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MB0036 – Strategic Management & Business Policy Assignment Set- 1

1. Explain the different circumstances under which a suitable growth strategy should be selected by any company to improve its performance (i.e., intensive, integrative or diversification growth). You may select an example of your choice to substantiate your views. Answer: Strategies to Improve Sales There are three alternatives to improve the sales performance of a business unit, to fill the gap between actual sales and targeted sales: a) Intensive growth b) Integrative growth c) Diversification growth a) Intensive Growth: It refers to the process of identifying opportunities to achieve further growth within the company’s current businesses. To achieve intensive growth, the management should first evaluate the available opportunities to improve the performance of its existing current businesses. It may find three options: • To penetrate into existing markets • To develop new markets • To develop new products At times, it may be possible to gain more market share with the current products in their current markets through a market penetration strategy. For instance, SONY introduced TV sets with Trinitron picture tubes into the market in 1996 priced at a premium of Rs.10,000 and above over the market through a niche market capture strategy. They gradually lowered the prices to market levels. However, it also simultaneously launched higher-end products (high-technology products) to maintain its global image as a technology leader. By lowering the prices of TVs with Trinitron picture tubes, the company could successfully penetrate into the markets to add new customers to its customer base. Market Development Strategy is to explore the possibility to find or develop new markets for its current products (from the northern region to the eastern region etc.). Most multinational companies

MB0036 – Strategic Management and Business Policy

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It is also said at Microsoft that VCRs can be programmed via e-mail. refrigerator. it would be able to gain more control over the market or generate more profit. personal computer. ‘In the near future. Study the following example Development Strategy is. Microsoft envisions a home where everyday appliances and electronics are smart. toaster oven. Product Development Strategy involves consideration of new products of potential interest to its current markets (e. forward or horizontal integration within the industry. However. to develop markets globally. if this company acquires some of its most profitably operating intermediaries such as wholesalers or retailers. the business processes have to be integrated for linear growth in the profits. washing machines and so on. which could lead to price pressures. If a company operating in music systems takes over the manufacturing business of its plastic material supplier. it is MB0036 – Strategic Management and Business Policy -2- . b) Integrative Growth: It refers to the process of identifying opportunities to develop or acquire businesses that are related to the company’s current businesses. The corporate plan may be designed to undertake backward. b) Developing software to allow these devices to communicate.g. According to Bill Gates. More often. laundry washers can be designed to send an instant message to the home computer when the load is done and refrigerators can be made to send an e-mail when there’s no more milk.have been entering Indian markets with this strategy. to understand what Product MICROSOFT’s New Strategy It is called PC-plus. (Backward Integration) Alternatively. care should be taken to ensure that these new markets are not low density or saturated markets. It has three elements: a) Providing computer power to the most commonly used devices such as cell phone. Microsoft plans to give these appliances ‘brains‘ and provide them the means to talk to each other through their Windows CE Operating System. Gramaphone Records to Musical Productions to CDs)– as part of a Diversification strategy. dishwasher. c) Investing heavily to help build wireless and high-speed internet access throughout the world to link it all together. PC-based networks will help us control many of our domestic matters with devices that cost no more than $ 100 each ‘.

If the company legally takes over or acquires the business of any of its leading competitors. Those reviewing this type of document have expectations you must meet. c) A company dealing in computer floppies plans to set up a Software Technology Park. What are the components of a good Business Plan and briefly explain the importance of each. A printing press might shift over to offset printing with computerised content generation to appeal to higher-end customers and also add new application areas ( Horizontal Diversification ) – or even sell stationery. b) A vendor supplying engine boxes to Maruti decides to supply the same with modifications to Hyundai. The classic examples for this would be engineering and textile firms setting up software development centres or Call Centres with new service clients. if this competitor is weak. Like a good recipe. this is planned with new products that have technological or marketing synergies with existing businesses to cater to a different group of customers (Concentric Diversification). 2. it might be counterproductive due to dilution of brand image). This makes sense when such opportunities outside the present businesses are identified with attractive returns and that industry has business strengths to be successful. products or markets (Conglomerate Diversification). When you create a business plan. If they do not see those crucial decision making MB0036 – Strategic Management and Business Policy -3- . it is called horizontal integration (however. don't attempt to recreate its format. Situation Analysis Sales Improvement Strategies: a) A supplier of computer stationery invests in a computer stationery manufacturing unit.forward integration. Answer: The format of a Business Plan is something that has been developed and refined over the years and is something that should not be changed. Alternatively. a business plan needs to include certain ingredients to make it work. In most cases. c) Diversification Growth: It refers to the process of identifying opportunities to develop or acquire businesses that are not related to the company’s current businesses. the company might choose new businesses that have nothing to do with the current technology.

Market Analysis Section An analysis of the market shows that you have done your homework. Devote the balance of your business plan to providing details of the items outlined in the Executive Summary. Financing Section MB0036 – Strategic Management and Business Policy -4- . The Business Section Be sure to include the legal name. Describe how you plan to better serve your market than your competition is currently doing. Use the Executive Summary section of your business plan to accurately describe the nature of your business venture including the need that you plan to fill. the proposed market. Describe the organization of your business including your management team. It's important to keep the description easy to read using common terminology. It needs to show the demand for your product or service. Remember. Executive Summary Section Every business plan must begin with an Executive Summary section. Otherwise. trends within the industry. Never assume that those reading your business plan have the same level of technical knowledge that you do. A well-written Executive Summary is critical to the success of the rest of the document. Show the reasons why people need your product or service.the amount of capital you seek. Also. so each and every word must be carefully selected and presented. Show this by including a brief analysis of the characteristics of your potential market. briefly describe your sales and marketing plan or approach. Finally include the numbers that those reviewing your business plan want to see . This section is basically a summary of your Marketing Plan. a description of your pricing plan and packaging and a description of your company policies. the carefully calculated sales projections and your plan to repay the loan. If you've captured your audience so far they'll read on. no matter how great your business idea. Here is where you need to capture the attention of your audience so that they will be compelled to read on. physical address and detailed description of the nature of your business. it's a summary. they'll close the document and add your business plan to the heap of other rejected ideas.components they’ll see no reason to proceed with their review of your business plan.

Also. MB0036 – Strategic Management and Business Policy -5- . You wish to start a new venture to manufacture auto components. Include resumes and biographies of key players on your management team. launching a test-marketing campaign.including all critical components . and how successful the marketer has been. You can accomplish this by a Google search on the Internet. or conducting surveys. Show the amount of personal funds you are contributing and their source. as business adviser Mike Pendrith points out. Well you do. Idea Researching In this stage. We will see here in the following paragraphs different stages of achieving the same goal. or revolves around a better way of making and marketing an existing one. you are attempting to find what the level of interest is in the products (or services) you wish to market. Use one today and produce a professional-quality Business Plan . By now you're probably thinking that you don't need Business Plan just yet. Here in this case supposing we are to start a new venture of manufacturing auto components and also to market them. you are researching your idea. These software packages are easy to use and affordable. While many would argue that the idea stage is not a stage at all. After this. Answer: Every business starts out as an idea. Include all pertinent financial worksheets in this section: annual income projections. Show staffing projection data for the next few years. 1. Explain different stages in the process of starting this new business.The Financing section must show that you are as committed to your business venture as you expect those reading your business plan to be. The object of your research is to find out who is marketing the same product or service in your area. a break-even worksheet. corporation or limited liability corporation. Include the legal structure of your business whether it is a partnership. you as a business builder must refine this idea into a money-making reality. projected cash flow statements and a balance sheet. it is actually a turning point. Also include the amount of capital you need and your plan to repay this debt. Management Section Outline your organizational structure and management team here. and there is business plan building software that can help you through this immense project. This idea usually involves the invention of a new product.tomorrow! 3.

cash flow control. such as a small business loan or grant. 4. Also. If insurance is a requirement. or if you wish to lease a building. examine the legal ramifications of your business. Advertising Campaign MB0036 – Strategic Management and Business Policy -6- . 2. Know the tax laws governing your business. This includes the planning of whether to take any loans or make personal investments in the company. their existence and also how successful they are. be aware of any safety laws governing you as an employer. According to the Biz Ed website. Financial Planning Financial planning involves thinking about the financial costs of starting and maintaining your business.Here as the main goal is to start a company that manufactures the auto components. prepare to budget for it. At this stage. Hence we are also to make a research on the feasible area where we can start our organization and licenses that we need to take keeping in mind the environmental factors as well. it is important to consider the legal requirements of selling your product or service. As Pendrith points out. And also the competitors who are all marketing that. In the business plan you typically include following heads: i) ii) iii) iv) v) vi) vii) viii) Executive Summary Company and Product Description Market Description Equipment and Materials Operations Management and Ownership Financial Information and Start-Up Timeline Risks and Their Mitigation 3. this is crucial if you want funding. you should consider such issues as the costs of running the business. the prices you wish to charge your customers. you need to consult with an attorney or business adviser for assistance. and how you wish to set up financial reserves in case of an emergency or an event causing significant loss to the business. we are to make a research on all the auto companies which are procuring the spares from the outside vendors. Business Plan Formulation You must write a business plan. Pendrith advises. As part of the initial research process. According to the Biz Ed website.

risk. the newspaper. your commercial partner will need some reassurance about the quality of the offer you are making to them. Preparing for Launch Advertise for employees. Think about what you look for in an employee. it may actually raise questions about their commitment to MB0036 – Strategic Management and Business Policy -7- . one needs to plan on the plant and machinery as well. or to support your research. Utilizing print.’ Indeed. This apart personal marketing is much more suggested. considering. Then begin requesting resumes and setting up interviews. they will need to satisfy themselves that it is a viable proposition.Decide how you will market your product. Hence sign boards are the feasible solution and also pamphlets circulated across the pioneers. radio or TV is also wise. Consider your budget and your target audience. the Internet. 4. a better advertising media will be road side sign boards placed close to the auto companies for getting the deals to manufacture their spares. Explain the process of due Diligence and why it is necessary. They need to have real time experience in the shop floor activities. Be specific about the requisite skills and experience you are seeking. the size of your advertising budget. As TV is useful only to reach the common man and he is not our target customer. This also requires adequate planning. making hiring decisions based on the standards you have set. Thus these are all the stages that I would consider performing if incase I plan to start a manufacturing unit producing automobile components. The employees apart. Here in this case more than TV. The process of assessing the viability. your name and the name of your business. potential liabilities and commercial prospects of a project is known as ‘due diligence. Answer: Due diligence Of course. If you are involved in licensing technology or seeking commercial support for your research you are likely to hear of ‘due diligence. In this case we will be looking for a few candidates in managerial position who must be good in managing things apart from minimal technical knowledge. of course. Make up business cards with your logo on it. if a potential partner seems not to be interested in this kind of issues. Make sure that they are of the most professional quality. Lower level people at the shopfloor people. to buy a share of patent rights.’ When a future partner is considering whether or not to license technology. 5.

including foreign patents. cash flow. You would think twice about purchasing a business if you found that it was burdened with debts. or key trade secrets or copyright material (such as manuals or software) – may also need to be identified or located. They may want the right to use your trade mark in association with the patented technology. confidentiality arrangements. For example. • Checks on employment contracts. as these may also affect the commercial partner’s interests in the technology. assets and liabilities of a business that is being purchased or otherwise financially supported. Other intellectual property rights – such as related trade mark or design registrations. and contracts with other parties that may interfere with the exercise of IP rights. • Details of the patent prosecution such as examiners’ reports and other opinions. Even a serious level of uncertainty or doubt could be enough to deter a potential partner. MB0036 – Strategic Management and Business Policy -8- . especially if they have run into this kind of difficulty before. such as patent registers and patent databases. For instance. due diligence will involve assessing the overall commercial operations. patent validity and scope of patent claims. they may be unwilling to take out a licence for your patent without getting access to the software you have developed for a related process. The same applies to a potential investment involving intellectual property. to check whether you have later filed patent applications on improvements to the original patented technology. a contractor or a visiting researcher could actually be legally entitled to some or all of the patent rights. particularly if the relationship assumes some degree of risk and investment on their part. So in a due diligence process. or to find out that the patent was being opposed by another company. Generally. or was about to be involved in difficult litigation. or to find that there is prior art available that calls into question its validity.the project or the credibility of their business plan. a potential commercial partner would not want to invest in patented technology only to find out that patent renewal fees have not been paid and the patent has lapsed. Due diligence may also involve searching for information about the full range of IP rights that might impact on the relevant technology – for instance. It may transpire that a student. or if there were doubts about whether it really owned its assets. your commercial partner may undertake a range of checks and need various forms of information. These may include: • Checks on external records. • Independent advice from patent attorneys on issues such as patent ownership. • Searches of patent databases for conflicting technology. that may limit the value of their investment in the original technology.

Checks on laboratory notebooks in the event that the validity of US patents is of concern to the commercial partner (this also provides reassurance as to claims of ownership of the patent). Surveys of the activity of competitors and owners of competing technology. shortterm profits. others yet argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. Furthermore. sustainable responsible business (SRB). Essentially. self-regulating mechanism whereby business would monitor and ensure its support to law. It should also speed up the licensing negotiations. Ideally.• • • • Details of any legal challenges to the patent. stakeholders and all other members of the public sphere. communities. business would embrace responsibility for the impact of its activities on the environment. Consequently. it essentially is titled to aid to an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. and possibilities of conflict. CSR is the deliberate inclusion of public interest into corporate decision-making. In preparing to licence your technology. also known as corporate responsibility. employees. consumers. and you will be in a stronger negotiating position in negotiating licence terms. Is Corporate Social Responsibility necessary and how does it benefit a company and its shareholders? Answer: Corporate social responsibility (CSR). you will be able more effectively to reassure your commercial partner. responsible business. and international norms. and Analysis of freedom to operate issues. you should consider in advance these kind of due diligence issues. and ultimately the commercialization of your intellectual property. If you can anticipate and provide comprehensive answers to these questions. 5. Critics argue that CSR distracts from the fundamental economic role of businesses. Proponents argue that there is a strong business case for CSR. planet. corporate citizenship. and the honoring of a triple bottom line: people. However. ethical standards. others argue that it is nothing more than superficial window-dressing. Corporate Social Responsibility has been redefined throughout the years. and the way the proceedings were resolved. CSR-focused businesses would proactively promote the public interest by encouraging community growth and development. profit. and voluntarily eliminating practices that harm the public sphere. or corporate social performance. is a form of corporate self-regulation integrated into a business model. CSR policy would function as a built-in. MB0036 – Strategic Management and Business Policy -9- . in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate. regardless of legality. The practice of CSR is much debated and criticized.

Potential business benefits The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise. and are difficult to quantify.g. For example. The UN has developed the Principles for Responsible Investment as guidelines for investing entities. As a corporate practice and a career specialization. The term "CSR" came in to common use in the early 1970s. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Orlitzky. balanced scorecards).. Simultaneously. corporations have re-branded their core values in the light of business ethical considerations (e. descriptive approaches are also taken. It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. In the increasingly conscience-focused marketplaces of the 21st century.g. higher UK road tax for higher-emission vehicles). In academia.g. was used to describe corporate owners beyond shareholders as a result of an influential book by R Freeman in 1984. Historically. both within major corporations and within academia. social responsibility charters). ethics codes. meaning those on whom an organization's activities have an impact. and Rynes found a correlation between social/environmental performance and MB0036 – Strategic Management and Business Policy . the demand for more ethical business processes and actions (known as ethicism) is increasing. today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. pressure is applied on industry to improve business ethics through new public initiatives and laws (e. In some cases. interest in business ethics accelerated dramatically during the 1980s and 1990s. after many multinational corporations formed. The term stakeholder. Business ethics can be both a normative and a descriptive discipline. Schmidt. Deming's Fourteen Points. the field is primarily normative.Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. BP's "beyond petroleum" environmental tilt).10 - . though there is a large body of literature exhorting business to adopt measures beyond financial ones (e. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). although it was seldom abbreviated. ISO 26000 is the recognized international standard for CSR (currently a Draft International Standard).

business development or public relations departments of an organization. License to operate MB0036 – Strategic Management and Business Policy . CSR can also help improve the perception of a company among its staff. in addition to the more obvious economic and governmental drivers. such as The Co-operative Group. courts. CSR can play a role in building customer loyalty based on distinctive ethical values. However. Business service organizations can benefit too from building a reputation for integrity and best practice. businesses may not be looking at short-run financial returns when developing their CSR strategy. CSR may be based within the human resources. Some companies may implement CSR-type values without a clearly defined team or program. Potential recruits often ask about a firm's CSR policy during an interview. The business case for CSR within a company will likely rest on one or more of these arguments: Human resources A CSR program can be an aid to recruitment and retention. particularly within the competitive graduate student market. whereby CSR can also be driven by employees' personal values. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks. The Body Shop and American Apparel are built on ethical values. particularly when staff can become involved through payroll giving. fundraising activities or community volunteering. These can also draw unwanted attention from regulators. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. See also Corporate Social Entrepreneurship. The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include charitable efforts and volunteering. and having a comprehensive policy can give an advantage. or may be given a separate unit reporting to the CEO or in some cases directly to the board. Brand differentiation In crowded marketplaces. Several major brands.11 - . governments and media.financial performance. Risk management Managing risk is a central part of many corporate strategies.

The other type supplied them with know-how.e. more loyalty. consumers. 6. investors (particularly institutional investors). communities in the areas where the corporation operates its facilities. An investor was expected to excel in obtaining high yields on his capital – not in industrial management or in marketing. higher productivity. or the environment seriously as good corporate citizens with respect to labour standards and impacts on the environment Stakeholder priorities Increasingly. A single investor (or a small group of investors) could no longer accommodate the needs even of a single firm. Actually. and so on). A manager was expected to manage. there was little difference between financial and strategic investors. A firm resembled a household and the number of people involved – in ownership and in management – was correspondingly limited. Distinguish between a Financial Investor and a Strategic Investor explaining the role they play in a Company. Additionally. and the media. One type supplied firms with capital. MB0036 – Strategic Management and Business Policy . Investors of all colors sought to safeguard their investment by taking over as many management functions as they could. diversity. Thus. the scales of industrial production (and of service provision) expanded. two classes of investors emerged. investments were small and shareholders few. People invested in industries they were acquainted with first hand. improved recruitment. Answer: In the not so distant past. corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. academics. Key external stakeholders include customers. not to be capable of personally tackling the various and varying tasks of the business that he managed. As knowledge increased and specialization ensued – it was no longer feasible or possible to micro-manage a firm one invested in. increased retention. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.12 - . (10 marks). separate businesses of money making and business management emerged.Corporations are keen to avoid interference in their business through taxation or regulations. regulators. As markets grew. By taking substantive voluntary steps. they can persuade governments and the wider public that they are taking issues such as health and safety.

The strategic investor. searching for willing buyers for his stake. the balance between financial investors and strategic investors is shifting in favour of the latter. The price of his shares is the most important indication of success. marketing techniques.13 - . nor the resources to get seriously involved in any one of them. The financial investor has little interest in the company's management. This is "bottom line" short termism which also characterizes operators in the capital markets. In many cases.all depend on the strategic investor. Indeed. That there is a strong relationship between the quality and decisions of the strategic investor and the share price is small wonder. more and more. the financial investor has no interest. The financial investor represents the past. gradually. a separation was maintained. Invested in so many ventures and companies. represents the real long term accumulator of value.money is abundant.right and wrong . The financial investor is satisfied with a management team which maximizes value. in many cases. so is macro-management. intellectual property. Paradoxically. to generate profits. Optimally. to a growing extent. clientele and a vision. to issue new products and to acquire new clients . Given the ability to create a brand.but. for instance.technology. So are. These are the functions normally reserved to financial investors: MB0036 – Strategic Management and Business Policy . the level of customer satisfaction. The financial investor is always on the lookout. the strategic investor also provided the necessary funding. it is the strategic investor that has the greater influence on the value of the company's shares. People understand that money is abundant and what is in short supply is good management. management skills. The strategic investor represents a discounted future in the same manner that shares do. are purely financial investors. But. investment banks and other financial institutions. The quality of management. on the other hand. The stock exchange is a popular exit strategy. the success or failure of marketing strategies. the education of the workforce . This is the extent of its involvement. The financial investor participates in quarterly or annual general shareholders meetings. For "exit strategy" read quick profits. Micro-management is left to others . Venture capital and risk capital funds. his money buys for him not only a good product and a good market. a sense of direction. But his interpretation of the rolls and functions of "good management" are very different to that offered by the strategic investor. Its money is the result of past .decisions. but also a good management. the rate of the introduction of new products. Its orientation is short term: an "exit strategy" is sought as soon as feasible.

the income. especially. 8. To implement continuous financial audit and control systems to monitor the performance of the firm. the audits. which directly deal with the finances of the firm. business plans. To collaborate and coordinate the activities of outside suppliers of financial services hired or contracted by the firm. full and accurate set of accounting books of the firm reflecting all its activities in a manner commensurate with the relevant legislation and regulation in the territories of operations of the firm and with internal guidelines set from time to time by the Board of Directors of the firm. the expenditures. 6. the adherence to the budget. 1. regularly and duly prepare and present to the Board of Directors financial statements and reports as required by all pertinent laws and regulations in the territories of the operations of the firm and as deemed necessary and demanded from time to time by the Board of Directors of the Firm. investment memoranda and all other financial and business documents as may be required from time to time by the Board of Directors of the Firm. financial consultants. To comply with all reporting. To alert the Board of Directors and to warn it regarding any irregularity. the budgets and any other matter of a financial nature or which could or does have a financial implication. To regulate. underwriters and brokers. financial plans. lack of adherence. the financial operations. its flow of funds. the banking system and other financial venues. lack of compliance. lacunas and problems whether actual or potential concerning the financial systems. other budgets. the financing plans. the management echelons. auditors. 7. the accounting. 4.Financial Management The financial investor is expected to take over the financial management of the firm and to directly appoint the senior management and. To timely. 5. This is usually achieved both during a Due Diligence process and later. accounting and audit requirements imposed by the capital markets or regulatory bodies of capital markets in which the securities of the firm are traded or are about to be traded or otherwise listed. financial institutions and capital markets with the aim of securing the funds necessary for the MB0036 – Strategic Management and Business Policy .14 - . the cost of sales and other budgetary items. To maintain a working relationship and to develop additional relationships with banks. 3. To prepare and present for the approval of the Board of Directors an annual budget. 2. supervise and implement a timely. feasibility studies. including accountants. as financial management is implemented.

– in order to determine the changes in the credit risk rating of said factors. 3. 3. To collaborate with legal institutions. 4. to initiate and engage in all manner of activities. The selection of infrastructure. industrial processes. To improve the collection methods in order to reduce the amounts of arrears and overdue payments. etc. The strategic investor is. He is. data gathering methods and venues in order to properly evaluate and predict the credit risk rating of a client. conducive to the financial health. arrears and overdue payments and other collectibles. the growth prospects and the fulfillment of investment plans of the firm to the best of his ability and with the appropriate dedication of the time and efforts required. 10. regularity. quantitative methods. Minimizing the costs of infrastructure by deploying proprietary components and planning. law enforcement agencies and private collection firms in assuring the timely flow and payment of all due payments. Otherwise. or the average period of such arrears and overdue payments. 2. put in charge of: 1. Collection and Credit Assessment 1. or supplier. the attainment of its development plans and its investments.15 - . equipment. distributors and other debtors in the timely and orderly payment of their dues. To coordinate an educational campaign to ensure the voluntary collaboration of the clients. MB0036 – Strategic Management and Business Policy . Negotiations and agreements with providers and suppliers. questionnaires. To constantly monitor and analyse the payment morale. raw materials. To construct and implement credit risk assessment tools. usually.. therefore. etc. 4. To analyse receivables and collectibles on a regular and timely basis. 6.operations of the firm. To fully computerize all the above activities in a combined hardware-software and communications system which will integrate into the systems of other members of the group of companies. distributor. The provision of corporate guarantees and letters of comfort to suppliers. 5. non-payment and non-performance events. 9. put in charge of the following: Project Planning and Project Management The strategic investor is uniquely positioned to plan the technical side of the project and to implement it. whether financial or of other nature. 2.

advertising. sales promotion methods. It is the market leaders in certain territories. etc. its recognition and market awareness. Special events.. The strategic investor is also in charge of "vision thinking": new methods of operation. The strategic investor usually organizes a distribution and dealership network. Marketing and Sales 1. 5. premises. 4. 2. protocols. The planning and implementation of line connections. Project planning. buildings. The strategic investor also implements these plans or supervises their implementation. The presentation to the Board an annual plan of sales and marketing including: market penetration targets. It developed software and personnel capable of analysing any market into effective niches and of creating the right media (image and PR). individual users and businesses in the territory.g. The dissemination of the product as a preferred choice among vendors. predicting the future trends and market needs. etc. new market niches. new marketing ploys.5. vouchers). or a sales network (retail chains) including: training. a franchising network. This is an important asset. The strategic investor is usually possessed of a brandname recognized in many countries. reliably. The strategic investor typically brings to the firm valuable experience in marketing and sales. co-branding. inventory and accounting controls. sponsorships. can attract users. local marketing and sales promotion and other network management functions.16 - . 6. implementation and supervision. collaboration with businesses. market penetration. public relations and other media campaigns. 3. market analyses and research. which. profiles of potential social and economic categories of clients. image. It has built large databases with multi-year profiles of the purchasing patterns and demographic data related to thousands of clients in many MB0036 – Strategic Management and Business Policy . points. collaboration with other suppliers – are all the responsibilities of the strategic investor. pricing. It has been providing goods and services to users for a long period of time.). solving issues of compatibility (hardware and software. The enhancement of the brandname. etc. distributors. 6. 7. structures. computer network connections. network control.. pecuniary and quality supervision. factories. The planning and implementation of incentive systems (e. It has numerous off the shelf marketing plans and drawer sales promotion campaigns. 7. advertising and sales promotion drives best suited for it. advertising campaigns. The planning and erecting of the various sites. if properly used.

distributors. vendors. implement and supervise all the stages of the technological side of the business. customer services. images. The entrepreneurs – who sought to introduce the two types of investors. Above all. To represent the firm in its contacts. proprietary. technological solutions to the needs of the firm. sounds. intranet) to deal with all the aspects of the structure and the operation of the firm. its clients and suppliers. 2. or persons. To run the day to day business of the firm. authorities. it accumulated years of marketing and sales promotion ideas which crystallized into a new conception of the business.17 - . 2. To secure the unobstructed flow of relevant information and the protection of confidential organization. communication. Technology 1. PR and image materials. most conducive to the conduct of its business and to present the new structure for the Board's approval within 30 days from the date of the GM's appointment. articles. representations and negotiations with other firms. The strategic investor puts at the disposal of the firm proprietary software developed by it and specifically tailored to the needs of companies operating in the firm's market. in the first place – are usually left with the following functions: Administration and Control 1. paper clippings. 5. The strategic partner's engineers are available to plan. The planning and the execution of an integration program with new technologies in the field. 3. It owns libraries of material. software. The planning and implementation of a fully operative computer system (hardware. and proprietary trademarks and brand names. 4. 4.countries. To oversee the personnel of the firm and to resolve all the personnel issues. 3. To structure the firm in an optimal manner. sales personnel. The training is conducted at its sole expense and includes tours of its facilities abroad. Education and Training The strategic investor is responsible to train all the personnel in the firm: operators. MB0036 – Strategic Management and Business Policy . The planning and implementation of new technological systems up to their fully operational phase. in collaboration with other suppliers or market technological leaders. The encouragement of the development of in-house.

And – being well acquainted with entrepreneurs – they insist on having unmitigated control of the business. They may be less visionary – but also more experienced. They rebel and prefer to remain small or even to close shop than to give up their cherished freedoms. These things antagonize the entrepreneurs. They are more interested in business results than in dreams. MB0036 – Strategic Management and Business Policy . They feel that they are losing their creation to cold-hearted. mean spirited. But the very personality traits which qualify them to become entrepreneurs – also hinder the future development of their firms. for fear of losing all their money. corporate predators. Entrepreneurs are excellent at identifying the needs of the market and at introducing technological or service solutions to satisfy such needs. Only the introduction of outside investors can resolve the dilemma.in knowing when to let go.This is why entrepreneurs find it very hard to cohabitate with investors of any kind. Outside investors are not emotionally involved. This is where nine out of ten entrepreneurs fail .18 - .