PRIME ACADEMY

LO1: POLICY & BUSINESS POLICY LO9: STRATEGIC LEVELS IN ORGANISATION LO8: VISION, MISSION, GOALS & OBJECTIVES
Policy: A principle or rule to guide the decisions & achieve Corporate Level: Controlled by top level management VISION: Desirable future of the organization (where we want
stated objectives - Sets visions, mission, goals and objectives to go?)
Business Policy: Study of - Allocate the resources among different business Elements of Strategic Vision:
• Responsibility of senior management Business Level: Business level managers are responsible for the profit of - Mission Statement
• Crucial problem that affect success in the enterprise self-contained division - LT course of action
• Decisions that determine the directions of organisation - Help the organization achieve its corporate division - Communication of vision
- Develop distinctive competencies and competitive advantage in each unit MISSION: Current scope of operations (who we are?)
Functional level: Functional level managers are responsible for specific Describes – PUV CAB8
LO2: MANAGEMENTS business functions [HR, purchases, etc.] 5 Areas included in mission Statement – McPEB9
Def: Getting the things done effectively & efficiently - Integrating the activities within functional area
through & with people (or) Mobilisation and utilisation of - Assuring FLS mesh with BLS & CLS GOALS & OBJECTIVES: Desired end S – Specific
the resources [physical, human and needed] in a judicious towards which efforts are directed M – Measurable
manner - They should be challenging A – Attainable

BUSINESS POLICY
• Efficiency – Doing things rightly - They should be SMART R – Realistic
• Effectively – Doing right things T – Time bound

LO3: STRATEGY & STRATEGIC LO7: STRATEGIC MANAGEMENT MODEL

Strategy formulation: Setting vision, mission
Def: A unified, comprehensive & integrated plan designed to
assure that the basic objective of the business are achieved. MANAGEMENT - Performing External, Internal audit
- Establish long-term objectives
Strategy is partly proactive and partly reactive
Proactive – It is framed from the past experience of Strategy Implementation: Generate & Select strategies
business LO4: dynamic of competitive strategy - Implement the Strategic management issues
Reactive – It is modified or changed with the changes takes - Implement the Strategies
Strengths Opportunities
place in the environment Evaluation: Measure and evaluate performance
& Weakness & Threats
Designation – BIOPSY1
Importance – BM/UC/OT/DM2
Internal Competitive External
LO6: DECISION MAKING
Factors Factors Dimensions in Strategic Issues – PFMET7
Strategy
1 3
B – Business direction V – Vision setting Impementing Broader Societal LO5: STRATEGIC MANAGEMENT
O – Organisational Audit O – Objective setting Factors Expectation
P – Process, product, people
Def: Managerial process of forming VOICE3
I – Implementing Strategy
IC – Intense Competitive advantage C – Crafting a strategy
Tasks: BEMEC4
Y – Y factor: Examining external factors E – Error
Competitive Strategy is not only dependent on their own strategy but also Importance: DUPDCM5
S – Stakeholders interest on the strategy’s of competitors. Develops: MPGP6

2 4 5 6 7 8 9
BM – Beginning & Means B – Beginning D – Decision making M – Mission P – Long term Prosperity P – Present capabilities M – Markets
UC – Handle Uncertainity E – Ends U – Uncertainity in Environment P – Business Portfolio F – Future oriented U – Unique compeencies C – Customers
OT – Opportunities & Threats M – Means P – Proactive G – Goals, objective M – Multifunctional consequences V – Values P – Products & Servies
DM – Decision Making E – Evaluation D – Defence mechanism P – Funcational Plans E – External Environment C – Competitive advantage E – Employees
C – Control C – Competitive advantage creation T – Top management decision A – Activities B – Business philosophy
M – Measurement of progress B – Business SCOPE

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LO1: BUSINESS PROCESS RE-ENGINEERING LO4: SIX SIGMA

Process means a set of activities with clearly defined inputs REACHING A management driven, scientific methodology for product
and outputs. and process.
Business Process is set of logically related tasks in order to
achieve outcome of value for customer.
STRATEGIC EDGE WHY: 6s THEMES
• Money
The keys in definition • Genuine customer focus
• Customer Satisfaction
• Fundamental [what are they & their work] LO3: TOTAL QUALITY MANAGEMENT • Quality • Data Driven
• Radical, [root cause of problem & change that]
Quality is ability of a product or service consistenly meet or exceed expectations • Impact on employees • Process managemnet
• Dramatic, [incremental growth to achieve quantum • Growth
• Processes, [relook & replace with new] Why: • Boundarless
• Competitive Advantage collaboration
• Tasks. [tasks are important, but mainly completion] • Delight the customer • Communication
• Fierciful competition • Drive for perfection
DeCEaSe • Benchmarking
Reasons for BPR: • High technology & complicated products
• To obtain quantum, simply and streamline processes Methodology: TWO
Determinants of Quality:
• Speed up work folow by IT.
• Design, planned quality, DMADV DMAIC
D • Conformance to design,
Steps in Implementation of BPR:
• Ease of use, Define. Measure. Analyse
1. Determining objectives and framework I • Service after delivery.
2. Identify customers and determine needs Design, Verify Improve, Control
3. Study the existing process S Principles: (KAIZEN) STUDY
4. Formulate a redesign process plan Principles
F 1. Commitment to quality
5. Implement the redesign 2. Customer Focus 1. Two types of causes:
PDSA
6. Improve process continuously I I I 3. Preventing defects PLAN ACT • Chances [Can’t be identified, cannot be eliminated]
7. IT in a big way 4. Continuous improvement • Assignable [Identified & immediately eliminated]
T 5. Employee Empowerment DO
Common Problems: 2. Defects are randomly distributed, apply mean & S.D.
6. Process Management
1. Complacency; 7. Managing Supplier Quality
2. Resistance to change
CART 8. Corrective action LO5: CONTEMPORARY STRATEGIC ISSUES
3. Time & Cost 9. Inventory reduction E-commerce
4. Assumptions
10. Training Competition
Buyers Bargaining power
LO2: BENCH MARKING has SM in Non-profit
Power of information organisation
Comparing one business performance with best What to Benchmark: to
Six Steps in Benchmarking: Entry to e-commerce
• Process and • Educational
1. Identify your problem area Helps to identify best supplier
• Financial for Institutions
2. Identify industries with similar area
Intra firm Interfirm Across industry • Performance Globalisation thrust • Medical
3. Survey companies for measures & Practices in
• Functional Foster diffusion of ideas organisations
Costs: 4. Visit the best practice to
• Product Swift movement by company • Government
• Visit cost [travel, boarding] • Strategy 5. Implement new business practice and
Advertisement agencies &
• Time cost [researching problems] • Best in class 6. Evaluation Department
• Database cost [create & maintain a best practices] At internet Speed.

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LO1: POLICY & BUSINESS POLICY LO6: RESEARCH & DEVELOPMENT STRATEGY
MNC SBU’s Departments Own Strategies FORMULATION OF Includes:

FUNCTIONAL STRATEGY
• Development of new products
FUNCTIONS • Improvement of old products
• Transfer of complex technology

Marketing Financial Production Logistics 7 Issues:

LO3: FINANCIAL STRATEGY 1. Product or Process improvements
1. Financing Decision 2. Basic or Applied [From starting or middle]
R&D HR 2. Capital Expenditure Decision 3. Leaders or Followers in R&D
3. Dividend Decision 4. Robotics or Manual Processes
Goals:
4. Working Capital Decision
1. Business feasible at functional level 5. R&D spending [High, Medium & Low]
2. Better performance 6. Product or Process R&D [Improvements or Innovation]
Evaluating the worth of Business
3. Competitive advantage 1. Determine Net worth 7. In-house or Outsource [Own practise and by Renting]
2. Present value of future cashflows
3. Let market decide its business worth. Use market capitalization plus
LO7: HUMAN RESOURCE STRATEGY – Role is “SM”
LO2: MARKETING STRATEGY FORMULATION premium.
1. Have an appropriate reward system
is what you do to reach people, as you are a company for 2. Create competitive atmosphere
rendering services for them. LO4: PRODUCTION STRATEGY
3. Facilitate change by focussing on
Issue 1: Affects • Substance over form
Main aim: with limited sources increase sales with • Nature of products
sustainable competitive advantage. • Accomplishment
• Markets served 4. Diversity of workforce [Young vs Not so young]
• Manner in which markets served.
Techniques: 5. Help build core competency
Social, Augmented, Direct, Relationship, Person, Differential, Issue 2: Production system is concerned with 6. Develop appropriate work ethics
De-marketing, Place, Services, Organisation • Capacity, Location, Layout (Design) 7. Empowerment of Human resources
• Product, work systems 8. Provide purposeful direction
Marketing Process: Issue 3: Strategies related to Operational control 9. Buildingcore competency
• Segmenting • Aggregate production planning
• Targeting • Material Supply, Inventory cost Supply Chain Management
• Positioning It is a part of logistics.
LO5: LOGISTICS STRATEGY It refers to linkage amongst
Mix: 7 P’s • Supplier • Manufacturers • Customers
Logistics is a process which integrates all supplies by ensuring
1. Product Decision: How we design and package
1. Right quantity 2. Place 3. Time & 4. Cost
2. Price Decision: Purchasing power of customer Implementation of SCM
3. Place: Getting customers at right place Components 1. Product development
4. Promotion: Communicate the product to target group a. Transportation 2. Procurement
5. People Decision: Influence the buyers b. Outsourcing 3. Manufacturing
c. Logistics Systems
6. Physical Evidence: Venue where service is executed 4. Physical distribution
d. Competitors
7. Process: Flow of activities the Company will follow in e. Information 5. Customer services
execution of service f. Strategy Review 6. Performance measurement

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MEANING: LO7: BOSTON CONSULTANT GROWTH MATRIX
Analysing = Scanning which means to “look our quickly
and systematically” i.e. to be done for
STRATEGIC ANALYSIS [BCG]
Stars: Everyone love this
• External Environment • Internal Environment
LO3: INDUSTRY & COMPETITIVE ANALYSIS position,as high growth
rate, high RMS
Opp. Threats Strengths Weakness Competition: Two or more entities fight for samething
Seven Issues: Question Mark: High
1. Nature and strength of competition Growth, but doesn’t
LO1: STRATEGIC ANALYSIS generate much costs
2. Overall industrial attractiveness
Two crucial factors – while drawing good strategy 3. Triggers of change Cash cows: generate
4. Dominant Economic feature cash in. Excess of cash needed. No need of investments
Industry and Company’s external 5. Assessing competitive position (SGA) Dogs: Best to sell this (dogs) business, invest in another.
Competitive conditions capabilities & Limitations 6. Key Success Factor
Issues: 7. Likely moves of competitors LO8: ANSOFF PRODUCT GROWTH MATRIX
1. TIME 2. BALANCE 3. RISK Product
LO4: SWOT Analysis LO5: TOWS Analysis– Henz Weihrich Present New
Market
Strategy evolves Based on our Complexities in Strengths (IF) Weakness (IF) SO-stg (maxi-maxi) W-O-stg (mani-maxi) Market Product
Present
over time. strength we have the environment Like: Innovation, Like: Inability, Penetration Development
maximize both by grabbing Market
Small decisions to take/capitalize result in org’s/ Quality, Unskilled, New Diversification
strength & opportunity to Development
turned over night. opportunities Co’s inability Technology Damaged Opportunities overcome weakness.
reputation use S O use O W LO9: ARTHUR D LITTLE MATRIX
External Internal Opportunities (EF) Threats (EF)
S-T-stg (maxi-maxi) W-O-stg (mani-maxi) B. Industry maturity
Like: Internet, Like: New A. Competitive Position
D in tech competitor, Capitalise the by grabbing Embryonic Growth Mature Ageing
<1 yr. (ST) (LT)>1 yr. <1 yr. (ST) (LT)>1 yr. strength & opportunity to 1. Dominant – Like
Wrong
interpretation
D by Environ.
Obscelence of
Org. is unable
to cope with
D by internal
capacities and
New markets Price Cow, High
incidences of Opportunities. overcome weakness. monopoly ü ü ü ü
use S O use O W 2. Strong – market share
*Strategic Failure strategy stg demand.* preferences* Tax, etc.
is strong ü ü ü –
LO2: SITUATIONAL ANALYSIS LO6: PORTFOLIO ANALYSIS 3. Favourable – No single
A. External Analysis B. Internal Analysis Business Portfolio (BP) player controls ü ü – û
4. Tenable – may face
1. Customer Analysis 1. Performance Analysis Aim: 1) Analyse Current BP.
2) Develop Growth Stg. by new B.
erosion by stronger ones ü – û û
5. Weak – continuous loss
Seg Mot UnN Financial Non-Financial 3) Decide which is no longer retained
of market share
– û û û
2. Competitor Analysis (SWOT) 2. Determinants Analysis C1: Strategic Business Unit (SBU)
• Decides your ability and measures both It could be a division, product, or a company LO10: GENERAL ELECTRIC BUSINESS SCREEN (GEBS)
strengths, weakness.
Identify Image & Action C2: Experience Curve effects E cop
Performance Plan C. Strategy Identification and selection HIGH Investor Grow

ATTRACTIVENESS
When org gets more experiene,
Env. stg less cost of production

MARKET
MEDIUM Earn Selectively
3. Market Analysis (Porter’s 5 force)
Current Ind stg Harvest or divest
SWOT Stg Options C3: Product Life Cycle: LOW
Performance
Key triage Entry Exist Barriers W I G D M
Strong Medium Low
Co. Stg. Evaluable COMPETITIVE POSITION
4. Environment Analysis (do PEST) [Req/Res/Risk] 4 1 2 5 3

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COMPETITIVE ENVIRONMENT MACRO ENVIRONMENT (GD PEST)

Michael Porters Five Force Model BUSINESS G – Global – Integrating with world market
Six Reasons – MRFTTP3

ENVIRONMENT Eight Manifestations – REPTILCS4

D – Demographic
Population features – Age, Sex, Education, etc.
P – Political

ENVIRONMENTAL INFLUENCES ON BUSINESS Govt Legal Political

– Complex (which include many factors) [Under which [Compliance [Sustaining
business is held] with laws] unions]

Y
– Dynamic (changes repidly) E – Economic

EM
– Uncertainity (which is difficult to predict) Demand & Supply Forces, availability of 4M’s
& Cost – Revenue
– Impact S – Social – beliefs, norms, relationships, values, etc.
T – Technological changes

AD
Solution: Kierstsu (Example) – Small groups formation to
carry on business through coordination
RELATIONSHIP BETWEEN MICRO ENVIRONMENT (CIMCOS)

AC
OBJECTIVES OF BUSINESS BUSINESS AND ENVIRONMENT C – Consumer (their needs and buying patterns)
1. Survival – Initial stages of Business I – Intermediaries (bridge the gap between producers and consumers)
They exchange
2. Stability – Conservation objective M – Market

E
Lease Expensive i) Information (Knowledge of CPTMD2 is necessary)
3. Growth – Popular objective ii) Resources C – Competitors
IM
It takes place through ASETS (their strategies and price structure)
iii) Influence & Power
4. Efficiency – Operational objective O – Organisation
PR

Tool for Reduction in cost Owners – Profits

5. Profit Making – Ultimate, Primary objective BOD – Institution and Building
[The first four objectives are meant for profit making] Employees – Career and Job guarantee
“PEGSS” S – Suppliers (Affect the cost structure)

1 2 3 4
A – Assets Increase C – Cost Structure M – Cheap Material R – Regional blocks L – Linked Economies
S – Sales Volume increase P – Price sensitivity R – No Richness E – Efficiency in Marketside C – Configure any where
E – Acquisition of New Enterprise T – Technological changes F – Foreign Investment P – Privatisation S – Skilled resources
T – Technological adoption M – Maturity of Market T – Time and space is low T – Trade Barriers
S – Share in Market D – Distribution pattern T – Reduction in Transportation costs I – Infrastructure at International prices
P – Private Enterprises

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LO1: STRATEGY FORMULATION AND
IMPLENTATION STRATEGY LO4: VALUE CHAIN-ANALYSIS

IMPLEMENTATION

support Activities
Infrastructure
Formulation is a “Planning fucntion”. It refers to “Courses of
Human Resource Management

margin
action.”
Implentation is a “Doing Function”. It refers to “translating
thought into action”.
AND CONTROL (1) Technology Development
Procurement
Basic Elements:
LO3: Organisation & Strategy Implementation
1. Strategic Analysis (understanding and Identify)

Operations

margin
Marketing
and Sales
Outbound
Logistics

Logistics
2. Strategic choice (selecting strategic option) Need Structure, Resources, MIS & HR

Inbound

Service
3. Strategic Implementation (convert into action)
Chandler’s Strategy – Structure Relationship
Efficiency-Effectiveness (EE) matrix
Strategy Management New strategy New administrative Organizational
1. It achieves its right goals with performance declines
is formulated problems emerge
Operational Management

effective ineffective
an efficient output/input ratio Primary Activities
1 2
inefficient efficient

2. Company will slowly die out Thrive Die Organizational A new organizational
because it is not focusing on Slowly performance improves structure is established 4. SBU Structure (Strategic Business Unit)
right things Segment of a company analysed to develop organised strategy
3 4
3. Is better off than that in 2. Die Types of Organization Structure: aimed at future business.
Survive
Quickly 1. Flat SBU Structure
4. Will die almost instantly. Owner
CHIEF EXECUTIVE OFFICER
Link between formulation and implementation:
employees employees employees employees Corporate Corporate Strategic Corporate Corporate
Strategy Strategy
Formulation implementation R&D Finance Planning Marketing HR
(Thought) (action)
2. Functional CHIEF EXECUTIVE OFFICER
Two-way Linkage SBU A SBU B SBU C SBU D
Sales & Human
Marketing Finance Production
Forward Backward Marketing Resources Division Division Division Division Division Division
[Formulation provide [Formulation gets affected
3. Divisional
direction Implemenation] by Implementation] 5. Matrix Structure
Geography Divisional Structure Product Divisional Structure • Ideas to be cross fertized
LO2: ISSUE IN STRATEGY IMPLEMENTATION PRESIDENT PRESIDENT • Abilities to process info must improved
Issue 1: From Intent to Result • Resource are scarce
INDIA U.S. U.K. CARS BIKES
a. Project Implementation (Project creates facilities) Phase 1: Cross-functioned task forces [new product]
b. Procedural Implementation (Based on rules & Regulation) HR Marketing HR Marketing HR Marketing Plans MFG Plans MFG
Phase 2: Product/brand management [more permanent]
c. Resource allocation (Allocated to various SBU’s) Phase 3: Mature matrix [Both functional and product
d. Structural Implementation (Simple and Flexible structures are permanent]
Structures) Geography Divisional Structure Process Divisional Structure
e. Functional Implementation (Guidelines to operate) 6. Network Structure
Director of Sales Vice President for Sales
Each function handled by different entity. Production by one,
Issue 2: Why do implementation problems arise marketing by one, Finance of one, retains overall strategy and
Retails Wholesale Government Sales Director Sales Director Sales Director
(Shift in responsibility) Accounts Accounts Accounts West East North control function.

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LO5: IDENTIFYING CORE COMPETENCIES
May be in Design, Process,Quality, etc., STRATEGY IMPLEMENTATION
• It is not easy for competitors to imitate.
• It can be leveraged widely to many products
AND CONTROL (2)
LO6: MANAGING LINKAGES LO9: STRATEGIC CONTROL
Core competancy basedon managing linkages A process to assure actual performance
Key points:   1. Important, 2. Easy to miss, Involves: Establishing standards, compute actual & variance
3. May based on core-competency ORGANIZATIONAL CONTROL
4. Activities and also support activities

LO7: LEADERSHIP AND STRATEGIC IMPLEMENTATION Operational Management Strategic

Control Control Control
For good strategy, Staying on top, Promoting culture, Responsible, Ethical
and Corrective actions. Need: Need: Need:
Achieving Resources Various Strategies.
Transactional Leadership Transitional Leadership Excellence. obtained. Adopted are.
Control concerned Control includes. Helping in
A: Motivated by carrot & Stick A: People will follow who with Individual and Return of External
(Rewards & Punishment) inspires them group investment – Cost – Opportunities
Product – quality and Threats
Style: Work on principle and Style: S/He had a vision and
also exceptions also mission LO10: BUILDING A STRATEGY – SUPPORTIVE CORPORATE CULTURE
Culture refers to a company
Limitation: Largely motivated Limitation: Traps of this Values, Beliefs, Business Principle, Traditions, Ways of operating, Internal work Environment
by money & simple reward leadership is that passion
and confidence can by easily in as are in
mistaken for truth
Strategy-culture conflict:
LO8: STRATEGIC CHANGE Culture is out of sync with strategy, culture has to be changed.
Step 1: Recognize the need for change A prolonged strategy culture conflict weakens, efforts of managerial becomes strong.
[Not after getting into troubles, Better to do SWOT]

Step 2: Creat a shared vision to manage change Changing in Problem culture:

[Lack of vision can cloud efforts] Step 1: Identify facts of present culture
Step 2: Specify new actions
Step 3: Institutionalize the change.
Step 3: Talk openly about problems
Step 4: Follow with visible forceable actions.
[Implement, Moniter, feeback]

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LO4: GENERIC STRATEGIC
STRATEGIC PLANNING
LO1: IMPORTANCE
Strategic planning involves planning for organisation as whole ALTERNATIVES
PLANNING 1. How to achive cost leadership
LO3: LEVELS OF STRATEGY a. Have high asset turnover
decides
b. Achieve low operating costs
A. Corporate-level strategy is responsible for market definition, address entire enterprise.
c. Control our procurement
What to do When to do How to do Who is to do it Characteristics: chain
1. Flexible and dynamic 5. Long range in nature
Helps in providing Direction and Focus d. Use of technology
2. Emerging from to management level 6. Ensures Competitive and FEMALE ‘D’
Strategic Planning Complex setting By a company:
3. Multi-pronged and integrated
7. Deployment of Limited sources
4. Action Oriented a. Low levels of bureaucracy,

Y
Top-down Bottom up b. Adequate capital,
GRAND STRATEGIES - STRATEGY ALTERNATIVES

EM
c. Process – re-engineering
Centralised one. De-centralised one.
skills,
Top management decides Operational managers
Operational management take part in deciding with Stability Growth Retrenchment Combination d. Cost consciousness
implements Top management

AD
Focus on Incremental, not Increase in profits, Involves in reduction Simultaneous pursuit Disadvantages:
LO2: CORPORATE STRATEGY on dramatic improvement sales or market share of scope of different strategies 1. Customer’s shift to lower
Lays roadmap for achieving growth concerned with priced ones

AC
a) Business, b) Products and c) Markets. Intensification Diversification 2. A reputation of low quality
Issue 1: Pro-active vs Re-acive 3. Others can copy and
Increase in efficiency Undertake a new
Issue 2: Strategic uncertainty of the existing firm businesses dislodge
Issue 3: Scenario analysis [get ready for any scenario]
Issue 4: Stages of corporate strategy

EMarket Market Product Conglomerate Vertically Concentric 2. Differentiation:

IM
Stage 1: Developing a Strategic vision Penetration Development Development Diversification Integrated Diversification
• Leads to higher costs for
i) Short term vs Long Term Growth manufacturer
Gaining more Introducing present Enters into new New products with
ii) Focus vs Diversification Development of Undertake business
market share with products into new business, that having technological • Impacts performance
PR

new products of suppliers

iii) Global vs Local Specific current products geographies no relationship synergies
through reducing directness
iv) Quality vs Price
Measurable • May fail sometimes
v) Mass vs Niche
Attainable Forward Backward • Sometimes appropriate
Stage 2: Setting Strategic Objectives
Issue 1: Objective must be SMART Realistic, but Cloth shirt Cloth Yarn
Issue 2: Long Term Objectives
challenging 3. Focus on Niche Strategy:
Issue 3: Balance Score Card Timescale B. Focus on Niche Strategy: C. Functional Level Strategies: Based on cost leadership on
Deals with Deals with differentiation
Stage 3: Creating a Strategy
• Identifying niches • Efficiency utilizing specialists The company should compete
Stage 4: Implementation • Co-ordinating SBU activities • Integrating activities • Focus on few target groups
1. Staffing 2. Budgeting 3. Operating • Monitoring Markets • Assuring that Functional vs Strategy
• Needs of mass market
• Developing distinctive compentencies with Business vs Strategy
Stage 5: Monitoring
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