Introduction to Strategic Management

Strategic management analyzes the major initiatives taken by a company's top management on behalf of owners, involving resources and performance in internal and 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 stakeholder. Strategic management is a level of managerial activity under setting goals and over tactics. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies. In the field of business administration it is useful to talk about strategic alignment between the organization and its environment or strategic consistency. According to Arieu (2007), there is strategic consistency when the actions of an organisation are consistent with the expectations of management and these in turn are with the market and the context

Definition of Strategic Management:According to Jauch and Glueck Strategic Management is a stream of decisions and actions which leads to the development of an effective strategy or strategies to help achieve corporate objectives the strategic management process is the way in which strategies determine objectives and make strategic decisions

H.L. Ansoff defines as Strategic Management is a systematic approach to a major and increasingly important responsibility of general management to position and relate the firm to its environment in a way which will assure its continued success and make it secure from surprises Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new
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technology, new competitors, a new economic environment., or a new social, financial, or political environment. Strategic Management can also be defined as "the identification of the purpose of the organisation and the plans and actions to achieve the purpose. It is that set of managerial decisions and actions that determine the long term performance of a business enterprise. It involves formulating and implementing strategies that will help in aligning the organization and its environment to achieve organisational goals.

STRATEGIC MANAGEMENT IS ONE OF THE MOST IMPORTANT HARD SKILLS IN BUSSINESS MANAGEMENT. The initial task in strategic management is typically the compilation and dissemination of the vision and the mission statement. This outlines, in essence, the raison dtre of an organization. Additionally, it specifies the organization's scope of activities and the markets a firm wishes to serve. Strategic management involves adapting the organization to its business environment .it is a fluid and complex. Change creates novel combinations of circumstances requiring unstructured nonrepetitive responses. Strategic management affects the entire organization by providing direction Strategic management involves both strategy formation (called it content) and also strategy implementation (called it process).Strategic management is partially planned and partially unplanned. It is done at several levels: overall corporate strategy, and individual business. The overall objective of strategic management is two fold:1. To create competitive advantage, so that the company can outperform the competitors in order to have dominance over the market. 2. To guide the company successfully through all changes in the environment.

Analysis Strategy Formation

Analysis of an organization's strengths and weaknesses is a key concept of strategic management. Other than the internal analysis, an organization also undertakes external analysis of factors such as emerging technology and new competition. Through internal and external analysis, the organization creates goals and objectives that will turn weaknesses to strengths. The analyses also facilitate in strategizing ways of adapting to changing technology and emerging markets.

About the company

In the year 2008 Om wires and cables was formed by Mr. Umesh Kukreja. It is located in the industrial area of Mahadev complex. The company was started by Umesh Kukreja ,the whole work is carried on in supervision as he is the sole proprietor of the company. The company mainly produces copper wires and also manufactures aluminum wires. There are in all 12 Employees in the company and 4 machines. They employees of the company are given many facilities such as timely lunch and tea breaks, proper ventilation, weekly one day off, over time benefit. The manufacturing process of the company is carried on with the help of skilled labour. The salaries of the employees depend upon the experience of their work done. The owner maintains good relations with the employees by listening to their problems and immediately solving it. The company has the distribution channel shown below:

Manufacturer

Wholesaler

Retailer

cccccccc Customer

Its an very popular company in the world of wires and cables. No doubt, there is high level of competition present the company has potential to survive in the market. Copper wires manufactured by company are used in almost all kinds of electronic device. Aluminum proves as an substitute of copper so it also produced by the company. Main positive points of the company are: Financial resources Updated technology Skilled labour Goods relations with employees, customers and suppliers These points helps the company to face the competition . The quality of wires are checked twice so as to maintain the goodwill in the market.

Manufacturing process

The manufacturing process of the company is divided in different parts: Process of heating Drawing Straightening Current testing Cutting Insulating Final inspection Coiling of wires Printing of authentication marks and company name Packing These processes are explained below Process of heating: In this process the copper is heated or melted on high temperature. The .c temperature ranges from 300-350 under high pressure for 12 hours. This process is also known as the process of annealing. Heating of copper eliminates the waste materials and other particles forming it as a pure form of copper. All the unwanted particles are removed so as to move the copper to another step of drawing.

Drawing : The copper after heating is poured into containers and with this the process of drawing starts. In this step the copper is drawn into sheets of different sizes and is kept of cooling for some time. As the ductility of copper is more it can be easily drawn into sheets.

 Straightening : As the copper sheets are cooled down, it requires straightening. So the straightening machine is used to straighten the improper sheets of copper. This process is useful as it makes easily for the labour to carry forward these sheets to the process of cutting of wires.

Current testing : After straightening the sheets are ready for cutting into thin wires but before this these sheets are passed through the current testing machine so as to ensure the conductivity of copper against the electric current. If the sheets are conductive i.e, they react with the electric current then it is forwarded to the process of cutting. Cutting : The current tested sheets are now sent to this process so as to cut them into thin wires. In this process the sheets are cut down into wires with the help of cutting machine. Insulating :

The thin copper wires are insulated with Rubber coating as insulating prevents From shock to the persons. Insulation of Wires are done in Different ways: Red wire insulation Yellow wire insulation Blue wire insulation

Final processing : After the insulation the wires are now ready for coiling, but before coiling the wires are put to a process of final processing in this process the insulate wires are tested once again with the help of current. So as to ensure the safety of the user using the wires.
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 Coiling : In this process the wires are coiled into rolls. As the wires are coiled the rolls of the wires are ready for packing. The coiling of is done with the help of huge coiling machine.

Printing : In this step the coiled wires are passed through the printing machine by which the ISI MARKS AND TRADE MARKS, VOLTAGE and other authenticated marks are printed on the wire. Besides these marks the companys name is also printed on the wire. The marking is done on the per meter criteria Packing:

The wires are packed as mentioned before on per meter criteria, the wires are packed into boxes and plastic rolls. The boxes and rolls are now ready to be delivered into market.

SWOT ANALYSIS: Meaning:

A SWOT analysis is commonly used in marketing and business in general as a method of identifying opposition for a new venture or strategy. Short for Strengths, Weaknesses, Opportunities and Threats, this allows professionals to identify all of the positive and negative elements that may affect any new proposed actions. SWOT Analysis is the most renowned tool for audit and analysis of the overall strategic position of the business and its environment. Its key purpose is to identify the strategies that will create a firm specific business model that will best align an organizations resources and capabilities to the requirements of the environment in which the firm operates. In other words, it is the foundation for evaluating the internal potential and limitations and the probable/likely opportunities and threats from the external environment. It views all positive and negative factors inside and outside the firm that affect the success. A consistent study of the environment in which the firm operates helps in forecasting/predicting the changing trends and also helps in including them in the decision-making process of the organization.

Definition of 'SWOT Analysis': A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, straight forward model that assesses what an organization can and cannot do as well as its potential opportunities and threats. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results.

The purpose of a SWOT analysis:

The SWOT analysis enables companies to identify the positive and negative influencing factors inside and outside of a company or organization. Besides businesses, other organizations, in areas such as community health and development and education have found much use in its guiding principles. The key role of SWOT is to help develop a full awareness of all factors that may affect strategic planning and decision making, a goal that can be applied to most any aspect of industry.

An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given below Strengths - Strengths are the qualities that enable us to accomplish the organizations mission. These are the basis on which continued success can be made and continued/sustained. Strengths can be either tangible or intangible. These are what you are well-versed in or what you have expertise in, the traits and qualities your employees possess (individually and as a team) and the distinct features that give your organization its consistency. Strengths are the beneficial aspects of the organization or the capabilities of an organization, which includes human competencies, process capabilities, financial resources, products and services, customer goodwill and brand loyalty. Examples of organizational strengths are huge financial resources, broad product line, no debt, committed employees, etc.

Weaknesses - Weaknesses are the qualities that prevent us from accomplishing our mission and achieving our full potential. These weaknesses deteriorate influences on the organizational success and growth. Weaknesses are the factors which do not meet the standards we feel they should meet. Weaknesses in an organization may be depreciating machinery, insufficient research and development facilities, narrow product range, poor decision-making, etc. Weaknesses are controllable. They must be minimized and eliminated. For instance - to overcome obsolete machinery, new machinery can be purchased. Other examples of organizational weaknesses are huge debts, high employee turnover, complex decision making process, narrow product range, large wastage of raw materials, etc.

Opportunities - Opportunities are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable. Organizations can gain competitive advantage by making use of opportunities. Organization should be careful and recognize the opportunities and grasp them whenever they arise. Selecting the targets that will best serve the clients while getting desired results is a difficult task. Opportunities may arise from market, competition, industry/government and technology. Increasing demand for telecommunications accompanied by deregulation is a great opportunity for new firms to enter telecom sector and compete with existing firms for revenue.

Threats - Threats arise when conditions in external environment jeopardize the reliability and profitability of the organizations business. They compound the vulnerability when they relate to the weaknesses. Threats are uncontrollable. When a threat comes, the stability and survival can be at stake. etc.
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SWOT ANALYSIS OF

STRENGTHS OF THE COMPANY: Finance Skilled labour Goodwill Good relations with Customers New technology

WEAKNESS OF THE COMPANY:

Disputes amongst Employees Powerful Competitors

OPPORTUNITIES OF THE COMPANY: Free Export trade Less Restrictions by Government Decrease in cost of Raw Materials Development in Technology

THREATS OF THE COMPANY: Slow Market Growth Increase in Cost of Raw Materials Entry of new Resourceful Company Changes in Government Policies

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Porters 5 forces model

The model of the five forces was developed by Michael e. porter in his book competitive strategy: techniques for analyzing industrial and competitors in 1980. It is based on the insight that a corporate strategy should meet the opportunities and threats in the organisations external environment. It is a very important tool for analyzing an industry structure in strategic processes. It helps in accessing where the power lies in a business situation. Porters model is considered an important part of planning tool set. When we are clear about where the power lies we can take advantage of our strengths and can improve the weakness and thus can compete efficiently and effectively. We come to know that whether new product, services or business will do profit or not.

1. Bargaining power of buyers:

Bargaining power of buyers means that how much easily the buyers can drive the prices down. How much pressure a customer can have on a business.If a customer has an impact on the market and can affect a companys margins and volumes, then the customer holds an substantial power. The buyers have power when they can easily switch to other substitute available for product. The buyers have more power in the following situations: Small number of buyers. If there are small number of buyers and large number of sellers than the buyers have options for the purchase of goods and they can easily switch between the suppliers if they want to. Buyers purchase in a large quantities. When switching to another product is simple for the buyers. When product is not differentiated. The product is not extremely important to buyers; they can do without the product for a period of time. Buyers cost of switching to a competitors product is low. When buyers are price sensitive. The bargaining power can be lowered down by offering differentiated product.

2. Bargaining power of suppliers:

Bargaining power of supplier means how strong is the position of a seller. How much the suppliers have control over the increasing the prices of supplies.The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are. It depends upon how much pressure supplier can have on the business. The suppliers have more powers in the following situations:
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When there are few suppliers for a product. If there are few suppliers then the buyers dont have much option to switch to other suppliers. When the suppliers product is unique and have low or no substitute. When switching to another is costly for the buyers. When the product is very important and the buyers cant go without it. When the suppliers are concentrated and more organized.

When suppliers have more control over supplies and its prices that segment is less attractive. Its best way to make win-win relation with suppliers.

3. Competition among existing firms:

It means the intensity of competition among the existing competitors in the market. It depends upon the capabilities and the number of the competitor firms. If the competitors product or services are more similar and prices are equal or there is no much difference in the prices then the competition in market is high. And buyers have many substitute and can switch easily to another supplier. A highly competitive market can be due to the following situations: When there are many suppliers of the same size and there is no dominant firm. There is very little differentiation between the products or services of the firms. When customers have low switching cost. When exit barriers are high and rivals have to stay and compete. When fixed cost are high resulting huge production and reduces in prices. When market growth is slow.

4. Threats of substitute products:

It means that how easily can a buyer switch to other substitute product of other competitors. The threat is more the switching cost is lower. 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. Threats of substitute are high in the following situations: When there are many substitute available. When customer can easily find the product at the same or lower price. When our quality is lower and the competitors quality is better than ours. If substitutes are similar, it can be viewed in the same light as a new entrant.

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5. Threats of new entrants:

It means entry of new firms with similar product or services into the market. It depends upon the entry and exit barriers. If there are no or less entry barrier then there is more competition in the market. There is more threat of the new entrants in the following situations: If the capital required to start the business are less. Few economies of scale are in place. When there is low switching cost. If the new entrants have new and advance technologies in their favour. If product is not differentiated. If our fixed cost is high.

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Five force model of

from the previous points we got a clear vision about what the five force model actually is and how important it is. so from the following points we can show the five force model of this company. Bargaining power of the customers : Customers of this company are not the final users of the product many a times various links are involved between the buying and selling process. so, mostly the bargaining power is in the hands of the firm itself but due to following points sometimes this power is given to the customers..... Bulk purchases Good relations More Availablity of the substitutes due to lower prices of the substitutes

Bargaining power of the Suppliers : Suppliers themselves fixes the prices and their profit margins. they also decides the baigaining margins so the firm has no option left with it instead of accepting the supliers policies. but sometimes it becomes possible to fix the price due No Major buyer Many Suppliers Available Price Differntiation.

Threats posed by substitutes : Aluminium proves as a major substitute of copper but it is rightly said that the thing made for the specified work cannot be replaced in any situation same is the case with copper.

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 Threats by new entrants : This situation arises due to: Changes in Governmental policies Free Trade Less Restrictions Increased demand

Competitions Among The Existing Firms : High Competition is present in the of business of wires and cables. by adopting various policies firms deals with this competition. this firm is capable enough to face such competition. this competition results in Slower Market And Industrial Growth Pricing Battles No Dominant Firm.

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CONCLUSION

From this project we concluded that copper has high flexibility ductility, malleability. The demand of copper in the market. The strengths and opportunities of the company are the main reflectors of profit while the weakness and threats negative points of the company. The Industrial analysis of the firm show that the bargaining power of the firm is in the hands of manufacturer. The entry of new firm does not affect the working of company more over it can he proved as an threat. The changes in governmental policies rules and regulations results in changes of in internal and external working of the firm.There are an requirement skilled labour in manufacturing process. The experience plays an vital role in this field. The firm enough capable to fight with its existing firms. Threats from Substitute products is low as the substitute of copper is Aluminum which is also manufactured in the firm.

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