New

 Employee  Orienta1on  
•  Ge3ng  to  know  your  new  assignment  
•  Familiarizing  yourself  with  your  new  
environment  
•  Mee1ng  new  colleagues    
Strategic  Management  
 
Successfully  formulate  and  implement  value-­‐crea7ng  
strategy  
 
•  Based  on  (sustainable)  compe11ve  advantage  
•  To  earn  above-­‐average  returns  
•  To  create  value  for  stakeholders  
 
Strategic  planning    
•  Strategic   planning   is   an   organiza1on's  
process   of   defining   its   strategy,   or   direc1on,  
and   making   decisions   on   alloca1ng   its  
resources  to  pursue  this  strategy.  It  may  also  
extend  to  control  mechanisms  for  guiding  the  
implementa1on  of  the  strategy.  
Strategic  planning    
Strategic  Management  
Strategic  Management  Process  
•  Strategic   Inputs:   Internal   and   External  
Scanning  
•  Strategic   Ac1ons:   Formula1on   and  
implementa1on  of  strategy  
•  Strategic  Outcomes:  Above,  at  or  below  
average  returns  
Strategic  Management  Process  
Strategic  Management  
From  Organiza1onal  Vision  to  Tac1cal  Steps  
•  Define  the  Organiza1on:  
–  Vision    
–  Mission  Statement    
•  Understand  the  Opera1ng  Environment  [S  W  O  T]  
–  Internal  Condi1ons  (Strengths  and  Weaknesses)  
–  External  Environment  (Threats  and  Opportuni1es)  
•  Determine  Strategic  Alterna1ves    
•  Formulate  Strategy  (long  term)  
•  Implement  Strategy  through  Tac1cs  (short  term)  
Mission  of  a  Firm  
 
Clearly  ar1culate  3-­‐5  year  plan  of  firm  
 
Iden7fy:  
•  The  industry(ies)  it  wishes  to  par1cipate  in  
•  How  it  wishes  to  par1cipate  
–  Marke1ng  mix  (product,  price,  place,  promo1on)  
–  Customer  “wants  and  needs”  it  will  serve  
–  Posi1on  it  will  hold  in  its  chosen  markets  
 STRATEGIC  MANAGEMENT  PROCESS  

FORMATION  OF   CONSIDERATION  OF  

MISSION  &   SWOT  ANALYSIS     STRATEGIC  
OBJECTIVES   ALTERNATIVES  

EVALUATION   IMPLEMENTATION   CHOICE  OF  

AND  CONTROL   STRATEGY  
STRATEGIC  FORMULATION  
        Strategic  forma7on  involves  four    important  
steps  which  are,[SWOT]  

1.  Determina1on  of  mission  and  objec1ves  

 
2.  Analysis  of  strengths  and  weakness  of  the  
firm  
 
3.  Environmental  opportuni1es  and  threats  
 
4.  Genera1on  of  alterna1ves  strategies  and  
choosing  the  most  appropriate  strategies.  
 1.Determina7on  Of  Mission  And  Objec7ves  

•  Strategic  management  can  be  defined  as  the  art  

and   science   of   formula1ng,   implemen1ng   and  
evalua1ng   cross-­‐func1onal   decisions   that  
enables  an  organiza1on  to  achieve  its  objec1ves.  

•  In   short,   strategy   is   a   means   to   achieve   the  

objec1ves.   It   is,   therefore,   quite   obvious   that  
determine  the  mission  and  objec1ves,  is  the  first  
step  in  the  strategic  forma1on.  
•  The   mission   defines   the   board   social   purpose  
and   scope   of   the   organiza1on   whereas  
objec1ves   more   specifically   define   the   direc1on  
to  achieve  the  mission  
 
•  Objec1ves   help   translate   the   organiza1on  
mission   into   results   while   objec1ves   may   be  
generic   in   their   expression,   goals   sets   specific  
targets  to  be  achieved  with  in  a  1me  frame.  
 2.SWOT  ANALYSIS  

•  In  strategic  management,  the  term    strategic  is  

used   to   mean   “pertaining   to   the   rela1on  
between   the   firm   and   its   environment”   this  
indicates   the   role   of   SWOT   in   strategic  
management.  
 
•  In   strategic   management   the   strength   and  
weakness   of   the   firm   and   opportuni1es   and  
threats   in   the   environment   will     indicate   the  
pordolio  strategy  and  other  strategies  it  should  
pursue.  
  
3.STRATEGIC  ALTERNATIVES  
 
       Given  the  mission  and  objec1ves  and  having  
analyzed  the  strength  and  weakness  of  the  firm  and  
environmental  opportuni1es  and  threats.  This  
strategies  should  proceed  to  generate  possible  
alterna1ves  strategies.  There  may    be  different  
strategies  op1ons  for  accomplishing  a  par1cular  
objec1ves.  
 
  
4.Evalua7on  And  Choice  
 
•  The  purpose  of  considering  different  strategic  
op1ons  is  to  adopt  the  most  appropriate  
strategy.  This  necessitates  the  evalua1on  of  
strategic  alterna1ves  with  reference  to  certain  
criteria.  

•  Criteria  such  as  suitability,  feasibility  and  

acceptability  are  commonly  employed  to  
evaluate  the  strategic  op1ons.  
 5.Implementa7on  

•  Opera1onalsing   the   strategy   requires  

transcending   the   various   components   of  
strategy   to   different   levels,   mobiliza1on   and  
alloca1on   of   resource,   structuring   authority,  
responsibility,   task   and   informa1on   follows,   and  
establishing  polices.  

•  Implementa1on   of   strategy   involves   a   number  

of  administra1ve  and  opera1onal  decisions.  
 6.Evalua7on  And  Control  

•  Evalua1on   and   control   is   the   last   phase   of   the  

strategic  management  process.  The  objec1ve  is  
to   exami ne   whether   the   strategy   as  
implemented  is  mee1ng  its  objec1ves  and  if  not  
to  take  correc1ve  measures.  

•  Con1nuous  monitoring  of  the  environment  and  

implementa1on  of  the  strategy  is  essen1al.    
        Benefits  of  Strategic  Management  

1.  strategic   management   helps   to   envision   an  

organiza1on’s   future,   formulate   mission   and  
make  objec1ves  clear.  

2.  Strategic  management  makes  the  management  

dynamic,   appropriate   to   the   environment   and    
future  oriented.    
 
3.   It   make   people   realize   what   are   they   working  
for,   what   is   expected   of   each   SBU,   division,  
func1onal   department   and,   to   some   extend,  
individuals.  
 
4.   Strategic   management   facilitates   beger  
d e l e g a 1 o n ,   o r g a n i z a 1 o n   m o n i t o r i n g ,  
performance  evalua1on  and  control.  
 
5.   Strategic   management   would   enable   a  
company   to   meet   compensa1on   more  
effec1vely.  
 LIMITATIONS  
 
1.  Strategic   management   is   a   means   to   achieve   the  
mission   and   objec1ves   of   the   organiza1on.   Hence  
any   lack   of   realism   or   other   limita1on   of   the  
mission  or  objec1ves  would  naturally  get  reflected  
in  the  strategy.  

2.  Another   problem   is   that   strategic   planning   is   a  

complex   and   difficult   task   which   requires   people  
with   vision,   exper1se   and   commitment   and  
appropriate  system.    
        
3.  An  important  limita1on  of  strategic  management  is  
that  if  the  implementa1on  of  strategy  is  not  
effec1ve,  even  an  excellent  strategy  would  not  
produce  expected  result  
THANK Y
O
U
Michael  Porter’s  
Five  Forces  Model      
Michael Porter …
 

“An   industry’s   profit   poten1al   is  

largely
  determined
  by
  the
 
intensity
  of
  compe11ve
  rivalry
 
within
 that
 industry.”
 
 

 
 Structural reasons why …
… some industries were profitable
* Firm concentration
* Established cost advantages
* Product differentiation
* Economies of scale
Porters
 Five
 Forces
 …
 
 
*
 Threat
 of
 Entry
 

 *
 Bargaining
 Power
 of
 Suppliers
 

 
 
 *
 Bargaining
 Power
 of
 Buyers
 

 
 *
 Development
 of
 Subs1tute
 

 
 
 Products
 or
 Services
 

 
 
 
 
 *
 Rivalry
 among
 Compe1tors
 
 

 
 
 
 
 

 
 Barriers
 to
 Entry
 …
 
…
  large
  capital
  requirements
  or
  the
 
 
 
 
need
 to
 gain
 economies
 of
 scale
 quickly.
 
 

 
…
  strong
  customer
  loyalty
  or
  strong
  brand
 
preferences.
 

 
…
  lack
  of
  adequate
  distribu7on
  channels
  or
 
access
 to
 raw
 materials.
 

 
Power
 of
 Suppliers
 …
 
 

 
 
 …
 high
 when
 
 
*
  A
  small
  number
  of
  dominant,
  highly
 

 concentrated
 suppliers
 exists.
 
*
  Few
  good
  subs;tute
  raw
  materials
  or
 

 suppliers
 are
 available.
 
 
*
  The
  cost
  of
  switching
  raw
  materials
 

 or
 suppliers
 is
 high.
 
 

 
Power
 of
 Buyers
 …
 
 
… high when
* Customers are concentrated, large or
buy in volume .
* The products being purchased are
standard or undifferentiated making it
easy to switch to other suppliers.
* Customers’ purchases represent a
major portion of the sellers’ total
revenue.
Subs7tute
 products
 …
 
 
… competitive strength high when
* The relative price of substitute
products declines .
* Consumers’ switching costs decline.
* Competitors plan to increase market
penetration or production capacity.
Rivalry
 among
 compe1tors
 
 

 
 
 
 …
 intensity
 increases
 as
 
*
  The
  number
  of
  compe;tors
  increases
 

 or
 they
 become
 equal
 in
 size.
 
*
  Demand
  for
  the
  industry’s
  products
 

 declines
 or
 industry
 growth
 slows.
 
*
  Fixed
  costs
  or
  barriers
  to
  leaving
  the
 

 industry
 are
 high.
 
 

 
 Summary
 …
 

 
  As
  rivalry
  among
  compe7ng
  firms
 
intensifies,
  industry
  profits
  decline,
  in
 
some
  cases
  to
  the
  point
  where
  an
 
i n d u s t r y
  b e c o m e s
  i n h e r e n t l y
 
una^rac7ve.
 

 
Porter’s five force model
Analysis
5 Forces
Rivalry among the competitor
Threat of entrants
Bargaining power of supplier
Bargaining power of buyers
Threat of substitutes
Analysis
• Reliance Retail, Aditya Birla Group , Vishal Retail’s,
Bharti and Walmart, etc
•  FDI policy not favorable for international players.
•  Domestic conglomerates looking to start retail chains.
• International players looking to foray India.
• The bargaining power of suppliers varies depending
upon the target segment.
• The unorganised sector has a dominant position.
•  There are few players who have a slight edge over
others on account of being established players and
enjoying brand distinction.
•  Consumers are price sensitive..
• Availability of more choice.
• Unorganized retail
MANAGEMENT
 POLICY
 AND
 STRATEGY
 
(Generic
 Compe77ve
 Analysis)
 

40  
 Generic  Strategies  

Low-­‐cost  
leadership  

Differen7a7on    Focus  

41  
 PORTER’S  GENERIC  STRATEGIES  
 

Compe77ve  
Advantage  
Lower  Cost     Differen1a1on  

Broad   1.  Cost   2.  Differen1a1on  

Target   Leadership  
Compe77ve  Score  
3  A.  Cost  Focus   3  B.  Differen1a1on    
Narrow                Focus  
Target  

42  
 Requirements  For  Generic  Compe77ve  Strategies  

Generic      Commodity  Required    Common  Organiza7onal  

Strategy    Skills  and  Resources      Requirements  
Overall  cost  •  Sustained  capital  investment      •  Tight  cost  control  
leadership          access  to  capital        •  Frequent,  detailed  control  
                   reports  
       •  Process  engineering  skills      •  Structured  organiza1on  
                 and  responsibili1es  
       •  Intense  supervision  of  labor      •  Incen1ves  based  on  
       •  Products  designed  for  ease                mee1ng  strict  quan1ta1ve  
       •  Low-­‐cost  distribu1on  system          targets  in  manufacture  
Differen1a1on    •  Strong  marke1ng  abili1es        •  Strong  coordina1on    
     •  Product  engineering    among  func1ons    
       in  R&D,  product  development,  and  marke1ng  

43  
REQUIREMENTS  FOR  GENERIC  COMPETITIVE  STRATEGIES  
           CONTD…  
       •  Strong  capability  in  basic    •  Subjec1ve  measurement  and  
             research                incen1ves  instead  of      
                   quan1ta1ve  measures  
       •  Corporate  reputa1on  for      •  Ameni1es  to  agract  highly    
             quality  or  technological          skilled  labour,  scien1sts,  or  crea1ve  people  
             leadership              
       •  Long  tradi1on  in  the  industry    
             or  unique  combina1on  of  skills  
             drawn  from  other  businesses  
       •  Strong  coopera1on  from  
             channels  
   Focus    •  Combina1on  of  the  above      •  Combina1on  of  the  above  policies  
             policies  directed  at  the          directed  at  the  regular  strategic  
             par1cular  strategic  target        target    

44  
BCG  Matrix    
BCG  Growth  share  matrix  
•  The   simplest   matrix   is   the   growth   share  
matrix   developed   by   Boston   Consul1ng  
Groups.  
•  It  is  a  four  cell  matrix  which  compares  various  
businesses/   products   on   the   basis   of   growth  
rate  &  its  rela1ve  market  share.  And  ploged  
it  on  the  matrix  accordingly.  
Structure  of    BCG  Matrix:  

Stars Question marks

Cash cows Dogs

In   the   above   figure   each   products   or   SBU   is  
represented  by  circle  and  the  area  of  circle  to  
represents   the   rela1ve   significance   of   each  
product  or  SBU.      
 
      the   growth   share   matrix   has   a   lot   in  
common  with  product  life  cycle  :  
1.  Stars-­‐   stars   are   market   leaders.   They   are   at  
the   peak   of   their   product   life   cycle   and  
usually   able   to   generate   enough   cash   (to  
maintain  their  high  market  share).  

2.  Ques1on   marks-­‐   ques1on   marks   indicate  

new  products  that  are  typically  introduced  in  
fast  growing  industry.  Like  stars  they  require  
substan1al   investment   so   that   they   can  
become  star.    
3.   Cash   cows:     They   bring   or   generate   more   cash  
than  is  necessary  to  maintain  its  market  share.  
And   they   are   milked   for   cash   that   will   be  
invested  in  ques1on  mark  products.  
 
4.   Dogs:     These   products   with   low   market   share  
and  do  not  have  poten1al  to  bring  much  cash.  
  According   to   BCG   matrix   they   should   carefully  
be   either   sold   off   or   managed   for   cash  
genera1on.      
BALANCED  SCORE  CARD  
                                                                  

                                                     
David  Norton   Robert  Kaplan  
Perspectives
•  GOALS & PERFORMANCE MEASURES
–  Financial perspective
•  How do we look to shareholders?
–  Customer perspective
•  How do customers see us?
–  Internal Business perspective (BPR)
•  What must we excel at?
–  Innovation & Learning perspective
•  Can we continue to improve & create value?
•  FINANCIAL perspective

GOALS MEASURES
Survive Cash flow
Succeed Quarterly sales
Growth
Operating income by division
Prosper Increase in market share
Increase in Return on Equity
Customer  Perspec1ve  
GOALS MEASURES
New products % sales from new products
% sales from proprietary products
Responsive On-time delivery
supply (customer definition)
Preferred Share of key accounts’
suppliers purchases
Ranking by key accounts
Customer # of cooperative engineering
partnerships efforts
Internal  Business  perspec7ve  
GOALS MEASURES
Technology Benchmark vs. competition
capability
Manufacturing Cycle time
excellence Unit cost
Yield
Design Efficiency
productivity
New product Schedule: Actual vs. Planned
innovation
Innova7on  &  Learning  perspec7ve  
GOALS MEASURES
Technology Time to develop next generation
leadership
Manufacturing Process time to maturity
learning
Product focus % products equalling 80% of
sales
Time to market New product introduction vs.
competition
 Example:BSC  
CATEGORY   Purpose   Aim  
Learning  &  Growth  for   To  achieve  our  vision   How  will  we  sustain  our  
Employees   ability  to  change  &  
improve?  
Internal  Business   To  sa1sfy  our  stakeholders   Where  must  we  excel  in  
Processes   &  customers   our  business  processes?  

Customer  Sa7sfac7on   To  achieve  our  vision   How  should  we  appear  to  
our  customers?  
Financial  Performance   To  succeed  financially   How  should  we  appear  to  
our  stakeholders?  
 Learning  &  Growth  for  Employees  
GOALS   MEASURES  
Increase  employee  process  ownership   Employee  survey  scores  
Improve  informa1on  flows   Changes  in  informa1on  reports  
Frequencies  across  supply  chain  partners  

Increase  employee  iden1fica1on  of   Compare  actual  disrup1ons  with  reports  

poten1al  supply  chain  disrup1ons   of  poten1al  disrup1on  drivers  
RISK-­‐RELATED  GOALS  
Increase  employee  awareness   Number  of  employees  agending  risk  
management  training  
Increase  supplier  accountability   Supplier  contract  provisions  on  risk  
Increase  employee  awareness  of  supply   Number  of  departments  par1cipa1ng  in  
chain  risks  &  other  enterprise  risks   supply  chain  risk  iden1fica1on  &  
assessment  workshops  
 Internal  Business  Processes  
GOALS   MEASURES  
Reduce  waste  across  supply  chain   Pounds  of  scrap  
Shorten  1me  from  start  to  finish   Time  from  raw  material  purchase  to  
product/service  delivery  to  customer  
Achieve  unit  cost  reduc1ons   Unit  costs  per  product/service  delivered  
%  of  target  costs  achieved  

RISK-­‐RELATED  GOALS  
Reduce  probability  &  impact  of  threats   Number  of  employees  agending  risk  
management  training  
Iden1fy  specific  tolerances  for  key   Number  of  process  variances  exceeding  
processes   specified  acceptable  risk  tolerances  

Reduce  number  of  exchanges  of  supply   Extent  of  risks  realized  in  other  func1ons  
chain  risks  to  other  enterprise  processes   from  supply  chain  process  risk  drivers  
Customer  Sa7sfac7on  
GOALS   MEASURES  
Improve  product/service  quality   Number  of  customer  contact  points  
Improve  1meliness  of  product/service   Time  from  customer  order  to  delivery  
delivery  
Improve  customer  percep1on  of  value   Customer  scores  of  value  
RISK-­‐RELATED  GOALS  
Reduce  customer  defec1ons   Number  of  customers  retained  
Monitor  threats  to  product/service   Extent  of  nega1ve  coverage  of  quality  in  
reputa1on   press  
Increase  customer  feedback   Number  of  completed  customer  surveys  
about  delivery  comparisons  to  other  
providers  
Financial  Performance  
GOALS   MEASURES  
Higher  profit  margins   Profit  margin  by  supply  chain  partner  
Improved  cash  flows   Net  cash  generated  over  supply  chain  
Revenue  growth   Increase  in  customers  &  sales  per  
customer  
%  annual  return  on  supply  chain  assets  

RISK-­‐RELATED  GOALS  
Reduce  threats  from  price  compe11on   Number  of  customer  defec1ons  due  to  
price  
Reduce  cost  overruns   Surcharges  paid  
Holding  costs  incurred  
Over1me  charges  applied  
Reduce  costs  outside  the  supply  chain   Warranty  claims  incurred  
from  supply  chain  processes   Legal  costs  paid  
Sales  returns  processed  
Advantages  of  BSC  
•  It   is   used   to   align   the   business   ac1vi1es        
to  vision  and  strategy  
•  It  improves  Internal  &  External  communica1ons    
•  It  is  used  to  monitor  organiza1ons    performance    
•  It   provides   management   with   comprehensive  
picture  of  opera1ons  
•  It  provides  strategic  feed  back  
•  It  improves  decisions  &  beger  solu1ons  
 
Disadvantages  
•  It  Doesn’t  provide  Recommenda1ons  
•  It  is  not  fully  Efficient  
•  It  takes  1me  
•  It  is  High  Implementa1on  of  cost  
•  It  can  show  low  profit    
  
PEST  Analysis  
 PEST ANALYSIS

This   form   of   business   analysis   examines   the   external    

environment     and   the   global   factors   that   may   affect   a  
business.    
 
It  can  provide  a  quick  and  visual  representa1on  of  the  
external   pressures   facing   a   business,   and   their  
possible  constraints  on  strategy.  
 
 
  is  usually  divided  into  four  external  influences  
It  
on  a  business    P  –  Poli7cal  
 
       E  –  Economic  
 
       S  –  Social  
 
       T  –  Technological    
 
 PEST  Analysis  
POLITICAL:  This  is  concerned  with  how  poli1cal  developments,  
regionally,  na1onally  and  interna1onally  might  affect  a  
business’s  strategy.    
 
•  Employee  protec1on-­‐  
health/safety,  redundancy  pay,  discrimina1on,  minimum  
wage  
•  Consumer  protec1on-­‐  
truth  in  adver1sing,  high-­‐pressure  sales  tac1cs,  sales  
agreements  
•  Compe11on  protec1on-­‐  
unfair  trade  prac1ces,  monoply,  mergers  &  takeovers  
 
 PEST  Analysis  
ECONOMIC:  This  involves  the  analysis  of  a  wide  
variety  of  economic  factors  and  their  effects  on  a  
business.  They  include:  
•  Economic  growth  and  rising  living  standards  
•  Low/high  levels  of  infla1on  
•  Low/high  levels  of  unemployment  
•  Balance  of  payments    
(value  of  imports  vs  exports)  
 PEST  Analysis  
SOCIAL - What  compe11ve  advantage  might  a  business  gain  by  social  
changes  taking  place  outside  of  the  business?  

•  Aging population, reduced birth rates, longer life expectancy

•  Changing role of women in the workplace
•  Improved Education – better skilled workers
•  Early retirement, more leisure time
•  Rising divorce rates, more “single” households
•  Job security
•  Immigration creating a wider range of consumer tastes
 
 
 
 PEST  Analysis  

TECHNOLOGICAL – The  impact  of  technological  advancement  on  

business  strategy.    
 
•  Business  Soqware  applica1ons  (word  processing,  spreadsheets,  
database,  accoun1ng  systems,  inventory  systems)  
 
•  Computer-­‐aided  design  
 
•  Computer-­‐aided  manufacturing  
 
•  Internet/Intranet