STRATEGY CHOCE

AND
FORMULATON
USNESS STRATEGY
This refers to aggregated strategies of a
single business firm or a SU
Strategies are generally of 2 kinds
Multi Domestic and
Global
1. Multi Domestic
This strategy involves product tailored to
individual country
Multi-domestic - contd
There is decentralization of decision making.
Local sourcing is done.
Costs are high
GLOAL STRATEGY
You compete everywhere
Product is similar for all markets
Centralized control
Effective generally if Economies of Scale are
involved, Costs have to be kept lower and fast
product deployment is involved
Comparison of the two strategies
Market Drivers viz customer needs,
existence of distribution network etc
Cost Drivers Economies of Scale or
Scope
Government Drivers Trade policies ,
market regulations , capitalism/socialism
Competitive Drivers competition with
local products or global products
STRATEGC FACTORS
ANALYSS SUMMARY ie SFAS
Also called SWOT
FAS or EFAS
A group exercise on SWOT.
An assignment on SWOT
Generic Competitive Strategies
Are basically of 3 kinds as suggested by
Michael Porter:
1. Overall cost leadership
2. Differentiation and
3. Focus on a particular market niche
Combinations ????
Overall Cost Leadership Strategy
e.g.
Departmental Stores.
Discount Stores like WAL MART
The objective is to control the cost .
The competitor's price is the benchmark.
Usually prevalent in unbranded commodities
Pitfall Things like R&D may be ignored
Major input needs to be put in technology
DFFERENTATON STRATEGY
You differentiate the product or the service
That product or service is UNQUE.
Customers compare the same with the competition.
Customer should be willing to pay extra
E.g. HP laser printers
Caterpillar Dealer network
Whirlpool Appliances Features
Polo Ralph Lauren Apparel ndustry
Pitfall
mitation .
Changing consumer trend and taste
Focus Strategies
Also called segmentation/niche strategy.
DOMNO'S / PZZA HUT
This basically involves on concentrating on
particular customers , product line ,
geography , channel of distribution.
Martin rower serves only 8 food chains in
US
Pitfall : Market size
Competitors may find submarkets
Corporate Strategy
The direction that an organization takes
with the objective of achieving business
success in long term.
Strategic Alliances
An agreement between two or more
individuals or entities stating that the
involved parties will act in a certain way in
order to achieve a common goal.
Strategic alliances usually make sense
when the parties involved have
complementary strengths.
Strategic alliances contd...
Some alliances in ndia :
NT and ETS for TOEFL
TCS and CSCO to build next generation
data centres.
TATA and NTT DOCOMO . Tata
teleservices has a subscriber base > 30 M
3i nfotech has an alliance with CC
Lombard , Max New York & ARTEL.