Strategic management

1. Solve any two

A.Define strategic management

Strategic management analyses the major initiatives taken by a company's top management on behalf of owners, involving resources and performance in external environments. It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Recent studies and leading management theorists have advocated that strategy needs to start with stakeholders expectations and use a modified balanced scorecard which includes all stakeholders.

B. with a clean and neat diagram explain the importance of business process integration and the roles and responsibilities of each department?

2.A. What do you mean by pestle and sca analysis

PEST analysis "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.

Composition
Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and

therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and lesswilling workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers). Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation. Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones. Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.

Applicability of the Factors

The model's factors will vary in importance to a given company based on its industry and the goods it produces. For example, consumer and B2B companies tend to be more affected by the social factors, while a global defense contractor would tend to be more affected by political factors. Additionally, factors that are more likely to change in the future or more relevant to a given company will carry greater importance. For example, a company which has borrowed heavily will need to focus more on the economic factors (especially interest rates). Furthermore, conglomerate companies who produce a wide range of products (such as Sony, Disney, or BP) may find it more useful to analyse one department of its company at a time with the PESTEL model, thus focusing on the specific factors relevant to that one department.

Sustainable Competitive Advantage(SCA) Sustainable competitive advantage is the focal point of your corporate strategy. It allows the maintenance and improvement of your enterprise's competitive position in the market. It is an advantage that enables business to survive against its competition over a long period of time.

Hypercompetition is a key feature of the new economy. New customers want it quicker, cheaper, and they want it their way. The fundamental quantitative and qualitative shift in competition requires organizational change on an unprecedented scale. Today, your sustainable competitive advantage should be built upon your corporate capabilities and must constantly be reinvented. Distinctive and Reproducible Capabilities The opportunity for your company to sustain your competitive advantage is determined by your capabilities of two kinds distinctive capabilities and reproducible capabilities - and their unique combination you create to achieve synergy. Distinctive capabilities are the basis of your competitive advantage. According to the new resource-based view of the company, sustainable competitive advantage is achieved by continuously developing existing and creating new resources and capabilities in response to rapidly changing market conditions. Your distinctive capabilities - the characteristics of your company which cannot be replicated by competitors, or can only be replicated with great difficulty - are the basis of your sustainable competitive advantage. Distinctive capabilities can be of many kinds: patents, exclusive licenses, strong brands, effective leadership, teamwork, or tacit knowledge. Reproducible capabilities are those that can be bought or created by your competitors and thus by themselves cannot be a source of competitive advantage. Many technical, financial and marketing capabilities are of this kind. Your distinctive capabilities need to be supported by an appropriate set of complementary reproducible capabilities to enable your company to sell its distinctive capabilities in the market it operates.

B.With an example of your choice explain the importance of Michael porters five forces model
Five Forces Analysis assumes that there are five important forces that determine competitive power in a situation. These are:1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are. 2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, they are often able to dictate terms to you. 3. Competitive Rivalry: What is important here is the number and capability of your competitors if you have many competitors, and they offer equally attractive products and services, then youll most likely have little power in the situation. If suppliers and buyers dont get a good deal from you, theyll go elsewhere. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. 4. Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power. 5. Threat of New Entry: Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favourable position and take fair advantage of it Importance: Five Forces Model Porter's five forces determine a company's competitive environment, which affects profitability. The bargaining power of buyers and suppliers affect a small company's ability to increase prices and manage costs, respectively. For example, if the same product is available from several suppliers, then buyers have bargaining power over each supplier. However, if there is only one supplier for a particular component, then that supplier has bargaining power over its customers. Low-entry barriers attract new competition, while high-entry barriers discourage it. For example, opening a home-cleaning business is simple, but starting a manufacturing company is considerably more difficult. Industry rivalry is likely

to be higher when several companies are vying for the same customers, and intense rivalry leads to lower prices and profits.

3. What do you mean by productivity? explain any three productivity techniques as one of the strategic fit for enhancing productivity at the shop floor level
Productivity is a measure of the efficiency of production. Productivity is a ratio of production output to what is required to produce it (inputs). The measure of productivity is defined as a total output per one unit of a total input. JIDOKA Jidoka is a Toyota concept aimed at describing the man-machine interface such that people remain free to exercise judgement while machines serve their purpose. Machine jidoka incorporates fail-safe devices on machinery to prevent. Human jidoka allows operators to stop the process in the event of a problem. Workers have the ability to stop the line if: equipment malfunctions; defects are found; work delays occur; or materials or parts shortages occur.

The following three principles are central to the jidoka way of working. Do not make defects. Do not pass on defects. Do not accept defects. Jidoka has two separate meanings automation and autonomation. Automation refers to changing from a manual process to a mechanised process. The problem with this is that there is often no device for stopping the process if a malfunction occurs. Because this process can lead to a large number of defects in the event of a machine malfunction it is considered unsatisfactory by Japanese manufacturers. Autonomation, a term coined by Toyota, refers to automation that automatically controls defects. Jidoka is often referred to as automation with a human mind. Autonomation technically refers to a technique for detecting and correcting production defects that combines a mechanism for detecting defects with another for stopping the line or machine when defects occur. HEIJUNKA Heijunka is the Toyota planning system, which focuses on achieving consistent levels of production. Toyota officially defines heijunka as distributing the production of different [body types] evenly over the course of a day It incorporates the principles of line balancing by attempting to equate workloads, levelling demand out by creating an inventory

buffer and replenishing that buffer. For example, more advanced lean plants are using loadlevelling boxes to visually represent the levelled schedule. Heijunka is a key operating concept of just-in-time (JIT) manufacturing systems. In practice, it involves load levelling and line balancing, as well as achieving uniform scheduling of production so that as one operation ends the next operation is ready to begin. If perfect heijunka is attained in a JIT manufacturing system, a uniform or rhythmic flow of mixedmodel production is possible. Although the levelling aspect of heijunka typically results in more even production and process workloads, the underlying rule is essentially the rule of heijunka an even work load for all employees. In heijunka, parts must also be supplied to the assembly process in very small lots without delays. One of its benefits is that the levelled load benefits upstream parts-fabrication processes and parts suppliers too, who are freed from having to maintain high capacities solely to cope with large lots in downstream processes. Heijunka also has the capability of reducing lead times by minimising time losses due to changeovers. Multiple products are assembled simultaneously instead of first dedicating the line to one product then changing the entire line to produce another. The entire line is seldom changed over between products. Just-In-Time (JIT) A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity. In the factory, JIT continually focuses attention on waste and in particular on the time spent on all aspects of the manufacturing process. The goal is to minimise the standard lead-time by adopting a keep-it-moving approach to manufacturing. This will not be achieved by reacting to latest developments; it requires careful planning, testing and agreement as to how all those involved with both manufacturing and support functions will act. The basic aim of JIT in a factory is to: reduce lead times minimise inventory reduce the defect rate to zero and accomplish all of the above at minimum cost

There are three essential ingredients to effective manufacturing excellence through JIT: JIT manufacturing techniques, which aim to promote a rapid response to customer demand while minimising inventory for example, pull systems, short change-over times, small transfer batch sizes and plant layouts that support short movements of materials; a total quality culture, an approach to running the organisation which pursues excellence in both the product and every area of the business, including customer service, purchasing, order taking, accounting, maintenance, design, etc.; and

 people involvement, that is the involvement of all employees in the development of the organisation through its culture and its manufacturing and other business processes.

4. What do you mean by scm? And how do you correlate this with customer relationship management for creating brand for the product
Supply chain management (SCM) is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Customer relationship management (CRM) is a widely implemented model for managing a companys interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, service and retain those the company already has, entice former clients to return, and reduce the costs of marketing and client service. For any business to extract maximum benefit from its CRM deployment, it is important that it be linked to the back processes. Supply chain management, when connected via business intelligence tools with CRM, can throw light on many hitherto unknown aspects of a company's business processes. The insight offered by CRM into customer behavior and demand patterns can be made use of to streamline manufacturing and distribution of products as managed by the supply chain function. An important feature to understand when deploying CRM is that it can only provide information that has to be used both at the front end and back end to improve processes. Customer segmentation information can be used to structure the purchase of raw materials, scheduling manufacturing, managing inventory, and overall running the supply chain. A business can obtain major cost savings by acting upon information from CRM systems. Dell Dell is one of the most successful and profitable computer corporations in history. It has been known for its innovative customer service and product custom configuration. As it continues to grow, it is faced with the challenge of how to maintain its customer relationships and inventory management, while continuing to meet the demands and requirements of its customers. Dells collaboration with other computer software companies has allowed it to become a leader in customer relationship management (CRM) and supply-chain management (SCM). CRM-SCM integration strives to satisfy and promptly deliver products to customers, ensuring availability of the product and maintaining profitability of the manufacturer. There

are many lessons learned from Dells experience. These lessons can be transferred to other companies in the industry. Ensure better customer service is offered.

Dell has become an industry leader in service and reliability. Dell has used CRM to its advantage. This has instilled trust into their customers. By custom-building a computer that the customer desires, this has created a very strong relationship with the customers. Implement technology in a phased fashion

Dell tested key tasks in each of its regions prior to deployment. It set-up mock environments to develop, test, and support systems in patches without disrupting the live version. Dell was able to bring on one piece of the system at a time. As one part became more efficient, then Dell added other components in stages. Dell ensured that each stage of the process performed will and allowed for future growth before rolling out the entire system. This minimized the risk, while at the same time increasing efficiency. Extend the connection from the customer to the supplier

Dell was able to extend its build-to-order model from suppliers to the customer while continuing to maximize operational efficiency and customer satisfaction. Customers were able to save money while being able to purchase a customized machine because Dell passed on the savings, which resulted from efficient inventory management, no excess inventory or inventory shortages. It was able to share, in real-time, information with suppliers about customer demands and buying patterns.