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STRATEGIC MANAGEMENT NOTES-SYBMS

UNIT I
1. What is a Business Strategy and explain its purpose.
2. Define Strategic Management and state its importance
3. Define Goals and Objectives
4. What are the guidelines of setting Business Objectives
5. Write short notes on steps in formulating Business Objectives

UNIT II
1. Explain the process and importance of PESTEL Analysis
2. What is SWOT analysis and explain its importance in strategic management
2 Write short notes on Internationalization
3 Explain briefly different functional level strategies
4 Write short notes on Marketing and HR strategy

UNIT III
1 Write short notes on Structural Implementation
2 Write short notes on Behavioral Implementation
3 Explain importance of GE 9 cell matrix and McKinsey 7S Framework in strategic
management
4 Explain importance of BCG matrix and Porter’s Five Forces model in strategic
management

UNIT IV
1. What are Techniques of Strategy control
2 Explain different Quantitative and qualitative analysis to evaluate strategic control
3 Write short notes on following comparative analysis techniques
Historical analysis, Industry norms and Benchmarking
4 In comprehensive analysis what are different factors under key factor rating

QUESTIONS

Unit- 1
1. What is a Business Strategy and explain its purpose.

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1. Discharges Board Responsibility


2. Facilitates Better Delegation
3. Forces an Objective Assessment
4. Provides a Framework for Decision Making
5. Promotes Staff Participation
6. Minimize weaknesses
7. Enables Measurement of Progress
8. Provides an Organizational Perspective
9. Improves Employee’s Efficiency
10. SWOT Analysis
11. Aids in planning
12. Organizing Resources
13. Helps in Evaluation
14. Facilitates Communication and Coordination
15. Helps to face Competition
2 Define Strategic Management and state its importance
Meaning of Strategic Management:

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The strategic management process means defining the organization’s strategy. It is also
defined as the process by which managers make a choice of a set of strategies for the
organization that will enable it to achieve better performance.

The strategic management has certain importance are briefly explained as follows :

1. Choice of Strategy: - strategic management helps to management to select the best


possible strategy option. Then it may be internal or external growth of the organizatio n.
For example, in case of internal growth it may adopt intensification or diversifica tio n
strategy
2. Improves Employee’s Efficiency: - strategic management clarifies about what to do,
how to do, when to do a particular task to the employees. This helps to employee to
perform a job accurately and expertise which leads to increase in efficiency.
3. SWOT Analysis: - A thorough analysis of internal and external environment of a
business enables to identify the strength and weakness as well as threats and
opportunities of the business. This helps the business to keep pace with the changing
nature of the environment affecting to the firm. And this is possible only with the help
of strategic management.
4. Aids in planning: - strategic management helps to frame realistic plans.
5. Organizing Resources: - business objectives can be accomplishing with the help of
proper allocation and utilization of resources. This is possible only with the systematic
plan, which is the result of strategic management.
6. Helps in Evaluation: - the important aspect of strategic management is evaluation of
plans or strategy. Here the actual performance will be compared with standards set and
if any variation is found then the corrective measures are taken.
7. Facilitates Communication and Coordination: - as the strategies are well planned.
For its proper execution there is need to have proper communication and coordinatio n
at all levels of operations.
8. Helps to face Competition: - strategic management enables a firm to meet competitio n
more effectively. This is because strategic management enables to develop effective
strategies to face the competition.

3 Define Goals and Objectives

Goals
• Goals are defined as the lifelong aims, which an individual or entity endeavor
to achieve something.
• It determines what the company is attempting to accomplish
• Although the previous goal statement about widgets does not say specifically
how your company can reach it, it does serve an important purpose.
• Setting goals helps define the direction that a business will take.
• Goals should align with your business’ mission and vision statements, which
are even more general and abstract statements of your business’ values and
aspirations.
Objectives

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• On the other hand, objectives are the specific milestones which a person plans
to achieve in a limited period.
• These are precise, measurable, time-based, actions that assist in the
achievement of goal.

4 What are the guidelines of setting Business Objectives


• Clarity
• Language easy to understand
• Consistency
• Should not be contradictory to each other
• Should be consistent and coordinated
• Quantifiable, specific & measurable
• Numeric or quantifiable terms
• Act as standards for measuring performance
• Time bound
• Specific range, 1-5yrs preferably
• Realistic
• Achievable
• Challenging to motivate for efficiency
• Flexible
• No rigidity
• Adjusted as per business environment

5 Write short notes on steps in formulating Business Objectives


Formulation of Business Objectives

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• Reviewing of Vision & Mission statements


• Scope of business activity
• Corporate philosophy & culture
• Value system
• Analysis of environmental factors
• Internal factors
• HR, financial, physical facilities, management structure
• Understand strengths & Weakness
• External factors
• Customers, suppliers, competitors, PESTEL
• Understand opportunities & threats
• Past objectives & achievements of organization
• Past objectives are guidelines
• No much deviation from past
• Setting of objectives
• Short term & long term objectives set
• Once objectives are set proper communication to mangers & employees

UNIT- 2
1 Explain the process and importance of PESTEL Analysis
 Environmental analysis is a process by which organizations keep track of relevant
environment in order to identify opportunities and threats influencing their business.
 The organizations single out the most important factors of present in the environment
which will help to achieve its objectives.
 Environment analysis a part of SWOT analysis.
 Environmental analysis is also called environmental scanning.
 It should be linked to current planning and operations Environmental analysis requires
information inputs which can be obtained from:
i. Forecasting
ii. Management information system
iii. Written information
iv. Audio visual reports
v. Newspapers
vi. Sales personnel

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Importance:
1. Continuous process: Environmental analysis is an ongoing process. It enables the
organization to develop new trends. These rends can be evaluated in the light of
organizational requirements. Changes in environment take place but the analysis
process is continuous.
2. Exploratory process: It is an exploratory process because it not only considers the
present situation but also takes in to account the different dimensions of future. It is
time tested to work out alternative courses of action.
3. Identifies SWOT: Environmental analysis also helps us to identify the SWOT of the
company. It helps us to identify the strength, weakness, opportunities and threats.
These 4 factors help the business to survive and gain profit through its activities. It
helps the company to grab opportunities and get alert of threats.
4. Social acceptance: environmental analysis guides business to become consumer
oriented. In order to achieve fast growth, the business must appeal the social groups.
Social acceptance is the best situation for a business to emerge victorious by defeating
competitors.
5. Adopt monitoring: Environmental analysis enables the organization to monitor
prevailing trends in the market. The main purpose of monitoring is to organize data to
see clearly whether certain trends are developing. Monitoring helps the raw data to
exact data. Monitoring describes environmental trends and identifies areas for future
analysis.
6. Adopt forecasting: One of the major contributions of environmental analysis is that it
makes use of forecasting. Forecasting is an exercise to estimate the events of the future
based on the analysis of past and present situation. With the help of forecasting the
business is better prepared to present future projections and alternative plans.
2 What is SWOT analysis and explain its importance in strategic management
Strengths – Positive traits in your business and in your control. Strengths frequently
incorporate resources, viable benefits, the positive parts of those in your workforce and the
perspectives identified with your business that you do especially well, concentrating on all the
internal segments that add significance or present you a competitive lead.

Weaknesses – Factors that are in your control yet bring down your capacity to get or keep up
an aggressive edge, for example, imperfect expertise, absence of resources, restricted access to
abilities or innovation, substandard services or meagre physical area. Weaknesses embody the
negative internal facets of your business that lessen the general esteem, your services or
products give.

Opportunities – Are summary of the external factors that symbolize the incentive for your
business to survive and thrive in the marketplace. These variables incorporate the particular
opportunities accessible in your market that give an advantage, including market development,
lifestyle alterations, determination of current issues or the fundamental capacity to offer a
higher level of quality in relation to your rivals to advance an increment sought after for your
services or products.
Threats – Are external components beyond the controlling ability of your business, that can
possibly put your marketing methods, or the whole business, at threat? The essential and
ubiquitous threat is rivalry.

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Advantages of SWOT Analysis to a business
1. SWOT analysis gives an acceptable perspective of your strengths, and permits you to
expand on them to meet your business targets.
2. It shows your weaknesses and gives an opportunity to overturn them.
3. It provides for you a sneak peak into the opportunities that dwell ahead. Utilizing this
you can draft your vital development arrangements focused around your weaknesses
and strengths.
4. It helps you examine conceivable threats to your business, and roll out essential
improvements to the business arrangements and development plans. Moreover, it
encourages making supplementary or optional plans, emergency arrangements, and so
on.
5. It helps you utilize a methodology to match your strengths and opportunities; utilize
those methods for changing over your weaknesses and threats into your strengths and
opportunities.
6. The whole SWOT analysis methodology brings to light your resources, and gives
inspiration and the essential drive to continue your marketing strategies in spite of all
odds
3 Write short notes on 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.
 The expansion through internationalization could be done by adopting either of the
following strategies:

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 International Strategy: The firms adopt an international strategy to create value by
offering those products and services to the foreign markets where these are not available.
This can be done, by practicing a tight control over the operations in the overseas and
providing the standardized products with little or no differentiation.
 Multidomestic Strategy: Under this strategy, the multi-domestic firms offer the
customized products and services that match the local conditions operating in the foreign
markets. Obviously, this could be a costly affair because the research and development,
production and marketing are to be done keeping in mind the local conditions prevailing
in different countries.
 Global Strategy: The global firms rely on low-cost structure and offer those products
and services to the selected foreign markets in which they have the expertise. Thus, a
standardized product or service is offered to the selected countries around the world.
 Transnational Strategy: Under this strategy, the firms adopt the combined approach of
multi-domestic and global strategy. The firms rely on both the low-cost structure and the
local responsiveness i.e. according to the local conditions. Thus, a firm offers its
standardized products and services and at the same time makes sure that it is in line with
the local conditions prevailing in the country, where it is operating.

4 Explain briefly different functional level strategies

Marketing Strategy:
 Marketing involves all the activities concerned with the identification of customer
needs and making efforts to satisfy those needs with the product and services they
require, in return for consideration.
 The most important part of a marketing strategy is the marketing mix, which covers all
the steps a firm can take to increase the demand for its product.
 It includes product, price, place, promotion, people, process and physical evidence.
 For implementing a marketing strategy, first of all, the company’s situation is analysed
thoroughly by SWOT analysis.
 It has three main elements, i.e. planning, implementation and control.
 There are a number of strategic marketing techniques, such as social marketing,
augmented marketing, direct marketing, person marketing, place marketing,

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relationship marketing, Synchro marketing, concentrated marketing, service marketing,
differential marketing

Financial Strategy:
 All the areas of financial management, i.e. planning, acquiring, utilizing and
controlling the financial resources of the company are covered under a financial
strategy.
 This includes raising capital, creating budgets, sources and application of funds,
investments to be made, assets to be acquired, working capital management, dividend
payment, calculating the net worth of the business and so forth.
Human Resource Strategy:
 Human resource strategy covers how an organization works for the development of
employees and provides them with the opportunities and working conditions so that
they will contribute to the organization as well.
 This also means to select the best employee for performing a particular task or job.
 It strategizes all the HR activities like recruitment, development, motivation, retention
of employees, and industrial relations.
Production Strategy:
 A firm’s production strategy focuses on the overall manufacturing system, operational
planning and control, logistics and supply chain management.
 The primary objective of the production strategy is to enhance the quality, increase the
quantity and reduce the overall cost of production.
Research and Development Strategy:
 The research and development strategy focuses on innovating and developing new
products and improving the old one, so as to implement an effective strategy and lead
the market.
 Product development, concentric diversification and market penetration are such
business strategies which require the introduction of new products and significant
changes in the old one.
For implementing strategies, there are three Research and Development approaches:
To be the first company to market a new technological product.
To be an innovative follower of a successful product.
To be a low-cost producer of products.
5 Write short notes on Marketing and HR strategy
Marketing Strategy can be defined as building and planning a long-term and forward-looking
approach with a well-defined plan to attain the desired goals and objectives of accomplishing
higher sales, increased revenue generation for the company, retaining the loyal base of
customers, attracting the new set of customers, and gaining a competitive advantage in the
market amongst others.
1. Importance of Marketing Strategy
2. Marketing strategy provides an organization an edge over it’s competitors.
3. Strategy helps in developing goods and services with best profit making potential.
4. Marketing strategy helps in discovering the areas affected by organizational growth
and thereby helps in creating an organizational plan to cater to the customer needs.
5. It helps in fixing the right price for organization’s goods and services based on
information collected by market research.

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6. Strategy ensures effective departmental co-ordination.
7. It helps an organization to make optimum utilization of its resources so as to provide a
sales message to its target market.
8. A marketing strategy helps to fix the advertising budget in advance, and it also
develops a method which determines the scope of the plan, i.e., it determines the
revenue generated by the advertising plan.
HR Strategy
 Strategic human resource management is the practice of attracting, developing,
rewarding, and retaining employees for the benefit of both the employees as
individuals and the organization as a whole.
 HR departments that practice strategic human resource management do not work
independently within a silo; they interact with other departments within an
organization in order to understand their goals and then create strategies that align with
those objectives, as well as those of the organization.
 As a result, the goals of a human resource department reflect and support the goals of
the rest of the organization.
 Strategic HRM is seen as a partner in organizational success, as opposed to a necessity
for legal compliance or compensation.
 Strategic HRM utilizes the talent and opportunity within the human resources
department to make other departments stronger and more effective.
UNIT3
1 Write short notes on Structural Implementation
1. A key aspect of implementing strategy is the need to institutionalize that strategy so that
it permeates daily decisions and actions in a manner consistent with long term strategic
success. The fit between the internal organization of an enterprise and its strategy is
central to strategic management.
2. Inappropriate internal organization can prevent or impede the development and
implementation of a strategy.
3. Three fundamental elements must be managed to "fit" the strategy if that strategy is to be
effectively institutionalized: organizational structure, leadership and culture.
4. Two basic kinds of organizational structures exist: (1) a formal organizational structure,
and (2) an informal organizational structure.
5. The formal organizational structure represents the relationships between resources as
designed by management.
6. The informal organizational structure represents the social relationships based on
friendships or interests shared among various members of an organization.
7. When implementing a strategy, managers must take both the formal and the informal
organizational structure into consideration for three reasons:
8. First, there is the question of whether the existing organizational structure will promote
or impede successful implementation.
9. Second, there is question of what management levels and personnel within the
organization will be responsible for various implementation tasks.
10. Third, the informal organization can be used to facilitate successful implementation.
11. The Nature of Organizational Structure
12. An organization exists when two or more people coordinate their efforts, on an ongoing
basis, to strive for a common purpose.

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13. When an entrepreneur consider taking on another person, the time has arrived for
creating organizational structure
2 Write short notes on Behavioral Implementation
The behavioral of the employees affect the success of the organization. Strategic
implementation requires support, discipline, motivation and hard work from all manager and
employees.

1. Influence Tactics: The organizational leaders have to successfully implement the


strategies and achieve the objectives. Therefore the leader has to change the behavior of
superiors, peers or subordinates. For this they must develop and communicate the vision
of the future and motivate organizational members to move into that direction.

2. Power: it is the potential ability to influence the behavior of others. Leaders often use
their power to influence others and implement strategy. Formal authority that comes
through leaders position in the organization (He cannot use the power to influe nce
customers and government officials) the leaders have to exercise something more than
that of the formal authority (Expertise, charisma, reward power, information power,
legitimate power, coercive power).

3. Empowerment as a way of Influencing Behavior: The top executives have to


empower lower level employees. Training, self managed work groups eliminating whole
levels of management in organization and aggressive use of automation are some of the
ways to empower people at various places.

4. Political Implications of Power: Organization politics is defined as those set of


activities engaged in by people in order to acquire, enhance and employ power and other
resources to achieve preferred outcomes in organizational setting characterized by
uncertainties. Organization must try to manage political behavior while implementing
strategies.

5. Leadership Style and Culture Change: Culture is the set of values, beliefs, behaviors
that help its members understand what the organization stands for, how it does things
and what it considers important. Firms culture must be appropriate and support their
firm. The culture should have some value in it . To change the corporate culture involves
persuading people to abandon many of their existing beliefs and values, and the
behaviors that stem from them, and to adopt new ones

6. Values: Value is something that has worth and importance to an individual. People
should have shared values. This value keeps the every one from the top manage me nt
down to factory persons on the factory floor pulling in the same direction.

7. Ethics and Strategy: Ethics are contemporary standards and a principle or conducts that
govern the action and behavior of individuals within the organization. In order that the
business system function successfully the organization has to avoid certain unethica l
practices and the organization has to bound by legal laws and government rules and
regulations.

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8. Managing Resistance to Change: To change is almost always unavoidable, but its
strength can be minimized by careful advance. Top management tends to see change in
its strategic context. Rank-and-file employees are most likely to be aware of its impact
on important aspects of their working lives

9. Managing Conflict: Conflict is a process in which an effort is purposefully made by


one person or unit to block another that results in frustrating the attainment of the others
goals or the furthering of his interests. The organization has to resolve the conflicts.

3 Explain importance of GE 9 cell matrix and McKinsey 7S Framework in strategic


management
The GE 9-Cell Matrix was developed with the intention to overcome certain limitations of
the BCG Matrix. The Matrix was pioneered by General Electric Co., with the aid of Boston
Consulting Group and McKinsey & Co.
 The matrix consists of 9 cells (3X3) and Two Key Variables :
• Business Strength
• Industry Attractiveness
Business Strengths :
• Product features/ Patents
• Market Share
• Profit Margins
• Price/ Quality Competitiveness
• Market Intelligence
Industry Attractiveness :
• Market Size & Growth
• Economies of scale
• Technology
• Social/ environmental aspects
 • Competitive factors
Advantages
• Matrix identifies the optimum business port folio as one that fit perfectly strengths and
help to explore most attractive industry sector or market
• It allows intermediate ratings between high and low and between strong and week.
• It helps in channeling the corporate resources to business and achieving competitive
advantage and superior performance.
• It helps in better strategic decision making and better understanding of business scope.
Weakness
• It tends to obscure business that are become to winners because their industries are
entering at exit stage.
McKinsey 7S Framework

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• The McKinsey 7 S model refers to the seven key interrelated or integrated elements of
an organization which are subdivided into hard and soft elements:
The Hard elements are within the direct control of the management as it can be easily
defined and identified. The following elements are the hard elements in an organization.
• Strategy: It is the plan of action, or the roadmap or the blueprint by way of which an
organization gains a competitive advantage or a leadership edge.
• Structure: This refers to organizational structure or the reporting pattern.
• Systems: This includes the day to day activities in which the staff members involve
themselves for ensuring the completion of their assigned tasks.
The Soft elements are less tangible and are difficult to be defined and identified as such
elements are more governed by the culture. But according to the proponents of this
model, these soft elements are equally important as the hard elements in determining an
organization’s success as well as growth in the industry. The following elements are the
soft elements in an organization:
• Shared Values: The superordinate goals or the core values which get reflected within
the organizational culture or influence the code of ethics.
• Style: This lays emphasis on the leadership style and how it influences the strategic
decisions, people motivation and organizational performance.
• Staff: The general staff or the capabilities of the employees
• Skills: The core competencies or the key skills of the employees play a vital role in
defining the organizational success.
The framework can be used to understand where gaps may appear in the organisation,
which is creating imbalance and what areas of the business to align and improve to
increase performance. It can be used as a tool in a variety of corporate situations.
4 Explain importance of BCG matrix and Porter’s Five Forces model in strategic
management
The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help
with long-term strategic planning, to help a business consider growth opportunities by
reviewing its portfolio of products to decide where to invest, to discontinue or develop
products. It's also known as the Growth/Share Matrix.
1. Dogs: These are products with low growth or market share.
2. Question marks or Problem Child: Products in high growth markets with low market share.
3. Stars: Products in high growth markets with high market share.
4. Cash cows: Products in low growth markets with high market share
The Matrix is divided into 4 quadrants based on an analysis of market growth and
relative market share
Benefits of the BCG-Matrix
1. The BCG-Matrix is helpful for managers to evaluate balance in the companies’s
current portfolio of Stars, Cash Cows, Question Marks and Dogs.

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2. BCG-Matrix is applicable to large companies that seek volume and experience effects.
3. The model is simple and easy to understand.
4. It provides a base for management to decide and prepare for future actions.
5. If a company is able to use the experience curve to its advantage, it should be able to
manufacture and sell new products at a price that is low enough to get early market
share leadership. Once it becomes a star, it is destined to be profitable.
Porter’s Five allows you to evaluate a specific industry in a simplified and in depth way and
create strategies to work on them. Five Forces are:

1. -Inter-firm Rivalry. How many firms are there? Who are my competitors? Who are the
major players? On what are we competing?

2. -Supplier Power. Who are my suppliers? How many alternatives are available? How
do I get lower prices? Does it make sense to Vertically Integrate?

3. -Buyer Power. Who are my buyers? How many alternatives are available? How do I
get higher prices for my products? Does it make sense to Vertically Integrate?

4. (A higher number of suppliers and buyers increases your power in the market by
making them compete against each other on price for your items)

5. -Threat of Substitute Goods. Substitutes threats can vary by industry. Your product
should be unique and hard to imitate if you want to combat this force.

6. -Threat of New Entrants. How do I create barriers to entry so that very few competitors
can enter the market? Your goals is to consolidate the market to increase your power.
UNIT4
1. What are Techniques of Strategy control
Techniques of Strategy control: Its refers to control that helps in assessing and anticipating
the change taking place in the environment which can have significant impacts on firm’s
strategies. Classified in two groups
a) Strategic Momentum control -
i)Responsibility control centers: Relate to the core of management control systems such as
revenue, expenditure, profit and investment
ii) Focusing on success Factors: It enables to examine the factors that contribute to the
success of strategy such as growth in number of customers, Production unit, sales revenue,
number of employee, profitability, etc.
iii)Generic strategy Approached: Strategies are compared with the competitor’s strategies
B) Techniques of Operational control:
Classified in four groups:
i)Strategic issue management: Aimed at identifying one or more key environmental
developments and assessing their impact on the organization
ii) Strategy Field Analysis: It is a technique of examining the nature and extent of synergies
that exist or are lacking between the unit of an organization

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iii)System Modeling: It is based on computer based model that stimulates the essential
features of organization and its environment.
iv)Scenarios: It is about likely environment the firm would face in the nature

2. Explain different Quantitative and qualitative analysis to evaluate strategic control


Qualitative Analysis
 Qualitative analysis is a securities analysis that uses subjective judgment based on
unquantifiable information, such as management expertise, industry cycles, strength of
research and development
 This approach depends on the kind of intelligence that machines (currently) lack, since
things like positive associations with a brand, management trustworthiness, customer
satisfaction, competitive advantage and cultural shifts are difficult, arguably
impossible, to capture with numerical inputs.
 Qualitative analysis can sound almost like "listening to your gut," and indeed many
qualitative analysts would argue that gut feelings have their place in the process
Quantitative analysis
 Financial Analysis Ratio analysis EVA (Economic Value Added) ABC
(Activity Based Costing)
 Non-Financial Analysis Everything cannot be expressed in monetary terms Goodwill,
employee morale, service call rate, inventory units used per period, absenteeism
3. Write short notes on following comparative analysis techniques
Historical analysis, Industry norms and Benchmarking
 Historical analysis Comparison with one’s own performance over a period of time.
Graphical representation of company’s performance Comparison can be done to
see improvements & pitfalls
 Industry Norms Comparison with competitors More specifically, comparison
with strategic groups Strategic groups are conceptually defined cluster of
competitors that share the same strategies.
 Benchmarking Benchmark is the reference point for taking measures against.
Purpose is to find the best performers in an area so that one could match one’s own
performance with them and even surpass them.
 Benchmarking Performance Benchmarking Process Benchmarking Strategic
Benchmarking
 Benchmarking Internal Benchmarking Competitive Benchmarking Functional
Benchmarking Generic Benchmarking
4. In comprehensive analysis what are different factors under key factor rating
Key Factor Rating Organizational Capability Profile (OCP)
Financial Capability Profile (a) Sources of funds (b) Usage of funds (c) Management of
funds
Marketing Capability Profile (a) Product related (b) Price related (c) Promotion related (d)
Integrative & Systematic
Operations Capability Factor (a) Production system (b) Operation & Control system (c)
R&D system
Personnel Capability Factor (a) Personnel system (b) Organization & employee
characteristics (c) Industrial Relations

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General Management Capability (a) General Management Systems (b) External Relations
(c) Organization climate

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