1. Concept of Strategy2

1. Concept of Strategy0. Nature of Strategy0. Facilitates meeting the objectives of the organisation0. Blend of internal and external factors0. Combination of Actions0. Involve contradictory actions0. Future oriented0. Requires systems and norms0. Provides overall framework0. Essense of Strategy1. Long term objectives1. Competitive advantage1. Vector1. Synergy0. Strategy V/s Policies0. Strategy V/s Tactics0. Strategy V/s Programmes, Procedures, Rules0. Levels of Strategy5. Corporate Level5. Business Level5. Functional Level0. Importance of Strategy6. to take decisions on long range forecasts6. To deal with a new trend and meet competition6. To get financial benefits6. Helps focus on organization objectives and gives direction6. Helps organizational effectiveness6. Makes managers proactive6. Motivates employees6. Involves people across different levels6. It improves corporate communication, coordination and allocation of resources1. Process of Strategy

1. Process of Strategy0. Strategic Intent0. Vision0. Mission0. Business Definition2. Focus2. Differentiation0. Objectives and Goals0. Environmental and organizational analysis1. Environmental Search1. Environmental Diagnosis0. Identification of strategic alternatives2. Stability2. Expansion2. Retrenchment2. Combination2. Modernization2. Integration2. Diversification6. Concentric Diversification6. Conglomerate Diversification6. Horizontal Diversification2. Joint Ventures2. Strategic Alliance2. Mergers2. Acquisitions2. Takeovers2. Divestments2. Turnaround Strategy0. Choice of strategy3. Objective factors0. Corporate portfolio analysis0. Experience Curve0. PLC Concept0. BCG Matrix0. GE Nine Cell Matrix0. Space Diagram0. Hofers product market evaluation matrix0. Directional policy matrix0. Competitor analysis0. Industry analysis3. Subjective factors0. Implementation of strategy4. Project implementation4. Procedure implementation4. Resource allocation4. Structural implementation4. Functional implementation4. Behavioural implementation0. Evaluation and control1. Strategic Framework2. Strategic Intent0. Vision0. Envisioning0. Core Ideology0. Envisioned Future0. Core Values and Core Purpose0. Mission2. Nature of Mission0. Social Reasoning0. Philosophical and visionary0. Legitimizes societal existence0. Stylistic objectives2. Characteristics of a mission statement1. Realistic and achievable1. Should be precise1. Clear for action1. Should be distinct1. Societal linkage1. Should be dynamic1. Should be motivating1. Process of accomplishing mission should be indicated0. Business Definition3. Dimensions0. Customer Groups0. Customer functions0. Alternative technologies0. Objectives and Goals4. Need for establishing objectives0. Yardstick to measure performance0. Motivating force0. To Pursue vision and mission0. Define the relationship0. Basis for decision making4. What objectives to be set1. Profit objective1. Marketing objective1. Product objective1. Productivity objective1. Financial objective1. Social objective1. Human resource objective4. Characteristics of objectives2. Form a hierarchy2. Multiplicity of objectives2. Specific time horizon2. Attainable objectives2. Should be understandable2. Must be concrete2. Should be set within constraints4. Process of setting objectives (factors as per Glueck)3. Environmental factors3. Existing resources of enterprise and internal power structure3. Values of top management3. Understanding past1. Environmental Analysis3. Broad dimension of external environment3. PESTEL Framework1. Political factors1. Economic factors1. Socio-cultural factors1. Technological factors1. Environmental factors1. Legal factors3. McKinseys 7s Framework

3. General environment & organisations strategy3. Environmental scanning4. Delphi Method4. Constructing scenarios1. Competitive Forces4. Porters Five forces framework0. Rivalry among competitors in the industry (Competitive Rivalry)0. Stability of the environment0. The life expectancy of competitive advantage0. Characteristics of strategies pursued by competitors 0. The potential entrants (threat of entrants)1. Barriers0. Economies of scale0. Learning or experience effect0. Cost disadvantage independent of scale0. Brand benefits0. Capital requirements0. Switching cost0. Access to distribution channel0. Anticipated growth0. Others8. Regulatory policies8. International trade restrictions8. Tariffs0. The substitute products2. Competitive pressure depends on following factors:0. Whether substitutes are attractively priced0. Whether buyers consider those substitutes satisfactory in terms of quality and price0. How easily buyers switch to substitutes0. The bargaining power of suppliers3. Suppliers bargaining power depend on:0. Importance of buyer to the supplier group0. Importance of suppliers product to the buyer0. Greater concentration among suppliers than buyers0. High switching cost for buyers0. Credible threat of forward integration by suppliers0. The bargaining power of buyers4. Buyers bargaining power depend on:0. Undifferentiated or standard supplies0. Customers price sensitivity0. Accurate information about the cost structure of suppliers0. Greater concentration in buyers industry than suppliers industry and relatively large volume purchase0. Credible threat of backward integration by buyers4. Process for analyzing external environment4. Strategic Group2. Competitive Intelligence4. Scenario Planning3. Steps in implementing Scenario Planning0. Identification of the issues0. Classification of the issues

0. Analyzing and Problem Solving1. Internal analysis1. Cost6. Cost Levels in India0. Causes and Effects of High costs in India6. Changing role of cost in different market conditions1. Cost in Sellers Market0. Price of a product = Internal Cost + Desired Profit Margin1. Cost in Buyers Market1. Profit Margin = Permissible Price Internal cost orTolerable Cost = Permissible Price Acceptable Profit6. Experience Curve2. Causes of Experience Curve Effect0. Improved productivity of labour0. Increased specialization0. Innovation in production methods0. Value engineering and fine tuning0. Balancing production line0. Methods and system rationalization2. Additional considerations for using experience curve effect1. Distinguish experience from time1. What is a unit experience1. How to consider influence of time2. Experience curve and competitive strategy2. Limitations of Experience Curve3. Not possible to draw experience curve if cost of the unit is not recorded3. Cost of manufacturing by competitors difficult to obtain3. Late entrant must operate at lowest initial cost 3. Not a base for formulating a strategy6. Role of Cost in Business Growth3. Relative cost advantage and competitive strategy6. Cost Leadership4. Prerequisite to Cost Leadership as per Porter0. Aggressive construction of efficient scale facilities;0. Vigorous pursuit of cost reduction from experience;0. Tight cost and overhead control;0. Avoidance of marginal customer accounts;0. Cost minimization.4. Three Generic Competitive Strategy

4. Drawbacks of Cost Leadership2. Initiation by the competitive firms2. Threat of competitive firms from other countries2. Firm losing cost leadership due to fast technological changes, which required high capital investment2. Threat by competitors to capture still lower cost segments2. Competition based other than cost.1. Differentiation and focus7. Differentiation0. Need for differentiation0. To compete against rivals0. To create entry barriers0. To reduce threat arising out of substitutes0. To develop differentiation advantage0. Types of differentiation1. Tangible differentiation0. Design0. Packaging0. Style0. Quality0. Composition 1. Intangible differentiation1. Image1. Brand1. Company reputation1. Customer preferences0. Sources of Differentiation2. Value Chain2. Uniqueness1. Policy Choice1. Links1. Timing1. Location1. Inter-relationship1. Learning1. Integration1. Scale1. Institutional factors0. Cost of Differentiation3. Training3. Advertisement3. Skilled workforce3. Expensive materials0. Advantages and Disadvantages of Differentiation4. Advantages0. Premium price for the firm0. Increase in number of units sold0. Increase in brand loyalty by the customers0. Sustaining competitive advantage4. Disadvantages1. Uniqueness of the product not valued by buyers1. Excess amount of differentiation1. Loss due to differentiation7. Focus: A Concept1. Variants of Focus Strategy0. Cost Focus0. Differentiation Focus1. Situations when Focus Strategy is effective1. Market segment is large1. Has growth potential1. Market segment not significant enough to success of the major competitors1. Focuser has efficient resources1. Focuser is able enough to defend challenges1. High cost for competitors1. Focuser is able to choose from different segments1. Advantages & Risks of Focus Strategy2. Advantages0. Can defend porters competitive forces0. Can reduce competition0. Threat from producers producing substitute products reduced0. Bargaining power of customers reduced0. Would increase market share and profitability2. Risks1. Market segment may not be large to generate profits1. Segments needs may become less distinct from main market1. Competition may take over the target segment1. Growth strategies-I8. Levels of Strategy0. Corporate Strategy0. Major components of Corporate Strategy0. Growth or Directional Strategy0. Portfolio Strategy0. Corporate Parenting strategy0. Nature and scope of Corporate Strategy1. Reasons for Corporate Strategy0. Economic Reasons0. Non-economic reasons1. Types of Generic Corporate Strategies1. Stability strategies0. Rationale for using Stability Strategy0. Approaches to Stability strategy1. Holding strategy1. Stable Growth1. Harvesting Strategy1. Profit or Endgame strategy1. Growth strategies1. Conditions for Opting expansion strategy1. Expansion through intensification1. Ansofs Product Market Expansion Grid

0. Market Penetration0. Market Development0. Combination Strategy0. Combination Strategy1. Expansion through integration2. Vertical Integration0. Backward Integration0. Forward Integration2. Horizontal Integration1. Internal expansion1. External expansion1. International Expansion3. International Market Entry Modes0. Exporting0. Licensing0. Joint venture0. Direct investment3. Strategy options for going international1. Multi-domestic1. Global1. Transnational1. Retrenchment strategies1. Combination strategies0. Business-level (Competitive) Strategy0. Functional Strategy1. Growth strategies-II9. Diversification0. Types of Diversification0. Related Diversification (Concentric Diversification)0. Market related concentric diversification0. Technological related concentric diversification0. Unrelated Diversification (Conglomerate Diversification)0. Rationale for Diversification1. Economies of scale and scope (synergy)1. Widen Market base and Enhance market power1. Profit stability1. Improve financial performance1. Growth1. Counter competitive threats1. Access to latest technology1. Regulatory factors0. Alternative routes to diversification2. Mergers and acquisitions0. Mergers0. Different Forms of Mergers0. Horizontal Merger0. Vertical Merger0. Market-extension Merger0. Product-extension Merger0. Conglomeration0. Forms of Mergers from Finance standpoint1. Pooling of interests1. Purchase Mergers1. Consolidation Mergers0. Acquisitions1. Buy up1. Reverse Merger0. Reasons for M&A2. Reduce Competition2. Cost efficiency2. Avoid being a take over target2. Improve earnings and reduce sales variability2. Market and product line issues2. Acquire resources2. Synergy2. Tax Savings2. Cashing out0. Reasons for failure of M&A3. Integration difficulties3. Faulty assumptions3. Failure to carry out effective due-diligence3. Inordinate increase in debt3. Too much diversification3. Problems in making M&A work0. Methods to value a target company for M&A4. Comparative Ratios0. PE (Price to earnings) ratio0. EV/Sales (Price-to-sales) ratio4. Replacement Cost4. Discounted cash flow4. Synergy

4. Other criterion4. Market price + 10% premium = Reasonable purchase price4. Cash transactions4. Sensible appetite0. Steps involved in M&As5. Initial offer by the intending buyer5. Response from the target company: target company can do one of the following1. Accept the terms of the offer1. Attempt to negotiate1. Execute a poison pill or some other hostile takeover defense1. Find a white knight5. Closing the deal0. M&A: Indian scenario2. Strategic Partnering1. Joint Venture1. Long-term contract1. Strategic alliances1. Strategic alliances10. Factors promoting rise of strategic alliances0. To gain competitive advantage0. To respond to uncertainties0. To concentrate on core business0. To benefit from bigger players0. To achieve synergy10. Types of strategic alliances1. Licensing arrangements1. Joint ventures1. Cross Holdings, Equity Stakes and Consortia10. Benefits of Strategy Alliances2. Entering new markets2. Reducing manufacturing costs2. Developing and diffusing technology2. Reduce Financial risk and share cost of Research and Development2. Achieve and Ensure competitive advantage10. Cost and Risk of Strategic Alliances3. Cultural and Language barriers3. Lack of Trust3. Lack of Autonomy3. Lack of Clear Goals and Objectives3. Lack of Co-ordination between Management Teams3. Differences in Management Style3. Lack of Commitment3. Creating a Potential Competitor3. Problems of Co-ordination and loss of agility3. Potential for Conflicts3. Difficulty in Managing Alliances10. Factors contributing to Successful Strategic Alliances4. Senior Management Commitment4. Similarity of Management Philosophies4. Frequent Performance Feedback4. Clearly Defined, Shared Goals and Ojbectives4. Thorough Planning4. Clearly Understood Roles4. Global Vision4. Partner Selection4. Communication between partners: Maintaining Relationships10. Planning for a Successful Alliance5. Choosing Partner carefully5. Clarity of purpose5. Select a Project5. Understanding each others business processes5. Alliance plan needs to be formulated5. Balancing contributions of partners5. Complete Trust5. Participation at the Top5. Freedom to Innovate5. Have an Exit Strategy10. Corporate Social Responsibility10. amijares@westinsfoairport.com1. Turnaround11. Impact of Decline/Decay on the Organisations0. Psychological and behavioural reactions to decline0. Conservatism0. Infighting0. Employee Attrition0. The stigma of closing the company: Reaction by Clients & Suppliers1. Severing Business1. Reduction of quality service1. Bargaining for favourable terms1. Assaulting the credibility11. Factors contributing to rapid decline or decay1. Organisation slack1. Leadership1. Managerial Control11. Retrenchment Strategy to stop decay2. Condition of Moderate Adversity2. Condition of High/Severe Adversity11. Retrenchment strategies3. Turnaround strategy0. Turnaround Process0. Retrenchment0. Recovery Stage0. Survival Strategy1. Divestment1. Spin-off1. Restructuring the business operations2. Management restructuring2. Financial reengineering2. Business reengineering0. Liquidation Strategy2. Sale2. Bankruptcy1. Structural dimensions12. Levels of Strategic change

12. Matching Organisation Structure to Strategy1. Strategy Critical activities1. Degree of Authority1. Providing for Co-ordination12. Determinants of Organisational Structure12. Strategy and Structure Proposition12. The Stages model of Structure4. Stage I: 4. Stage II4. Stage III4. Stage IV12. Forms of Organization5. Functional Structure5. Product Divisions5. Holding Company5. Matrix Form12. Structuring Multinational Organizations6. Mother-Daughter type Structure

6. International Division

6. Global Structures2. Global Product Structure

2. Global Area Structure

6. Matrix Structures

12. Structure for Development Programmes7. Structural Form7. Network Structure

12. Perspectives on Strategy and Structure8. Porters Perspective0. Overall Cost Leadership0. Differentiation Strategy0. Focus Strategy8. Peters and Watermans Perspective

1. Behavioral dimensions13. Role of Leadership13. Concept of Leadership13. Functions of Leadership2. Functions for Task Needs0. Defining the Task0. Making the Plan0. Allocating work and resources0. Controlling quality and tempo of work0. Checking performance against plan2. Functions of Group needs1. Setting standards example1. Maintaining discipline1. Building team spirit1. Encouraging, motivating, giving a sense of purpose1. Appointing sub-leaders1. Ensuring communication withing the group1. Training the group2. Functions for individual needs2. Attending to personal problems2. Praising of individuals2. Knowing individuals personally2. Recognizing and using individual abilities2. Training individuals13. Leadership styles13. Corporate Culture13. Ethics and Values13. Functional Strategies1. Control14. Strategic Control Process

0. Three Phases0. Evaluation Criteria0. Performance Evaluation0. Feedback0. Quantitative criteria for evaluation1. Financial Ratios0. Return on Investment0. Return on Equity0. Profit Margin0. Market share0. Debt to equity0. Earnings per share0. Sales growth0. Assets growth0. Methods of Control2. Dupont System of Financial Control

2. Budgets2. Audits2. Time Related Control Methods3. Critical Path Method (CPM)3. Programme Evaluation and Review Technique (PERT)3. Management by Objectives (MBO)0. Performance Standards3. Historical Standards3. Industry Standards3. Present Standards0. Analysis and follow up action for control4. Motivational Report4. Economic Report0. Problems of Control Systems1. Evaluation of strategy15. Stages

15. Process of Evaluation

15. Business Portfolio Analysis2. Types0. Display Matrices0. BCGs Growth-Share Matrix

0. Limitations0. Predicting profitability from growth and market share0. Difficulty in determining market share0. No consideration for experience curve synergy0. Disregard for human aspect0. GEs Strategic Business Planning Grid

0. Profit Impact of Market Strategy (PIMS) Model0. Arthor D Little Companys Matrix

0. Hofers Product/Market Evolution Matrix

0. Qualitative Factors0. Balanced Score Card (BSC)0. Structure for Evaluation0. Evaluation systems in Multi-business company0. Characteristics of an effective evaluation strategy0.