Strategic Management

Answer 1. INTRODUCTION:
Porter Generic Strategics were set out by Michael Porter in 1945. It is combination of three
approaches – Cost Leadership and Differentiation and Focus. Further he then sub divided
Focus strategy into two parts – Cost Focus and Differentiation Focus.
Cost Leadership: - Emphasis on Low-Cost product to earn more business or reduced cost to
earn more profits.
Differentiation: - Generally focus to make their products different or more attractive than
any other competitor in an industry
Focus (Cost Focus and Differentiation): - It is an extension of Cost Leadership and
Differentiation. It concentrates on Niche Market, understanding the dynamics of that market
and unique need of customers in it.
As a highly populated country, the Indian Market is very diverse. Income level of Indian
population varies a lot, a portion of population is Rich, some are middle class and some poor.
Before launching a product in Indian Market, a business needs to understand all the segments
of market i.e., what areas are important and should be focused on. So, by applying all above
mentioned four strategies, we will able to cover all aspects of market.
CONCEPT:
So as per above explanation, we can use Focus strategy to launch this luxury car.
Differentiation Focus: -
In this strategy, Organization will look for product differentiation within one small market or
smaller group of consumers rather than wider range of consumer/market. Organization firstly
should understand the need of consumers to develop different/specialized product to satisfy
the needs of that consumer group.
In India, normally rich people won’t hesitate to pay extra for Luxury product, the facilities
and Comfort as they are considered necessary. Then the Organizations can make a unique
and luxury product with addition of some cost. The Italian company that is manufacturing
luxury sports car Pagani Huayra can attract rich consumers easily by providing unique luxury
products along with better service facility. Through this, company can charge extra price with
that within short span of time company can reach its breakeven point.
Advantages: -
1. Easy to attract upper class for unique product
2. In position to charge some extra price the targeted customer is Rich consumer who
doesn’t bother about smaller increase in price
3. By charging extra company could reach breakeven point in short span of time and in
position to earn profit for organization
Firstly, we will apply differentiation focus strategy then Cost Focus strategy since company is
already manufacturing luxury sports car, so it is easy to understand the needs of consumers
group and make the product accordingly. Also, modified products make the company come
in a position to charge some extra price that would lead to earn more profits.
Once company will reach its breakeven point, it can go for further level i.e., Cost Focus.
Cost Focus: -
As it is said earlier, company will reduce the existing cost or lower its selling price to attract
more consumer so that consumer base would increase in niche market i.e., a particular market
instead of covering of whole market. By doing that middle class family will attract to
purchase the product. However, this will impact the consumer base of upper class which
could be maintained with new unique development of product. In Today’s world where
technology also product in known
Advantages of Cost focus: -
1. Volume will increase lead to more earning being Consumer base will increase due to
cost reduction.
2. Stake percentage in particular market increased of the organization
3. More consumer base of different level of earning group.
4. Increased reputation/Goodwill of the organization
Conclusion:
As per above justification, Italian Luxury Sports Car manufacturing brand “Pagani Huayra”
can apply first Focus differentiation strategy. By doing this organization target the upper class
of market, so that would be in position to attain break up point at very early stage and start
earning soon. Then after some time when company has created a comfortable position in
market, it can target the other level of customer in particular market. Thus, we will create
focus on differentiation at initial level of launching of product in Indian market.

Answer 2. Introduction:
PESTLE analysis is a framework to analysis of macro external environment factors of world
which influence/effect the working of an organization from the outside. Through the result of
analysis identify the weakness and threats which will use as an input for other management
tools such as SWOT analysis.
PESTLE stand for: -
• P – Political
• E – Economic
• S – Social
• T – Technological
 • L – Legal
• E – Environmental
PESTLE analysis helps to understand the management of market behavior and business
position better so that it will help to evaluate how your strategy fits into the broader
environment. Analysis applies at any position – Launching of products/entrance into new
market or existing strategy.
Concept and Application: -
So, to know better, below are detailed explanation of all factors of analysis to decide whether
Kikkoman should enter in Indian market or not.
Political Environment: - Through this to know about how and to extent government
intervene in the economy. Some are politically motivated factors which could affect the
business likely Government policies for industries development, Government stability, Trade
import/export policy, Tax benefits, Rules & Regulation of labour laws etc. So organization
need to understand these policies and political interference to start the business and develop
the business strategy accordingly. As per current Indian political environment, policy are very
relaxing about FDI/FII investments. There are certain tax benefits are available for FII/FDI
projects in India. So political Environment is favorable for Kikkoman garment to enter the
Indian Market.
Economic Environment: - These factors are determinants of an economy’s performance that
directly impacts a company and have resonating long term effects. Both Macro and Micro
Factors Like Economic growth, Interest Rate, Exchange rate, Inflation, Labor cost, Consumer
disposable income, Credit availability etc to consider. India is one of the fastest growing
economies in the world. Indian Economy has been significantly stable post introduction of
Industrial reform in 1991. Policies are liberal towards foreign investors/capital, Corporate
taxes are reducing in past few years and Domestic consumption are encourages the
organization, so Economic factor are also favorable.
Social Environment: - These factors to check Social aspects, attitudes and trend that
influence your business growth. India has a gigantic consumer market being population of
India. People of India are influenced highly towards social attitude and beliefs. Currently
people are preferred to buy domestics instead of international. Mostly people are trying to
avoid purchase of Chines products and Government also pushing for “Make in India” project,
so It is an unfavorable factor.
Technical Environment: - This factor pertains to innovation in technology that may affect
the operation of an organization. India is already one of the most technologically advanced
countries in the world. For Outsourcing work, mostly foreign companies are depending on
Indian IT industries. With the advanced IT infrastructure and highly skilled work force,
Indian companies can innovate or adapt to changes very frequently. So, for Kikkoman it is a
challenging factor
Legal Environment: - The fifth element to address in the PESTEL analysis is the legal
landscape. These factors have both external and internal sides. There are certain laws that
affect the business environment in a certain country. Current and Future legal and regulatory
requirement impacting our business organization. These factors include Consumer protection,
Labor, health & safety, Advertising standard etc. These laws need to consider/Understand
first before taking any step. These factors are mostly barriers to enter into market of other
country for Global organization. As per Indian Laws, every product would have to pass
through all laws and regulations. Also in India, courts take a long time to settle the legal
battles. This is also an unfavorable factor for Kikkoman.
Environmental Factors: - Environmental forces impacting businesses and/or customer’s
geographical location, the surrounding environment, and natural resources used by an
organization. Factors of a business environmental analysis include but are not limited to
climate, weather, geographical location, global changes in climate, environmental offsets, etc.
Indian Government also strict regarding towards environmental rules violation due to global
warming. Also, Indian people now looking for product from reliable source. Thus, this
segment is also not favorable factor for an organization.
Conclusion: -
India is highly populated country and mostly people are middle class or Poor class families,
availability of low Labor cost, skilled manpower and political relaxation are favoring for new
setup. But higher challenges to get through legal consequences, technology advancement and
Environmental issue are adverse for new setup in India. Most of the situation/ factors
explained above are not in favor of Kikkoman, a Japanese company. So, not advisable to
enter in Indian market.

Answer 3a. Introduction:

To thrive and retain that success, every business in the world needs a mixture of numerous va
riables and components. However, due to a lack of cash, ineffective marketing, the wrong peo
ple on board, or inefficient products and services, not every one of them succeeds to keep the
graph heading higher.
It may then begin to descend the road and enter a downward spiral. Corporate turnaround is
the process of reviving a company and regaining its footing.
Businesses all over the world frequently encounter a downturn in their operations, either as a
result of higher-than-expected expenditure or lower-than-expected sales or earnings.
While this scenario can be addressed and dealt with effectively in some circumstances, it can
also lead to a downward spiral in others. In this instance, the organization's management
must find a method to claw its way out of the abyss and back to profitability.

Concept:
The process of turning a loss-making organisation into a profit-making one is known as
corporate turnaround or turnaround management. It is basically a process of corporate
rejuvenation aimed at preserving a struggling company and correcting all of the blunders and
incorrect steps that can lead to a profit-generating position once more. A organised, well-
planned, and methodological approach to a company's revival is achieved by adopting a step-
by-step process that requires time, investment, and participation.
Strategies to implement are:
1. Change in management – As part of a turnaround recovery strategy, companies
frequently change incumbent CEOs. Most organisations choose new chief executives
from outside the company during turnaround circumstances to inject a new style of
thinking into the top management.
It's based on the assumption that CEOs are to blame for a company's poor
performance, and that their replacement signals a shift in the company's fortunes. As a
result, a new senior management team might help a company focus on new
turnaround tactics.
2. Focus on core activities – As a turnaround recovery strategy, companies also revert
to focusing on their core business. Companies choose markets, customers, and
products that have the potential to earn large profits as a result of the enhanced
emphasis, and adopt the measures as the primary focus of the firm's activity.
For example, a business can refocus on its most loyal or least price-sensitive
consumer segments or product lines.
3. Cost management – Cost efficiency strategies are often implemented first in any
recovery strategy. Companies prefer turnaround recovery strategies that achieve cost
efficiencies because they are easy to implement, require little capital, and their effects
are almost immediate. Cost-oriented turnaround strategies include reducing research
and development (R&D), stretching accounts payable, eliminating pay increases,
reducing accounts receivable, cutting inventory, investment diversification, and
reducing marketing activities.
4. Human Resources for retrenchment of assets – After a cost-cutting effort,
companies that are experiencing performance decrease frequently adopt asset
retrenchment actions. Companies use the method to assess underperforming areas in
order to eliminate or improve them. Retrenching assets as a turnaround recovery
strategy is only as effective as a company's ability to create cash flow.

Conclusion:
The survival of a failing business requires a turnaround. A turnaround is a long-term positive
change in a company's performance in order to achieve desired results. A successful
turnaround is a lengthy process that necessitates a strong management team and a solid
business foundation.
Because of the volatile business environment, there has been constant pressure for growth
over the last few years. Businesses are investing in technology or other high-ticket items to
ensure that they can run operations smoothly and generate revenue. All of this has
increased the pressure on businesses to keep up with the competition.
Management plays an important role in identifying and implementing turnaround strategies.
Thus, FrenchShine can use any of the strategies to arrest the decline of revenues and
profitability in their organisation.
Answer 3b. Introduction:
A joint venture (JV) is a type of business partnership in which two or more parties agree to
pool their resources in order to complete a certain job. In the colloquial sense, they are a
partnership, but they can take on any legal structure. JVs are frequently used to enter a
foreign market by partnering with a local company.
A strategic alliance is an agreement between two organisations to collaborate on a mutually a
dvantageous initiative while maintaining each company's autonomy. The arrangement is less
complicated and less enforceable than a joint venture, which involves two companies pooling
resources to form a new company.

Concept:
A joint venture is a business arrangement in which more than two organizations or parties
share ownership, expenses, investment returns, profit, governance, and other aspects of the
firm. Various organizations expand either by infusing additional cash or by forming Joint
Ventures with other firms in order to obtain a good synergy from their competitors.
A strategic alliance is a partnership between two companies that have agreed to pool their
resources to work on a specific, mutually beneficial project.
A strategic alliance agreement could aid in the development of a more efficient process for a
corporation. Strategic partnerships enable two or more organizations, individuals, or other
entities to collaborate on common or related objectives.
A key distinction between a joint venture and a strategic alliance is that in a joint venture, all
of the companies involved form a new legal entity with a new identity, whereas in a strategic
alliance, each company works as a separate individual entity.
Despite the fact that the strategic alliance is an unofficial agreement between the
organizations involved, the obligations and tasks are the same.
The strategic alliance's lifespan is determined by the alliance's aims as well as the gains and
demands of the strategic partners. Companies that form strategic alliances expand their
businesses at a far faster rate than they would if they worked alone.
Conclusion:
Thus, Strategic Alliance is a better choice for FrenchShine. To enter a new market, strengthen
its product line, or gain a competitive advantage The partnership allows two companies to
collaborate on a common aim that benefits both.