Strategic management Unit 1 lesson 1 Definition of strategy according to Chandle strategy is the determination of the basic long term

rm goals and objectives of an enterprise and the adoption of the course of action and the allocation of resources necessary for carrying out these goals Function of strategy management 1. 2. 3. 4. Environment scanning Strategy formulation vision, mission, SWOT, long term objectives and alternative strategy Strategy implication annual objectives, policies, motivate employees, resource allocation Strategy evaluation & control review internal & external environment, measure performance and corrective action

Concept of corporate strategy Company growth and competition was based on the ability to corner industrial licenses and letters of intent from the government. License becomes weapon in the hand of the industrial houses to be used in a manner beneficial for them. Active preemption: business houses grabbed a disproportionately large share of licenses, either directly or through some proxy. Fully secure that no other competitors is going to enter the market. Passive preemption: business houses maintained a large number of dormant companies on whose name they got out licenses and thus prevented anyone else from entering the market. Creation of shortage: artificial scarcity of commodity to increase the prices Joint venture for technological up gradation: Level of strategy o Corporate strategy; strategy on overall business units of organization. Geographical coverage, diversity of product or business units and how resources are to be allocated between the different units of the organization o Business level strategy: compete successfully in particular markets. Strategic business unit. o Functional strategy: strategy for each function in organization like operation, finance, marketing, human resource etc.

Corporate goals and objectives formulation strategy Corporate goal and objective includes profitability, growth of sales, utilization of resource (ROI) and market leadership. Hierarchy of objectives

Long range and short range objectives Multiplicity of objectives objectives based upon level of organization Network of objectives interrelated and inter dependent.

Types of objectives Financial objectives Strategic objectives

Lesson 2 company environment Corporate responsibility is more commonly addressed by CSR, in addition to its shareholders; organization interacts with employees, consumers, public authorities, nongovernmental organization Rating opportunity Evaluation of opportunity is based on expected reaction from competitors, degree of control possible over prices, costs, distribution channels, marketing, production costs, ROI, period of time before reaching BEP, pay back period etc. Bench marking: is the process of comparing the business processes and performance matrices including cost, cycle time, productivity, quality etc. o Process benchmarking o Financial benchmarking o Performance benchmarking o Benchmarking from an investor perspective o Product benchmarking o Strategic benchmarking o Functional benchmarking single function on improving the operation o Best in class benchmarking leading competitor o Operational benchmarking staffing and productivity flow (procedures performance) Benchmarking methodology o Identify business problem area o Identify other industries that have similar processes o Identify organizations that are leaders in these areas o Survey companies for measures and practices o Visit the best practice companies to identify leading edge practices o Implement new and improves business practices Balance score card The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business

activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance

The Learning & Growth Perspective This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organization, people -- the only repository of knowledge -- are the main resource The Business Process Perspective This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission). The Customer Perspective Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good. The Financial Perspective Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough handling and processing of financial data.

Company environment and resources Environment = external environment (PEST) + internal environment (Strength and weakness) Resource = tangible resource + intangible resource o Tangible (finance-borrowing capacity, organizational structure, physical location o Intangible = innovation scientific capabilities, reputation with customers & suppliers, technology Resource based view = economic rent emphases on opportunity and competence. Opportunity and competence. Opportunity is assessed by the resource that the firm has. o Porter resource based theory sustainable competitive advantage

Strategy and personal value Personal value system is a set of consistent ethic value. Business ethics - Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Differences in values often perceived as unethical lies in differences in values between business people and key stakeholders. Differences in values can make it difficult for one group to people to understand anothers actions. Moral relativism - Moral relativism is the philosophical theory that morality is relative, that different moral truths hold for different people. It comes in two forms: ethical subjectivism and cultural relativism. Ethical subjectivism holds that morality is relative to individuals; cultural relativism holds that it is relative to culture. Both deny the existence of moral absolutes, of objective moral truths that hold for all people in all places at all times. According to moral relativism, it makes no sense to ask the abstract question whether a given act is good or bad. According to moral relativism, there is no goodness or badness in the abstract; there is only goodness or badness within a specified context. An act may thus be good for one person but bad for another, or good in one cultural setting but bad in another, but cannot be either good or bad full stop.

Strategic and social responsibility

Unit II Lesson 3 corporate planning and vision of firm Corporate strategic planning

Systematic process of determining goals to be achieved in the foreseeable future. It consists of: (1) Managements fundamental assumptions about the future economic, technological, and competitive environments. (2) Setting of goals to be achieved within a specified timeframe. (3)Performance of SWOT analysis. (4) Selecting main and alternative strategies to achieve the goals. (5) Formulating, implementing, and monitoring the operational or tactical plans to achieve interim objectives.

Mission
A written declaration of an organization's core purpose and focus that normally remains unchanged over time. Properly crafted mission statements (1) serve as filters to separate what is important from what is not, (2) clearly state which markets will be served and how, and (3) communicate a sense of intended direction to the entire organization. A mission is different from a vision in that the former is the cause and the latter is the effect; a mission is something to be accomplished whereas a vision is something to be pursued for that accomplishment. Also called company mission, corporate mission, or corporate purpose.

Lesson 4 corporate planning processes A basic management function involving formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. The planning process (1) identifies the goals or objectives to be achieved, (2) formulates strategies to achieve them, (3) arranges or creates the means required, and (4) implements, directs, and monitors all steps in their proper sequence. Corporate planning Hierarchical levels of planning Strategic objectives for top management or corporate mission Business process objectives for SBUs Individual objectives for departments individual manager (performance appraisal, rewards and consequences)

Setting objectives Top down objectives Bottom up objectives Balance the objectives based upon levels of importance given to each department Multiplicity of objective objectives list should be short Theme for objectives use single theme ex: increase sale by 20% next year

Use result oriented objectives Quantify the objectives customer satisfaction should be reaching to 90 % by this year end Network objectives Make them challenging but attainable SMART Formulation o Specific: clearly stated with factual description o Measurable against concrete criteria o Achievable o Realistic scope should fit the boundary of the business o Timely Role of planning business planning provide the overall direction to the organization

Corporate strategic planning process 1. Specify objectives 2. Generate strategies 3. Evaluate strategies 4. Monitor result

Unit III Environmental analysis of firm Environment scanning model Scanning the threats and opportunities Evaluating or ranking of the issues and trends according to their importance to current or planned operations Forecast the current trends using forecasting techniques Monitoring Competitive environment analysis Competitive profiling involves creating a simple profile of how products and processes match up to what the market wants and what competitors can offer. o Perceptual mapping mind mapping o Strategic group analysis A strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies. For example, the restaurant industry can be divided into several strategic groups including fast-food and fine-dining based on variables such as preparation time,

pricing, and presentation. The number of groups within an industry and their composition depends on the dimensions used to define the groups
Use of Strategic Group Analysis This analysis is useful in several ways: Helps identify who the most direct competitors are and on what basis they compete. Raises the question of how likely or possible it is for another organization to move from one strategic group to another. Strategic Group mapping might also be used to identify opportunities. Can also help identify strategic problems.

Five forces model

The threat of the entry of new competitors Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by incumbents, the abnormal profit rate will tend towards zero (perfect competition). The existence of barriers to entry (patents, rights, etc.) The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter and non-performing firms can exit easily. Economies of product differences Brand equity Switching costs or sunk costs Capital requirements Access to distribution Customer loyalty to established brands Absolute cost Industry profitability; the more profitable the industry the more attractive it will be to new competitors. The threat of substitute products or services The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives: Buyer propensity to substitute Relative price performance of substitute

Buyer switching costs Perceived level of product differentiation Number of substitute products available in the market Ease of substitution. Information-based products are more prone to substitution, as online product can easily replace material product. Substandard product Quality depreciation The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes. Buyer concentration to firm concentration ratio Degree of dependency upon existing channels of distribution Bargaining leverage, particularly in industries with high fixed costs Buyer volume Buyer switching costs relative to firm switching costs Buyer information availability Availability of existing substitute products Buyer price sensitivity Differential advantage (uniqueness) of industry products RFM Analysis The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices for unique resources. Supplier switching costs relative to firm switching costs Degree of differentiation of inputs Impact of inputs on cost or differentiation Presence of substitute inputs Strength of distribution channel Supplier concentration to firm concentration ratio Employee solidarity (e.g. labor unions) Supplier competition - ability to forward vertically integrate and cut out the BUYER Ex.: If you are making biscuits and there is only one person who sells flour, you have no alternative but to buy it from him.

Assessing internal environment through functional approach and value chain

Value chain A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of the independent activity's value. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. A diamond cutter, as a profession, can be used to illustrate the difference of cost and the value chain. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business, e.g. ISO 9001.

Requirements of value chain

Coordination and collaboration; Investment in information technology; Changes in organizational processes; Committed leadership; Flexible jobs and adaptable, capable employees; A supportive organizational culture and attitudes;

Activities

The value chain categorizes the generic value-adding activities of an organization. The "primary activities" include: inbound logistics, operations (production), outbound logistics, marketing and sales (demand), and services (maintenance). The "support activities" include: administrative infrastructure management, human resource management, technology (R&D), and procurement. The costs and value drivers are identified for each value activity. Industry Level An industry value chain is a physical representation of the various processes that are involved in producing goods (and services), starting with raw materials and ending with the delivered product (also known as the supply chain). It is based on the notion of value-added at the link (read: stage of production) level. The sum total of link-level value-added yields total value. The French Physiocrat's Tableau conomique is one of the earliest examples of a value chain. Wasilly Leontief's Input-Output tables, published in the 1950s, provide estimates of the relative importance of each individual link in industry-level value-chains for the U.S. economy. Identifying critical success factors Critical success factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of a company or an organization. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement. "Critical success factors are those few things that must go well to ensure success for a manager or an organization, and, therefore, they represent those managerial or enterprise area, that must be given special and continual attention to bring about high performance. CSFs include issues vital to an organization's current operating activities and to its future success."

Lesson 6 internal analysis of firm SWOT SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. A SWOT analysis must start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strengths: characteristics of the business, or project team that give it an advantage over others Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others Opportunities: external chances to improve performance (e.g. make greater profits) in the environment Threats: external elements in the environment that could cause trouble for the business or project

PESTLE

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 less-willing 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.

Core competence
A core competence is the result of a specific unique set of skills or production techniques that deliver value to the customer. Such competences empower an organization to access a wide variety of markets. Executives should estimate the future challenges and opportunities of the business in order to stay on top of the game in varying situations

A core competency is a concept in management theory originally advocated by CK Prahalad, and Gary Hamel, two business book writers. In their view a core competency is a specific factor that a business sees as being central to the way it, or its employees, works. It fulfills three key criteria:
It is not easy for competitors to imitate. It can be leveraged widely to many products and markets. It must contribute to the end consumer's experienced benefits.

A core competency can take various forms, including technical/subject matter know-how, a reliable process and/or close relationships with customers and suppliers. It may also include product

development or culture, such as employee dedication, best Human Resource Management (HRM), good market coverage etc. Core competencies are particular strengths relative to other organizations in the industry which provide the fundamental basis for the provision of added value. Core competencies are the collective learning in organizations, and involve how to coordinate diverse production skills and integrate multiple streams of technologies. It is communication, an involvement and a deep commitment to working across organizational boundaries. Few companies are likely to build world leadership in more than five or six fundamental competencies. For an example of core competencies, when studying Walt Disney World - Parks and Resorts, there are three main core competencies:
Animatronics and Show Design Storytelling, Story Creation and Themed Atmospheric Attractions Efficient operation of theme parks

Implication of core competencies

Organizational competencies fit concept

Identification of organizational competencies is essential in determining how to use them. Organizational competencies are those competencies that result in the long term competitive success of the organization. List of organizational competencies needed to provide the products to consumer List of organization competencies with respect to quality and services demand by consumer Listing the organizational competencies that enable to provide product characteristics or service attributes so as to favour consumer buying decision Cost advantage over the competitor price Core competencies stretch concept Stretch concept depends up on the business process but in fit concept is depend upon on product and market. Concentrating resource convergence and focus Accumulating resource extracting and borrowing Complementing resource blending and balancing ex: technology integration, functional integration and new product imagination Conserving resources recycling, co-opting (join hands with potential competitors to fight a common enemy) and shielding (reduce exposure to unnecessary risks and use our competitors strength) Recovering resources expediting success (expensive resource should be reclaimed as soon as possible) Stakeholders expectation

 Quality of investment goal of maximizing stockholders wealth and providing shareholders with

an adequate rate of return Return on equity Net profit / stockholders equity Price earning ration measure the amount investors are willing to pay per of profit PER = market price per share / earnings per share Organizational risk organization is primarily interested with the risk and attached to the borrowings and the competence with which the borrowings are managed. Profitability Return on invested capital = net profit / invested capital Cash flow current ratio and inventory turnover Social cost corporate social responsibility Marketing capability Technology capability of the firm Strategic business alignment capability

Scenario planning Scenario planning looks at whats going to happen tomorrow Scenario planning may involve aspects of Systems thinking, specifically the recognition that many factors may combine in complex ways to create sometime surprising futures (due to non-linear feedback loops). The method also allows the inclusion of factors that are difficult to formalize, such as novel insights about the future, deep shifts in values, unprecedented regulations or inventions. Systems thinking used in conjunction with scenario planning lead to plausible scenario story lines because the causal relationship between factors can be demonstrated. In these cases when scenario planning is integrated with a systems thinking approach to scenario development, it is sometimes referred to as structural dynamics. 1. Identify and analyze the organizational issues that will provide the decision focus 2. Specify the key decision factors 3. Identify and analyze the key environmental forces 4. Establish the scenario logics 5. Select and elaborate the scenarios 6. Interpret the scenarios for their decision implications

UNIT IV Lesson strategy formulation Lesson strategy formulation

Generic strategies

1. Cost Leadership. The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost. Factories are built and maintained, labor is recruited and trained to deliver the lowest possible costs of production. 'cost advantage' is the focus.
2. Differentiation

Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin. 3. Focus or Niche strategy. The focus strategy is also known as a 'niche' strategy. Where an organization can afford neither a wide scope cost leadership nor wide scope differentiation strategy, a niche strategy could be more suitable. Here an organization focuses effort and resources on a narrow, defined segment of a market. Competitive advantage is generated specifically for the niche.

Grand strategy Corporate level strategies are known as grand strategies.

Corporate strategy vision, corporate goals Business unit strategy mission, business goals, competencies Functional strategy goals of each department

Lesson 8 strategies of leading companies Please read this chapter from the book

Unit V Lesson 9 tools of strategic planning and evaluation Competitive cost advantage This strategy emphasizes on efficiency, by producing high volumes of standardization products, the firm hopes to take advantage of economies of scale and experience curve effects. For example close supervision of labour, tight cost control, incentives based on quantitative target, product designed for ease of manufacture etc. Learning curve Learning curves graphically portray the costs and benefits of experience when performing routine or repetitive tasks. Also known as experience curves, cost curves, efficiency curves, and productivity curves, they illustrate how the cost per unit of output decreases over time as the result of accumulated workforce learning and experience. That is, as cumulative output increases, learning and experience cause the cost per unit to decrease. Experience and learning curves are used by businesses in production planning, cost forecasting, and setting delivery schedules, among other applications.

An 80 percent learning curve is standard for many activities and is sometimes used as an average in cost forecasting and production planning. An 80 percent learning curve means that, for every doubling of output, the cost of new output is 80 percent of prior output. As output doubles from one unit to two units to four units, etc., the learning curve descends quite sharply as costs decrease dramatically. As output increases, it takes longer to double previous output, and the learning curve flattens out. Thus, costs decrease at a slower pace when cumulative output is higher.

BCG matrix To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis of their relative market shares and growth rates.

Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
Discounted cash flow analysis - discounted cash flow (DCF) analysis is a method of valuing a

project, company, or asset using the concepts of the time value of money. All future cash flows are estimated and discounted to give their present values (PVs) the sum of all future cash flows, both incoming and outgoing, is the net present value (NPV), which is taken as the value or price of the cash flows in question. Benefit cost ratios - A benefit-cost ratio (BCR) is an indicator, used in the formal discipline of costbenefit analysis that attempts to summarize the overall value for money of a project or proposal. A BCR is the ratio of the benefits of a project or proposal, expressed in monetary terms, relative to its costs, also expressed in monetary terms. All benefits and costs should be expressed in discounted present values. Sensitivity analysis - Sensitivity analysis (SA) is the study of how the variation (uncertainty) in the output of a statistical model can be attributed to different variations in the inputs of the model .Put another way, it is a technique for systematically changing variables in a model to determine the effects of such changes. Analyzing the risk Exit criteria - risk exposure for the risks to the project are at or above the level of acceptable for the project

Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off.

Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share. Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership,

Lesson 10 strategy implementation Various approaches to implementation of strategy Strategic control approach
Strategy balance Policies Capital allocations Performance assessment Establishment & infrastructure Agreed business plan

1. Factors affecting organizational design

Organizational structure and strategy Size on structure Information processing perspective on structure

Vertical information linkages Horizontal information linkages External environment on structure People on structure New developments changing in the nature of business, social structure and technology are bringing in new aspects into organizational design. Cellular manufacturing - Cellular Manufacturing is based upon the principals of Group Technology, which seeks to take full advantage of the similarity between parts, through standardization and common processing. In Cellular Manufacturing systems machines are grouped together
according to the families of parts produced. The major advantage is that material flow is significantly improved, which reduces the distance travelled by materials, inventory and cumulative lead times.

2. Organizational culture
Organizational culture is defined as A pattern of shared basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration" that have worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems Ravasi and Schultz (2006) state that organizational culture is a set of shared mental assumptions that guide interpretation and action in organizations by defining appropriate behavior for various situations. External cultural and social influences National and regional Internal cultural and social influences

3. Matching organization structure with strategy 4. McKinseys 7 s Model McKinsey 7S Framework is a management model developed by well-known business consultants Robert H. Waterman, Jr. and Tom Peters (who also developed the MBWA-- "Management By Walking Around" motif, and authored In Search of Excellence) in the 1980s. This was a strategic vision for groups, to include businesses, business units, and teams. The 7S are structure, strategy, systems, skills, style, staff and shared values. The model is most often used as a tool to assess and monitor changes in the internal situation of an organization.

The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. Whatever the type of change restructuring, new processes, organizational merger, new systems, change of leadership, and so on the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration.

5. Strategic control process

Premise controls - "Premise control has been designed to check systematically and continuously

whether or not the premises set during the planning and implementation process are still valid. It involves the checking of environmental conditions. Premises are primarily concerned with two types of factors: Environmental factors (for example, inflation, technology, interest rates, regulation, and demographic/social changes). Industry factors (for example, competitors, suppliers, substitutes, and barriers to entry) Implementation controls - "Implementation control is designed to assess whether the overall strategy should be changed in light of unfolding events and results associated with incremental steps and actions that implement the overall strategy. Strategic surveillance - strategic surveillance is designed to monitor a broad range of events inside and outside the company that are likely to threaten the course of the firm's strategy." Special alert control - "A special alert control is the need to thoroughly, and often rapidly, reconsiders the firm's basis strategy based on a sudden, unexpected event." The analysts of recent corporate history are full of such potentially high impact surprises (i.e., natural disasters, chemical spills, plane crashes, product defects, hostile takeovers etc.). 6. DU Ponts control model Duponts model is a technique that can be used to analyze the profitability of a company using traditional performance management tools. To enable this, the DuPont model integrates elements of the income statement with those of the balance sheet.

Refer http://www.12manage.com/methods_dupont_model.html