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Strategic Management

Question 2:
(A) Discuss the role of Corporate Social Responsibility (CRS) and business ethics in corporate strategy? (B) Explain the element of the strategic management process? How are they interrelated?

Answer:
CSR is the way that businesses manage the economic, social and environmental impacts of their operations into their values, culture, strategy and operations to maximize the benefits and minimize the downsides. It is driven by both Government looking for businesses to make positive contributions and the costs and benefits of the business and may involve new approaches in their activities of:

governance ethics health and safety environment human rights, labour, culture, minorities sustainability accountability customer satisfaction.

An effective approach to CSR can enhance brand and company reputation by improving efficiency, reducing the risk of business disruptions, and open up new opportunities driving innovation.

Attitudes to CSR in Developing Countries CSR is not new to Asia and the developing countries, under the UNIDO project a survey was conducted which made it clear that in the developing countries like Pakistan, organizations were aware of the need for CSR, and the key issues in five areas were also identified in the same study as: business principles (e.g. corruption); consumer issues, (e.g. product safety); community issues (e.g. human rights); labour standards (e.g. freedom of association); and environmental issues (e.g. energy efficiency). Of the business principles it is clear that transparency and accountability are the key issues for the majority. Awareness was also identified as an issue. CSR is emerging with a new thrust now in Asia mainly attributable to globalization and there is a need to be aware of private sector responsibilities. As SR always existed in Asia; its the 'C' that is new and is now getting more organized as a movement.

Corporate Ethics Strategy Since the 1990s, corporate ethics has been recognized as a primary function of organizations. Corporate ethics is divided into business ethics (BE) and corporate social responsibility (CSR). The two concepts are not synonymous but complement and support each other. Business ethics refers to the company's organizational behavior in an ethical and legal fashion. Corporate social responsibility is the behavior and action by a company in relation to society. In other words, an organization has to function ethically and maintain, develop social welfare activities. Approaches The rationale of a corporate ethics strategy depends on the reason a company has to believe and follow BE and CSR. A corporate entity must realize that ethical actions and behavior will reduce and cut through red tape and other administrative legal hassles in the long run.

Departmental Roles BE and CSR involve departments of human resources, public relations and finance. The two functions focus on doing business the legal manner to benefit the organization. The strategy involves developing a company website to constantly reach out to the public to make them aware of their public welfare activities.

Key Elements of the Strategic Management Process There are four key elements of the strategic management process. They are environmental scanning, strategy formulation, strategy implementation and strategy evaluation. Regardless of the size of the business, ensuring that these steps become part of the organization's operations can provide a focused, consistent and aligned approach to ensuring that business goals and objectives are met. Scanning the Internal and External Environment Organizations are impacted by both internal and external factors that affect their success. Strategic management requires a careful and thorough look at these factors. Internally, organizations will want to consider such things as employee information sales data, operational data. Externally companies will want to look at industry, economic and competitive data. All of these inputs will be part of the SWOT analysis that will review strengths, weaknesses, opportunities and threats as the starting point for the development of strategies.

Strategy Formulation The SWOT analysis is a critical input to the development of strategies that will help organizations achieve their goals and objectives. Strategies will be based on leveraging, or capitalizing, on strengths and weaknesses -- or avoiding or overcoming weaknesses and threats. Strategies provide organizations with a sense of direction in terms of how they will achieve their desired outcomes.

Strategy Implementation Strategy implementation will involve the creation of specific tactics or action plans that indicate how strategies will be achieved. For the development of a brand campaign, for instance, tactics might include: selecting an advertising agency, creating promotional materials, developing or updating web sites, etc.

Strategy Evaluation Once strategies are implemented, evaluation becomes an ongoing part of the process of strategic management. Those with accountability for achieving certain plan elements should be asked to provide updates on progress on a regular basis, with a focus on metrics designed to indicate the effectiveness of their actions. Positive results may suggest that some plan elements should be further emphasized or expanded; weaker results may suggest that some plan elements should be modified or abandoned.

Question 4:
Consider the shampoo market in India. Prepare a table showing the differences between the strategies adopted by the top 5 brands. Explain each point.

Answer:
Evolution of Shampoo in India HLL undisputed leader from the early 90s Sunsilk launched in 1964 (General Shampoo platform) Clinic Plus launched in 1971(Family, health shampoo platform) Clinic All Clear launched in 1987(Therapeutic AD Shampoo) Sunsilk re-launched in 1987 - Shampoo + Conditioner (Beauty platform) with Sachet SKU HLL Goes rural with Sachet Clinic Active launched in 1991(with Pro Vitamin B - health platform) Sunsilk re-positioned and re-launched in 1994 (Nutracare) - Pink for dry hair, yellow for normal hair, green for oily hair and black for long hair

Market share in Indian shampoo industry

Top Brands Clinic Plus Head & Shoulders Garnier Chik

Various shampoo products Unilever Clinic Plus, Sunsilk, Clinic All Clear, Dove PG Pantene, Head & Shoulders Cain Care Satin, Nyle Dabur Vatika, Total Protect ITC Vivel

Problem faced by shampoo companies Frequency of shampoo usage is very low mostly used once or twice in a week. Per Capita consumption of Shampoo in India - 13 ml , Indonesia - 160 ml, Thailand 330 ml. Consumers use natural products like henna and shikakai. Very large people use ordinary toilet soap to wash hair. Perception of chemical contents in shampoo.

Shampoo market is segmented on benefit platforms

Cosmetic(shine,health,strength,long hair) Anti-Dandruff Herbal

Rural market for shampoo 70% of population lives in rural India. More than 50% FMCG sales comes from rural markets. 90% sales comes in form of sachets of Rs 1-3. Increasing brand awareness and income. Special focus of FMCG companies in rural India.

Brand Name

Target Customer Young girls typically between 8-14 Both male and female between 18-44 sufferings from dandruff. Semi-urban, rural women age between 18-44

Influencer

Benefits

Ads / Celebrity

Clinic plus

Mother

Strong and long hair

Chulbuli A animated series on internet. Kareena kapoor and Saif ali khan.

Head and Shoulders

Expert (dermatologist) or celebrity

Dandruff free healthy hair

Chik

Mother, friends

Soft and beautiful hair for long time

Chik Satin AD

Segmentation of Shampoo Market Shampoo market is segmented on three benefit Segment such as: Cosmetic(shine, strength & luster): Sunsilk, Pantene, clinic Plus , chik Anti -Dandruff: clinic all clear , Head & shoulders Herbal-Vatika , Nyle & Meera

Target of Shampoo Market Hair Shampoos are targeted at Upper middle class Now, also middle class and house wives Upper class rural consumers Teenagers - they are the major segment

Concepts of Consumer Behaviour used in Shampoo Mass Market Classifying customer : Market Segmentation & Marketing Mix Consumer Research Process : Qualitative & Quantitative Research Personality & Brand Brand endorsers Impersonal & Interpersonal Communications