Paper 3: Strategic Management

SECTION A Unit I: Strategic management - Introduction to strategic management, Strategic decision making, Strategic management process; Difference between Policy, Strategy and Tactics.

Unit II: Strategic Intent - Vision, Mission & goals, Preparation of Vision & Mission Statement; Organisational objectives, Hierarchy of objectives & strategies, setting of Objectives.

Unit III: Internal & Resource analysis - SWOT analysis, Resource analysis- a) Organisation capabilities & competitive advantage b) Value chain analysis; Concept of synergy -Core competency, Competitive analysis - Interpreting the five forces model, Competitors analysis

Unit IV: External analysis - Environment analysis a)Components of External environment b)Components of Internal environment c)Environmental scanning. Industry Analysis a) A Framework for industry analysis b)Michael Porters Analysis c)Usefulness of industry analysis. Unit V: Strategy Formulation (Case study) - Corporate level strategy: A) Growth-Concentration, Horizontal, Vertical, B) Diversification- Concentric, conglomerate. C) Expansion through Cooperation; Merger, Acquisitions, Joint ventures & strategic alliances D) Stability -Pause/proceed with caution, No change, Profit strategies. E) Retrenchment Turnaround, Captive Company Strategy, Selling out Bankruptcy, Liquidation. SECTION B Unit VI: Business Level strategy & Functional level strategy - A) Business Level strategy- Competitive advantage, Low cost strategy, Differential strategy and Focus strategy, B) Functional level strategy Operations strategy, Marketing strategy, Financial strategy, Human Resource strategy. Unit VII: Portfolio Approach & analysis - a)Portfolio analysis, advantages & disadvantages, b)BCG Matrix c) General Electrics Business Screen, d)Life cycle or Arthur D Litt le matrix, e) Balance scorecard. Unit VIII: Global strategy - Reasons for globalization, Global expansion strategy, International Portfolio Analysis; Market entry strategy, International strategy & competitive advantage. Unit IX: Strategic Implementation - 7 s framework- (separate variables in details), Strategic Business Unit (SBUS), Merits & Demerits of SBU; Leadership, Power & organisation culture.

Unit X: Strategic evaluation, Control & continuous Improvement - Establishing strategic evaluation & control; The quality imperative: continuous Improvement to build customer value, Fundamentals of Six sigma approach for continuous improvement.

Key Terms Unit I to X

1. Strategy: a unified, comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. 2. Strategic environment: It is the set of decision and actions resulting in formulation and implementation of strategies designed to achieve corporate objectives. 3. Strategic input: It includes strategic intent, vision, mission, values, philosophy, environmental analysis and internal organizational analysis. 4. Strategic actions: It includes corporate strategies, business strategies and functional strategies. 5. Strategic outcomes: it means the ultimate goal of strategic management which consists of sustained competitive advantage and above average returns. 6. Crafting strategy: Is the art of strategy design begins with the recognition of environmental threats and their transformation into opportunities. 7. Tactics: It represents a short range plan for operations where an element of conflict is involved. 8. Operational Management: It refers to the day to day activities or current operations and it concentrates only on short-term issues and is concerned with day to day problems like resources allocation, scheduling, monitoring performance etc. 9. Business environment: The business environment includes factors in sectors outside the firm which can lead the opportunities and threats. These sectors include technological, economic, social, political and ecological sectors. 10. Environmental analysis: It is the process by which strategists monitor the environmental settings to determine opportunities for and threats to the firm by breaking a whole into its parts to find its nature, function and relationship. 11. Environmental scanning: It focuses on identifying precursors or indicators of potential environmental changes and issues. 12. External environment: The external environmental factors are largely beyond the control of an organization, its success will depend to a very large extent on its adaptability to the environment. 13. PEST analysis: Political, Economic, Social, and Technological analysis. A technique of environmental scanning to analyze the influence of macro environmental factor on business organization. 14. Political environment: The form of government in position, its stability, its attitude towards business, its economic, industrial and trade policies, its tax policies, its encouragement towards investments, the philosophy of political parties etc. 15. Legal Environment: The legal environment serves to define what organization can and cannot do at a particular point of time. 16. Economic environment: The economic environment of business refers to overall state of the country/regions economy. Economic factors refer to the character and direction of economic system within which the firm operates. 17. Socio-cultural environment: It consists of factors like social traditions, values and beliefs, level and standards of literacy and education, ethical standards and state of society, extent of social satisfaction, conflict and cohesiveness.

18. Demographic environment: Factors such as population growth, age composition, family size, family life cycle , income levels, religion, tastes and habits, education levels, birth rate, death rate etc. 19. Technological environment: It includes the changes in technology which can alter the firms competitive position. Technological changes bring many new opportunities as ell as causing threat by making existing systems obsolete. 20. Globalization: It is the integration of national economics into a single international economy and business firms must consider the whole world as a source of competition, a source for parts and an opportunity for new customers. Globalization stress convergence of patterns of production and consumption and resulting homogenization of culture. 21. Privatization: it means liberalization and deregulation which unleash forces of competition and bringing the operations of the enterprise within the discipline of market forces. 22. Business intelligence: It refers to skills, technologies, applications and practices used to help a business firm to acquire a better understanding of its commercial text to support better business decision making. 23. Competitive intelligence: It refers to the informal monitoring of the firms competitors about their management, customers, markets, products, services, technologies, finances and other facilities. It is used as a tool to alert management to early warning of both threats and opportunities. 24. Internal Environment: It consists of firms own resources and capabilities. It means t he nature of technology possessed, patents and designs, financial and managerial resources etc. it also means companys capability to produce superior quality, manage supply chains and access to input. It consists of other intangible assets like companys name/image, foreign tie-ups etc. 25. SWOT analysis: it is a critical analysis and assessment of strengths and weaknesses, opportunities and threats in relation to the internal and external environmental factors affecting an entity. 26. GAP analysis: It is done by comparing current level of performance of the business firm with the previously set goals. The gap analysis process involved determining, documenting, and approving the variance between business requirements and current capabilities. 27. Value: It refers to the usefulness of the product or service and as a result its value to the customer. Value is the amount buyers are willing to pay for what a firm provides them. 28. Value chain: It is the chain of activities that is performed to add value to inputs in order to arrive at the final product. Products pass through all activities of the chain in order and at each activity the product gains some value. 29. Value chain analysis: It is a strategic managerial tool to assess and review the various business functions in which utility is added to the products or services. 30. Competitor Analysis: it is a through analysis of the competitive environment to provide insight into current and future characteristics of the competitors and their strategic moves, and deals with actions and reactions of individual firms within an industry or strategic group. 31. Strategic group: A strategic group is the group of firms in an industry following the same or similar strategies with similar resources.

32. Key success factors: A critical or key success factor is a key feature of an organization or its environment, which has substantial impact on its success. 33. Strategic positioning: It entails doing things differently from competitors in a way that delivers a unique type of value to customers, such as through a different set of features, a different array of services, or different logistical services. 34. Competency: It is defined as any knowledge, skill, set of actions or thought pattern that distinguishes reliably between superior and average performed, a competency is what superior performance do more and with better results that average performer on the job. 35. Core competence: A companys core competence is defined by that set of products, customer segments, processes and technologies in which one can build the greatest competitive edge. Core competence means resources and capabilities that serve as a source of competitive advantage for a firm over is competitors. 36. Competitive advantage: The competitive advantage for an organization means discovering the needs of the customers and then satisfying and even exceeding their expectations for the purpose of achieving the goals of the organization. 37. Strategic planning: It is a systematic and analytical approach which reviews the business as a whole in relation to its environment, to create a viable link between the organizations objectives and resources and its environmental opportunities. 38. Strategy Formulation: It is not a rational and continuous process. It is not a step by step process. Strategy formulation is event driven, not programmed; usually creative intuitive, adaptive and flexible process. 39. Corporate planning: It is concerned with determination of objectives treating the company as a whole. It develops means to achieve the companys overall objectives. 40. Long range planning: It is a systematic and formalized process concerned with directing and controlling future operations of an enterprise towards desired objectives for periods spreading generally over five or more years. 41. Contingency plan: it is plan to cope with such unforeseen consequences which mark deviatios from the strategic planning process. Such contingency plans are formulated in advance to take care of unknown events and unexpected challenges. 42. Strategic Option: It means the decision to select the strategic alternatives which is best suited for attaining the organizational objectives. 43. Strategic choice: The business firms face an almost infinite number of alternative strategies from which to choose. The strategic choice is the decision involves focusing on few alternatives, considering selection factors, evaluating the alternative against these criteria and making the actual choice. 44. Strategic Intent: It refers to the purpose the organization strives for. It is the framework within which firms operate, adopt a predetermined direction and attempt to achieve their goal. 45. Vision: The vision of the firm refers to the broad category of long-term intentions that it wishes to pursue. It refers to the aspirations of the business. It is a package of ideals and beliefs regarding the firms purpose and values that project an image of what the business will be in the future.

46. Mission: The mission of a business firm may be defined as the fundamental, unique purpose that sets it apart from other firms of its type. It indicates the nature and scope of business operations in terms of product, market and technology. It provides a formal statement to insiders and outsiders of what the company stands for its image and characters. 47. Objectives: These are the end results which an organization strives for, which are to be accomplished by the overall plan over a specified period of time. Objectives form the basis for functioning of an organization and seek to achieve by its existence and operations. 48. Goals: Goals are usually called as events or milestones. The goals of a business firm are not necessarily quantified, but they interpret the mission to the needs of different stakeholders, who might have conflicting interests. 49. Plan: Plan is directed towards achievement of specific objectives over a specified period of time. Plan is futuristic and involves formal rational process. 50. Policy: A policy is a guide which delimits action but does not specify time. Policy is the key administrative tool for effective implementation and execution of strategies. 51. Sustainability: It refers to a development process that improves economy society and ecology, to meet the needs and wants of the current generation, while maintaining or increasing the resources and productive capacities that are passed along to future generations. 52. Sustainable Growth: It is used to describe a view on growth which advocates that growth be limited to a relatively slow rate so that growth does not jeopardize the carrying capacity of the immediate physical environment. 53. Sustainable Competitive Advantage: A business strategy is powerful if it is capable of producing sustainable competitive advantage. For a business units competitive advantage to be sustainable, its resources must be valuable, scarce and difficult to imitate or substitute. 54. Impact analysis: It is a brain storming technique used to formulate strategies, after detailed analysis of its impact o the organization. 55. Situation Analysis: It is a technique helps in gathering, classifying, analysis and understanding of all necessary information for strategic planning. 56. Master strategy: it is firms basic plan for dealing the important elements in its life like change, growth and adoption. Master strategy sets broad goals of a firm. 57. Corporate Strategies: These strategies relate to individual divisions oriented toward a particular industry product or market, in a multi-product and multi-division organization. 58. Business Strategies: These strategies relate to individual divisions oriented toward a particular industry, product or market, in a multi-product and multi-division organization. 59. Functional Strategies: The functional level strategies further limited to the configuration of business variables falling with in the purview of particular function of an SBU. Functional strategies help in implementation of grand strategy by organizing and activating specific subunits of the company. 60. Competitive strategy: A competitive strategy is intended to achieve some form of competitive advantage for the firm. It aims to establish a profitable and sustainable position against the forces that determine industry competition. 61. Low-cost provider strategy: It aims at providing the same or better value to the customers of an organization at a low cost that its competitors. In effect, cost leadership aims at achieveing

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acceptable quality at the lowest possible cost, by opening up a sustainable cost gap over competitors. This strategy is lso called Overall Cost Leadership strategy. Differentiation Strategy: It attempts to make the product unique in terms of attributes which are desirable to the customer, including customer service. The object is to achieve some competitive advantage by marketing products, which perceived to be superior in the eyes of customers. Focus Strategy: A focus strategy is based on segmenting the market and targeting particular segments instead of trying to serve the entire market with a single product. The focus may be either cost focus or differentiation focus. Grand Strategy: The corporate level strategies are categorized into four categories ziv. Stability strategies, growth strategies, retrenchment strategies and combinations strategies, These strategies are also called as grand strategies, basic strategies or generic strategies Stability Strategy: It focuses on firms existing line or lines of business and attempts to maintain them. A stability emphasizes all efforts to be put to maintain existing level of performance. Growth Strategy: The growth strategies strive to keep up the growth of an organization. A firm implements this strategy by redefining the business either adding to the scope of activity or substantially increasing the efforts of the current business. Integrative Growth Strategies: These strategies are designed to achieve increase in sales, assets and profits. These strategies are achieved through horizontal integration and vertical integration. Horizontal integration: When two or more firms dealing in similar lines of activity combine together then horizontal integration takes place. Vertical integration: It refers to the integration of firms in successive stages in the same industry. It may be either backward integration or forward integration. Backward integration: It is a vertical integration in which the company expands backwards by diversification into supplying raw materials. Forward integration: It is a vertical integration in which down stream integration takes place to those businesses that sell eventually to the customers. Diversification: It means going into an operation which is either totally or partially unrelated to the present operations. Concentric diversification: In this form of diversification the new line of business will be related to the existing one. The firms enter into a new business activity which is linked to the firms existing business activity. Conglomerate Diversification: In this form, a firm established in one industry diversifies into another business which is unrelated industry. External growth Strategies: These are also called inorganic growth strategies, in which a firm intends to grow externally when it takes over the operations of another firm. Firms prefer external growth strategies for quick growth of market share, profits and cash flows. Merger: A merger refers to a combination of two or more companies into a single company either through absorption or consolidation. Takeover: A takeover generally involves the acquisition of a certain block of equity capital of a company which enables the acquirer to exercise control over the affairs of the company.

78. Joint Venture: It is a form of business combination in which two unaffiliated business firms contribute financial and /or physical assets, as well as personnel, to a new company formed to engage in some economic activity, such as the production of marketing a product. 79. Strategic Alliance: It is an arrangement or agreement under which two or more firms cooperate in order to achieve certain commercial objectives. 80. Franchising: It provides an immediate access to business operations and technology in profitable fields of operations. The concept of franchising is quire comprehensive and covers an extensive range of marketing and distribution arrangements for goods and services. 81. Licensing: A licensing agreement is a commercial contract whereby the licenser gives something of value to the licensee in exchange of certain performance and payments. 82. Retrenchment Strategies: These strategies are adopted when the enterprise is not doing well when an organizations survival is threatened and it is not competing effectively. These strategies are also called defensive strategies. 83. Turnaround: It refers to the measures which reverse the negative trends in the performance indicators of the company. This strategy emphasizes on improving internal efficiency and a failing company can be nursed back to health through a combination of efforts. 84. Sell off: In a strategic planning process, a company can take decision to concentrate on core business activities by selling off the non-core business divisions. It is also called hive-off. 85. Spin Off: A spin-off is adopted as a business strategy to separate business which doesnt comfortably merge with each other. 86. Liquidation: It involves the selling of the entire operation. Selling all of the companys assets, in parts, for their tangible worth is called liquidation. In liquidation, the owners interests are better served than in an inevitable bankruptcy. 87. Harvest: In this strategy, the firm reap maximum out of the existing firm without any additional investment being made. The company exits the industry once it has harvested the maximum possible returns it can. 88. Cost centre: Cost centre is the smallest organization as subunit for which separate cost allocation is attempted. It can be location, person or item of equipment. Cost centre managers have only control over costs. 89. Revenue Centre: It is a responsibility centre in which a manager is only held responsible for the level of revenue or outputs of a centre as measured I monetary terms, but not responsible for the costs of the goods or services that the centre sells. 90. Profit Centre: A profit centre is any sub-unit of an organization to which both revenues and costs are assigned, so that the profitability of the subunit may be measured. 91. Investment centre: In this form, the divisional manager is allowed some discretion about the amount of investment undertaken by the division and profit earned must be related to the amount of capital invested and performance is measured by return on capital employed. 92. Decision making: It means the thinking which results in the choice among alternative courses of action. 93. Zero base budgeting: Is a method of budgeting whereby all activities are re-evaluated each time a budget is formulated. It is a formalized system of budgeting for the activities of an enterprise as if each activity were being performed for the first time i.e. from zero-base.

94. Corporate social responsibility: It denotes the way the companies integrate the general social, environmental and economic concerns of the society into their own values. Strategies and operations in a transparent and accountable manner and thereby contribute to the creation of wealth and improvement in the standard of living of the society at large. 95. Corporate governance: It is a system by which business corporations are directed and controlled. It is concerned with establishment of a system whereby the directors are entrusted with responsibilities and duties in relation to the direction of corporate affairs. It is concerned with accountability of persons who are managing it towards the stakeholders. 96. Corporate culture: It is the strong levels of beliefs and assumption that are practiced by the members of an organization unconsciously as a style of functioning and keeping its business environment. 97. Synergy: it is the advantage to a firm gained by having existing resources which are compatible with new products or markets that the company is developing. It can be described as the 2+2>4 effect, where a firm looks for combined results that reflect a better rate of return than would be achieved by the same resources used independently as separate operations. 98. Business Portfolio: A business portfolio is the collection of strategic business units that makes up a corporation. An organization carrying on portfolio businesses should formulate a strategy that would build an effective mix of markets, products and thus achieve corporate objectives. 99. Strategic Business Unit: A SBU is normally defined as a division of the organization where the managers have control over their resources and direction over the deployment of resources within specified boundaries. 100. Star: Stars are the products that are rapidly growing with large market share. They earn high profits but they require substantial investment to maintain their dominant position in growing market. 101. Cash Cows: Cash Cows generate high cash returns, which can be sued to finance elsewhere in the business. Cash cows have a strong market position in the industry that has matured. 102. Question Marks: the question mark is also called as a problem child or wild cat. Question marks are the products/business whose relative market share is low but have high growth potential. These products require additional funds to improve their market share. 103. Dogs: products with low market share and limited growth potential are referred to as dogs. The prospects for such products are bleak. They provide a poor return on investment and not enough to achieve the organizations target rate of return. 104. Six Sigma: it is a statistical and problem solving methodology that is focused on variation and defect reduction. In statistical terms, reaching six sigma means that the process or product will perform with almost no defects. 105. Balanced scorecard: The objectives and measures view organizational performance from four perspectives: Financial, Customers, Internal business process, and Learning and growth. These four perspectives provided the framework for BSC. 106. Outsourcing: The outsourcing system allows companies to contract services that are not within the scope of their expertise, so that they can focus their time, money, and energy on their core competencies.

107. Strategic fit: Is developing strategy by identifying opportunities in the business environment and adapting resources and competences so as to take advantage of these. 108. Stretch: Is the leverage of the resource and competences of an organization to provide competitive advantage and or yield new opportunities. 109. Experience lens: Views strategy development as the outcome of individual and collective experience of individuals and the taken-for-granted assumptions. 110. Strategic Leader: Is an individual upon whom strategy development and change are seen to be dependent. 111. The learning organization is capable of continual regeneration from the variety of knowledge, experience and skills of individuals within a culture which encourages mutual questioning and challenge around a shared purpose or vision. 112. Intended strategy is an expression of desired strategic direction deliberately formulated or planned by managers. 113. Realized strategy is the strategy actually being followed by an organization in practice. 114. Strategic drift: Occurs when the organizations strategy gradually moves away from relevance to the forces at work in its environment. 115. Structural drivers: are forces likely to affect the structure of an industry, sector or market. 116. An industry: Is a group of firms producing the same principal product. 117. Convergence: is where previously separate industries begin to overlap in terms of activities, technologies, products and customers. 118. Barriers to entry are factors that need to be overcome by new entrant if they are to compete successfully. 119. Competitive rivals are organizations with similar products and services aimed at the same customer group. 120. Primary activities: Are directly concerned with the creation of delivery of a product or service. 121. Support activities help to improve the effectiveness or efficiency of primary activities. 122. The value system is the set of inter organizational links and relationships which are necessary to create a product or service. 123. Industry norms compare the performance of organizations in the same industry or sector against a set of agreed performance indicators. 124. Best in class benchmarking compares an organizations performance against best in class performance - wherever that is found. 125. Key rigidities are activities that are deeply embedded and difficult to change and out of line with requirements of new strategies. 126. Governance framework: Describes whom the organization is there to serve and how the purposes and priorities of the organization should be decided. 127. Stakeholders: Are those individuals or groups who depend on the organization to fulfill their own goals and on whom, in turn, the organization depends. 128. Stakeholder Mapping: Identifies stakeholder expectations and power and helps in understanding political priorities.

129. The ethical stance: Is the extent to which an organization will exceed its minimum obligations to stakeholders and society at large. 130. A mission statement: Is a generalized statement of the overriding purpose of an organization. 131. Corporate parents: The levels of management above that of the business units and therefore without direct interaction with buyers and competitors. 132. The Directional Policy: Position SBUs according to how attractive the relevant market is in which they are operating and the competitive strength of the SBU in that market. 133. No frills strategy: Combines a low price, low perceived added value and a focus on a price-sensitive market segment. 134. Equilibrium: Is a situation where each competitor contrives to get the best possible strategic solution for itself given the response from the other. 135. Suitability: Is concerned with whether a strategy addresses the circumstances in which an organization is operating the strategic position. 136. Acceptability: Is concerned with the expected performance outcomes of a strategy. 137. Feasibility: Is concerned with whether an organization has the resources and competences to deliver a strategy. 138. A functional structure: Is based on the primary activities that have to be undertaken by an organization such as production, finance and accounting, marketing, human resources and information management. 139. A Multidivisional structure: Is built up of separate divisions on the basis of products, services or geographical areas. 140. A Holding company: Is an investment company consisting of shareholdings in a variety of separate business operations. 141. A matrix structure is a combination of structures which could take the form of product and geographical divisions or functional and divisional structures operating in tandem. 142. A team based structure attempts to combine both horizontal and vertical coordination through structuring people into cross functional teams. 143. A project based structure is one where teams are created, undertake the work and are then dissolved. 144. Strategic planning style: The relationship between the centre and the business units is one of a parent who is the master planner prescribing detailed roles for departments and business units. 145. Financial control: The role of the centre is confined to setting financial targets, allocating resources, appraising performance and intervening to avert or correct poor performance. 146. Strategic control: Is concerned with shaping the behavior in business units and with shaping the context within which managers are operating. 147. Virtual organizations: Are held together not through formal structure and physical proximity of people. But by partnership collaboration and networking. 148. A Transnational Corporation: Combines the local responsiveness of the international subsidiary with the advantages available from co-ordination found in global product companies.

149. Reinforcing cycles: are created by the dynamic interaction between the various factors of environment, configuration and elements of strategy; they tend to preserve the status quo. 150. Data mining: Is about finding trends and connections in data in order to inform and improve competitive performance. 151. A business model: Describes the structure of product, service and information flows and the roles of the participating parties. 152. Diffusion is the extent and pace at which a market is likely to adopt new products. 153. Collaboration or Participation: In the change process is the involvement of those who will be affected by strategic change in the identification of strategic issues, the setting of the strategic agenda, the strategic decision making process or the planning of strategic change. 154. Intervention: Is the co-ordination of and authority over processes of change by a change agent who delegates elements of the change process. 155. Direction: Involves the use of personal managerial authority to establish a clear future strategy and how change will occur. 156. Coercion: Is the imposition of change or the issuing of edicts about change. 157. A change agent: Is the individual or group that effects strategic change in an organization. 158. Leadership is the process of influencing an organization in its efforts towards achieving an aim or goal. 159. Policies: are guidelines to decision-making. Policies tell people what they may or may not do. Objectives indicate the destination and policies provide the route. 160. Shared vision: Means that individuals from across an organization have a common mental image and a mutually supported set of aspirations that serve to unite their efforts. 161. Resources: Inputs into a firms production process including physical, human and material resources. 162. Purpose: Anything which an organization strives for. 163. Social Audit: A systematic evaluation of a companys activities in terms of their social impact. 164. Whistle-blowing: Reporting perceived unethical organizational practices to outside authorities. 165. Corporate Philanthropy: Charitable donations of company resources. 166. Altruism: Unselfish devotion to the interests of others. 167. ETOP: Environmental threat and opportunity profile. 168. Macro-environment: The general environment that affects all business firms. 169. Remote-environment: It comprises of factors that originate beyond and usually irrespective of, any single firms operating situation. 170. Ecology: The relationships among human beings and other living things and the air society and water that support them. 171. Switching costs: One-time costs that buyers of an industrys outputs incur if they switch from one companys product to another. 172. Exit barriers: Obstacles to leaving an industry. Exit barriers can be economic, strategic or emotional.

173. Global economy: A global economy is one in which goods, services, people, skills and ideas move freely across geographic boundaries. 174. Economies of scale: Refer to the decline in unit costs of a product or service that occurs as the volume of production per period of time increases. 175. Opportunities: Characteristics of the external environment that have the potential to help a firm achieve its important goals. 176. Threats: Characteristics of the external environment that may prevent the firm from achieving its important goals. 177. Weakness: A limitation or deficiency in one or more resources of competencies relative to competitors that impedes a firms effective performance. 178. Transible Assets: Assets which are visible, easy to identify and evaluate. 179. Intangible Assets: Assets which are largely invisible and difficult to quantify. 180. Resource based view: Each firm is endowed with a unique bundle of resources and organizational capabilities. It tries to develop competencies from those resources and when put to use effectively, these become the source of the firms competitive advantages. 181. Market development: It consists of marketing present products, often with only cosmetic changes to customers in related market areas by adding channels of distribution or by changing the content of advertising or promotion. 182. Product development: It involves the substantial modification of existing products or the creation of new but related products that can be marketed to current customers through established channels. 183. Consortia: Are defined as large interlocking relationships between businesses of an industry. 184. Tacit collusion: it exists when several firms in an industry cooperate tacitly to reduce industry output below the potential competitive level, thereby increasing prices above the competitive level. 185. Global Firm: A global firm plans, operates and coordinates its activities on a worldwide basis. 186. Global outsourcing: The use of worldwide suppliers, regardless of where they are located geographically, who are best able to provide the required output. 187. Greenfield venture: The most risky type of direct investment whereby a company builds a subsidiary from scratch in a foreign country. 188. Innovation: It is a new idea applied to initiating or improving a process product or service. 189. BCG Matrix: A method of evaluating businesses relative to the growth rate of their market and the organizations share of that market. 190. GE business screen: A method of evaluating business along two dimensions; industry attractiveness and competitive position; in general , the more attractive the industry and the more competitive the position, the more an organization should invest in a business. 191. Tall structure: A structure that has many hierarchical levels and narrow spans of control. 192. Flat structure: A structure that has a broad span of control and relatively few hierarchical levels.

193. Span of control: The number of employees reporting directly to a given manager. 194. Inventory: Goods the organization keeps on hand for use in the production process. 195. EOQ: Economic Order Quantity is an inventory management technique that is designed to minimize the total of ordering and holding costs for inventory items. 196. Just in Time: An inventory control system that schedules materials to arrive precisely when they are required on a production line. 197. Total quality management: is a strategic commitment by top management to change its whole approach to business to make quality a guiding factor in everything it does. 198. Empowerment: Takes place when employees are properly trained, provided with all relevant information and the best possible tools, fully involved in key decisions and fairly rewarded for results. 199. Leverage: A companys long term debt in relation to equity in its capital structure. The larger the long-term debt the higher the leverage. 200. New product development: The development of original products, product improvements, product modifications and new brands through the firms own R & D efforts.

Questions
Unit I: Strategic management - Introduction to strategic management, Strategic decision making, Strategic management process; Difference between Policy, Strategy and Tactics.

1. 2. 3. 4.

Define and explain the word strategy What are the key elements of business strategy? Briefly explain the steps involved in the process of strategic management. Strategic management process encompasses three phases Strategy formulation, implementation, evaluation and control. Discuss. 5. Differentiate between strategy and tactics.
Unit II: Strategic Intent - Vision, Mission & goals, Preparation of Vision & Mission Statement; Organisational objectives, Hierarchy of objectives & strategies, setting of Objectives. 1. What is a vision statement? How does it differ from mission statement? 2. Discuss in brief the elements of a meaningful mission statement of a corporate organization. 3. Why do firms have objectives? 4. Define the terms goals, objectives, plans and policies. 5. Define sustainability and sustainable growth. Unit III: Internal & Resource analysis - SWOT analysis, Resource analysis- a) Organisation capabilities & competitive advantage b) Value chain analysis; Concept of synergy -Core competency, Competitive analysis - Interpreting the five forces model, Competitors analysis. 1. Briefly state the purpose of SWOT analysis. 2. Explain the concept of value chain analysis. 3. Explain the concept of core competency. 4. How a firm can create and sustain competitive advantage? 5. What are the five competitive forces?

Unit IV: External analysis - Environment analysis a)Components of External environment b)Components of Internal environment c)Environmental scanning. Industry Analysis a) A Framework for industry analysis b)Michael Porters Analysis c)Usefulness of industry analysis. 1. List the environmental factors that affect an organizations strategy. 2. Briefly explain the concept of Environmental Scanning. 3. What are the steps in PEST analysis? 4. Describe business intelligence and competitive intelligence. 5. Describe the global environmental factors. Unit V: Strategy Formulation (Case study) - Corporate level strategy: A) Growth-Concentration, Horizontal, Vertical, B) Diversification- Concentric, conglomerate. C) Expansion through Cooperation; Merger, Acquisitions, Joint ventures & strategic alliances D) Stability -Pause/proceed with caution, No change, Profit strategies. E) Retrenchment Turnaround, Captive Company Strategy, Selling out Bankruptcy, Liquidation. 1. What is concentration strategy? 2. Describe integration strategies. 3. Describe the terms Merger, Acquisition and JV. 4. What is turnaround strategy? 5. What are the basic reasons for diversification of a firm? Unit VI: Business Level strategy & Functional level strategy - A) Business Level strategy- Competitive advantage, Low cost strategy, Differential strategy and Focus strategy, B) Functional level strategy Operations strategy, Marketing strategy, Financial strategy, Human Resource strategy. 1. What is meant by corporate level strategy? 2. What is meant by business unit level strategies? 3. Describe Porters generic strategies. 4. Describe the term Competitive Advantage. 5. Describe the term operations strategy. Unit VII: Portfolio Approach & analysis - a)Portfolio analysis, advantages & disadvantages, b)BCG Matrix c) General Electrics Business Screen, d)Life cycle or Arthur D Litt le matrix, e) Balance scorecard. 1. What is the meaning of business portfolio? 2. What is BCG matrix? 3. What is GE matrix? 4. Describe the Arthur D Little matrix. 5. Describe the concept of Balance scorecard. Unit VIII: Global strategy - Reasons for globalization, Global expansion strategy, International Portfolio Analysis; Market entry strategy, International strategy & competitive advantage. 1. Describe the term Globalization. 2. What are the basic reasons for a firm to go for global markets? 3. Describe various entry strategies a firm may employ while going global. 4. How do companies evaluating potential markets? 5. Describe the Ansoffs matrix. Unit IX: Strategic Implementation - 7 s framework- (separate variables in details), Strategic Business Unit (SBUS), Merits & Demerits of SBU; Leadership, Power & organisation culture. 1. Explain the concept of SBU. 2. What are the merits of SBU? 3. What are the demerits of SBU? 4. Discuss the McKinseys 7s framework. 5. Discuss the concept of MBO & MBE.

Unit X: Strategic evaluation, Control & continuous Improvement - Establishing strategic evaluation & control; The quality imperative: continuous Improvement to build customer value, Fundamentals of Six sigma approach for continuous improvement. 1. Describe the control system for evaluation of strategy. 2. Identify the typical problems encountered in designing and managing control systems. 3. What are the steps involved in process of Management control system? 4. Describe the concept of Six Sigma. 5. Describe the concept of customer value.