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by : DR. T.K. JAIN AFTERSCHO☺OL centre for social entrepreneurship sivakamu veterinary hospital road bikaner 334001 rajasthan, india FOR – CSE & PGPSE STUDENTS (CSE & PGPSE are free online programmes open for all, free for all) mobile : 91+9414430763
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My purpose here is to give a few ideas about strategic management for intrapraneurs. Read a lot. Be an intrepreneur, change the society, change the world. Go with positive spirit. Please pass this presentation to all those who might need it. Let us spread knowledge as widely as possible. I welcome your suggestions. I also request you to help me in spreading social entrepreneurship across the globe – for which I need support of you people – not of any VIP. With your help, I can spread the ideas – for which we stand....
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WHAT IS STRATEGY ?
Strategy is a unified comprehensive course of action which you plan for achieving your objectives considering the business environment, your resources and your capabilities. Strategy is for long term and enables you to achieve your goals.
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What are the types of strategies?
There are 3 levels of strategy : 1 corporate level 2. business level 3. functional level
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Corporate level strategies
It is framed at corporate level. If you are working in a group, there are many units in that group, you have to formulate strategy for the group as a whole.
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Business level strategy
It is formulated at each unit level (SBU level) SBU = strategic business unit there may be different strategy in corporate level and business level. For example : you may go for expansion in corporate strategy, but may go for retrenchment of an individual unit (which might not be growing).
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Functional level strategy ?
It is formulated at functional level. Here we are looking at the functions of the organisation and define each functional objectives and strategies : for example : for marketing deparment, the strategy may be to get highest market share for finance department : the strategy may be to have highest ROI.
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What are the grand strategies ?
There are 4 types of generic strategies : 1. expand 2. diversify 3. stability 4. mix of above three strategies
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Porter's classification of strategies
There are three types of strategies : 1. focus 2. differentiation 3. cost leadership
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What is FOCUS ?
Focus on niche market / small segment of market put all your efforts to develop the services of this small market segment example : Mercedes / BMW focus on premium segment
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What is differentiation ?
Differentiate your products from your competitors example : Dettol is better germ killer than other soaps in the market
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What is mission of the organisation?
The ultimate goal is the mission of the organisation. Mission is defined in terms of the ultimate services the company wants to fulfill. It is similar to purpose. Example : Apollo hospital has the mission of providing good quality health care facilities to people
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What is vision ?
Where do you want to see your organisation after 5 / 10 / 15 years. Vision means what you visualise for your organisation in the long term. Vision is defined in terms of the future status of the organisation.
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What is the objective of the organisation?
The end state that the organisation wants to achieve in the long term is called objective of the organisation. Example : After 10 years, Tata Motors want to be the number one commercial vehicle maker in the world.
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What is strategic Intent?
Intent = desire / aspiration / dreams no progress without DREAMS here we want concrete, well defined, written and realistic dreams. These dreams are spelled out in terms of objectives, goals, mission, vision and purpose. Thus Strategic Intent includes all the terms that we have discussed so far.
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What are steps in strategy formulation ?
Formulate your mission / purpose undertake environmental analysis undertake analysis of competitors, industry scenario and identify your competencies look into different strategic choices for you select the best strategy decide about strategy, objectives formulate implementation plan review your strategies and your progress.
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How to undertake environmental analysis ?
There are two environments : external and internal you have to undertake thorough PEST Analysis for external environment.
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What is PEST ?
Political Economical social Technological environment study the trends, processes, and directions so that you may formulate appropriate strategy
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What is SWOT?
S= strengths W= Weakness O = Opportunity T=Threat It is also called TOWS matrix prepare this so that you know about your external environment
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What is SAP?
Her SAP =Strategic Advantage Profile Here we prepare a profile about how our company is superior in comparison to other companies. Here we are looking at the environmental aspects and preparing the strategy which can relate our strengths to our opportunities. It enables us to focus on our competencies (strenghts) and how to use them.
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What is crucial in behavioural implementation of strategy?
People must understand, imbibe and follow the strategy. For this, change the leadership style, culture, and overall environment in the company.
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What are the most popular options ?
INTEGRATION AND DIFFERENTIATION (these are not mathematics terms here). Integrate = connect yourself well with your suppliers, customers and entire value chain Differentiate = identify how you are different from your competitors and how you can be superior in delivering products / services in comparison to your competitors. Try to see that this differentiation is clear to your customers also (not just to you alone in this world).
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How to set objectives?
Involve people in strategy objective formulation ensure that people set their own objectives and become responsible for achieving them. The objectives should be concrete, verifiable, reviewable, practical, and achievable. The objectives should be written down in BOLD.
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We follow multiple objectives we follow a hierarchy of objectives (with clear priorities) the objectives give us direction that we need. Objectives should be understandable, time bound, clear, and expressed in terms of achievable deadlines.
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What is turnaround ?
Converting sick unit into a profitable unit is called turnaround. Turnaround strategy focuses on cost reduction, process improvement, better networking etc.
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How do you undertake strategic analysis ?
Undertake PESTLE analysis undertake PORTER'S 5 forces analysis undertake MCKINSEY 7 S analysis undertake SWOT (or TOWS) analysis generate strategic ALTERNATIVES other tools
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PORTER'S 5 FORCES
1. Suppliers 2. customers 3. substitute products 4. potential entrants 5. competitors A CLOSE STUDY OF ALL THESE FORCES WILL HELP YOU IN FORMULATING YOUR STRATEGIES
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Suppliers, customers, have bargaining power. Porter's model presents us an analytical perspective. If you working in large scale, you have advantage. If you have good network with suppliers, you have advantage. It is also important to study the switching cost of these parties – if they want to switch over to new parties. Before formulating your strategy, you have to understand your 5 forces, so that later you dont face any problem.
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How to undertake internal resource analysis ?
List down all internal resources identify your unique capabilities, competencies and your superior delivery methods. Identify your CSF (critical success factors) undertake VALUE CHAIN ANALYSIS use BALANCED SCORECARD ANALYSIS
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What is CSF?
Every business requires some key capabilities for its success. Identify the capabilities that you have and which can enable you to succeed in the business. Example : heritage hotels in Bikaner are successful due to their unique looks,folk art, cultural symbols, art and craft.
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Some examples of CSF ?
Better organisational culture Lower employee turnover Lower production cost Better quality Locational factors (like Bhujia of Bikaner) Better training of employees Younger staff
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What is Value Chain Analysis ?
Identify the value chain in each product. Identify the contribution of each element in the value chain. Value chain = the complete chain of intermediaries from origin to consumption. Example : for carpets – the value chain starts from sheep rearers, wool traders, and includes thread makers, carpet weavers, marketers and ends at the last retail store that sells the carpet.
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Example of value chain analysis
Look at Bikaji = leader in Bhujia and Sweet industry from Bikaner look at their inbound logistics (wherefrom they procure raw material) how do they process the raw material look at their outbound logistics (whom they supply) how do their marketing / distribution department work ?
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What is balanced score card?
There are 4 factors in balanced scorecard : 1. Financial component = contribution in terms of profitability 2. Organisational component : = leadership, innovation, change management 3. Customers = new customers added, and services to existing customers 4. operations = product development / improvement etc.
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It is also a good tool for study of the organisational processes. Compare your processes with an icon. You can set your performance standards and try to achieve those standards. Example : an MNC benchmarked itself with SEWA in terms of commitment of employees and dedication. It was very successful in its efforts.
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How to undertake benchmarking?
It requires top management support there must be agreement between the two companies benchmarking involves sharing, ideas and opinoions employees must be willing to learn and change.
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There are many other methods like : qualitative assessment – find overall feel of employees, capture their subjective assessments try to identify the sentiments of employees and frame objectives and strategies, which can involve employees undertake surveys, identify the gaps. Use tools like OD interventions, identify the areas where you can develop the organisations.
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How to undertake SWOT ?
Identify your strengths – note it down – relate it to the opportunities identify your weaknesses – try to develop your capabilities in these sectors opportunities – undertake brainstorming, look for untapped potential, identify hidden opportunities threats – explore them and prepare for them.
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