Professional Documents
Culture Documents
ANNUAL OBJECTIVES:
Objectives that the firm seeks to achieve in one year.
Short term objectives- more specific-based on long term objectives. Ex: cutting
manufacturing costs by 20%- 4 years- 5% each year.
LONG-TERM OBJECTIVES:
Refers to those results that an organization seeks to achieve over a number of years.
Ex: profitability, ROI, competitive position, technological leadership, productivity,
employee relations, public responsibility and employee development
3.STRATEGY IMPLEMENTATION:
Strategies formulated need to be implemented (difficult)
Strategy formulation is positioning forces before action
Strategy implementation is managing forces during action
Strategy formulation focuses on efficiency
Strategy formulation is primarily an intellectual process
Strategy implementation is primarily an operational process
Strategy formulation requires good intutions and analytical skills
Strategy implementation requires special motivation and leadership skills
4.STRATEGY EVALUATION:
It helps determine the extent to which the company‟s strategies are successful in attaining
its objectives
Activities include –
Establishing performance targets, standards and tolerance limits for objectives, strategies
and implementation plans
Measuring the performance in relation to the targets at a given time. If outcomes are
outside the limits, inform managers to take action
Analyze deviations from acceptable tolerance limits
Execute modifications where necessary and/or feasible
Strategy evaluation can be a complex and sensitive task
Too much emphasis may be expensive and even counter productive
No manager wants to be evaluated too closely
Little or no evaluation can create even worse problems
Adaptive mode
1.Entrepreneurial mode:
2.Adaptive mode:
Characterized by reactive solutions to existing problems
Results in a fragmented strategy with incremental improvement
3.Planning mode:
Appropriate information for situation analysis is gathered systematically
Few alternatives are developed and the best is selected
Encompasses both the proactive search for opportunities and a reactive solution to
existing problems
Who is served?
We will harness our knowledge and energy to provide goods and services that are necessary for life,
health and growth
We will succeed in business only by creating value for our customers, our suppliers, employees,
shareholders and neighbors. We will build stronger customer relations and create solutions: Explore,
Discover, Create and Deliver
We build customer relationships on integrity. We develop solutions that our customer need. We are
forward-thinking and action-oriented
A well conceived vision comprises two main components namely-core ideology and
envisioned future
A good vision build upon the play between these two complimentary forces
Vision should also reflect the concerns of other stake holders such as shareholders,
customers, local community and society
The vision of the company should try to stream line and correlate the personal goals of
the employees with organizational goals
MISSION STATEMENTS
Firms without a operation identify the scope of operations in product and market terms
only
The fundamental and enduring purpose of an organization that sets it apart from other
organizations of a similar nature
It refers to the philosophy of the business and serves to build the image of the company
in terms of activities currently pursued by the organization, and its future plans
Most effective are those that are direct, precise and memorable
History of organization
What are our principal products at present and what will they be in the future?
What are the basic beliefs, values, aspirations and philosophical priorities of the firm?
The product or service can satisfy a customer need currently felt by specific market
segments
We will become the world‟s most valued company to patients, customers, colleagues, inventors,
business partners, and the communities where we work and live
The management philosophy of the business will result in a favorable public image
The business will provide financial rewards for those willing to invest their labor and
money in the firm
With hard work and the support of others, the business can grow and be profitable in
the long run
As the business grows, the company may redefine its mission statement. The revised mission
statement generally reflects the same set of elements as the original. It will state:
Company Goals
Just as the mission statement tries to make a company‟s vision more specific, company
goals attempt to make a mission statement more concrete
Goals indicate a desired future state that a company attempts to realize. To be meaningful, goals
should have three main characteristics
They should be precise and measurable: If a goal cannot be stated precisely and,
measured accurately, the company will face difficulties in assessing its progress in
attaining that goal.
To maintain its focus, an organization should operate with a limited number of major goals. This
implies that only goals should be selected.
Deadlines can inject a sense of urgency into goal attainment and act as motivators.
Company Philosophy
Company philosophy and values give a framework/boundary for individual actions
aimed at achieving corporate goals
A company‟s philosophy is also known as its creed, and usually forms a part of the
company's mission
It reflects or states the basic beliefs, values, aspirations, guiding principles and
philosophical priorities that the strategic decision-makers are committed to emphasize in
their management of the firm
Public Image:
Public agitation often stimulates a heightened corporate response, but an organization is generally
concerned about its image even in the absence of expressed public concern
Company Self Concept:
A major determinant of any company‟s continued success is its continuous interaction with the
external environme
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Social Responsibility
Corporate social responsibility is a public movement that has gained momentum over
the past few decades
Citizens have started demanding that corporations be accountable for their actions
This movement has resulted in business managers becoming more transparent and
socially responsible in their actions
Organizations are being pressurized to improve their performance not only in financial
but also in non financial areas
As a result, organizations have started building social criteria into their strategic
decision-making.
Human rights issues and healthy environmental practices are no longer seen as
compromising on profitability.
The firms with a good reputation in these areas are regarded highly by the public and
are often able to sustain profits even under adverse circumstances.
Responsibilities of Business
Shareholders
Employees
Customers
Local Community
Society
When an organization attempts to define its mission, it incorporates the interests of various claimant
groups. This process involves four steps
Identification of Claimants
Strategic managers should strive for the optimal profit that can be achieved over the
long run
These costs include all the costs determined by a detailed analysis of social balance
between the firm and society
If there are social costs in areas where no objective standards for correction exist,
managers should generate a corrective standard
When competitive pressure precludes socially responsible action, the business should
recognize that its operation in depleting social capital represents a loss
Marketing Strategy
It can capture a large share of an existing market for current products through market
penetration and market saturation
Push Strategy involves spending a large amount of money on trade promotion such as
discounts, advertising allowances, instore special offers etc.
Pull strategy involves spending more money on advertising to build brand awareness so that
shoppers will ask for the products. Research studies have pointed out that a high level of
advertising is most beneficial to leading brands in a market
Pricing:
Skim pricing means high pricewhen the product is novel and competitors are few
Penetration pricing is aimed at gaining high market share with a low price
Penetration pricing is considered to be good for the firm in the long term
MARKET SEGMENTATION
Concept
Process of dividing a market into distinct subsets of consumers with common needs or
chractertics and selecting one or more segments to target with a distinct marketing mix
Mass Media
Allow producer to avoid head on competition by differentiating their offering not only on the
basis of price but through style , package , promotion
1. Market segmentation
3. Positioning of product
Nine major catagories provide most popular base for the market.
1. Region 1. Culture
2. City size 2. Religion
3. Density of area 3. Sub-culture
4. Climate 4. Social class
5. Family life cycle
Demographic segmentation
Use Related Segmentation
1. Age
2. Sex 1. Usage rate
3. Marital status 2. Awareness stability
4. Income 3. Brand loyalty
5. Education
6. Occupation Use situation segment
Hybrid segmentation
1. Concentration strategy
2. Multi mix strategy
Concentration strategy
Org focus attention on one market segment and develop market mix for segment
Advantages – concentration strategy
1. Can thoroughly research the segment‟s wants and run a much lower risk of not being able
to satisfy its target market
2. Long product runs may be possible
3. Distribution , promotion and prices can be keyed to satisfy one segment
Disadvantages
1. Organisation can not spread its risk
2. Decline in selected segment‟s buying power or change in tastes or entry of rival can have
negative impact
3. Concentration on more segment by firm may result in directing efforts in directing efforts to
other segment
The Multi segment Strategy
1. Involves developing of two or more strategies for two or more market segment
2. Some firms start with concentration strategy and once successful begun to bexpand in
other segment
3. IBM first focussed on main frame computer market , entered personal computer with PC
Advantages
1. Can serve greater number of potential customer
2. Can utilize excess capacity to serve addittional segment
Disadvantages
1. Product cost may go up as shorter production runs are necessary to produce a large
number of produc
• Dividing the market by grouping the customers with similar tastes, preferences into one segment
is called segmentation
1. Segment marketing
2. Individual marketing
3. Niche marketing
4. Local marketing
1.Segment marketing – Dividing the market into different segments on the basis of homogenous
need.
• Segmented on basis of broad similarity with regard to some attributes
• Segmentation is also sometimes identifying, capturing & retaining potential new markets
2.Individual marketing – Extreme marketing in which marketers focus on individual customers.
• Keep track of individual tastes & preferences of individual customers
• Many companies are approaching individuals through e-mails to promote their products.
3.Niche marketing – Marketers effort to position their product or service in smaller markets that
have similar attributes and have been neglected by other marketer
• Segment further divided into sub segments to cater unsatisfied needs of small group is called as
niche.
4.Local marketing – marketers offer customized products to suit the local markets.
• THINK GLOBAL ACT LOCAL
• McDonald‟s introduced Indianized products such as AlooTikka, Chicken, Patties, Paneer
Salsa, Chicken Mexican...
– Company resources
– Product homogeneity
– Competitors‟ strategy
One-to-One Marketing
An individualized marketing method that utilizes customer information to build long-term, personalized,
and profitable relationships with each customer.
- „share of customer‟
By Association
Problem Solution
Perceptual Mapping
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or
groups of products in customers‟ minds.
#2 Beef Up Marketing
Frequently, companies will hastily cut their marketing and promotions efforts during a difficult economy.
This is actually the opposite of what should be done. While it may save an initial amount of money in
the short term, it will ultimately reduce presence in the marketplace and lower the chance of acquiring
new business. Keeping your company‟s name out there indicates your dedication to the construction
industry and shows that you‟re remaining strong and productive despite the economic downturn.
\
#3 Renegotiate Your Contracts
Take this period of slower business to review all of your existing contracts. From contracts for
accounting services to insurance and equipment, to the vending machines in the break room,
renegotiate your terms. Vendors may be more willing than ever to offer lower prices, better terms, or
financing in order to retain your business. This is especially true with banks right now. Since many
banks across the country are also struggling, they‟re eager to attract clients with big deposits. Often
times, you can get a better rate on a loan or ask to have rates reduced on an existing loan if you
refinance or offer to move your company‟s deposits to a new bank.
#5 Hire an Expert
While most of these strategies can be achieved without outside help, hiring an expert to evaluate your
business plan and offer process and workflow improvements might be the best way to develop a long-
term strategic game plan to staying successful. “Businesses often operate on a “things to do” strategy
and don‟t take the time to define the big picture processes,” states David Brown, president of D. Brown
Management, a leading provider of project management and consulting services for the construction
industry. “If you take the time to design the processes correctly and stay focused, goals will naturally
be achieved as a byproduct.”
Supply chain execution means managing and coordinating the movement of materials, information and
funds across the supply chain. The flow is bi-directional.
ACTIVITIES / FUNCTIONS
Supply chain management is a cross-function approach including managing the movement of raw
materials into an organization, certain aspects of the internal processing of materials into finished
goods, and the movement of finished goods out of the organization and toward the end-consumer. As
organizations strive to focus on core competencies and becoming more flexible, they reduce their
ownership of raw materials sources and distribution channels. These functions are increasingly being
outsourced to other entities that can perform the activities better or more cost effectively. The effect is
to increase the number of organizations involved in satisfying customer demand, while reducing
management control of daily logistics operations. Less control and more supply chain partners led to
the creation of supply chain management concepts. The purpose of supply chain management is to
improve trust and collaboration among supply chain partners, thus improving inventory visibility and the
velocity of inventory movement.
1.Strategic of SCM
Strategic network optimization, including the number, location, and size of warehousing,
distribution centers, and facilities.
Strategic partnerships with suppliers, distributors, and customers, creating communication
channels for critical information and operational improvements such as cross docking, direct
shipping, and third-party logistics.
Product life cycle management, so that new and existing products can be optimally integrated
into the supply chain and capacity management activities.
Information technology chain operations.
Where-to-make and make-buy decisions.
Aligning overall organizational strategy with supply strategy.
It is for long term and needs resource commitment.
2.Tactical
3.Operational
Daily production and distribution planning, including all nodes in the supply chain.
Production scheduling for each manufacturing facility in the supply chain (minute by minute).
Demand planning and forecasting, coordinating the demand forecast of all customers and
sharing the forecast with all suppliers.
Sourcing planning, including current inventory and forecast demand, in collaboration with all
suppliers.
Inbound operations, including transportation from suppliers and receiving inventory.
Production operations, including the consumption of materials and flow of finished goods.
Outbound operations, including all fulfillment activities, warehousing and transportation to
customers.
Order promising, accounting for all constraints in the supply chain, including all suppliers,
manufacturing facilities, distribution centers, and other customers.
From production level to supply level accounting all transit damage cases & arrange to settlment
at customer level by maintaining company loss through insurance company.
Supply chain business process integration involves collaborative work between buyers and suppliers,
joint product development, common systems and shared information. According to Lambert and
Cooper (2000), operating an integrated supply chain requires a continuous information flow. However,
in many companies, management has reached the conclusion that optimizing the product flows cannot
be accomplished without implementing a process approach to the business. The key supply chain
processes stated by Lambert are:
3. Globalization Era
The third movement of supply chain management development, the globalization era, can be
characterized by the attention given to global systems of supplier relationships and the expansion of
supply chains over national boundaries and into other continents. Although the use of global sources in
the supply chain of organizations can be traced back several decades (e.g., in the oil industry), it was
not until the late 1980s that a considerable number of organizations started to integrate global sources
into their core business. This era is characterized by the globalization of supply chain management in
organizations with the goal of increasing their competitive advantage, value-adding, and reducing costs
through global sourcing.
4. Specialization Era—Phase One: Outsourced Manufacturing and Distribution
In the 1990s industries began to focus on “core competencies” and adopted a specialization model.
Companies abandoned vertical integration, sold off non-core operations, and outsourced those
functions to other companies. This changed management requirements by extending the supply chain
well beyond company walls and distributing management across specialized supply chain
partnerships.
5. Specialization Era—Phase Two: Supply Chain Management as a Service
Specialization within the supply chain began in the 1980s with the inception of transportation
brokerages, warehouse management, and non-asset-based carriers and has matured beyond
transportation and logistics into aspects of supply planning, collaboration, execution and performance
management.
6. Supply Chain Management 2.0 (SCM 2.0)
Building on globalization and specialization, the term SCM 2.0 has been coined to describe both the
changes within the supply chain itself as well as the evolution of the processes, methods and tools that
manage it in this new "era".
The SCM components are the third element of the four-square circulation framework. The level of
integration and management of a business process link is a function of the number and level, ranging
from low to high, of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985).
Consequently, adding more management components or increasing the level of each component can
increase the level of integration of the business process link. The literature on business process re-
engineering,[16] buyer-supplier relationships,[17] and SCM[18] suggests various possible components that
must receive managerial attention when managing supply relationships. Lambert and Cooper (2000)
identified the following components:
There are four major decision areas in supply chain management: 1) location, 2) production, 3)
inventory, and 4) transportation (distribution), and there are both strategic and operational
elements in each of these decision areas.
1. Location Decisions
The geographic placement of production facilities, stocking points, and sourcing points is the
natural first step in creating a supply chain. The location of facilities involves a commitment of
resources to a long-term plan. Once the size, number, and location of these are determined, so
are the possible paths by which the product flows through to the final customer. These decisions
are of great significance to a firm since they represent the basic strategy for accessing customer
markets, and will have a considerable impact on revenue, cost, and level of service. These
decisions should be determined by an optimization routine that considers production costs,
taxes, duties and duty drawback, tariffs, local content, distribution costs, production limitations,
etc. (See Arntzen, Brown, Harrison and Trafton [1995] for a thorough discussion of these
aspects.) Although location decisions are primarily strategic, they also have implications on an
operational level.
2. Production Decisions
The strategic decisions include what products to produce, and which plants to produce them in,
allocation of suppliers to plants, plants to DC's, and DC's to customer markets. As before, these
decisions have a big impact on the revenues, costs and customer service levels of the firm.
These decisions assume the existence of the facilities, but determine the exact path(s) through
which a product flows to and from these facilities. Another critical issue is the capacity of the
manufacturing facilities--and this largely depends the degree of vertical integration within the
firm. Operational decisions focus on detailed production scheduling. These decisions include the
construction of the master production schedules, scheduling production on machines, and
equipment maintenance. Other considerations include workload balancing, and quality control
measures at a production facility.
4. Transportation Decisions
The mode choice aspect of these decisions are the more strategic ones. These are closely
linked to the inventory decisions, since the best choice of mode is often found by trading-off the
cost of using the particular mode of transport with the indirect cost of inventory associated with
that mode. While air shipments may be fast, reliable, and warrant lesser safety stocks, they are
expensive. Meanwhile shipping by sea or rail may be much cheaper, but they necessitate
holding relatively large amounts of inventory to buffer against the inherent uncertainty
associated with them. Therefore customer service levels, and geographic location play vital
roles in such decisions. Since transportation is more than 30 percent of the logistics costs,
operating efficiently makes good economic sense. Shipment sizes (consolidated bulk shipments
versus Lot-for-Lot), routing and scheduling of equipment are key in effective management of the
firm's transport strategy.
2. Replenishment cycle
3. Manufacturing cycle
4. Procurement cycle
Manufacturing cycle:
PUSH–PULL STRATEGY
"Push and pull" redirects here. For other uses, see Push and pull (disambiguation).
The image shows a technology push, mainly driven by internal R&D activities and market pull, driven
by the external market forces.
Push strategy
Another meaning of the push strategy in marketing can be found in the communication between seller
and buyer. In dependence of the used medium, the communication can be either interactive or non-
interactive. For example, if the seller makes his promotion by television or radio, it's not possible for the
buyer to interact with. On the other hand, if the communication is made by phone or internet, the buyer
has possibilities to interact with the seller. In the first case information is just "pushed" toward the
buyer, while in the second case it is possible for the buyer to demand the needed information
according to his requirements.
Applied to that portion of the supply chain where demand uncertainty is relatively small
Production & distribution decisions are based on long term forecasts
Based on past orders received from retailer‟s warehouse (may lead to Bullwhip effect)
Inability to meet changing demand patterns
Large and variable production batches
Unacceptable service levels
Excessive inventories due to the need for large safety stocks
less expenditure on advertising than pull strategy
Pull strategy
In a "pull" system the consumer requests the product and "pulls" it through the delivery channel. An
example of this is the car manufacturing company Ford Australia. Ford Australia only produces cars
when they have been ordered by the customers.
Applied to that portion of the supply chain where demand uncertainty is high
Production and distribution are demand driven
No inventory, response to specific orders
Point of sale (POS) data comes in handy when shared with supply chain partners
Decrease in lead time
Difficult to implement.
• CRM (Customer Relationship Management) are the concepts used by organizations to manage
their relationships with customers.
• From the outside, customers interacting with a company perceive the business as a single
entity.
• CRM helps a company unify its customer interactions and provide a means to track customer
information.
• CRM is “the development and maintenance of mutually beneficial long-term relationships with
strategically significant customers”
• CRM is “an IT enhanced value process, which identifies, develops,integrates and focuses the
various competencies of the firm to the„voice‟ of the customer in order to deliver long-term
superiorcustomer value, at a profit to well identified existing and potentialcustomers”.
• CRM is a business philosophy based on upon individual customers and customised products
and services supported by open lines of communication and feedback from the participating
firms that mutually benefit both buying and selling organisations.
• The buying and selling firms enter into a “learning relationship”, with the customer being willing
to collaborate with the seller and grow as a loyal customer. In return,, the seller works to
maximize the value of the relationship for the customer‟s benefit.
• In short, CRM provides selling organisations with the platform to obtain a competitive advantage
by embracing customer needs and building value-driven long-term relationships.
Determinants of CRM
“The focus [of CRM] is on creating value for the customer and the company over the longer
term” .
When customers value the customer service that they receive from suppliers, they are less likely
to look to alternative suppliers for their needs .
CRM enables organisations to gain „competitive advantage‟ over competitors that supply similar
products or services
“Today‟s businesses compete with multi-product offerings created and delivered by networks,
alliances and partnerships of many kinds. Both retaining customers and building relationships
with other value-adding allies is critical to corporate performance” .
“The adoption of C.R.M. is being fuelled by a recognition that long-term relationships with
customers are one of the most important assets of an organisation”
Implementing CRM
Benefits of CRM
Benefits of CRM include :
Reduced Costs, Because The Right Things Are Being Done (Ie., Effective And Efficient
Operation)
Increased Customer Satisfaction, Because They Are Getting Exactly What They Want (Ie.
Meeting And Exceeding Expectations)
Ensuring That The Focus Of The Organisation Is External
Growth In Numbers Of Customers
Maximisation Of Opportunities (Eg. Increased Services, Referrals, Etc.)
Increased Access To A Source Of Market And Competitor Information
Highlighting Poor Operational Processes
Long Term Profitability And Sustainability