Professional Documents
Culture Documents
STRATEGY
• Strategies are the means by which long term objectives will be achieved.
Business strategies may include geographical expansion, diversification,
product development, joint ventures.
CHARACTERISTICS
• To Makes discipline.
• To make control.
• Due to change
• Systemized decision
• Improves Communication
• Allocation of resource
Improves Coordination
Business level
1. Waste of time.
2. Too expensive.
3. Laziness .
4. Overconfidence .
5. Prior bad experience.
6. Content with success.
LIMITATIONS
• Using strategic planning to gain control over decisions and resources.
• Doing strategic planning only for regulatory requirements.
• Failing to communicate the plans to the employees.
• Top managers not actively supporting the strategic planning process.
• Being so formal that flexibility and creativity are stifled.
STRATEGIC MANAGEMENT PROCESS
For all types business
1. Strategic Intent
2. SWOT Analysis
3. Strategic Alternatives
5. Strategy Implementation
6. Strategic Evaluation
1. Strategic intent
• Formulating mission and mission statement.
• Business definition in terms of customer, product and technology.
• Formulating long term objectives.
1. Growth strategy
2. Diversification strategy
3. Merger & acquisition strategy
4. Joint Venture strategy
5. Business restructuring strategy
5. Strategy implementation
1. Institutionalization of strategy
2. Structural implementation
3. Functional implementation
o Miller and Dess view it simply as the “category of intentions that are broad ,
all inclusive and forward thinking.”
o The common stand of though evident in these definitions relates vision
being future aspirations that lead to an inspiration to be best in one’s field of
activity.
MISSION
Hunger and Wheelen says that mission is the “purpose or reason for the
organization’s existence.”
Business definition
Objectives are the ends that states that specifically how the goals shall be achieved
. In this way objectives make the goals operational.
Role of objectives
Characteristics of Objective
1. Profit.
2. Marketing.
3. Growth.
4. Employee’s welfare.
5. Social responsibility
Environment Appraisal
The environment of any organization is “the aggregate of all conditions , events &
influences that surround and affect it.
Characteristics of environment
1. Environment is complex.
2. Environment is dynamic.
3. Environment is multi-faceted.
4. Environment has a far-reaching impact.
Environmental factors
1. Economic environment.
2. Political environment.
3. Technological environment.
4. Socio- cultural environment.
5. International environment.(Economic factors ,Tax factors , Political legal
factors , Human Resource factors , Geographic and Competitive factors ,
Socio – Culture factors.)
S- STRENGTHS
W-WEAKNESS
O-OPPORTUNITY
T-THREAT
With all of above factors we can make the strategies to improve our organisation.
Environmental scanning
The process by which organisation monitor their relevant environment to identify
opportunities and threats affecting their business is known as environmental
scanning.
Approaches to environmental scanning
GENERIC STRATEGIES
• Forward integration
• Backward integration
• Horizontal integration
o Forward integration
Backward integration
Guidelines for
Backward Integration
When present suppliers are expensive, unreliable, or incapable of
meeting needs
Firm has both capital and human resources to manage new business
Horizontal Integration:-
Seeking ownership or increased control over competitors
• Market penetration
• Market development
• Product development
Market penetration (Seeking increased market share for present
products or services in present markets through greater marketing
efforts)
GUIDELINES
Current markets not saturated.
Usage rate of present customers can be increased significantly.
Market shares of competitors declining while total industry sales
increasing.
Market Development
Concentric diversification
Conglomerate diversification
Horizontal diversification
GUIDELINES:
Guidelines
o Highly competitive
Defensive Strategies
1. Joint venture
2. Retrenchment
3. Divestiture
4. Liquidation
a. Domestic forms joint venture with foreign firm, can obtain local
management to reduce certain risks
a. Firm has failed to meet its objectives and goals consistently over
time
b. When a division needs more resources than the firm can provide
1. marketing
2. finance
3. production
5. R& D
6. Management
How the firms compete with each other and to what extent? That should be
taken into account very carefully.
if vendors are less in the market and the organizations that have to
purchase from those vendors are more then the demand for those suppliers
will be more as the firms have to purchase from that less suppliers. The
reverse is the case if suppliers are more and buyers are less. Then the demand
for those suppliers will be less. Such circumstances create difficulties in
bargaining.
Mc Kinsey’s 7s Framework
• Structure: the way the organization is structured and who reports to whom.
• Systems: the daily activities and procedures that staff members engage in to
get the job done.
• Shared Values:
What are the fundamental values that the company/team was built on?
• Skills: the actual skills and competencies of the employees working for the
company.
• Placing Shared Values in the middle of the model emphasizes that these
values are central to the development of all the other critical elements. The
company's structure, strategy, systems, style, staff and skills all stem from
why the organization was originally created, and what it stands for. The
original vision of the company was formed from the values of the creators.
As the values change, so do all the other elements
GAPS MODEL
Customer Gap
This is the focus of the model and in many respects the gap most
providers should address first. It represents the difference between 'expected
service' and 'perceived service‘. To close this gap, providers need to consider
closing the following four gaps.
GAP 1
GAP 2
GAP 3
This is the gap between the service designs and standards and actual service
delivery. In other words having guidelines, manuals and well-communicated
standards is not enough to guarantee excellent service. Resources in the form
of people, systems and appropriate technology also need to be in place and
adequately monitored. Contact personnel must be properly trained,
motivated, measured and compensated according to service delivery
standards.
GAP 4
The final gap exists when there is a difference between actual service
delivery and the external communications and promises made by the
provider. These can be in the form of leaflets, web pages, presentations and
any other promotional media.
Strategy implementation
3. Resource allocation
4. Structural implementation
5. Behavioural implementation
1. Project implementation
Phases of a project
4. Implementation phase
1. Identification of activities.
4. Network construction
2. Procedural implementation
1. Formation of company.
2. Licensing procedures.
3. SEBI requirements.
5. FEMA requirements.
3. RESOURCE ALLOCATION
Procurement of resources
1. Financial resources.
2. Physical resources.
3. Human resources.
4. Technological resources
• Zero based budgeting(in this the strategist justify resource allocation demand
, not on the basis of the previous years’ budget, but on “ ground zero”, which
is based on fresh calculation of costs each time a plan is to be implemented.)
• Internal policies.
• There are competing organizational units with each trying to get more.
4. Structural implementation
• 1.Entrepreneurial structure.
• 2.Functional structure.
• 3. Divisional structure.
• 5. Matrix structure.
Entrepreneurial Structure
• Organization that is owned & manage by one person. E.g SSI. These
organisations are, product or service based firms single-business that serve
local markets. The owner looks after all decisions , whether they are day to
day operational matters or strategic in nature.
Owner - Manager
Employees
Advantages
• Timely response.
DISADVANTAGES:
Functional Structure
General manager
Advantages :
• Efficient distribution of work.
Disadvantages:
• Misuse of authority.
• Complicated
• No unity or command.
Divisional Structure
Disadvantages :
• Costly.
• Problems of coordination.
CEO
A , B, C D, E, F G, H, I
ADVANTAGES
• Better coordination .
• Better control.
• Assured accountability.
Disadvantages:
• Costly.
• Politics.
Matrix Structure
• Participative management
Disadvantages :
Corporate culture.
Personal Values
Business ethics.
Corporate culture
The culture of organisation also put impact on the implementation of the strategies.
In a well mannered & well organised organisation it is easier to implement the
strategies. E.g A participative type of organisation.
Corporate politics and power
Politics and power affect the way a strategy is formulated and implemented. A
manager cannot effectively formulate and implement strategy without being
perceptive about company politics and the managers have to use his powers.
Barriers in Evaluation
• Limits of Controls
• Difficulties in measurement
• Resistance to evaluation
• Short-termism
• (efficiency is “doing the things rightly” & effectiveness is “ doing the right
things.”)
• The BODs
• The CEOs
• The shareholders.
Strategic Control
• Premise Control
• Implementation Control
• Strategic Surveillance
Implementation Control
Strategic Surveillance
Operational Control
• Measurement of performance
• Analyzing variances
• Techniques for strategic control could be classified into two groups on the
basis of the type of environment faced by the organisation. The organisation
that operate in a relative stable environment may use strategic momentum
control, while those which face a relatively turbulent environment may find
strategic leap control more appropriate.
• These are to ensure that the assumptions on whose basis strategies were
formulated are still valid and finding out what needs to be done in order to
allow the organisation to maintain its existing strategic momentum.
• Information system.
• Control system.
• Appraisal system.
• Motivation system.
• Development system.
• Planning system.