IGNOU MBA MS-11 Solved Assignments 2010

Course Code : MS-11 Course Title : Strategic ManagementAssignment No. : 11/TMA/SEM-I/2010Coverage : All Blocks

Q1. Select a company of your choice. Recollect the current events and identify the important macro environmental factors which had an impact on the company. Try to study the opportunities and the threats posed to the company due to the macro environmental factors.

Solution: This has to be done by you….

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Q2. What do you understand by SWOT analysis? Explain how it is important for the organizations in taking strategic decisions. Illustrate your answer with the help of an example.

Solution: SWOT analysis is a general technique which can be applied across diverse functions and activities, but it is particularly appropriate to the early stages of planning for CORPORATE STRATEGY . Performing SWOT analysis involves generating and recording the strengths, weaknesses, opportunities, and threats relating to a given task. It is customary for the analysis to take account of internal resources and capabilities (strengths and weaknesses) and factors external to the organisation (opportunities and threats).

Importance of SWOT for the organizations in taking strategic decisions:Strengths usually describe things that the company excels at doing. All strengths listed should support a competitive advantage that the corporation has over its rivals. These can be tangible (fast delivery of products to customers) or intangible (excellent customer service promotes very high customer satisfaction). As these are internal attributes they should all be within the company’s control. Ask questions such as:

• What does the company do well?• What resources (physical and personnel) does the company possess?• What advantages does the company have over its rivals?

Do not forget to include key strengths that the people in the organization possess which includes things such as their experience, knowledge, educational background, business connections, and job skills. Tangible assets such as plant capacity, state of the art equipment and facilities, strong supply chains, available capital (or access to credit), loyal customers, patents, copyrights and superior information systems.The Strengths can be considered as anything that is favourable towards the business for example:

Currently in a good financial position (few debts, etc) Skilled workforce (little training required) Company name recognized on a National/Regional/Local level Latest machinery installed Own premises (no additional costs for renting) Excellent transport links (ease of access to/from the Company) Little/non-threatening competition

THE SWOT ANALYSIS --STRENGTHS -helps to identify the core compentences -helps how to maximize the strengths to gainthe maximum results --sales/profit/market share/competitive position.

OpportunitiesOpportunities are the external factors that will allow your business to succeed against its rivals. Since these are external factors, they may not be under control of the company. Ask questions such as:

• What opportunities for new products or services exist in your market?• Are new markets available that could provide opportunities for growth?• Have new technologies been developed that will allow us to compete more effectively?• Have consumer lifestyles, wants and desires shifted?• Are the target customers economically healthy?• Do previously resolved internal problems give the company a competitive edge?

Usually, opportunities reflect the areas where you can excel by changing the company’s marketing strategy. Should new products be launched? Should existing products be promoted to new customer groups? If possible, identify the time frame for each opportunity. Is it something the company must capitalize on by a certain date or will the opportunity last indefinitely?

Opportunities Keeping in mind what you have listed as your Company Strengths, SWOT Analysis can now influence the Opportunities for the business. These can be seen as targets to achieve and exploit in the future for example: Good financial position creating a good reputation for future bank loans and borrowings Skilled workforce means that they can be moved and trained into other areas of the business Competitor going bankrupt (Takeover opportunity?) Broadband technology has been installed in the area (useful for Internet users) Increased spending power in the Local/National economy Moving a product into a new market sector THE SWOT ANALYSIS -- OPPORTUNITIES-helps to identify gaps in the market which can be converted intoopportunities.-helps to identify the gaps in performance , which can be exploit

THE SWOT ANALYSIS --STRENGTHS -helps to identify the core compentences -helps how to maximize the strengths to gainthe maximum results --sales/profit/market share/competitive position.

THE SWOT ANALYSIS -- OPPORTUNITIES-helps to identify gaps in the market which can be converted intoopportunities.-helps to identify the gaps in performance , which can be exploited

THE SWOT ANALYSIS --THREAT-helps to identify the various threats likecompetition/social /political/economic/technological etcand to take preventive action.

The Benefits of these four SWOT Analyses:The main thrust of the exercise is to determine how the company’s strengths can be used to take advantage of opportunities and minimize critical threats. Eliminating weaknesses can also provide resources to capitalize on opportunities or ward off threats. Identifying the most critical issues provides a game plan for the business to follow based on an honest assessment of the firm’s potential.THIS HELPS TO DEVISE THE MOST EFFECTIVE CORPORATE STRATEGY.WHICH IN TURN HELPS TO DEVELOP THE MOST EFFECTIVE STRATEGIC PLANNING.

SWOT analysis can provide: A framework for identifying and analyzing strengths, weaknesses, opportunities and threats. The impetus to analyze a situation and develop suitable strategies and tactics. A basis for assessing core capabilities and competences. The evidence for, and cultural key to, change.

SWOT Benefits of Strategy in Organisation :Strategic planning serves a variety of purposes in organization, including to:1. Clearly define the purpose of the organization and to establish realistic goals and objectives consistent with that mission in a defined time frame within the organization’s capacity for implementation.2. Communicate those goals and objectives to the organization’s constituents.3. Develop a sense of ownership of the plan.4. Ensure the most effective use is made of the organization’s resources by focusing the resources on the key priorities.5. Provide a base from which progress can be measured and establish a mechanism for informed change when needed.6. Bring together of everyone’s best and most reasoned efforts have important value in building a consensus about where an organization is going.7. Provides clearer focus of organization, producing more efficiency and effectiveness8. Bridges staff and board of directors (in the case of corporations)9. Builds strong teams in the board and the staff (in the case of corporations)

10. Provides the glue that keeps the board together (in the case of corporations)11.Produces great satisfaction among planners around a common vision12. Increases productivity from increased efficiency and effectiveness13. Solves major problems

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Q3. Briefly discuss the role of organization’s mission, goals and objectives in strategic control. Explain with the help of an example.

Solution: Strategic control in IOS approach offers the opportunity to examine these organization’s mission, goals and objectives and technology issues in an “extended” view of the Organisation. How might a general manager think about the opportunity to leverage information and control mechanisms to influence behavior in the extended enterprise that encompasses, at least, it’s buyer and supplier communities.

Strategic Control serves support for understanding what is taking place in the organization’s mission, goals and objectives enterprise and in the market and support for influence the actions of participants, both inside and outside the enterprise. Objectives refers to the awareness and appreciation of what has taken place, is taking place, or could take place in the environment. Mission refers to the ability to communicate, command, persuade, or otherwise induce a particular behavior. It is the author's hypothesis that these two, non-orthogonal, measures can be used to examine the purpose and value of a set of Strategic controls, and information technology investment. The key questions then are as follows: To what extent do the controls contribute to managerial, or organizational Goal? To what extent does the control, or system of controls, create the proper level of influence that will lead to the desired behaviors?

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Q4. Take a recent example of a merger and try to analyze the aspects, which led to the merger.Solution: By Ayen Infante 02/23/2010 So-called out-of-home marketing company Trackworks had merged with LEAP Solutions, Out of Home Media Solutions, and Narra Digital Media and Marketing to strengthen its foothold on the outdoor and alternative advertising industry. The firm, whose flagship media property is the exclusive advertising rights over the Metro Rail Transit-3 (MRT-3), will now be known as The Trackworks Group. Once in a while the warring parties in a lawsuit more than reconcile. They merge. Schaumburg-based wireless provider iPCS Inc. agreed to be acquired Monday by Sprint Nextel Corp. for $831 million, including debt. The proposed deal settles a four-year legal battle. The outcome was not all together unexpected, as Illinois courts had sided with iPCS and left Sprint with little choice. A Sprint spokesman said the litigation was one of several strategic reasons to acquire iPCS, a Sprint affiliate that operates much like a

franchisee. Telecommunications analyst Chandan Sarkar said the litigation played a "huge role." He said he also suspects that a merger was exactly the outcome iPCS sought when it sued Sprint in July 2005. An iPCS spokeswoman declined to comment about the litigation. The conflict started with the 2005 merger of Sprint and Nextel, when iPCS and other Sprint affiliates cried foul over competitive problems the deal created for them.

The Nextel acquisition, iPCS argued, violated its exclusive right to sell wireless services under the Sprint brand name in a territory spanning seven Midwestern states, including Illinois. The company has about 700,000 customers; two of its biggest markets are Peoria and the Quad Cities. In August 2006, a Cook County circuit court judge ruled that Sprint must divest the Nextel network in iPCS' territory. Sprint acquired Nextel, best known for phones that also serve as walkie-talkies, in a $35 billion deal and was not about to accept the court order without a fight.

It appealed to the Illinois appellate court and lost. It asked the Illinois Supreme Court twice to hear its appeal, only to be denied both times. In the meantime, iPCS ratcheted up its litigation. It filed two more cases claiming Sprint violated the affiliate agreement over deals it made with Clearwire Corp. and Virgin Mobile USA. A team of Mayer Brown lawyers led by John Touhy and Michael Forde represented iPCS in the litigation. The Chicago law firm also advised the company in the Sprint transaction.

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Q5. Explain the concept of turnaround management? Illustrate your answer with examples.

Solution: Turnaround management is a process of devising , executing and managing a plan of corporate renewal. The process involves identifying the key drivers of an unstable business and implementing a sustainable recovery change strategies which rapidly improves the business.

Turnaround management involves a number of steps:STEP 1. INDENTIFY THE ROOT CAUSES.-sales down due to weak economy.-overly optimistic sales projections-poor strategic choices-high operating costs-high fixed costs that decrease flexibility-insufficient resources-unsuccessful R&D projects-high successful competitor-excessive debt burden-inadequate financial controls.----------------------------------------------STEP 2CONDUCT A SITUATION AUDIT / ANALYSIS.-------------------------------------------------STEP 3

DEVELOP A STRATEGIC CORPORATE OBJECTIVE--------------------------------------------------------STEP 4DEVELOP A CORPORATE STRATEGY--------------------------------------------------------------STEP 5DEVELOP A CORPORATE BUSINESS RESTRUCTURING PLANStrategic restructuring: The focus lies on core markets and promising business segments. Corporate divisions destroying value are divested. Operational restructuring: It focuses on leaner organization and leaner processes, on the simplification of manufacturing networks and corporate structures, as well as on maximizing efficiency and effectiveness. Financial restructuring: A combination of cost reduction, more flexible structures, and the development of a sustainable financial concept. -------------------------------------------------------------STEP 6DEVELOP A CHANGE MANAGEMENT PROGRAM--------------------------------------------------------------STEP 7DEVELOP AN EMERGENCY ACTION PLAN.-------------------------------------------------------------STEP 8DEVELOP AN IMPLEMENTATION PLAN.------------------------------------------------------------------THINGS TO REMEMBER:the overall financial situation is as transparent as possible and that the influence of the identified restructuring measures becomes clear, rapid analysis and concept development considering the information needs of the stakeholders are conducted, the most relevant people from the organization are involved in order to achieve acceptance for the implementation of improvements, consistent project management and controlling are established during the implementation phase to ensure that the pursued improvements are actually achieved, all stakeholders are continuously informed and involved in order to identify risks and avoid counterproductive conflicts.

Turnaround management --The organisation I am referring to, was facinga problem of declining sales/ market share for 2 consecutive year.

The organization, I am familiar with is a -a large manufacturer/ marketer of safety products-the products are used as [personal protection safety] [ industrial safety]-the products are distributed through the distributors as well as sold directly-the products are sold to various industries like mining/fireservices/defence/as well as to various manufacturing companies.-the company employs about 235 people.

-the company has the following functional departments*marketing*manufacturing*sales*finance/ administration*human resource*customer service*distribution*warehousing/ transportation*TQM ==============================================STEP 1.INDENTIFY THE ROOT CAUSES.-poor strategic choices-high operating costs-insufficient resources-high successful competitor-inadequate financial controls.----------------------------------------------STEP 2CONDUCT A SITUATION AUDIT / ANALYSIS.-the demand for the market was growing at 13%-the company sales was growing at 7%-the company was selling directly to the customers, using the salesforce.-lack of adequate product range.-lack of market coverage-lack of skills among the salesforce-demand for technical productsetc etc-------------------------------------------------STEP 3DEVELOP A STRATEGIC CORPORATE OBJECTIVE -go for 20% growth ----per annum over the next 5 years.-enter new market segments. [ 15% additional sales volume]-offer new product [ 15% additional sales volume ]--------------------------------------------------------STEP 4DEVELOP A CORPORATE STRATEGY-restructure the marketing department [ 3 product group management]-to achieve 80% sales through distributors in 5 years time.-to conduct more marketing development for new products.-to train all staff in the product knowledge.etc--------------------------------------------------------------STEP 5DEVELOP A CORPORATE BUSINESS RESTRUCTURING PLAN

Strategic restructuring: The focus lies on core markets and promising business segments. Corporate divisions destroying value are divested. -3 new product groups.-development a new salesdepartment to develop distributor sales.--------------------------------Operational restructuring: It focuses on leaner organization and leaner processes, on the simplification of manufacturing networks and corporate structures, as well as on maximizing efficiency and effectiveness. Financial restructuring: A combination of cost reduction, more flexible structures, and the development of a sustainable financial concept. -reorganizing the sales territories.-appointment of new distribtors --geographically.-pay for performance systems.-------------------------------------------------------------------------------------------STEP 6DEVELOP A CHANGE MANAGEMENT PROGRAM-implementation of the change management programover the 6 months period.--------------------------------------------------------------STEP 7DEVELOP AN EMERGENCY ACTION PLAN.which included-new product sourcing-new product development-new sales policies development-new distributors policies development-new training for salesforce - to manage the distributors.-new training for customer service staff.-new order processing / servicing system.etc etc-------------------------------------------------------------STEP 8DEVELOP AN IMPLEMENTATION PLAN.A PHASED PROGRAM OF IMPLEMENTATION.==========================================OVER THE NEXT 5 YEARS, THE COMPANY -MAINTAINED A 20 % GROWTH-IMPROVED THE MARKET SHARE SIGNIFICANTLY.-IMPROVED THE CUSTOMER COVERAGE BY 100%-MAINTAINED A STEADY SALES / PROFIT GROWTH.

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