risk Competitive
the Pressures
Business
©Pinaki Bhadury 2

3. CEO’s Options
Market
Opportuni
ties
Actions
Decrease Utilize
Skill Gaps to be strengths
taken
Uses of
Resources
This is all about Strategic Management
©Pinaki Bhadury 3

4. Phases of Growth
Small & medium sized companies
• Growth comes from entrepreneurship
• Strategic component is low
Medium to large sized companies
• As an organization grows, it becomes unwieldy to manage growth
Unplanned Growth Strategic Growth
• Look for opportunities • Recognize strengths &
• Interesting ideas weaknesses
• Set up business to market the • Focus on Core Competencies
idea • Looks for opportunities in line
• Acquires skills & capabilities with Strengths & Weaknesses
• Analyzes opportunities,
capabilities & strengths to
devise growth plans
©Pinaki Bhadury 4

5. Transformation Phase of a Company
Due to entrepreneurial growth, some where down the line, the
company grows in to a corporation
• It assumes a distinct flavour of its own
• Characteristics and typical behavourial patterns set in.
• Silos get developed
• People become emotional about their business
A CEO struggles to achieve growth and profit from his business
It is time to adopt Strategy Management at this point
So where does he start?
©Pinaki Bhadury 5

6. Influencing Factors in a Business
There is a constant need to :
• Scan these influencing factors
for changes
• Assess risks
• Changing attributes
• Take appropriate action to
align business based on these
changes
©Pinaki Bhadury 6

7. Strategic Roles of different Positions in an Organization
CEO Corporate Strategy
Strategic Business Plans
Business
Heads
Strategic Imperative & Options
Senior Managers Scenario Building
Middle Level Managers Analysis
Junior Level Managers Research
Senior Executives Data Aggregation
Data Collection
Executives
Market Inputs
©Pinaki Bhadury 7

8. Steps & Tools used
Strategy Formulation
©Pinaki Bhadury 8

9. Understanding the Value Chain
Understanding the Creating a Product Production (or
Identify Need
Market or a Service Acquire)
Relationship Delivering Services
Satisfy Need Delivery
Management to Customer
• Determine your business’ position in the value chain
• How far are you from his actual need?
• How many steps behind are you from your customer’s market
©Pinaki Bhadury 9

10. What Is Segmentation?
A process for dividing the market into groups of consumers that are similar across key
dimensions
• What products are used
• How products are used
• When products are used
• Why products are used
Classify customers and prospective customers according to segmentation scheme
• Government
• Industrial
• Retail
• Institution
Identify segments of high value that are underserved
• Rural
• Urban high net worth
• Students
Use common elements to develop targeted products and focused communication
©Pinaki Bhadury 10

11. Market Segmentation
Usage
Demography
Occasion
Geography Loyalty
Countries Attitudes
Where does
your
Consumers Satisfaction
business
come from?
Basically it consists of breaking down your business in to various reasons for success
©Pinaki Bhadury 11

12. Market Segmentation - Examples
South America South East
3% Russia China Others Asia
Africa
3% 4% 1% 16%
North 8% SAARC
America 10%
11%
Europe
7%
Middle East
37%
FERROUS METALS
9%
Sugar TEXTILE
POWER 4%
8%
GENERATION
11% CEMENT
37%
REFINERY &
PETROCHEMICAL CHEMICAL
15% 16%
©Pinaki Bhadury 12

13. Analysis of Market Segments
High 5
Strategic Low Neutral High
attractiveness
4 Invest or drop Excel in process Scoop
Volume
Growth
Competition 3
Cross-selling
…
Be
2 Drop Cash-out
opportunistic
Low 1
Define customer segments based on 1 2 3 4 5
Low High
strategic attractiveness and current
organisational capabilities
Organisational capabilities Low Neutral High
Technological/functional fit
References
Industry understanding
…
©Pinaki Bhadury 13

14. THE BCG Matrix
• A Matrix to compare relative High
position and performance of a
segment with others
Market Growth Rate
• Helps in taking decisions on
Problem Child Stars
various types of products /
businesses
– Products / Businesses to invest
– Products / Businesses to divest Dogs Cows
• Popularly used for Product
Low High
Portfolio Analysis Relative Market Share
• Difficult to use in practice
• Needs modification
©Pinaki Bhadury 14

15. BCG Analysis
Inconclusive Diagrams
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16. Modified BCG Analysis
Rel. Mkt Share = Business Revenue
Nearest Competitor’s Rev.
Relative Growth = Business Growth
Capital goods Ind. Growth
( Past=14% Present=16%)
©Pinaki Bhadury 16

17. Porter’s Five Forces of Competitive Position
New Market Entrants, eg:
 entry ease/barriers
 geographical factors
 incumbents resistance
 new entrant strategy
 routes to market
Supplier Power, eg: Competitive Rivalry, eg: Buyer Power, eg:
 brand reputation  number and size of firms  buyer choice
 geographical coverage  industry size and trends  buyers size/number
 product/service level quality  fixed v variable cost bases  change cost/frequency
 relationships with customers  product/service ranges  product/service importance
 bidding processes/capabilities  differentiation, strategy  volumes, JIT scheduling
Product and Technology
Development, eg:
 alternatives price/quality
 market distribution changes
 fashion and trends
 legislative effects
©Pinaki Bhadury 17

18. Application of Porter’s Five Forces
Indian Boiler Industry
New Market Entrants, eg: Medium
 entry ease/barriers • High investment
• Fixed routes to market
 geographical factors
 incumbents resistance
High  new entrant strategy
• High brand reputation  routes to market
• High product quality
• High relationship with customers
Supplier Power, eg: Competitive Rivalry, eg: Buyer Power, eg:
 brand reputation  number and size of firms  buyer choice
 geographical coverage  industry size and trends  buyers size/number
 product/service level quality  fixed v variable cost bases  change cost/frequency
 relationships with customers  product/service ranges  product/service importance
 bidding processes/capabilities  differentiation, strategy  volumes, JIT scheduling
Low
• Many buyers
• Few choices
Product and Technology • High Product Importance
Development, eg: • Low volumes
Low  alternatives price/quality
• No alternatives  market distribution changes
• Strong legislative controls  fashion and trends
 legislative effects
©Pinaki Bhadury 18

19. Market Research
• Market Size
• Growth Potential
• Customer Needs
– Buying Behaviour
– Preferences
• Competitive Intelligence
©Pinaki Bhadury 19

20. SWOT Analysis
Strengths (Internal) Opportunity (External)
• S1 • O1 (supplier position)
• S2 • O2
• S3 • O3
• S4 • O4 (Market opportunity)
• S5
Weakness (Internal) Threats (External)
• W1 • T1
• W2 • T2
• W3 • T3
• W4 • T4
• S1, S2, S3 & S4 are Core Strengths – Competencies
• W1, W2 & W4 are weaknesses of concern – to be eliminated
• T1 & T2 are the main threats to be addressed.
©Pinaki Bhadury 20

21. SWOT Analysis
Threats
Confront Avoid
External Environment
Opportunities
Exploit Search
Strengths Weaknesses
Internal Factors
©Pinaki Bhadury 21

22. SWOT – Business A
Strengths Opportunity
 Industry Application  Worldwide fuel shift to
Knowledge Agro-waste
 Expertise in solid & Agro-  CHPC movement
waste combustion  Manufacturing bases of
 Cost competitive customized MNCs shifting to non-
solutions western countries.
Weakness Threats
 Inadequate reach in overseas  Cost pressures in domestic
markets market from local
 Project Management in competition
overseas market  Regional Trade pacts –
 Absence of exclusive tie-up NAFTA, COMESA, AFTA, EU
for Incidental power.
©Pinaki Bhadury 22

23. SWOT – Business B
Strengths Opportunity
 In-house design Capabilities &  Fuel Shift due to rising electricity
Customise. & oil/gas prices
 Strong International Exposure.  CDM (Clean Development
 Capability to search/address new Mechanism)
applications  Energy Efficiency measures in
 Strong synergy with Steam Process Industry.
Generators / waste heat & related
applications
Weakness Threats
 Lack of competence to address  Low Cost Chinese Competition
HVAC Heating Ventilation and  Mega Privatised Power Projects –
Air Conditioning) markets. Power Costs may be lowered
 Entry Barriers in matured  Efficiency Improvement of
markets. Competing Products.
 Volatilatiy dependent on Gas &
Power prices
 Niche Market worldwide
©Pinaki Bhadury 23

24. SWOT – Few Typical Examples
Strengths Opportunities
• Engineering • New Markets
• Manufacturing • New Applications
• Innovation • Emerging Consumer
• Financial Preferences
• Marketing • Regulatory
• Human Resources • Legal
Weakness Threats
• Engineering • Competition
• Manufacturing • Substitutes
• Cost • Changing Preferences
• Human Resources • Economic
• Financial • Social
• Marketing • Political
• Identification of True Strengths, Weaknesses, Opportunities & Threats is the Key
• Often these get repeated in different areas creating confusion
©Pinaki Bhadury 24

25. SPACE (Strategy & Policy Analysis Collaborative)
Analysis
6 Financial Performance / Strength
5
Conservative
4.3
3.8
4
3.7 Aggressive
3
2
1 Market / Product
Competitive Position Attractiveness
-3.5 -3.0 2.3 3.0 4.3
0
-6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0
-1.8
-1 -1.3
-2
-3
FUTURE
PRESENT -3
Defensive
PAST
-3.7
-4
-5 Competitive
External Environment
-6
©Pinaki Bhadury 25

26. SPACE Analysis
Factors Menu
Financial Strength Env. Stability Industry Attractiveness. Competitive advantage
ROI Social trends Growth rate Market share
ROS Economic Climate Profit Trend Relative product quality
Cash Flow Political Climate Price cost trend Cost
Liquidity Technical Changes Life cycle Stage Relative Delivery capability
Capital reqd /avl. Demand Variability Competitor concentration Customer Loyalty (Repeat)
Ease of exit Entry Barriers. Ease of entry Customer Spread
Risk involved in dealing Cost Price Balance Differentiation Realised Price
with this product, country
Competitive pressure Customer concentration. Relative Value position
or ind vertical.
Legal Compliance. Technology (simp/ hard) Relative tech know how
Rel Perf. Of business
Ecological Changes Capital intensity. Customer spread.
• Total score for each dim/no of dim. Average score space plot
• Identify critical factors and their strategic implications
©Pinaki Bhadury
26

27. Strategic Options
• Existing Markets
• Increase Market Reach
Market Expansion • New Markets
• Organic
• Inorganic
• New Businesses
Portfolio Expansion
• New Products
• Product
Innovation • Application
• Process
©Pinaki Bhadury 27

28. Strategic Options
• Credit Policy
• Develop Retail Outlets
Financial • Pricing
• Buy over competition
• Investments in Assets
• Web based Sales
• ERP
IT
• KM
• Lower Cost of Operations
• Training
• Compensation
HR • Capability Building
• Employee Engagement
• Rewards & Recognition
©Pinaki Bhadury 28

29. Key Elements in Strategy Formulation
Vision
Analysis Mission
Segmenta Market
tion Research
SWOT
©Pinaki Bhadury 29

30. For further details contact:
pbhadury@yahoo.com
©Pinaki Bhadury 30