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Any thing that the business organization wants to achieve over a specified period of
time is called business objective.
b. Social Objectives – quality goods, fair trade practices, general society welfare
Socio economic
Technology
Government- political and regulatory
Cultural
International
Demographic
natural
( Expect questions in each of the above environment sectors . learn points with
examples for each )
4. What are the micro environment factors ?
Customer
Supplier
Competitor
Public
Marketing intermediaries
( Expect questions in each of the above environment sectors . learn points with
examples for each )
8. What is CSR ?
Economic systems are the basic arrangements made by societies to solve the
economic problem.
• Capitalistic
• Socialism
• Mixed economic system
Classificationof po
Policiesclassification
Functional Areas
Expression
Deriva
Scopeof organisation
B
23. How are policies classified based on management functions ?
Policies Strat
• G uidelinestoreach
goals
25. What are programmes ?
• T h o u g h t o r ie n t e
single use , steps for achieving specific objective, sequential
d
• G uidelines
Eg Training programmes, new product development programme, etc
Strategies Tactics
• Toplevel • L
• Irregular
29. What are rules ?
• R
• L
• Standard oro ngofter
norm m
conduct/behaviour in business in a particular • S
situation eg ‘no spitting’.
• O riginof tactics • R
30. What are the characteristics of objectives ?
• Fewdetails • V
• M
• Measurability o reim portant
- quantifiable • L
• Hierarchy
• Network
• Multiplicity- to cover all performance areas-
• Periodicity – L.T , M.T, S.T
• Verifiability – basis on which met or not
• Reality – official and operative –
• Quality- good vs bad
1. Commitment of subordinates
2. Effective planning
3. Effective controls
4. Means/end chain
5. Reduces conflict/ambiguity
6. Develops Managers
7. Motivation
Impact – likelihood forms part of the SWOT analysis. The key strategic issues or
factors outside the organisation that significantly impact the long-term competitive
position of the company are chosen for the opportunity and threat analysis . Factors
which have high impact and high likelihood are major opportunities and threats
depending on whether they are positive or negative.
The position a firm would like to attain in the distant future. forward
looking view of what an organisation wishes to become
What an organisation is and why it exists. Defines the role that an organisation
plays in a society
Feasable, precise, clear, motivating, distinctive, should indicate strategy, and means
to the end.
Economic systems are the basic arrangements made by societies to solve the
economic problem.The three types of economic systems :
Capitalistic economy
Socialistic economy
mixed economy
Since markets are not perfect, governments intervene and often play a major role in
the economy. Some of the goals of government are to:
Minimize market inefficiencies
Provide public goods
Redistribute income
Stabilize the macroeconomy:
Promote low levels of unemployment
Promote low levels of inflation
Absenteeism
Disciplinary action
Bonus options ( performance, attendance, longevity, profit)
Pension benefits
Dress code
Staff welfare ( food, pets, concierge, holidays, free clothes, transit, relocation ,
housing, game rooms)
Internet and email policy
54. what are the significant finance policies which impact corporate strategies ?
Major policies :
55. What are the strategic areas in production where policies need to be framed ?
1.Capacity ( how much, how to add )
2. Process ( batch, job shop, continuous ..)
3. Centralisation
4. Location ( near markets, near materials, near labour)
5. layout ( fixed, process, product, cellular ..)
6. Make or buy
7. Workforce management( selection, training, bonus, layoffs..)
8. Quality management ( safety, durability, serviceability, reliability,
conformance )
9. Work scheduling and control
Policies are framed in the area of product , price, place and promotion.
Examples : Advertising, Internet marketing, public relations, trade shows, direct
mail, lead management, customer lifecycle management, sales management,
leads,service, supplies, hiring, sales training, lifecycle management.
Environmental Appraisal
Organisation Appraisal
Corporate level strategies
Business level strategies
Strategic analysis
Strategic choice
Formulating strategies
Preparing a strategic plan
1. Ratio anlaysis
2. EVA (profit-cost of capital)
3. ABC( costs of activities in value chain)
4. employee turnover
5. Ad Recall
6. No of patents registered..
1. Performance
2. Process
3. Strategic
1.Internal – comparison between departments within company
2.Competitive – Between other competing companies
3.Functional - Between other non competitive companies
4.Generic – Between world class companies
Proposed by Robert S Kaplan and David Norton-Set of measures that give top
Management a comprehensive view of business
4 key performance measures in Balanced Scorecard
1. Customer Perspective- How do customers see us
2. Internal Business Perspective- What must we excel in ?
3. Innovation and learning perspective-Can we continue to create value ?
4. Financial perspective – How do we look at shareholders ?
72. What is OCP ( Organisation Capability Profile ) ?
The chart helps strategists to assess the S &W of the organisation in each
functional area
Capability S or W Competitive
Factor S or W
Finance High cost of
capital
HR Comparable to
competitors
1. Stability
2. Expansion
3. Retrenchment
4. Combination
Vertical :
New products/services to serve own needs
Supplying inputs or serving as a customer for outputs
Backward –Upstream-Going back to source of raw material
Forward –Downstream- Moving closer to consumer
Horizontal :
Conglomerate :
The procedure for Takeovers is enshrined in the Securities Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997 (“Regulations”) as amended in 2002
known as Takeover code. When an acquirer, acquires substantial quantity of shares or voting
rights of the target company, it results in thhe Substantial acquisition of Shares or takeover.
Stock values, tax concessions, synergy, acquisition of resources quickly, growth, diversification,
integration, reducing competition, asset valuation, managerial issues( leadership, culture,…),
compatability, good will .
A joint venture (often abbreviated JV) is an entity formed between two or more parties
to undertake economic activity together. The parties agree to create a new entity by both
contributing equity, and they then share in the revenues, expenses, and control of the
enterprise. The venture can be for one specific project only, or a continuing business
relationship such as the Sony Ericsson joint venture. This is in contrast to a strategic
alliance, which involves no equity stake by the participants, and is a much less rigid
arrangement.
Partners may provide the strategic alliance with resources such as products, distribution
channels, manufacturing capability, project funding, capital equipment, knowledge,
expertise, or intellectual property. The alliance is a cooperation or collaboration which
aims for a synergy where each partner hopes that the benefits from the alliance will be
greater than those from individual efforts. The alliance often involves technology transfer
(access to knowledge and expertise), economic specialization [1], shared expenses and
shared risk.
Get whole firm back in the black by curing problems of those businesses in portfolio
responsible for pulling down overall performance
I – Pre-turnaround
II – Period of Crisis
The first stage is the period just before the profitability begins to decline. The company is
still considered profitable at this point, but losing ground. The second period is known as
the period of crisis. At this point the company needs to turnaround. This stage is marked
by a decline in profits (even negatives), a fall in market share and the company's poor
cash situation.
The third stage is the period of recovery or the turning point. This is the stage where
serious action is taken to turnaround the company. Important decisions like scaling back
production or returning to an aggressive growth stage are taken. At this point, the
company's strategy is clear. The company can choose to rely on a centralised and low
cost system and continue profitably. Alternatively, it might decide to combine these
benefits with a growth strategy. This is the longest period and may last for years.
used by businesses when they downsize the scope of their business activities. Divestment
usually involves eliminating a portion of a business. Firms may elect to sell, close, or
spin-off a strategic business unit, major operating division, or product line. This move
often is the final decision to eliminate unrelated, unprofitable, or unmanageable
operations.
Divestment is commonly the consequence of a growth strategy. Much of the corporate
downsizing of the 1990s has been the result of acquisitions and takeovers that were the
rage in the 1970s and early 80s. Firms often acquired other businesses with operations in
areas with which the acquiring firm had little experience. After trying for a number of
years to integrate the new activities into the existing organization, many firms have
elected to divest themselves of portions of the business in order to concentrate on those
active ties in which they had a competitive advantage.
REASONS TO DIVEST
Portfolio models such as the Boston Consulting Group (BCG) Model or General
Electric's Business Screen can be used to identify operations in need of divestment. For
example, products or business operations identified as "dogs" in the BCG Model are
prime candidates for divestment.
1. Cost Leadership -
Cost based competition
Standard product
Low loyalty
2. Differentiation
• Large market requiring differentiated product resulting in increased
sales
• Diversified need
• Customer will pay premium for a valued differentiation
• Brand loyalt
3. Focus
• Niche strategies
• Either lower cost or differentiation
Gap analysis:
93. What is BCG ?
A technique of Strategic analysis and choice . Desired per
Present
Performance
Perform ance
Corporate Portfolio An
technique - BCG
High
Stars- Expansion
Question marks- Expansion, Retrenchment
Cash cows – stable growth
Industry growth rate
Dogs- Retrenchment
GENineCell matrix
EXPAND EXPAND
HIGH
CASH COWS
95. What is business level strategic analysis ?
STRONG AVERAGE W
Occurs due to learning effects, economies of scale, product redesign, production
process redesign, technology improvements
Porter's Five F
P
e
1. Entrepreneurial/ Simple
2. Functional
3. Divisional –Product, Customer, market
4. Matrix -
5. Network-
6. Product Team
7. Geographic
Refers to any number of practices that allow a company to better utilise its
inputs by, for example reducing defects in products , making products faster….
Areas of operational implementation :
1. Productivity- Relative amount of input needed to secure a given amount of
output.
2. Processes - Sequential steps in chronological order-
3. People – Employees,Suppliers,Investors
4. Pace - Amount of work done per unit of time
Productivity
• JIT
• Cycle time reduction
• Group technology
• Mass customisation
• Flexible manufacturing system
• Cellular manufacturing
• Total productive maintenance
• Lean manufacturing
Processes
• TQM
• Six sigma
• Value chain
• Business process reengineering
• ERP
• Bench marking
• Supply chain management
• outsourcing
People
• Strategic recruitment
• Performance management
• Training and development
• Separation management
Pace
• Time based management
• Information management
• Premise control
• Implementation control
• Strategic surveillance
• Special alert control
• When resource allocated to a plan, program or project does not benefit the
organisation as envisaged ,it has to be revised .
• Eg a new product launch - Is it part of strategy ?
• Milestone review is and example of implementation control when a project is
evaluated at critical junctures – eg Govt approval, plant purchase…-to see
whether it is worth going on with the project
• General Scanning for those events both inside and outside the organisation
which can affect the strategy
111.What is Special alert control ?
1. Strategic Objectives
2. Standards of performance
3. Actual performance
4. Measurement of performance
5. Analysing variance
6. Feedback
7. Reformulate