Enrollment number- 20180401093

Name- Vedant Vyas

Subject- Strategic Management
Year- 2 Sem-4
Date- 18/05/2020
Answer Sheet

Ans-1

Introduction:-

Strategy is an action that managers take to attain one or more of the organization’s goals.
Strategy can also be defined as “A general direction set for the company and its various
components to achieve a desired state in the future. Strategy results from the detailed
strategic planning process”.

Strategy is the blueprint of decisions in an organization that shows its objectives and goals,
reduces the key policies, and plans for achieving these goals, and defines the business the
company is to carry on, the type of economic and human organization it wants to be, and the
contribution it plans to make to its shareholders, customers and society at large.

Scope of strategy is as follows:-

 Strategy is a major course of action through which an organization relates itself to its
environment particularly the external factors to facilitate all actions involved in meeting the
objectives of the organization.
 Strategy is the blend of internal and external factors. To meet the opportunities and
threats provided by the external factors, internal factors are matched with them.
 Strategy is the combination of actions aimed to meet a particular condition, to solve
certain problems or to achieve a desirable end. The actions are different for different situations.
 Due to its dependence on environmental variables, strategy may involve a contradictory
action. An organization may take contradictory actions either simultaneously or with a gap of
time. For example, a firm is engaged in closing down of some of its business and at the same
time expanding some.
 Strategy is future oriented. Strategic actions are required for new situations which have
not arisen before in the past.
 Strategy requires some systems and norms for its efficient adoption in any organization.
 Strategy provides overall framework for guiding enterprise thinking and action.

Importance of strategy:

1. Provides Direction and Action Plans:

It establishes in a clear, concise and strategically sound way the direction for the organization
how this will be achieved, including detailed action plans

2. Prioritizes and Aligns Activities:

Strategic planning is about making choices, establishing priorities, allocating resources to

strategic initiatives and coordinating to achieve desired results.

3. Defines Accountabilities:

It defines clear lines of accountability and timelines for achieving expected results on the agreed
strategic initiatives.

4. Enhances Communication and Commitment:

In clarifying the vision and accountabilities, the strategic plan increases the alignment of all
organizational activities and fosters commitment at all levels.

5. Provides a Framework for Ongoing Decision Making:

Since all decisions should support the strategy, the strategy and the strategic initiatives are the
reference point for decision-making.
Ans-2

Introduction:-

‘Management Ethics’ is related to social responsiveness of a firm. It is “the discipline dealing

with what is good and bad, or right and wrong, or with moral duty and obligation. It is a standard
of behaviour that guides individual managers in their works”.

Importance:-

Primarily it is the individual, the consumer, the employee or the human social unit of the society
who benefits from ethics. In addition ethics is important because of the following:

1. Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human
needs. Every employee desires to be such himself and to work for an organization that is
fair and ethical in its practices.
2. Creating Credibility: An organization that is believed to be driven by moral values is
respected in the society even by those who may have no information about the working
and the businesses or an organization.
3. Uniting People and Leadership: An organization driven by values is revered by its
employees also. They are the common thread that brings the employees and the decision
makers on a common platform. This goes a long way in aligning behaviors within the
organization towards achievement of one common goal or mission.
4. Improving Decision Making: A man’s destiny is the sums total of all the decisions that
he/she takes in course of his life. The same holds true for organizations. Decisions are
driven by values. For example an organization that does not value competition will be
fierce in its operations aiming to wipe out its competitors and establish a monopoly in the
market.
5. Long Term Gains: Organizations guided by ethics and values are profitable in the long
run, though in the short run they may seem to lose money. Tata group, one of the largest
business conglomerates in India was seen on the verge of decline at the beginning of
1990’s, which soon turned out to be otherwise. The same company’s Tata NANO car was
predicted as a failure, and failed to do well but the same is picking up fast now.
6. Securing the Society: Often ethics succeeds law in safeguarding the society. The law
machinery is often found acting as a mute spectator, unable to save the society and the
environment. Technology, for example is growing at such a fast pace that the by the time
law comes up with a regulation we have a newer technology with new threats replacing
the older one. Lawyers and public interest litigations may not help a great deal but ethics
can.

Needs:-

1. Business organizations are economic and social institutions that serve customers’ needs
by supplying those right goods at the right place, time and price. This is possible if the
institutions engage in ethical practices.
2. Business houses operate in the social environment and use resources provided by the
society. They are, therefore, morally and socially committed to look after the interests of
society by adopting ethical business practices.
3. Ethical business activities improve company’s image and give it edge over competitors
to promote sales and profits.
4. Legal framework of a country also enforces ethical practices. Under Consumer
Protection Act, for example, consumers can complain against unethical business
practices. Labour laws protect the interests of workers against unethical practices.

Conclusion:-

The above mentioned are the needs and importance of ethics in strategic management which
helps organisation to achieve their objective.

Ans-3
Introduction:-

Understanding the competitive forces, and their underlying causes, reveals the roots of an
industry's current profitability while providing a framework for anticipating and influencing
competition (and profitability) over time,” A healthy industry structure should be as much a
competitive concern to strategists as their company's own position.

Porter's Five Forces

Porter theorized that understanding both the competitive forces at play and the overall
industry structure are crucial for effective, strategic decision-making, and developing a
compelling competitive strategy for the future.

In Porter's model, the five forces are:-

1. Competitive rivalry

This force examines how intense the competition is in the marketplace. It considers the
number of existing competitors and what each one can do. Rivalry competition is high when
there are just a few businesses selling a product or service, when the industry is growing and
when consumers can easily switch to a competitor's offering for little cost. When rivalry
competition is high, advertising and price wars ensue, which can hurt a business's bottom
line.

2. The bargaining power of suppliers

This force analyzes how much power a business's supplier has and how much control it has
over the potential to raise its prices, which, in turn, lowers a business's profitability. It also
assesses the number of suppliers of raw materials and other resources that are available. The
fewer supplier there are, the more power they have. Businesses are in a better position when
there are multiple suppliers.

3. The bargaining power of customers

This force examines the power of the consumer, and their effect on pricing and quality.
Consumers have power when they are fewer in number but there are plentiful sellers and it's
easy for consumers to switch. Conversely, buying power is low when consumers purchase
products in small amounts and the seller's product is very different from that of its
competitors.

4. The threat of new entrants

This force considers how easy or difficult it is for competitors to join the marketplace. The
easier it is for a new competitor to gain entry, the greater the risk is of an established
business's market share being depleted. Barriers to entry include absolute cost advantages,
access to inputs, economies of scale and strong brand identity.
 5. The threat of substitute products or services

This force studies how easy it is for consumers to switch from a business's product or
service to that of a competitor. It examines the number of competitors, how their prices and
quality compare to the business being examined, and how much of a profit those competitors
are earning, which would determine if they can lower their costs even more. The threat of
substitutes is informed by switching costs, both immediate and long-term, as well as
consumers' inclination to change.

Conclusion:-

The above shown was competitive analysis using Porter’s model which helps organisation in
many ways. Which provide information regarding buyers, suppliers in the market along with
their substitute.

Ans-4

Introduction:-
Boston Consulting Group (BCG) Matrix is a four celled matrix developed by BCG, USA. It is
the most renowned corporate portfolio analysis tool. It provides a graphic representation for an
organization to examine different businesses in its portfolio on the basis of their related market
share and industry growth rates. It is a two dimensional analysis on management of SBU’s
(Strategic Business Units). In other words, it is a comparative analysis of business potential and
the evaluation of environment.

According to this matrix, business could be classified as high or low according to their industry
growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each
of these cells represents a particular type of business.

1. Stars- Stars represent business units having large market share in a fast growing industry.
They may generate cash but because of fast growing market, stars require huge
investments to maintain their lead. Net cash flow is usually modest. SBU’s located in this
cell are attractive as they are located in a robust industry and these business units are
highly competitive in the industry. If successful, a star will become a cash cow when the
industry matures.
2. Cash Cows- Cash Cows represents business units having a large market share in a
mature, slow growing industry. Cash cows require little investment and generate cash that
can be utilized for investment in other business units. These SBU’s are the corporation’s
key source of cash, and are specifically the core business. They are the base of an
organization. These businesses usually follow stability strategies. When cash cows loose
their appeal and move towards deterioration, then a retrenchment policy may be pursued.
3. Question Marks- Question marks represent business units having low relative market
share and located in a high growth industry. They require huge amount of cash to
maintain or gain market share. They require attention to determine if the venture can be
viable. Question marks are generally new goods and services which have a good
commercial prospective. There is no specific strategy which can be adopted. If the firm
thinks it has dominant market share, then it can adopt expansion strategy, else
retrenchment strategy can be adopted. Most businesses start as question marks as the
company tries to enter a high growth market in which there is already a market-share. If
ignored, then question marks may become dogs, while if huge investment is made, then
they have potential of becoming stars.
4. Dogs- Dogs represent businesses having weak market shares in low-growth markets.
They neither generate cash nor require huge amount of cash. Due to low market share,
these business units face cost disadvantages. Generally retrenchment strategies are
adopted because these firms can gain market share only at the expense of
competitor’s/rival firms. These business firms have weak market share because of high
costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim,
it should be liquidated if there is fewer prospects for it to gain market share. Number of
dogs should be avoided and minimized in an organization.
Limitations of BCG Matrix

1. BCG matrix classifies businesses as low and high, but generally businesses can be
medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in this model.
3. High market share does not always leads to high profits. There are high costs also
involved with high market share.
4. Growth rate and relative market share are not the only indicators of profitability. This
model ignores and overlooks other indicators of profitability.
5. At times, dogs may help other businesses in gaining competitive advantage. They can
earn even more than cash cows sometimes.
6. This four-celled approach is considered as to be too simplistic.

The above shown was the short note on BCG Matrix.

Ans-5 (1)

Case Study Solution:-

In the given case study Dr. Kumar focuses on the quality of the service and results of the report,
their aim is to provide best and effective results to the customers they are not focusing on the
cost leadership strategy.

Dr. Kumar should adopt Differentiation Strategy and they have focus strategy in their business
but they need to maintain that strategy.

Differentiation Strategy:-

When the product is differentiated with its unique feature or unique selling point in order to
compete and win effectively, that is known as the differentiation strategy. Differentiate your
product or service, whatever it may cost and offer to customers on a higher price. It is a Type of
Business Strategy used by Apple, a company that promises differentiated products to its
customers.

So, Dr. Kumar only needs to focus on its unique services and best result reports to the customers
as Apple is doing worldwide to their customers, Dr. Kumar need to follow this in navi Mumbai.

Opportunities:-

Dr. Kumar has a great opportunity to run his business in navi Mumbai with complete monopoly
in the competitive market, due to his unique service no one can stand against him in the market.

They can capture many more clients by their services.

Focus Strategy:-

As the name suggests, this strategy is applied only for a selected audience of the small market
with specialized needs. The target market has unique needs and it is to cater these needs that
firms focus on. It is up to the firm to charge the premium or keep it below average for these
products. Usually, the firm to implement this strategy would choose the target market with low
or no competitors and with the aim to achieve competitive advantage. It is one of the strongest
Types of Business strategies because it has a definite demand in the market. This strategy should
target market segments that are less vulnerable to substitutes or where a competition is weakest
to earn the above-average return on investment.

Focus Type of Business Strategies is divided into two parts viz Focused Cost Strategy and
Focused Differentiation strategy. In cost focused, the prices are tailored for the particular need to
cater specific group of people. This doesn’t mean the prices are lower, on the contrary, the prices
may be higher.

Threats:-

Number of threats can be less due to focus strategy and differentiation strategy in their business,
there is only one threat in this business that the competitor comes along with new concept for the
same business which attracts public in their favor, so Dr. Kumar needs to keep upgrading
themselves to avoid such threats in the market.

Conclusion:-

Dr. Kumar only needs to follow the above mentioned strategies for successful business in their
aimed area. And also be aware of the new technology with time to protect customers safe. These
were my opinion on Dr. Kumar business which he needs to follow.