2 strategic models

1

Dr.L.Prakash Sai

The East India Company

Establishment: 1600 (by Queen Elizabeth)

Entitlement: Monopoly over the East Indies trade until 1783

Dissolution: 1874.

Bengal Famine

East India Docks, London

Robert Clive Warren Hastings

The East Offering Her riches to Britannia (1778)

http://opioids.com/opium/artificial-paradises.html

2

T

A

R

G

E

T

STRATEGIC ADVANTAGE

Low Cost

Market

Segment

Unique

All

Customers

Cost

Leadership Differentiation

Cost

Focus

Differentiation

Focus

Porter : Generic Strategies

Automobiles: Generic Strategies

3

T

A

R

G

E

T

STRATEGIC ADVANTAGE

Cost-Centered Services

Market

Segment

Unique Service Offerings

All

Customers

Cost Leadership Differentiation

Cost Focus Differentiation Focus

IT Industry: Generic Strategies

Prahalad‟s Core Competence

Strategic

Intent

CORE

COMPETENCE

STRATEGIC ARCHITECTURE

Honda:

Engines

Black & Decker:

200-600W electric motors

4

Value Disciplines Operational Excellence

Product Leadership Customer Intimacy

Dell

Fedex

Wal-Mart

South West Airlines

3M

Disney

Microsoft

Sony

IBM

Home Depot

Nordstorm

Four Seasons Hotel Product

Differentiation

Operational

Competence

Customer

Responsive

“Best Total

Cost”

“Best Total

Solution”

“Best

Product”

Business Ecosystem

Competing Organizations having shared product

and service attributes, business processes, and

organizational arrangements

Stakeholders, including Investors and

Owners, Trade Associations, Labor Unions

Govt.Agencies and other

Regulatory Organizations

CORE

CONTRI-

BUTIONS

Direct

Suppliers

Distribution

Channels

Suppliers of Complementary

Products and Services

Direct

Customers Suppliers of

My Suppliers

Standards Bodies

Customers of

My Customers

EXTENDED

ENTERPRISE

BUSINESS

ECOSYSTEM

CORE

BUSINESS

5

The Value Net

COMPETITORS

CUSTOMERS

COMPANY COMPLEMENTORS

SUPPLIERS

South West Airlines

American Airlines

Delta Hertz (rental car)

MCI (telecom)

Boeing

Peanuts

Business Travelers

Leisure Travelers

Strategy is the art of creating value.

It provides the intellectual frameworks, conceptual

models, and governing ideas that allow a company‟s

managers to identify opportunities for bringing value to

customers and for delivering that value at a profit.

In this respect, strategy is the way a company defines

its business and links together the only resources that

really matter in today‟s economy: knowledge and

relationships or an organization‟s competencies and

customers.

Source Normann, R. and Ramirez, R., “From Value Chain

to Value Constellation: Designing Interactive Strategy,”

Harvard Business Review, July-August 1993, p.65.

6

TOP 25 MANAGEMENT TOOLS

* Added in 2013

Source: Bain & Company, 2013

TOP 10 MANAGEMENT TOOLS (comparison)


7


“What is your organization‟s most important

priority over the next three years?”

Top 10 Management Tools most used)


*(t) tied

8

Usage and Satisfaction (on a scale of 1 to 5)



Tool Usage & Overall Satisfaction

Change Management

Strategic Planning

Mission and Vision CRM

9

Survey Insights


Bain research has provided a number of important insights:

Overall satisfaction with tools is moderately positive, but the rates of

usage, ease of implementation, effectiveness, strengths and

weaknesses vary widely

Management tools are much more effective when they are part of a

major organization effort

Managers who bounce randomly from tool to tool undermine

employees‟ confidence

Hyperbole surrounding the trendiest of tools often leads to unrealistic

expectations and disappointing results

Decision makers achieve better results by championing realistic

strategies and viewing tools simply as a means to a strategic goal

No tool is a cure-all

„Root-Branch‟ Corporate Strategy Framework

Rajnish Karki, “Corporate Strategy of Indian Organizations: The „Root-

Branch‟ Framework”, Vikalpa, Vol. 29, No. 3, July – September, 2004.

10

Reliance became the first „Fortune Global 500‟ Indian private sector

company in 2002. Founded by Dhirubhai Ambani, the company started as

a manufacturer of synthetic textiles in 1966 and integrated backward first

into yarn and fibre manufacture.

All the capacities were of globally efficient scale and the trend continued

with facilities for commodity plastics like PVC, polypropylene, and

polyethylene; petrochemical cracker complex; and, finally, the 27 MT oil

refinery.

From an earlier strategy of backward integration till mid-1990s, Reliance

started moving into related and unrelated areas in newly opened sectors

and will continue to diversify in the coming decade by leveraging its

standing and resources. “It continues to be more of a task-based

organization, an anomaly given the size, and will need to evolve into a

role-based organization and further on into an institution.”

Reliance Industries India Diversified

Reliance Industries - An update

Antilla ($2Bn.)

11

India‟s private sector leader in telecommunications industry.

Incorporated in 1985 by Sunil Bharti Mittal, to manufacture electronic

push button phones.

Bharti Cellular formed in 1992 to offer cellular services and, in 1998, it

became the first private fixed-line service provider in India.

In the 1990s, Bharti focused on the deregulated telecom sector and

formed joint ventures with foreign firms for finances and technology but

got out of all of them over the years and then mobilized finances from

international investors in late 1990s onwards and from IPO in mid-2002.

“In the coming decade, Bharti will continue to focus on telecom as there

is a lot of ground yet to be covered. And from being driven by

entrepreneurs, it will move further in its efforts to build an organization

and institution.”

Bharti Telecom India Focused

Bharti Telecom - An Update

Airtel across 20 countries

Pioneered business strategy of outsourcing all of its business operations except

marketing, sales and finance

Its network - base stations, microwave links, etc. - is maintained by Ericsson

and Nokia Siemens Network

Business support is provided by IBM,

Transmission towers are maintained by another company (Bharti Infratel)

Built the 'minutes factory' model of low cost and high volumes.

Ericsson agreed for the first time to be paid by the minute for installation and

maintenance of their equipment rather than being paid up front, which allowed

Airtel to provide low call rates of 1/minute

12

Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor

for a Japanese company Shionogi. India‟s largest pharmaceutical company and

ranks among world‟s top 100 with overseas sales more than 70 per cent.

It was incorporated in 1961 by Dr.Parvinder Singh. Its initial technology

orientation was born out of necessity when its long-term distributor agreement for

an Italian pharmaceuticals company was cancelled and it was forced to

manufacture its own products and develop process expertise.

In 1993, it committed itself to becoming a truly international research-based

pharmaceutical company and started to focus on international markets and on

developing new chemical entities.

“The vision and approach of the founder continue to guide the company which will

continue its globalization process in the coming decade.”

Ranbaxy Global Focused

Ranbaxy - An update

Japanese pharmaceutical company Daiichi Sankyo acquired a controlling share in

2008 (with a deal valued at about US$4.6 bn.).

Ranbaxy exports its products to 125 countries with ground operations in 43 and

manufacturing facilities in 8 countries.

In 1998, Ranbaxy entered USA, and now it is the biggest market for Ranbaxy,

accounting for 28% of sales in 2005.

During 2004-2005, Dinesh Thakur and Rajinder Kumar, two Indian employees of

Ranbaxy, blew the whistle on Ranbaxy's fabrication of drug test reports. Thakur

contacted the FDA in USA, which started investigating his claims.

In May 2013 the US fined the company US$500 million after found guilty of

misrepresenting clinical generic drug data and selling adulterated drugs to USA.

Malvinder Singh, CEO (2004)

http://www.ranbaxy.com.pl/pliki/grafhtm/drparvinder.jpg

13

Corporate Foresight

“Maturity levels of corporate foresight systems” by Hans Georg, Rene Rohrbeck and Katharina (2009).

Corporate Foresight Model


14


There are three kinds of companies:

those who make things happen;

those who watch things happen;

and those who wonder what’s happened.

- Anonymous

“Strategic Management and Business Policy”

Thomas Wheelen and David Hunger

“Strategic Management: Theory & Applications”

Adrian Haberberg and Alison Rieple