1 What is strategy? Explain some of the major reasons for lack of strategic management in some companies?

Answer : The concept of strategy has been borrowed from the military and adapted for use in business. A review of what noted writers about business strategy have to say suggests that adopting the concept was easy because the adaptation required has been modest. In business, as in the military, strategy bridges the gap between policy and tactics. Together, strategy and tactics bridge the gap between ends and means (Figure 1).

Reasons for lack of strategic management: Communications The number two response to our question about strategy failure should be familiar to all: Communications. Since we can't get it right at home -- with one in two U.S. marriages ending in divorce -- what makes us think we're going to get it right at work? Poor communications seems to take many forms. Apparently, some groups like to develop strategic plans, and then hide them under a rock. But they don't do it on purpose. "The failure to communicate the vision and strategic objectives to stakeholders" may mean that the developers of the strategy aren't getting out enough information for folks to understand what they're supposed to do with it. "New initiatives or objectives are outlined but not communicated throughout the organization as to how the new objectives should look and feel, what steps to take, time-frame, etc." "Poor communications among team members responsible for decisions in implementation. Expectations and opinions are not shared openly, thoroughly, and effectively." "Every tactical action supporting the strategic objectives needs to be included in an overall communication plan so that the strategy is reinforced." Communication is also much more than words and pictures. Communication is also delivered through demonstration. "The management team does not follow the strategy themselves." We all know about the hypocritical "do as I say, not as I do" admonition. What does that scream about the value of the strategy? That behavior will raise eyebrows faster than a cook who won't eat his own cooking! Leadership Which brings us to leadership, which was the fifth most popular category. From these responses we can learn that leadership is much like fly-fishing -- when you're up to your waist in it, it's suddenly much harder than it looks! "Most leaders grossly underestimate what it takes to lead effectively."

"Failing of leadership starting and ending at the top." "Lack of a true motivating leader." This contributor offered some specificity: "Weak leadership. This results in improper resource allocation, lack of buy-in, poor follow-through, inadequate checks, misaligned goals/ strategies/ actions, inefficient rewards and punishments, cover-ups, etc." This respondent noted that there was enough blame to go around: "Not a lack of leadership from the main person in charge but from either a lack of ability or the lack of 'willingness' from other personnel who are needed to step up and truly lead the effort to bring the strategies from paper to production." The message here is that we are all called to lead from wherever we are, even if we're not at the top. Not all management teams are blessed with skilled leaders. "Management team and/or owner not experienced/skilled enough to carry out the strategy." Some have titles associated with leadership, but not the authority: "No assigned champion/true owner of each project who has the authority to implement." I was taught that you must delegate authority at the same time you delegate responsibility. No Plan Behind the Idea The third most popular category is named, "No Plan Behind the Idea," captured in this summary: "Most great plans aren't. They are just nice, high-level ideas." Those of you that have attempted to execute plans that were as thin as the soles on Newman's shoes may easily relate to this: "'Strategic initiative?' No, it wasn't 'strategic' and it wasn't an 'initiative'. Calling something a strategic initiative doesn't make it one." It seems that many of our strategic planning sessions stop halfway, before there is a plan. "Very little planning, if any, goes into the implementation process." "Undeveloped intentions." Maybe you know some of these people: "Frequently the person with the great idea is not an execution giant." While no one is advocating using masking tape on a paint-by-numbers picture, how about this example of how to do it right: "the Microsoft of today NEVER rushes in ... they wait to see how things shake out, steal some early ideas, perfect them, then smash everybody they can and conquer the world." Inquiring minds want to know what a strategy document is really for. "A strategy document almost NEVER actually states what is to be done from day to day and a way for employees to track their actual progress. Most strategies stop at the 'conceptual stage' rather than actually give very SPECIFIC tasks to be done." Passive Management In fourth place is a category I call "Passive Management." This is characterized by assuming that things will run themselves after we get them started, which is about as likely as being hit by lightning while being eaten by a shark. Instead, I suggest that implementing strategic plans is more like keeping plates spinning atop a number of pointed sticks. If we don't put forth a regular effort to keep them spinning, the plates will fall down and the sticks will end up in uncomfortable places. "When the implementation phase begins there is not enough follow-through -- or follow-up for that matter -- from senior management." "Poor and inexperienced management to execute the plan." Notice the subtle difference here from leadership. While leadership is expected to communicate the vision and support it with demonstrable actions, management is expected to know how to execute the individual tactics. "All talk and no action, failure to assign and hold individuals accountable for delivering on the assignments."

Like leadership, management is not easy either: "It takes a special person to be able to define strategies and to plot out and manage others in how to achieve those strategies. Most fail because they assume their team has the wherewithal to pull it off and they therefore do not manage the process." I must say, I was surprised to learn that people want more management -- at least where implementing strategic plans is concerned! Motivation and Personal Ownership Our last category is actually our first category. This most popular category of Motivation and Personal Ownership contains responses focused on the question, "What's in it for me?" This is not to imply that we're all a bunch of selfish, greedy, self-serving individuals -- although recent headlines could certainly make that case successfully! -- it's really that people are looking for the meaning in what they do. In other words, they want to show up for more than just a paycheck. People want to build something, make a difference. "Don't understand the purpose, goal is minimized, vision disappears. No enthusiasm to make it happen. The bottom line, how will it affect ME?" More effort is needed to help people understand how getting behind the company's goals can support their personal goals. "The I/me mentality that is so prevalent today. If it works for me -- it works for me! Let everyone else deal with it." "You must have some kind of desire or necessary will to implement the plan. You must have some kind of image of the outcome." The message here is that you -- personally -- must desire the outcome. Perhaps that lack is what causes, "lack of buy-in from the entire group." "Typically the initiative fails because the people responsible for implementing it are not convinced of its value." What are the symptoms when there is no motivation/personal ownership? "Employee resistance." "Lack or no sense of urgency." "Inability of individuals to view strategic planning an important and exciting part of their job." "Lack of employees' support." "Lack of better sales efforts." Conclusion Pay attention to Motivation and Personal Ownership, Communications, No Plan Behind the Idea, Passive Management, and Leadership, and you'll be ahead of the strategic planning game. These observations and insights can help you improve your success rate with implementing strategic plans, so it doesn't feel like doing the splits over a case of dynamite. If you have had "great plans" fail -- I've lost personal count! -- take what we have learned here and embrace a new plan for those "high-level ideas." Let's also learn from Napoleon Hill: "The majority of men meet with failure because of their lack of persistence in creating new plans to take the place of those which fail." Braced with this knowledge, you'll do clearly better this time, and without need of bullets or amphetamines!

2 Explain the following: (a) Core competence Answer : The idea of "core competences" is one of the most important business ideas currently shaping our world. This is one of the key ideas that lies behind the current wave of outsourcing, as businesses concentrate their efforts on things they do well and outsource as much as they can of everything else.

A core competency is fundamental knowledge, ability, or expertise in a specific subject area or skill set. For example, an individual who becomes certified as a Microsoft Certified Software Engineer (MCSE) is said to have a core competency in certain Microsoft systems and networks. Companies with specific strengths in the marketplace, such as data storage or the development of accounting applications, can be said to have a core competency in that area. The core part of the term indicates that the individual has a strong basis from which to gain the additional competence to do a specific job or that a company has a strong basis from which to develop additional products. By using the idea, you'll make the very most of the opportunities open to you: You'll focus your efforts so that you develop a unique level of expertise in areas that really matter to your customers. Because of this, you'll command the rewards that come with this expertise. You'll learn to develop your own skills in a way that complements your company's core competences. By building the skills and abilities that your company most values, you'll win respect and get the career advancement that you want.

(b) Value chain analysis Answer : Value Chain Analysis is a useful tool for working out how you can create the greatest possible value for your customers. In business, we're paid to take raw inputs, and to "add value" to them by turning them into something of worth to other people. This is easy to see in manufacturing, where the manufacturer "adds value" by taking a raw material of little use to the end-user (for example, wood pulp) and converting it into something that people are prepared to pay money for (e.g. paper). But this idea is just as important in service industries, where people use inputs of time, knowledge, equipment and systems to create services of real value to the person being served the customer. And remember that your customers aren't necessarily outside your organization: they can be your bosses, your co-workers, or the people who depend on you for what you do. Now, this is really important: In most cases, the more value you create, the more people will be prepared to pay a good price for your product or service, and the more they will they keep on buying from you. On a personal level, if you add a lot of value to your team, you will excel in what you do. You should then expect to be rewarded in line with your contribution. So how do you find out where you, your team or your company can create value? This is where the "Value Chain Analysis" tool is useful. Value Chain Analysis helps you identify the ways in which you create value for your customers, and then helps you think through how you can maximize this value: whether through superb products, great services, or jobs well done. How to Use the Tool Value Chain Analysis is a three-step process: Activity Analysis: First, you identify the activities you undertake to deliver your product or service; Value Analysis: Second, for each activity, you think through what you would do to add the greatest value for your customer; and

Evaluation and Planning: Thirdly, you evaluate whether it is worth making changes, and then plan for action.

3 Describe in brief the following environmental factors which a business strategist considers: (a) Political factors Answer : This exercise dissects the political, governmental, and legal aspects of a particular business. Both local and global environments are studied because federal, state, local, and foreign governments are major regulators, deregulators, subsidizers, employers, and customers of organizations. The growing interdependence among economies, markets, governments, and organizations underscores the importance of considering the political variables affecting the conception, development, and operation of any business. Existing and potential developments bearing on government-driven tax laws, trade quota and restraints, regulatory framework, industry subsidies, investment incentives, local content manufacturing requirements, regulated pricing, trade agreements, economic treaties, and bureaucratic processes are major political realities that must be taken into account when planning for a business. National political stability is also a key consideration. The complexity of today's political landscape is exactly the reason why strategists now spend more time anticipating and influencing public policy actions. Entrepreneurs make sure that they have more time meeting government officials, attending government-sponsored conferences, rendering public speeches, issuing press releases, and becoming visible in trade groups, industry associations, and other congregations where updated political developments can be learned. (b) Technology Answer : Technology is a business enabler that has revolutionary impact on the actual conduct of business. It contributes to achieving desired business productivity and efficiency. The Internet serves as a good example; what used to be impossibility in instantaneous global communication has become a cold reality and an urgent necessity for every business in order to succeed. The Internet, including its e-commerce and social networking adjuncts, continues to change the nature of opportunities and threats in business. It alters product life cycles, increases distribution speed, creates new products and services, changes economies of scale, redefines business relationships, and propagates borderless transactions. In short, the Internet has become an indispensable business tool. Another good example of enabling technology application refers to the advancements in superconductivity systems, which increase the power of electrical products by lowering resistance to current. These improvements revolutionize business operations, especially in transportation, utility, healthcare, electrical, and computer industries. Technology, however, is a threat, a disruptive element that can cause monstrous operational problems for businesses that fail to keep pace with technological trends and innovations. This disruptive impact amplifies the essence of evaluating the technology issues surrounding the viability of a business. For example, by combining high technology and low-cost massive manpower, Chinabased businesses have achieved unprecedented global competitiveness.

4 Write a brief note on Turnaround strategy.

Answer : Turnaround strategy is a corporate practice designed and planned to protect (save) a loss making company and transform it into a profit-making one. Definition of Turnaround Strategy The definition of turnaround strategy w.r.t different senses is depicted below.

The concept or meaning of turnaround strategy covers following points: 1. Turnaround strategy means to convert, change or transform a loss-making company into a profit-making company. 2. It means to make the company profitable again. 3. The main purpose of implementing a turnaround strategy is to turn the company from a negative point to a positive one. 4. If a turnaround strategy is not applied to a sick company, it will close down. 5. It is a remedy for curing industrial sickness. 6. Turnaround is a restructuring strategy. Here, a loss-bearing company is transformed into a profit-earning company, by making systematic efforts. 7. It tries to remove all weaknesses to help a sick company once again become strong, stable and a profit-making institution. 8. It tries to reverse the position from loss to profit, from declining sales to increasing sales, from weakness to strength, and from an instability to stability. 9. It aids to reduce the brought forward losses of the loss-making company. 10. It helps the sick company to stand once again in the market. 11. It is a complete U-turn of a planned strategic economic transition. Examples of turnaround strategy: Financial Institution, for example, some bank A is suffering from losses due to non-performing assets (NPA). NPA is loan given but not yet recovered. This bank A will follow turnaround strategy and try to recover its loans by appointing recovery agents. Manufacturing company say XYZ is suffering from losses due to excess idle time taken by labour to complete their jobs. The manufacturing company XYZ will follow turnaround strategy to reduce labour inactivity by installing modern machines (automation) to carry on the same work or job.

Educational institution, for example, C is suffering from losses due to non-registration of students in their courses. This institution C will follow turnaround strategy to reduce losses by providing facilities like e-Registration, conducting online classes, etc. to attract students. 5 Define the term strategic alliance. What are its characteristics and objectives? Answer : A strategic alliance is a relationship between two or more entities that agree to share resources to achieve a mutually beneficial objective. For example, a company manufactures and distributes a product in the United States and desires to sell it in other countries. Another company wants to expand its product line with the type of product the first company creates, and has a worldwide distribution channel. The two companies establish an alliance to expand the distribution of the first companys product. Seven features of successful strategic alliances : Values To be successful in an alliance the organisations need to hold a shared set of values about the cause they are championing and about ways of working together. These values will influence the way the parties approach the alliance and how they work together. Leadership Partnerships require champions in each of the participating organisations, and these individuals need to take direct responsibility for achieving the partnership goals. Partnerships also require the unequivocal support of the leaders of the participating organisations. Clarity of mission and strategy Strategic alliances need a compelling mission, realistic objectives and a clear strategy for achieving them. Each partnership needs to have great clarity over its goals, achievable objectives with win-win opportunities for both organisations. Board commitment The boards of all participating organisations need to be strongly committed to the partnership and willing to support it through the good times and the difficult times. Resources Strategic alliances need to be properly resourced and there needs to be great honesty and realism about the time and financial commitments each organisation will have to make to the partnership. When it comes to reporting on how the resources have been applied, the financial reports need to be tailored to the needs of the partnership and not to necessarily follow the standard reporting formats of the participating organisations. Open and honest communications Managers need to recognise that many different stakeholders such as funders, board and committee members, staff, chapters and volunteers, may be affected by a strategic alliance. Each requires regular and thorough communication. Formal communications should be supported by plenty of informal communication, ideally at board, senior management and staff levels. Commitment to good faith negotiations When the alliance is being established there should be three ground rules. Without prior agreement of all partners: there should be no material changes in the partnership proposition

negotiators must be named and there should be no changes during negotiations there must be no negotiations with other external parties.

Objectives of successful strategic alliances : 1. Critical to a business objective While the most common type of alliance generates revenue through a joint go-to-market approach, not every alliance that produces revenue is strategic. For example, consider the impact on revenue objectives if the relationship were terminated? Clearly, a truly strategic relationship would have a great bearing on the prospects for achieving revenue growth targets. In addition to a single strategic alliance, related groupings of alliancesnetworks or constellations may also be critical to a business objective. This category also includes alliances with high potential, such as alliances that have large but unrealized revenue opportunity. Consider the impact of new industry standards that make it possible for products from different manufacturers to work together. Cost reduction may also be a core business objective of the alliance, particularly among supply-side partners. By investing together in new processes, technologies and standards, alliance partners can obtain substantial cost savings in their internal operations. Again, however, a cost-saving alliance is not truly strategic unless it has an underlying business objective, such as to achieve an industryleading cost structure. 2. Competitive advantage and core competency Another way in which an alliance can prove to be strategic is to play a key role in developing or protecting a firms competitive advantage or core competency. Learning alliances are the most common form of competitive/competency strategic alliances. An organizations need to build incremental skills in an area of importance is often accelerated with the help of an experienced partner. In some cases, the learning objective of the relationship is openly agreed between the partners; however, this is not always the case. Learning alliances work best when: 1. The objectives are openly shared 2. There is little chance of future competition (such as when the partners are in adjacent industries) 3. The cultures of the organizations are similar enough to enable process and methods to be leveraged, and 4. The governance structure of the alliances is established to promote learning at the executive, managerial and operational levels. 3. Blocking a competitive threat An alliance can be strategic even when it falls short of establishing a competitive advantage. Consider the case of an alliance that blocks a competitive threat. It is strategic to bring competitive parity to a secondary segment of a market in which the firm competes, when the absence of parity creates a competitive disadvantage in the related primary segments of that market. For example, competing in the high and medium price range of a market with a premium product may leave the firm vulnerable to a low-priced entry. If the firms manufacturing processes do not permit the creation of a low-priced product entry, a strategic alliance with a volume partner in an adjacent market can successfully block the competitive threat. 4. Future strategic options

From a longer-term perspective, an alliance that is not fundamental to achieving a business objective today could become critical in the future. For example, in 1984, a U.S. consumer products company needed to expand distribution beyond the Midwestern states. Faced with the prospect of European competition at some point in the future, the firm made a strategic decision to invest in an alliance with a distribution and support services company that had incremental distribution capacity in the U.S. and a similar presence in Europe, rather than invest in expanding its own local distribution capabilities. With the option to expand into European distribution at any point, the firm could work to sew up the U.S. market before expanding too quickly internationally. 5. Risk mitigation When an alliance is driven by intent to mitigate significant risk to an underlying business objective, the nature of the risk and its potential impact on the underlying business objective are the key determinants of whether or not it is truly strategic. Dual sourcing strategies for critical production components or processes are excellent examples of how risk mitigation can become the context for supply-side strategic alliances. As process manufacturing companies advance the yield of their operations, suppliers often collaborate with the manufacturer to ensure their new products fit within its new operations. The benefits of such an alliance are cost savings to the manufacturer and accelerated product development for the supplier. In situations where the suppliers product is critical to the manufacturers operation, it may be necessary for the manufacturer to have strategic alliances with two competing suppliers in order to mitigate such risks as unilateral cost increases or degradation in quality of service. 6 Write short notes on the following: a) Competitive advantage Answer : Competitive advantage is the favorable position an organization seeks in order to be more profitable than its competitors. The challenge for a marketing strategy is to find a way of achieving a sustainable competitive advantage over the other competing products and firms in a market. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. The strategies relate to the extent to which the scope of a business' activities are narrow versus broad and the extent to which a business seeks to differentiate its products. The four strategies are summarised in the figure below:

The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. By contrast, the differentiation focus and cost focus strategies are adopted in a narrow market or industry. Cost leadership With this strategy, the objective is to become the lowest-cost producer in the industry. The traditional method to achieve this objective is to produce on a large scale which enables the business to exploit economies of scale. Why is cost leadership potentially so important? Many (perhaps all) market segments in the industry are supplied with the emphasis placed on minimising costs. If the achieved selling price can at least equal (or near) the average for the market, then the lowest-cost producer will (in theory) enjoy the best profits. This strategy is usually associated with large-scale businesses offering "standard" products with relatively little differentiation that are readily acceptable to the majority of customers. Cost focus Here a business seeks a lower-cost advantage in just one or a small number of market segments. The product will be basic - perhaps a similar product to the higher-priced and featured market leader, but acceptable to sufficient consumers. Such products are often called "me-too's". Differentiation focus In the differentiation focus strategy, a business aims to differentiate within just one or a small number of target market segments. The special customer needs of the segment mean that there are opportunities to provide products that are clearly different from competitors who may be targeting a broader group of customers. Differentiation leadership With differentiation leadership, the business targets much larger markets and aims to achieve competitive advantage across the whole of an industry. This strategy involves selecting one or more criteria used by buyers in a market - and then positioning the business uniquely to meet those criteria. This strategy is usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer.

b) Porters Competitive threat model Answer : Porter suggests that there are five basic competitive forces, which influence the state of competition in an industry. He calls the structural determinants of the intensity of competition, which collectively determine the profit potential of the industry as a whole. Some industries have a

bigger profit potential than others, since keener competition means lower profits. These five competitive forces are as follows: Threat of New Entrants: A new entrant into an industry will bring extra capacity. The new entrant will have to make an investment to break into the market, and will want to obtain a certain market share. The strength of the threat from new entrants depends on two factors: The strength of the barriers of entry The likely response of existing competitors to the new entrants. Threat from Substitute Products: The products or services that are produced in one industry are likely to have substitutes that are produced by another industry, which satisfy the same customers need. Which firms in an industry are faced with threats from substitute products, they are likely to find that demand for their products is relatively sensitive to price. Bargaining Power of Customers: Customers should want better quality products and services at a lower price, and if they succeed in getting what they want, they will force down the profitability of supplies in the industry. The profitability of an industry is therefore dependent on the customers bargaining power. The Bargaining Power of Suppliers: Just customers can influence the profitability of an industry by exerting pressure for higher quality products or lower prices, so too can suppliers influence profitability by exerting pressure for higher prices. The Rivalry amongst Current Competitors in the Industry: The intensity of competitive rivalry within an industry will affect profitability of the industry as a whole. Competitive action might take the form of price competition, advertising battles, sales promotion campaigns, introducing new product from the market, improving after sales services or providing guarantee or warranties.