SUMMARY OF STRATEGIC MANAGEMENT

Q1) What is strategy?

• It the means of achieving the goals of the org

• It is the game plan of the management
• To achieve market position, attract & satisfy customers, organizational objectives

CA Swapnil Patni Page 1

 It is a long range blueprint of an organizations desired image
Corporate strategies are formulated by top managers
Strategy is partly proactive & partly reactive

Q2) Characteristics of corporate strategy?

Long range in nature

Action oriented
Multipronged & integrated
Flexible & dynamic
Formulated at top management level
Meant to cope up with competitive & complex setting
Made to achieve the objectives of the organization
Perceiving opportunities & threats
Decision making
Gives importance to combination, sequence, timing, direction

Q3) Nature, scope and concerns corporate strategy?

Concerned with the choice of businesses, products and markets

Viewed as the objective-strategy design of the firm
Designed for filling the firm's strategic planning gap
Ensuring that the right fit is achieved between the firm and markets
Builds' competitive advantages for the firm

Q4) What does corporate strategy ensure?

• It ensures growth & correct alignment of the firm with the environment
• Serves as design for filling strategic planning gap
• Helps to build relevant competitive advantages
• Masterminding and its external environment is the primary contribution

Q5) What is strategic management framework?

• Where are we now?

• Where do we want to be?

• How can we get there?

CA Swapnil Patni Page 2
 • Which is the best way?

• How can we ensure arrival?

Q6) What are the benefits of strategic management?

More proactive than reactive

Provides framework for all the major business decisions
Concerned with ensuring a good future for the firm
Serves as corporate defence mechanism against mistakes & pitfalls
Helps evolve certain core competencies & competitive advantages

Q7) What are the dimensions of strategic decision making?

Strategic issues require top management decisions

Strategic issues involve the allocation of large amounts of company resources
They are likely to have significant impact on firms long term prosperity
Strategic issues are future oriented
They have major multi functional consequences
Necessitate consideration of factors in the firms external environment

Q8) Describe the strategic management model?

Q9) What is vision?

CA Swapnil Patni Page 3
 • Top aageets ies & olusios aout the opas dietio
• Product –customer- market- technology focus constitutes a strategic vision
• It poides a paoai ie of hee e ae goig “tategi isio is the oad ap of a opas futue
• Where we want to be?
• Future-oriented

Must be achievable
Long term & must motivate

Q10) What are the elements of strategic vision?

Who we are and where we are now?

Where we are going?
Communicating the strategic vision in clear , exciting terms

Q11) What is mission ?

Typically focused on the present business scope

Who we are & what we do?
Should be precise ,clear ,feasible ,distinctive
What business are we in?

Q12) Why should an organization have a mission?

To ensure unanimity
To provide basis for motivating
To develop a basis or standard for allocating resources
To establish a general tone or organizational climate
To facilitate the translation of objective & goals into a work structure

Q13) Which points should be kept in mind while writing mission?

Mission gives an org its own special identity

Distinguishing from other similar companies
• Technology, competencies, activities are important, as they indicate boundaries on
its operation
• They are highly personalized – unique

Q14) What are objectives & goals?

• Translation of mission and vision

CA Swapnil Patni Page 4

 • Objectives are specific quantified versions of goals
• Goals are the desired ends towards which efforts are directed
• Goals are closed ended attributes which are precise & expressed in specific terms

Q15) Characteristics of objectives?

MT- SMART

• S – SPECIFIC
• M – MEASURABLE
• A – ATTAINABLE

CA Swapnil Patni Page 5

CA Swapnil Patni Page 6
Q21) You are appointed as a Strategic Manager by XYZ Co. Ltd. Being a Strategic
Manager what should be your tasks to perform
The primary task of the strategic manager is conceptualizing, designing and
executing company strategies.
For this purpose, his tasks will include:
 Defining the mission and goals of the organization.
 Determining what businesses it should be in.
 Allocating resources among the different businesses.
 Formulating and implementing strategies that span individual businesses.
 Providing leadership for the organization.

Q22) Strategy is partly proactive and partly reactive." Do you agree? Give reasons for your
answer.

Yes, strategy is partly proactive and partly reactive. In proactive strategy,

organizations will analyze possible environmental scenarios and create strategic
framework after proper planning and set procedures and work on these strategies
in a predetermined manner.

• However, in reality no company can forecast both internal and external

environment exactly.

• Everything cannot be planned in advance. It is not possible to anticipate moves of

rival firms, consumer behaviour, evolving technologies and so on.

• There can be significant deviations between what was visualized and what
actually happens. Strategies need to be attuned or modified in light of possible
environmental changes. There can be significant or major strategic changes when
the environment demands. Reactive strategy is triggered by the changes in the
environment and provides ways and means to cope with the negative factors or
take advantage of emerging opportunities.

Q23)What is Strategic Management? What benefits accrue by following a strategic

approach to managing?

• In a highly competitive marketplace, companies can operate successfully by

creating and delivering superior value to target customers and also learning how
to adapt to a continuously changing business environment.

CA Swapnil Patni Page 7

 • So to meet changing conditions in their industries, companies need to be
farsighted and visionary, and must have a system of managing strategically.

• Strategic management starts with developing a company mission (to give it

direction), objectives and goals (to give it means and methods for accomplishing
its mission), business portfolio (to allow management to utilise all facets of the
organisation), and functional plans (plans to carry out daily operations from the
different functional disciplines).

• The overall objective of strategic management is two fold:

 To create competitive advantage, so that the company can outperform the

competitors in order to have dominance over the market.

 To guide the company successfully through all changes in the environment.

 The following are the benefits of strategic approach to managing:

 Strategic management helps organisations to be more proactive instead of

reactive in shaping its future. Organisations are able to analyse and take
actions instead of being mere spectators. Thereby they are able to control
there own destiny in a better manner. It helps them in working within
vagaries of environment and shaping it, instead of getting carried away by its
turbulence or uncertainties.

 Strategic management provides framework for all the major business

decisions of an enterprise such as decisions on businesses, products,
markets, manufacturing facilities,

SUMMARY OF STRATEGIC ANALYSIS

Q1) What are the issues to be considered for strategic analysis?

• Strategy evolves over a period of time

• Balance
• Risk

CA Swapnil Patni Page 8

Q2) Which factors should be kept in mind while strategic analysis

Product situation
Competitive situation
Distribution situation
Environmental factors
Opportunity & issue analysis

Q3) Which factors should be considered in profiling an idusts eooi featues ?

Market size
Scope of rivalry
Market growth rate
No. of rivals
Dominant companies
No. of buyers
Distribution channels
Technological changes
Economies of scale
Location
Capital requirement
Industry profitability

Q4) Which questios help to idetif a idusts ke suess fatos?

On what basis do customers choose between the competing brands of sellers?

• What resources & competitive capabilities does a seller need to have to be
competitively successful?
• What does it take for sellers to achieve a sustainable competitive advantage?

Q5) What does SWOT stand for?

• S – strength

• W – weakness

• O – opportunity

• T – threats

CA Swapnil Patni Page 9

Q6) What is the significance of SWOT analysis?

• Provides guidance in strategy identification

• Provides a logical framework

Presents a comparative account

Q7) Describe TOWS matrix?

SO –(maxi-maxi) strengths can be used to build upon emerging opportunities

WO –(mini-maxi) strategies developed need to overcome weaknesses
ST –(maxi-mini) strengths can be used to minimize threats
WT –(mini-mini) strategies pursued must overcome weaknesses & cope with
existing threats

Q8) State some characteristics of SBU?

Single business or collection of related business that can be planned for separately
Has its own set of competitors
Has a manager who is responsible for strategic planning & profit

Q9) Describe the BCG matrix? ( C for kutta , G for gay)

 Characteristics
 Simplest way to portray corporation's portfolio of investments
 BCG- Boston Consulting Group
 It is a 2*2 growth share matrix
 It considers 2 factors :market growth(vertical axis) & market share(horizontal axis)
 Metaphors in BCG:
 Star

 Cash cow

 Question mark

 Dogs

 Basic strategies for the metaphors

MT – BABA HERO HONDA DHOOM DHOOM

CA Swapnil Patni Page 10
  BABA – build (Question mark)

 HERO – hold (star)

 HONDA – harvest (cash cow)

 DHOOM – divest (dog)

Q10) What are the Components i Asoffs podut aket goth ati?

Market penetration

Market development

Product development

Diversification

Q11) What are the potential external threats to opas ell eig?

New entrants
Substitutes
E commerce strategies
Slowdown in market growth
Foreign exchange fluctuations
Costly new regulatory requirements
Increasing bargaining power of customers or suppliers
Buyers preferences

Q12) What is portfolio analysis?

To analyse the current business portfolio, portfolio analysis is a must

Product lines & business units are viewed as series of investment from which
returns are expected
• Collection of businesses & products that make up the company
• Used for competitive analysis & corporate strategic planning

CA Swapnil Patni Page 11

Q13) What is the experience curve?

• Based on the phenomenon that unit cost decline as the firm gains experience in
terms of a cumulative volume of production
Q14) What are the stages in the PLC curve?

• Introduction

• Growth

• Maturity

Decline

Q15) On which points is the competitive position of a firm based?

Dominant

Strong

Favourable

Tenable

Weak

Q16) Describe GE model?

GE stands for Generic Electric Model

Also known as Business Planning Matrix
The model uses 2 factors while taking strategic decisions
 Business strength
 Market attractiveness

Q17) Why portfolio analysis?

• As per the performance of different products, different strategies can be used.

• It is the right method to understand, to know where we have to emphasis more.

Q18)Difference between BCG & GE?

CA Swapnil Patni Page 12

 BCG GE
2*2 matrix 3*3 matrix
Less accurate More accurate
Market growth rate & market share Market attractiveness & competitive
position
Considers only high & low Considers high, medium & low
Q19) Explain the meaning of the Strategic Group Mapping.

• Strategic group mapping is a technique for displaying the different markets or

competitive positions that rival firms occupy in the industry.
• A strategic group is a cluster of firms in an industry with similar competitive
approaches and market positions.
• An industry contains only one strategic group when all sellers pursue essentially
identical strategies and have comparable market positions

Q20)Explain the meaning of ADL Matrix.

• ADL Matrix: The ADL matrix which has derived its name from Arthur D. Little is a
portfolio analysis method that is based on product life cycle.
• The approach forms a two dimensional matrix based on stage of industry maturity
and the firms competitive position, environmental assessment and business strength
assessment.

CA Swapnil Patni Page 13

 SUMMARY OF FORMULATION OF FUNCTIONAL STRATEGY

Q1) Why are functional strategies needed?

• They are instrumental to implementing corporate strategies & hence achieving

corporate goals
• Form a basis for controlling activities in different functional areas
Leads to faster decision making
Lays down the framework
Leads to co ordination

Q2) Describe is the marketing process?

Dividing the market into segments based on different natures- market

segmentation
Choosing the best segments- market targeting
Designing strategies for chosen segments better than competition-market
positioning

Q3) What are the stages in marketing planning?

Executive summary
Current marketing situation
Threats & opportunities section
Marketing budget
Controls section
Marketing environment

Q4) What is marketing mix?

Product

Price

• Place

• Promotion

CA Swapnil Patni Page 14

Q5) What are the types of promotion?

• Personal selling

• Advertising

• Publicity

• Sales promotion

Q6) What is the expanded marketing mix?

CA Swapnil Patni Page 15

 I additio to the Ps thee is
People

Physical evidence

Process

Q7) Various marketing strategy techniques

Social marketing

Augmented marketing

Direct marketing

Relationship marketing

Services marketing

Person marketing

Organization marketing

Place marketing

• Differential marketing

• Synchro marketing

• Concentrated marketing

• De-marketing

Q8) Methods fo deteiig a usiesss oth ?

• Determining its net oth o stokholdes euit

CA Swapnil Patni Page 16

 • Future benefits its owners may derive through net profits.

• Selling price of a similar company

Q9) What is logistics strategy?

Logistics strategy ensures that the right materials are available , at the right place , at the
right time , of the right quality & at the right cost

Following are the benefits of logistics strategy

Cost savings
Reduced inventory
Improved delivery time
Customer satisfaction
Competitive advantage

Q10) What is SCM?

SCM refers to the linkages between the suppliers , manufacturers , customers

It involves activities like sourcing & procurement , conversion & logistics
Manages the movement of raw material into the org and the movement of finished
goods out of the org

Q11) Successful Implementation of SCM involves?

Product development

Procurement

Manufacturing

• Physical distribution

• Outsourcing

• Customer services

• Performance management
CA Swapnil Patni Page 17
Q12) R&D policies can enhance strategy implementation efforts to?

• Emphasize product process or process improvement

• Stress basic or applied research
• Be leaders or followers in R&D
• Develop robotics or manual type processes
• Spend high , avg or low amt on R&D
• Perform R&D within the firm or contract to outside firms

Q13) Which are the major R&D approaches?

Market new technological products

Be an innovative imitator of successful products

Be Low cost producer

Q14) Which points should be considered while recruiting human resource?

Recruitment & selection

Training

Appraisal of performance

Compensation

Q15) In which areas can HR manager play strategic role?

Providing purposeful direction

Creating competitive atmosphere
Facilitation of change
Diversion of workforce
• Empowerment of human resources
• Building core competency
• Development of works ethics & culture

CA Swapnil Patni Page 18

Q17)Explain the term marketing.
• In general, marketing is an activity performed by business organizations. In
the present day for business, it is considered to be the activities related to
identifying the needs of customers and taking such actions to satisfy them in
return of some consideration.
• The term marketing constitutes different processes, functions, exchanges
and activities that create perceived value by satisfying needs of individuals

Q18)What is logistics strategy? What are the areas to examine while developing a logistics
strategy?

• Management of logistics is a process that integrates the flow of supplies into,

through and out of an organization to achieve a level of service that facilitate
movement and availability of materials in a proper manner.
• When a company creates a logistics strategy it is defining the service levels
at which its logistics is smooth and is cost effective.
• A company may develop a number of logistics strategies for specific product
lines, specific countries or specific customers because of constant changes in
supply chains.
• There are different areas that should be examined for each company that
should be considered and should include:
 Transportation: Does the current transportation strategies help
service levels required by the organisation?
 Outsourcing: Areas of outsourcing of logistics function are to be
identified. The effect of partnership with external service providers
on the desired service level of organisation is also to be examined.
 Competitors: Review the procedures adopted by competitors. It is
also to be judged whether adopting the procedures followed by the
competitors will be overall beneficial to the organisation. This will
also help in identifying the areas that may be avoided.
 Availability of information: The information regarding logistics
should be timely and accurate. If the data is inaccurate then the
decisions that are made will be incorrect. With the newer
technologies it is possible to maintain information on movement of
fleets and materials on real time basis.

CA Swapnil Patni Page 19

 Strategic uniformity: The objectives of the logistics should be in line
with overall objectives and strategies of the organisation. They
should aid in the accomplishment of major strategies of the business
organisation.

CA Swapnil Patni Page 20