WHAT IS STRATEGY AND WHY IS IT IMPORTANT

Session 1

WHAT IS STRATEGY THE CORE CONCEPT

A companys strategy consists of the competitive moves and business approaches that managers employ to attract and please customers, compete successfully, grow the business, conduct operations and achieve targeted objectives

THEREFORE, THE QUESTIONS TO ASK

Where are we now

Where do we want to go How will we get there

ASSUME YOU ARE THE SALES HEAD OF A FMCG

PRODUCT COMPANY HAVING A AVERAGE MARKET IN A GROWING ECONOMY

Where are we now

Where do we want to go

How will we get there

STRATEGY AND COMPETITIVE ADVANTAGE

PATTERNS OF ACTIONS AND BUSINESS APPROACHES THAT DEFINE A COMPANY STRATEGY

Gain market share through pricing, performance measures, appealing design, better quality, customer service Diversify through new businesses Through acquisitions Alliances or strategic partnerships Through merger with rival companies Enter new geography or exit existing market Respond to changing market conditions and external circumstances Strengthen competitive capabilities or correct competitive weakness Define processes including R&D, marketing, and back office

STRATEGY AND COMPETITIVE ADVANTAGE

A company achieves sustainable competitive advantage when an attractive number of buyers prefer its products or services over the offerings of competitors and when the basis for this preference is durable

WHAT SETS A COMPANY APART FROM ITS

COMPETITOR

Being the industrys low cost provider

Out competing rivals based on such differentiating factors such as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority or good value for money Focusing on a narrow market niche Developing expertise and resource strength that the company competitive capabilities that rivals cant easily imitate or trump with capabilities of their own

INTERNATIONAL COMPANIES COMPETITIVE

ADVANTAGE AGAINST RIVALS

Hertz Enterprise rent a car Dell Coca cola Michelin Toyota Ritz Carlton

A COMPANYS ACTUAL STRATEGY IS PARTLY

PRO ACTIVE AND PARTLY REACTIVE

External

Reactive Proactive

Internal

Proactive Reactive

A COMPANYS ACTUAL STRATEGY IS PARTLY

PRO ACTIVE AND PARTLY REACTIVE

Changing circumstances and ongoing management efforts to improve the strategy cause a companys strategy to emerge and evolve over time a condition that makes the task of crafting a strategy - work in progress and not a one time event A companys strategy is driven partly by management analysis and choice and partly by the necessity of adapting and learning by doing

WHAT MAKES STRATEGY A WINNER

How well does the strategy fit the company situation

Is the strategy helping the company achieve a sustainable competitive advantage Is the strategy resulting in better company performance

STRATEGY AND RELATION WITH THE BUSINESS

MODEL

A companys business model relates to whether the revenue / cost / profit economics of its strategy demonstrate the viability of the business enterprise as a whole

LET US DISCUSS A STRATEGY OF TWO SIMILAR

COMPANIES

Selling FMCG products through retail

Selling FMCG products through direct marketing

STRATEGY EXECUTION IN OTHER WORDS

WOULD MEAN HAVING A VISION

LET US NOW DISCUSS THE VISION OF 2

DISTINCT COMPANIES

VISION

LEVISTRAUSS

We are the embodiment of the energy and events of our times, inspiring people with a pioneering spirit. We believe that business can drive profits through principles, and that our values as a company and as individuals give us a competitive advantage.

LEVISTRAUSS
Empathy Walking in other peoples shoes Empathy begins with paying close attention to the world around us. We listen and respond to the needs of our customers, employees and other stakeholders. Originality Being authentic and innovative The pioneering spirit that started in 1873 with the very first pair of blue jeans still permeates all aspects of our business. Through innovative products and practices, we break the mould. Integrity Doing the right thing Integrity means doing right by our employees, brands, company and society as a whole. Ethical conduct and social responsibility characterize our way of doing business. Courage Standing up for what we believe It takes courage to be great. Courage is the willingness to tell the truth and to challenge hierarchy, accepted practice and conventional wisdom. It means standing by our convictions and acting on our beliefs.

LEVISTRAUSS

Distinct product Target segment Pricing Marketing and promoting

Innovative

VISION

ITC LIMITED

Sustain ITC's position as one of India's most valuable corporations through world class performance, creating growing value for the Indian economy and the Company's stakeholders

ITC LIMITED

Let the class tell discuss

CONSIDER BUILDING A STRATEGY FOR A LOW COST AIRLINES .

List 6 areas

ETHICS HELP IN SHAPING THE STRATEGY OF

AN ORGANISATION

What is ethical to one organisation could be unethical to another and vice versa

Advertising tobacco Employing child labour Usage of substances that could potentially harm the consumer Sale of drugs banned in certain countries Accounting practices

MANY THANKS

Reach me at jshashidhar01@gmail.com Or call 9820447600

BOOKS TO READ

Malcolm Gladwell Winston Churchill Rudolf Giuliani Jack Welch

R Gopalakrishnan

CONSIDER BUILDING A STRATEGY FOR A LOW COST AIRLINES .

List 6 areas

1. Turnaround 2. Maintain standard fleet size 3. Gradual scale up 4. Direct ticket sales 5. Customer centric 6. No frills

ITC LIMITED
FMCG Cigarettes, personal care, food, lifestyle, education, safety matches and incense sticks Hotels Paper and Speciality Agri business E Choupal Information technology Travels