Professional Documents
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Submitted By :
Submitted By :
Prof. Dr. Abhinaya Chandra
Shaha (Vice Chancellor) Joy Roy
The Millennium University Id; 319MBA1012
Batch: 22
Strategy art of troop leader; office of general, command, generalship is a general plan to achieve
one or more long-term or overall goals under conditions of uncertainty. In the sense of the "art of
the general", which included several subsets of skills including tactics, siege craft, logistics etc.,
the term came into use in the 6th century C.E. in East Roman terminology, and was translated
into Western vernacular languages only in the 18th century. From then until the 20th century, the
word "strategy" came to denote "a comprehensive way to try to pursue political ends, including
the threat or actual use of force, in a dialectic of wills" in a military conflict, in which both
adversaries. Strategy has been studied for years by business leaders and by business theorists.
Yet, there is no definitive answer about what strategy really is. One reason for this is that people
think about strategy in different ways.
For instance, some people believe that you must analyze the present carefully, anticipate changes
in your market or industry, and, from this, plan how you'll succeed in the future. Meanwhile,
others think that the future is just too difficult to predict, and they prefer to evolve their strategies
organically. Gerry Johnson and Kevan Scholes, authors of "Exploring Corporate Strategy," say
that strategy determines the direction and scope of an organization over the long term, and they
say that it should determine how resources should be configured to meet the needs of markets
and stakeholders. Michael Porter, a strategy expert and professor at Harvard Business School,
emphasizes the need for strategy to define and communicate an organization's unique position,
and says that it should determine how organizational resources, skills, and competencies should
be combined to create competitive advantage.
While there will always be some evolved element of strategy, at Mind Tools, we believe that
planning for success in the marketplace is important; and that, to take full advantage of the
opportunities open to them, organizations need to anticipate and prepare for the future at all
levels. For instance, many successful and productive organizations have a corporate strategy to
guide the big picture. Each business unit within the organization then has a business unit
strategy, which its leaders use to determine how they will compete in their individual markets.
In turn, each team should have its own strategy to ensure that its day-to-day activities help move
the organization in the right direction. At each level, though, a simple definition of strategy can
be: "Determining how we are going to win in the period ahead." We'll now look more deeply at
each level of strategy – corporate, business unit, and team.
Strategy is important because the resources available to achieve these goals are usually limited.
Strategy generally involves setting goals, determining actions to achieve the goals, and
mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be
achieved by the means (resources). Strategy can be intended or can emerge as a pattern of
activity as the organization adapts to its environment or competes. It involves activities such
as strategic planning and strategic thinking.
Definition:
The Grand Strategies are the corporate level strategies designed to identify the firm’s choice with
respect to the direction it follows to accomplish its set objectives. Simply, it involves the
decision of choosing the long term plans from the set of available alternatives. The Grand
Strategies are also called as Master Strategies or Corporate Strategies.
There are four grand strategic alternatives that can be followed by the organization to realize its
long-term objectives:
Stability Strategy:
The Stability Strategy is adopted when the organization attempts to maintain its current position
and focuses only on the incremental improvement by merely changing one or more of its
business operations in the perspective of customer groups, customer functions and technology
alternatives, either individually or collectively. Generally, the stability strategy is adopted by the
firms that are risk averse, usually the small scale businesses or if the market conditions are not
favorable, and the firm is satisfied with its performance, then it will not make any significant
changes in its business operations. Also, the firms, which are slow and reluctant to change finds
the stability strategy safe and do not look for any other options.
No Change: The publication house offers special services to the educational institutions
apart from its consumer sale through the market intermediaries, with the intention to
facilitate a bulk buying.
Profit Strategy: The electronics company provides better after-sales services to its
customers to make the customer happy and improve its product image.
Pause/Proceed with Caution: The biscuit manufacturing company improves its existing
technology to have the efficient productivity.
In all the above examples, the companies are not making any significant changes in their
operations; they are serving the same customers with the same products using the same
technology.
Expansion Strategy:
The Expansion Strategy is adopted by an organization when it attempts to achieve a high growth
as compared to its past achievements. In other words, when a firm aims to grow considerably by
broadening the scope of one of its business operations in the perspective of customer groups,
customer functions and technology alternatives, either individually or jointly, then it follows the
Expansion Strategy. The reasons for the expansion could be survival, higher profits, increased
prestige, economies of scale, larger market share, social benefits, etc. The expansion strategy is
adopted by those firms who have managers with a high degree of achievement and recognition.
Their aim is to grow, irrespective of the risk and the hurdles coming in the way.
The firm can follow either of the five expansion strategies to accomplish its objectives:
Expansion through Concentration: The baby diaper company expands its customer
groups by offering the diaper to old aged persons along with the babies.
Expansion through Diversification: The stock broking company offers the personalized
services to the small investors apart from its normal dealings in shares and debentures
with a view to having more business and a diversified risk.
Expansion through Integration: The banks upgraded their data management system by
recording the information on computers and reduced huge paperwork. This was done to
improve the efficiency of the banks.
Expansion through Cooperation: The Expansion through Cooperation is a strategy
followed when an organization enters into a mutual agreement with the competitor to
carry out the business operations and compete with one another at the same time, with the
objective to expand the market potential.
Expansion through Internationalization: The Expansion through Internationalization is
the strategy followed by an organization when it aims to expand beyond the national
market. The need for the Expansion through Internationalization arises when an
organization has explored all the potential to expand domestically and look for the
expansion opportunities beyond the national boundaries.
Retrenchment Strategy:
The Retrenchment Strategy is adopted when an organization aims at reducing its one or more
business operations with the view to cut expenses and reach to a more stable financial position.
In other words, the strategy followed, when a firm decides to eliminate its activities through a
considerable reduction in its business operations, in the perspective of customer groups,
customer functions and technology alternatives, either individually or collectively is called as
Retrenchment Strategy. The firm can either restructure its business operations or discontinue it,
so as to revitalize its financial position.
Such strategy is followed when an organization is large and complex and consists of several
businesses that lie in different industries, serving different purposes. Go through the following
example to have a better understanding of the combination strategy:
A baby diaper manufacturing company augments its offering of diapers for the babies to have a
wide range of its products (Stability) and at the same time, it also manufactures the diapers for
old age people, thereby covering the other market segment (Expansion). In order to focus more
on the diapers division, the company plans to shut down its baby wipes division and allocate its
resources to the most profitable division (Retrenchment).
In the above example, the company is following all the three grand strategies with the objective
of improving its performance. The strategist has to be very careful while selecting the
combination strategy because it includes the scrutiny of the environment and the challenges each
business operation faces. The Combination strategy can be followed either simultaneously or in
the sequence.
The grand strategies are concerned with the decisions about the allocation and transfer of
resources from one business to the other and managing the business portfolio efficiently, such
that the overall objective of the organization is achieved. In doing so, a set of alternatives are
available to the firm and to decide which one to choose, the grand strategies help to find an
answer to it. Business can be defined along three dimensions: customer groups, customer
functions and technology alternatives. Customer group comprises of a particular category of
people to whom goods and services are offered, and the customer functions mean the particular
service that is being offered. And the technology alternatives cover any technological changes
made in the operations of the business to improve its efficiency.
2. Characteristics of BCG Metric?
When a company has many different products or even many different lines of business, strategy
becomes more complex. The company not only needs to complete a situation analysis for each
business, but also needs to determine which businesses warrant focus and investment. The
BCG matrix (sometimes called the Growth-Share matrix) was created in 1970 by Bruce
Henderson and the Boston Consulting Group to help companies with many businesses
or products determine their investment priorities.
The BCG matrix considers two different aspects of a business unit or product:
Market Share:
Market share is the percentage of a market (defined in terms of units sold or revenue) accounted
for by a specific product or entity. For instance, if you run a neighborhood lemonade stand that
sells 200 glasses of lemonade each summer, and there are two other competing lemonade stands
that sell 50 glasses and 150 glasses, respectively, then you have 50 percent market share. Out of
400 glasses sold, you sell 200 glasses, or 50 percent of the total.
Companies track market share data closely. For example, what is the market share for different
types of cell phones in the U.S.? The International Data Corporation reports these numbers
quarterly. As the following table shows, Android phones have had the dominant market share
over the past several years.
Market-Growth Potential:
The market-growth potential is more difficult to quantify, but it’s the other important factor in
the BCG matrix. Let’s use some of the products in Proctor & Gamble’s portfolio to identify
markets with different growth potential. How about bathroom tissue—is that a high-growth
market? Probably not. Data show that, in the U.S. anyway, bathroom tissue use tracks closely
with population numbers, which have declined 0.7 percent since 1992. How about the market for
high-end skin-care products? Generally, markets for products that serve Americans born between
1946 and 1964—the baby boomers—are growing rapidly. The reason is that this large generation
is aging with more income and a longer life expectancy that any previous generation.
Market-growth potential generally includes analysis of similar markets, as well as analysis of the
underlying drivers for marketing growth. It can be thought of as a “best guess” at what the future
value of a market will be.
Dog: A product or business with low market share in a mature industry is a dog. There is no
room for growth, which suggests that no new funds should be invested in it.
Cash Cow: A cash cow is a product or business that has high market share and is in a slow-
growing industry. It’s bringing in more money than is being invested in it, but it doesn’t have
much growth potential. The profits from a cash cow can be used to fund high-growth
investments, but the cash cow itself warrants low investment.
Question Mark: A question mark is a product or business that has low market share currently,
but in a growing industry. This case is trickier: the product/business is consuming financing and
creating a low rate of return for now, but its direction isn’t clear. A question mark has the
potential to become either a star or a dog, so close monitoring is needed to determine its growth
potential.
Star: A star has high market share in a fast-growing industry. This kind of product or business
is poised to bring strong return on the funds invested. It also has the potential to become a cash
cow at the end of the product life cycle, which can fund future investments.
According to the logic of the BCG matrix, as an industry grows, all investments become cows or
dogs. The intent of the matrix is to help companies make good portfolio-management decisions,
focusing investment in the areas that are likely to provide returns and fund future growth. The
matrix is a decision-making tool, and it does not necessarily take into account all the factors that
a business ultimately must face. For example, increasing market share may be more expensive
than the additional revenue gain from new sales. Because product development may take years,
businesses must plan for contingencies carefully.
While it is critical to understand the nature and intensity of the competitive forces in your
industry, it is equally critical to understand that the intensity of these forces is fluid and subject to
change. All industries are affected by new developments and ongoing trends that alter industry
conditions, some more speedily than others. Any strategies devised by your management team
will therefore play out in a dynamic industry environment, so it’s imperative that your managers
consider those factors driving change in your industry and how they might affect the industry
environment. Moreover, with early notice, managers may be able to influence the direction or
scope of environmental change and improve the outlook.
Industry and competitive conditions change because forces are enticing and pressuring certain
industry participants such as competitors, customers and suppliers to alter their actions in
important ways. The most powerful of the change agents are called driving forces because they
have the biggest influences in reshaping the industry landscape and altering competitive
conditions. Some driving forces originate in the macro-environment, but most originate in your
company’s more immediate industry and competitive environment.
Low biz risk and less industry uncertainty also affect competition in international market. In the
early stage the co. enters foreign matt with a conservative approach with less risky strategies like
exporting, licensing, joint marketing agreement and JV with local companies. As time goes and
the co accumulates experience, it starts moving boldly and independently making acquisitions,
constructing their own plants, putting their own sales and making capabilities to build strong
competitive position.
Project life cycles can range from predictive or plan-driven approaches to adaptive or change-
driven approaches. In a predictive life cycle, the specifics are defined at the start of the project,
and any alterations to scope are carefully addressed. In an adaptive life cycle, the product is
developed over multiple iterations, and detailed scope is defined for iteration only as the iteration
begins.
The Initiation Phase: The initiation phase aims to define and authorize the project. The project
manager takes the given information and creates a Project Charter. The Project Charter
authorizes the project and documents the primary requirements for the project. It includes
information such as:
The Planning Phase: The purpose of this phase is to lay down a detailed strategy of how the
project has to be performed and how to make it a success.
Strategic Planning
Implementation Planning
In strategic planning, the overall approach to the project is developed. In implementation
planning, the ways to apply those decisions are sought.
The Execution Phase: In this phase, the decisions and activities defined during the planning
phase are implemented. During this phase, the project manager has to supervise the project and
prevent any errors from taking place. This process is also termed as monitoring and controlling.
After satisfaction from the customer, sponsor, and stakeholder’s end, he takes the process to the
next step.
The Termination Phase: This is the last phase of any project, and it marks the official closure
of the project. This general lifecycle structure is used when dealing with upper management or
other people less familiar with the project. Some people might confuse it with the project
management process groups, but the latter contains activities specific to the project. The project
lifecycle, on the other hand, is independent of the life cycle of the particular outcome of the
project. However, it is beneficial to take the current life-cycle phase of the product into account.
It can provide a common frame of reference for comparing different projects.
These features are present almost in all kinds of project lifecycles but in different ways or to
different degrees. Adaptive life cycles are developed particularly with the intent of keeping
stakeholder influences higher and the costs of changes lower all through the life cycle than in
predictive life cycles.
Business is an art, and not everyone knows to master this art. Some people have the inborn
qualities to be a successful entrepreneur, and others work to develop these qualities.
No matter which of these descriptions best fits you, everyone can benefit from continuing to
improve on these important characteristics.
Here are the top five qualities of a successful entrepreneur:
4. Creative thinking
A successful entrepreneur is a creative thinker with loads of ideas constantly flowing through her
mind. This drastic ability to think of a wide range of new ideas helps an entrepreneur to initiate
different types of business in a unique, creative way.
5. Persistence
Persistence is the most basic and essential quality of a successful entrepreneur because even
good entrepreneurs experience failures and hurdles. But with persistence, you’re able to pick
yourself back up and keep moving towards your goals.
These five qualities will help you become the successful entrepreneur you aim to be. Look for
these qualities in yourself, and continue to progress each day for the benefit of yourself and your
company.
Successful entrepreneurs want to see what the view is like at the top of the business mountain.
Once they see it, they want to go further. They know how to talk to their employees, and their
businesses soar as a result.