8/18/2019 SM 1 ppt may 2014
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SESSION - 1
Introduction to Business Policy and Strategic Management
Is strategy the most important driver of superior performance?
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How Mind tree founders decided what the firm
would be doing, before its start?
Whether strategy follows expertise or strategyfollows imagination with intention: discuss
How did the Mind tree imagine the right way?
Why some hypotheses made by a firm lead topoor performance?
Why the growth withered from 2008 onwardseen when the leaders and strategy were same?
What is superior performance for Mind tree?
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A multidimensional concept The central concept on which
or around it an action for
winning is designed Early use in hunting and
warfare In business organization
context, theory evolved after
19!s "usiness arena e#uated with a
battlefield $ifferent definitions
- %inning formula- &ore decision- "usiness aspiration- An idea set for
getting what you
want - &ourse chart - A grand hypothesis- A thread in all
salient decisions
'a winning idea set to reach the future beneficial state of a firm(
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$ broad concept that embraces the entire set of salientdecisions and actions that determine the long runperformance of an organiation -.oteen /81
lanning, resource management, control, and ealuation forsuperior long run performance
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re history: "aylor,4ernard, !imon,4ower
5inancial planning
phase: *ew man,aul 6awrence,+ruc7er, !elni7
5orecast based
planning phase:3handler, $nsof,
$ndrews
rofession of
strategicmanagement:
#umelt, Wringler,Mintberg
&rowth of thediscipline -/80s1:orter, "om eters
#esource based iew-/0s1: 4arney,"eece, rahlad
ractice school-2000s1:
arab7ows7i,&oindara9an, +re9or
Human imagination-20/0s1: ;i; model
"able: / 5ig: /
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5ocus on offenceor defense
3ollectintelligence on
enemy
5irst moeradantage
6eeragingstrengths
3oeringwea7nesses
3reatingperception of
strength
Winningterritory with
least cost
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Traditionally a 3 step process:
• Strategy formulation after appraisal• Implementation with a plan•Monitoring & evaluation
Means-ends relationship (Fig 1.7)
Constant environmental scanning
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5irst: )ntrospect on what you Bwant;< 'our wants ta7e you to the ision !econd: )dentify who you are C who you want to be< Who you are C
want to be clarifies mission "hird: )magine how you can meet your wants that are in harmony with
your mission 5ourth: Ma7e the list of options that come up D process of inestigationE
introspectionE insightsE imagination< F 5ifth: $ssess your strengths, wea7ness, contextual constraints C
opportunities !ixth: Ma7e strategic choice of the path, based on the insights from the
personal !W(" !eenth: Write down the story in which you would be describing what
you would do, would not do, where you do, with whom, how you would
proceed<
%ighth: %nact the scriptG story C be in charge of the story as its hero< *inth: #etreat often for a wee7 to inspect C ealuate how it goes< "enth: 5ill the gaps C enhance the story by interEpositioning<
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Define what is superior performance
Decide the inputs required Craft unique configuration of resources Develop processes, systems, policies
STRATEG
!ay of sourcing resources "anner of using resources Timing, staging, phasing, milestones Designing metrics for measuring
#rograms, $udgets, dash$oard
!uperior
performance
How ?
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!tarts with
inestigationEintrospection -"able
/
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Gree% word& 'Strategos( ) the art of the general
General is in charge of the whole& #reparing
Equipping *rgani+ing Assessing #lanning Eecuting
Artistry ) mastery - originality in choices, decisions andactions
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More than 25important theories
Theory is an‘explanation of the
‘why’
Theories oforganizations
Theories inorganizations
Theories• Guides learning• Lights the way• Train judgments• Avoid pitfals
Ex: Resource basedTheory, Agencytheory, Institutional
theory
"H%(#)%! A!%+ )* !M
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A plan, pattern, ploy, practice, process
A unique position, perspective, programming
Strategy as fit, shaping
As sustaina$le competitive advantage
Shared mental representations pursuing cognitivelydistant opportunities
As choice to do or not to do
As stretch hypothesis to $e validated
#roduct mar%et scope
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Envisioning a$out the future state of the organi+ation Deliver superior value $y developing an offering of
utility with low imita$ility .rea% economic equili$rium law and generate
surpluses to fuel growth
Achieve superior performance, consistently anddura$ly
/armony, direction and coherence to all decisions 0tili+e all resources1orchestrating resources Reali+e vision with equity, efficiency
2n1$uilt flei$ility for adaptation Satisfy interests of sta%eholders .ecome a legitimate, reputed institution
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Growth as
expansion(Fig 1.2)
Growth asidentity (Fig
1.3)
Growth asincrease innet worth
Growth asleadership
ChallengesSpace togrow (Fig1.1)
Resources &cost
Avoidingthreats
Cooperationfrom
stakeholder
Enhancingstatus
TYPES OF GROWTH & ITS CHALLENGES
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Three issue clusters 34ig 5678 2nput issues #rocess issues *utput issues
.asic model compartmentali+es 2n practice, the phases and focus are continuous and adaptive
(pportunity C "hreats
%fficiency C Iuality
%ffectieness C !ustainability
4$!)3 M(+%6 (5 !M
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!trategic Management engages: -5ig /
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!trategyproidesdirectionand path-5ig /
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$nalysis 5acilitation &uide roblem framing Measurement lanning %xecution 3atalyst +ecision ma7ing 3ommunication
3ollaboration
D#eliability, @alidity, accuracy,
adaptabilityF
%!"%6+, %"(
!cenario planning 4uyer utility map @alue chain
analysis #esults based
framewor7 J B!; framewor7 !ix !igma +elphi techniLue
%##3 grid 4usiness process
reengineering
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$cademicians
ractitioners 3onsultants %nthusiasts "hought
leaders
3oncepts, ideas
"heories,prescriptions
"ools, framewor7s "echniLues 4enchmar7s
hilip !elnic7 idea of distinctie competence
$lfred 3handler structure follows strategy
Michael orter N forces analysis
ay 4arney #esource 4ased iew of strategy
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8/18/2019 SM 1 ppt may 2014
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Locate two retail shops selling readymade garments or clothes in the townand identify whether the shops have a strategy. Explain how you observedtheir strategy and describe it.
Form two or three member teams and each team make a two page note onthe significant contributions of strategy forerunners through web search.
Make a list of the competitive advantages of three reputed firms sellingmobile phone handset brands in your town in a tabular format and assesswhich of the three companies will grow better in future. Explain thereasons for your choice of the company, for future growth.
Which of the mobile phone companies in exercise 3 above has benefitedmost from the learning curve? Assess the relevance and role of learningcurve and innovativeness in the growth of the three firms. By taking onemodel released two years before, make a graph of the learning curve of the
three firms with cost of the handset in Y axis and number of piecesmanufactured in X axis. Organize a debate on whether learning curve or innovativeness gives moreor better competitive advantage to a firm using examples of products fromfirms.
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8/18/2019 SM 1 ppt may 2014
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How a tagline helps a company to get threeE fold increase in
turnEoer in eight years?
What are the strengths and capabilities of 4ritannia ?
What are the adantages of shifting 4ritannia from a biscuitcompany to a food company ?
what is the core of the strategy or common thread in alldecisions of 4ritannia ?
)s there enough space to grow for all biscuit companies in )ndia?)f yes, what winning formulae can be offered to a firm ?
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