Professional Documents
Culture Documents
Bfia01172009 2012041 BPSM PDF
Bfia01172009 2012041 BPSM PDF
Uttar Pradesh
India 201303
ASSIGNMENTS
PROGRAM: BFIA
SEMESTER-IV
Subject Name
Study COUNTRY
: Malawi
:BFIA01172009-2012041
Student Name
Signature :
Date
Assignment A
Assignment B
Assignment C
ii) Corporate strategies are useful for long range problems. They are not effective to overcome
current exigencies.
iii) The corporate strategy formulation process calls for considerable time, money and effort.
Developing appropriate corporate strategy is not a simple and economical proposition. For
financially weak companies, cost becomes a great hindrance.
iv) As future is uncertain and cannot be predicted accurately, the strategic planning system based
on hazy and uncertain estimates are not exact.
v) Implementation of corporate strategy is influenced by organizational factors, behavioral
factors and motivational factors. The gap between formulation and implementation of
corporate strategy does not give desired results to the organization.
Business definition is at the core of business strategies. By defining the who, what, and how of
a business, a business definition seeks to provide the direction in action has to be taken.
The who of the business definition refers to the customer groups that are targeted by a
business. Customer groups are identified based on the needs that they seek to satisfy. The bases
for identification popularly used are demographic characteristics, geographic segmentation or
lifestyles. Businesses must continuously focus on the needs of the customer group they identify
for targeting.
The what of a business definition deals with customer needs. The basic needs of food, clothing
are examples of customer needs. There could be higher older need of entertainment, education,
securityand social status. Businesses aim at the satisfaction of these needs. Companies must
dedicate the necessary time and resources to define customer needs. Products and services are
then designed to satisfy these needs. A business earn its revenues from providing customer
satisfaction through products and services. Beyond customer satisfaction is the idea of customer
delight that aims at providing even more value than what a customer would normally expect.
Businesses seek to enhance their competitive advantage by providing customer value in the form
of products and services.
The how of the business definition refers to the alternative technologies used to provide
services and products that satisfy the perceived needs of the customer groups identified. Besides
technical knowledge, alternative technology refers to the skills and competencies that a business
utilizes to provide products and services. The core competencies of a business dwell in its skills
base and this is used to provide value to the customer.
As can be concluded from above, business definition lays down the framework within which
businesses can operate. It can also provide direction in which businesses can expand or retrench.
organization can identify the social concerns to be served on the basis of its own environmental
analysis and choose those areas in which it believes it can contribute effectively by reducing the
social costs or enhancing social benefits.
This approach is helps the organization in defining its social objectives according to the needs
and requirements while considering its capability to meet those goals. Thus, it can well be
integrated into the strategic management process.
Assignment B
Q1. Congruence and coordination among strategies should take place through vertical
and horizontal fit. Explain and discuss this statement.
Answer:
CONGRUENCE AND COORDINATION AMONG STRATEGIES SHOULD TAKE PLACE THROUGH VERTICAL
AND HORIZONTAL FIT
A key task of strategy implementation is to align or fit the activities and capabilities of an
organization with its strategies. Strategies operate at different levels and there has to be
congruence and coordination among these levels. Congruence and coordination of strategies
among different levels is the vertical fit. There also has to be congruence and coordination
among the different activities taking place at the same level. This is called the horizontal fit.
The consideration of vertical fit leads us to define functional strategies in terms of their
capability to contribute to the creation of a strategic advantage for the organization. Strategic
marketing management, for example, focuses on the alignment of marketing management within
an organization with its corporate and business strategies to gain a strategic advantage. Strategic
operation management focuses on the alignment of operation management within an
organization with its corporate and business strategies to gain competitive advantage.
The consideration of the horizontal fit means that there has to be an integration of the operational
activities undertaken to provide a product or service to a customer. These have to take place in
the course of operational implementation. Operational implementation is the approach adopted
by an organization to achieve operational effectiveness. When an organization performs valuecreating activities optimally and in a way which is better than its competitors, it results in
operational effectiveness.
Q2. How can SWOT analysis help in short listing strategic alternatives at the corporate level?
Answer:
SWOT analysis can be applied to generate feasible strategic alternatives at the corporate level.
The socioeconomic factors are found to be supportive; while market opportunities both in the
domestic and export markets are also significant. Based on a fortuitous match between the
technological and supplier environment on the one hand, and operations-related internal factors
on the other, the firm is most likely to be a high-quality producer. These strengths can stand the
firm in good stead in its local marketing and export efforts.
General management can take proactive steps in order to sustain marketing efforts. Good
personnel may prove to be of value in the various activities that the firm undertakes. Finance is
the only problem area and cannot be neglected at any cost. It is quite possible that major
investments have been made in plant, equipments, and facilities, and a pay-off may be expected
in the long run. In such a case, the financial problems can be assumed to be of transient nature.
Should it be true, the firm can hope to overcome its negative financial features, provided it
adopts prudent financial policies in the near future.
Depending on whether other units are available for acquisition, the firm could even contemplate
a takeover. But this would again require immediate resources. Expansion strategies could also be
preceded by a short period of stability and the financial position can improve in the meantime.
The analysis can be continued until the strategists are able to shortlist feasible strategic
alternatives. Of course, the line of thought adopted by others may be different from that followed
another team. But it can be safely assumed that since the SWOT profiles are the same, different
analysts are likely to reach more or less the same set of conclusions. Much would depend on
other factors, for instance, the willingness of the management to task risks. A good and
meaningful SWOT analysis is likely to bring out a few feasible strategic alternatives.
Q3. Discuss the manner in which an organization can discharge its responsibilities to its
businesses as a good corporate parent.
Answer:
A diversified corporation or a multi-business company is often viewed as consisting of a
corporate headquarter or centre with strategic business units acting as satellites.
The manner in which the centre manages and nurtures the individual businesses is known as
corporate parenting. The total corporation is viewed in terms of resources and capabilities that
can be used to build individual businesses as well as create synergies across these businesses. In
this manner, corporate parenting attempts to do away with the one major drawback of the
corporate portfolio techniques. While portfolio techniques consider the industry attractiveness of
various industries and focus on the cash contributions that individual businesses could make to
the overall portfolio businesses, corporate parenting views the organisation in its totality as a
diversified corporation and focuses on the value created from the relationship between the parent
and its businesses.
Campbell, Goold, and Alexander suggest that the diversified corporation must address these two
issues:
(b) What organisational structure, management processes, and philosophy will foster superior
performance from the corporation's individual business units?
A good corporate parent will therefore endeavor to the search for the appropriate corporate
strategy through the following three steps:
i.
ii.
Examine each business unit in terms of those areas in which performance can be
improved.
iii.
Analyse how well the parent corporation fits with the business unit.
All in all, corporate parenting focuses intensely on the role of the parent in adding value to the
individual businesses.
Reference:
M Alexander, A Campbell and M Goold, "A new model for reforming -e planning review" in
Planning Review, Jan-Feb 1995.
CASE STUDY
In a market dominated by behemoths like SAIL and TISCO, finding a niche is of crucial
importance for a small player. What could a Lloyds do with a meagre annual capacity of making
six lakh tonnes of HR coils while SAIL sold over 1,600 lakh tonnes in the same time? Should
Lloyds follow the market leader or adopt its own unique approach to its business strategy? It is in
the context of such questions that Lloyds' attention came to rest on the manufacturing process.
Almost all steel producers adopt the blast furnace technology. In this, the process starts with a
clear differentiation among the ultimate products to be manufactured. So, manufacturing batch
size has to be large enough to take up customised orders. The raw material, iron ore, has to pass
through several complex stages of manufacturing.
Lloyds looked for an alternative technology that could suit its requirements. The solution lay
in the Electric Arc Furnace technology where the unique feature was that initial manufacturing
stages need not differentiate among different products. Such a differentiation came at a much
later stage. Translated into a business proposition, what it meant was that Lloyds could operate
with a much smaller batch size of, say, 100 tonnes and deliver quickly. For instance, a 1,000tonnes small order of specialised product custom-made to buyer's specification could be
delivered in as little as 15 days. Such a quick delivery schedule would not be possible for a large,
integrated steel manufacturer. In this manner, analogous to small gunboats that could effectively
torpedo a large, slow-moving ship, Lloyds carved out a niche in the highly competitive steel
market.
Question:
Comment on the nature of the business strategy of Lloyds. What are the conditions in
which such a strategy would succeed? Could fail?
Answer:
With the introduction of the new technology, Lloyds will now be able to meet customer-specific
orders in a shorter period of time than the big companies. The manufacturing process has also
been made simpler because differentiation is coming in at a later stage. The reduction in the
length of the manufacturing process time has also led to the reduction of the work-in-process
inventory. This would mean than the company would have funds that would otherwise be tied up
in inventory, available for other purposes.
Lloyds looked for an alternative technology that could suit its requirements. The Electric Arc
Furnace technology worked well for Lloyds because of the unique feature that initial
manufacturing stages need not differentiate among different products. This speeded up the
manufacturing process such that Lloyds could now operate with a much smaller batch size of,
say, 100 tonnes and deliver quickly.
Referring to the business definition of Abell, that defines business in three dimensions of
customer groups, customer function and technology; the customer groups here are customers of
steel products who need various differentiated steel products. The case highlights that Lloyds
could deliver specified custom-made orders within 15 days thereby highly satisfying its customer
function, i.e. what customers need.
This is achieved through the electric arc furnace technology. Thus, Lloyds has redefined its
business, according to the three dimensional business definition.
This strategy works and succeeds where there is integrated manufacturing and there are few
competitors such as in monopolistic competition as in this case, and is capable of winning
customers from the larger companies.
But success in an integrated steel industry means re-organizing the whole value chain to make
it more efficient and meet the tight schedules of delivery. This means that extra costs would be
incurred which implies reduced unit profit.
Assignment C
Q.1 The marketing strategy emphasises price as the key to
good value; operations runs with tight cost control;
development focuses on cost reduction.
Which of Porter's competitive strategies is illustrated here?
A. Divisionalisation
B. Differentiation
C. Cost Leadership
D. Differentiation focus
E. Cost Focus
b) False
Q. 19 to be effective, strategies must result from rational and
methodical planning processes based on analyses of both
internal resources and capabilities and the external
environment.
a) True
b) False
Q. 20 Elements of strategic management model:
A . Environmental Scanning
B. Strategy Formulation
C. Strategy implementation
D. Evaluation and Control
21 In SWOT Analysis, Strengths and Weaknesses is
a) External Analysis
b) Internal Analysis
c) Environmental analysis
d) Economic Analysis
22.
A strategic vision describes the route a company
intends to take in developing and strengthening its business.
It lays out the companys strategic course in preparing for the
future.
a) True
b) False
23. The vision statement of a firm focuses on its present
business purpose - who we are and what we do
a) True
b) False