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MS-11 REFERENCE MATERIAL
Strategic Management
1. Select a specific company of your choice. Read about this company and its current position. Based
on your study, identify some of the important macro environmental opportunities and threats for
this company.
Tata Motors - Macro Environment
For financial year 2008, the TATA motors reported the consolidated revenues (net of excise) at Rs. 356.51
bn posted a growth of 10.2% over Rs. 323.61 bn in the previous year. The Consolidated Profit after tax (PAT) for
the year was Rs. 21.67 bn, a marginal decrease over Rs. 21.69 bn in the previous year.
Standalone EBITDA impacted by 6.6% to Rs.30.92 bn in FY08 from Rs 33.12 bn in FY07; EBITDA
margin stood at 10.76% in FY08 as compared to 12.06% in the previous financial year.
Following are the main macro environmental factors from FY08 that had direct bearing on the company’s revenue
and profitability figures:
GDP Growth
Encouraged by the continuing thrust in investments which grew by 31.6%, the GDP growth in the third quarter of
fiscal 2008 came in at 8.4% compared to 9.1% in the same quarter last year.
A good kharif season supported growth of 3.2% in agriculture while Industry and services grew at a
moderated level of 8.4% and 10.5%
SWOT Analysis - Tata Motors Limited
The company began in 1945 and has produced more than 4 million vehicles. Tata Motors Limited is the
largest car producer in India. It manufactures commercial and passenger vehicles, and employs in excess of 23,000
people. This SWOT analysis is about Tata Motors.
Strengths
• The internationalisation strategy so far has been to keep local managers in new acquisitions, and
to only transplant a couple of senior managers from India into the new market. The benefit is that
Tata has been able to exchange expertise. For example after the Daewoo acquisition the Indian
company leaned work discipline and how to get the final product 'right first time.'
• The company has a strategy in place for the next stage of its expansion. Not only is it focusing
upon new products and acquisitions, but it also has a programme of intensive management
development in place in order to establish its leaders for tomorrow.
• The company has had a successful alliance with Italian mass producer Fiat since 2006. This has
enhanced the product portfolio for Tata and Fiat in terms of production and knowledge exchange.
For example, the Fiat Palio Style was launched by Tata in 2007, and the companies have an
agreement to build a pick-up targeted at Central and South America.
Weaknesses
• The company's passenger car products are based upon 3rd and 4th generation platforms, which put Tata
Motors Limited at a disadvantage with competing car manufacturers.
• Despite buying the Jaguar and Land Rover brands (see opportunities below); Tat has not got a foothold in
the luxury car segment in its domestic, Indian market. Is the brand associated with commercial vehicles
and low-cost passenger cars to the extent that it has isolated itself from lucrative segments in a more
aspiring India?
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• One weakness which is often not recognised is that in English the word 'tat' means rubbish. Would the
brand sensitive British consumer ever buy into such a brand? Maybe not, but they would buy into Fiat,
Jaguar and Land Rover (see opportunities and strengths).
•
Opportunities
• In the summer of 2008 Tata Motor's announced that it had successfully purchased the
Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the World's luxury car
brand have been added to its portfolio of brands, and will undoubtedly off the company the chance to
market vehicles in the luxury segments.
o Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for around
USD $16 million.
o Nano is the cheapest car in the World - retailing at little more than a motorbike. Whilst the World
is getting ready for greener alternatives to gas-guzzlers, is the Nano the answer in terms of
concept or brand? Incidentally, the new Land Rover and Jaguar models will cost up to 85 times
more than a standard Nano!
o The new global track platform is about to be launched from its Korean (previously Daewoo)
plant. Again, at a time when the World is looking for environmentally friendly transport
alternatives, is now the right time to move into this segment? The answer to this question (and the
one above) is that new and emerging industrial nations such as India, South Korea and China will
have a thirst for low-cost passenger and commercial vehicles. These are the opportunities.
However the company has put in place a very proactive Corporate Social Responsibility (CSR)
committee to address potential strategies that will make is operations more sustainable.
• The range of Super Milo fuel efficient buses are powered by super-efficient, eco-friendly engines. The bus
has optional organic clutch with booster assist and better air intakes that will reduce fuel consumption by
up to 10%.
Threats
• Other competing car manufacturers have been in the passenger car business for 40, 50 or more years.
Therefore Tata Motors Limited has to catch up in terms of quality and lean production.
• Sustainability and environmentalism could mean extra costs for this low-cost producer. This could impact
its underpinning competitive advantage. Obviously, as Tata globalises and buys into other brands this
problem could be alleviated.
• Since the company has focused upon the commercial and small vehicle segments, it has left itself open to
competition from overseas companies for the emerging Indian luxury segments. For example ICICI bank
and DaimlerChrysler have invested in a new Pune-based plant which will build 5000 new Mercedes-Benz
per annum. Other players developing luxury cars targeted at the Indian market include Ford, Honda and
Toyota. In fact the entire Indian market has become a target for other global competitors including Maruti
Udyog, General Motors, Ford and others.
• Rising prices in the global economy could pose a threat to Tata Motors Limited on a couple of fronts. The
price of steel and aluminium is increasing putting pressure on the costs of production. Many of Tata's
products run on Diesel fuel which is becoming expensive globally and within its traditional home market.
Thus these are the important macro environmental opportunities and threats for this company.
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2) Assume that a group of investors are planning to open a restaurant offering family meals in the city.
The restaurant would require various functional strategies to be adopted. List out the suggestions that you
would like to give them to plan and implement the functional strategies.
How to Open a Restaurant
Ask a restaurant consultant about opening a restaurantand you're likely to get a succinct answer: "Don't!"
The failure rate is high, the costs can soar out of control and the hours are brutal. If you remain convinced that you
are the next Alice Waters or Wolfgang Puck, put on your toque, brush up on your knife skills and forge ahead.
Difficulty & Moderately Challenging Suggestions:
Instructions
1. Clarify your concept and put all the proposed details--from decor to dessert choices--in writing. If
you can't write about them, they need more thought.
2. Investigate the regulatory requirements, both city and state. Prepare for a plethora of paperwork,
including byzantine building codes with regulations covering everything from kitchen exhaust
systems to interior finish requirements.
3. Find an ideal location. Do a demographic study of the surrounding area. Research the amount of
foot traffic and the availability of easy parking. Then negotiate a lease you can afford.
4. Plan your menu early in the game. Kitchen layout and equipment purchases depend on it. Reduce
your equipment costs either by purchasing used equipment or leasing new.
5. Find the funds. Write a detailed business plan and consider forming a small private corporation or
starting a limited partnership. However much money you think you need, raise more. Many
restaurant consultants blame the high rate of new restaurant failures on undercapitalization.
6. Allocate the available space. Remember that in addition to dining and kitchen areas you'll need
room for dishwashing, storage, bathrooms and administrative work.
7. Plan the layout for the dining area. Remember to balance your desire for the maximum number of
seats with your future customers' desire to shun tables crammed into awkward corners. Also avoid
locating tables in the middle of the room like woebegone little islands. "Nestle tables--particularly
two-tops--against low divider walls or other architectural features," advises restaurant owner and
designer Pat Kuleto.
8. Keep the kitchen layout focused on efficient, safe food preparation. Ensure that there is sufficient
light and ventilation, as well as enough space so that cooks, servers and dishwashers are not
bumping into one another at the busiest times.
9. Don't neglect the graphics. From the exterior signage to the look of the menus, graphic design
plays an important part in a restaurant's overall look.
10. Pay attention to lighting design. Focus dramatic light onto the tables to highlight the food, and
complement it with glowing atmospheric light to make the customers look good.
11. Research and develop the menu. Taste-test the recipes repeatedly until the kitchen can achieve
consistency. Remember that the food also has to look good on the plate. Plot out your menu
pricing strategy. Have the final menu proofread before sending it to the printer.
12. Decide whether to offer full bar service. Apply for a wine and/or liquor license.
13. Investigate insurance needs thoroughly. Restaurants are simmering stockpots of potential
accidents--from fires to floods to food poisoning and a hundred other potential horrors. The
National Restaurant Association (restaurant.org) is an outstanding resource for insurance-related
information..
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14. Select and train the staff. Look for enthusiasm as well as experience. Allow ample training time
before the restaurant opens. Remember that the person running the front of the house is as
important as the person running the kitchen, and great service is as important a factor in winning
customer loyalty as great food.
15. Set up a book keeping and accounting system. Establish control over the meal checks. There are
dozens of scams that dishonest servers and cashiers can pull; get some expert advice on how to
prevent them.
16. Designate a core of trusted employees to supervise storage areas carefully. Stress that they must
check in all deliveries and audit the food inventory frequently.
17. Pass your opening inspection by a food safety specialist with your local health department, along
with a plumbing inspection. You'll receive a permit to operate, which will be reviewed yearly.
18. Open your doors and welcome hungry diners.
What is Your Restaurant Marketing Strategy?
When you open a restaurant, you will need as many new customers as you can get to make your
establishment a raving success. Your restaurant marketing strategy will be the biggest part of bringing in new
business. Here are a few restaurant marketing strategies for you to try.
1. Market your Restaurant in Hotel and Motel Rooms- People on vacation and people who do a great deal
of traveling, will want to know where to find an excellent meal in your town. An excellent restaurant marketing
strategy is to call or visit hotel and motels within a 5 mile radius of your restaurant, and ask them if you can place
menus and coupons in their rooms and lobby areas. Some hotels and motels provide a list of area attractions for
their guests, ask them if you can add your restaurant to their list. When the guests get hungry they will see your
menu or your name on the list and will think of your restaurant.
2. Form an Alliance With Local Event Sponsors. This is another great restaurant marketing strategy! After
any local concert or sporting event, people may be ready to have a meal before they go home. Many people come
from quite a long distance to these events, and they will be looking for a place to eat before they head home. You
can advertise on existing monitors, or have someone stationed at the door and give out menus when the patrons go
inside. Remember women are more apt to keep flyers than men. In exchange for the advertising you can advertise
the event in your restaurant.
3. Enter and Sponsor Contests- One of the biggest ways to use a restaurant marketing strategy, is to enter
and win a contest. You can enter your cook or chef in a cooking contest, or enter contests in restaurant magazines
and browse the internet to find contests to enter. You can create contests in your restaurant that will bring in
customers.
4. Sell Gift Certificates- As another restaurant marketing strategy, offer gift certificates that your
customers can buy for their friends so that they can try your cuisine. Each gift certificate is a referral to your
restaurant. Make sure the gift certificates come in several different amounts, so the buyers can decide how much to
spend.
5. Give Out Samples in Busy Locations- Have some of your staff go to busy locations such as shopping
centers, parks, malls etc., and give out samples of your most popular fare. When someone stops to sample your fare,
you can hand them a menu, a specials flyer, a business card, and a coupon for savings at your establishment. This
should give you more traffic and so many satisfied customers.
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6. Offer Specials- You can offer special prices on great food on special days. You can also offer a buffet of
finger foods at special prices from 11 to 2 for the lunch hour. A great restaurant marketing strategy is offering
frequent diner cards so that they can get a free meal after buying so many at the restaurant.
3) What do you understand by organizational culture? Apply the concept to a University Library,
which requires a specific organizational culture.
Organizational culture is an idea in the field of organizational studies and management which describes
the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has
been defined as "the specific collection of values and norms that are shared by people and groups in an organization
and that control the way they interact with each other and with stake holders outside the organization.".
This definition continues to explain organizational values, also called as "beliefs and ideas about what
kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of
behavior organizational members should use to achieve these goals. From organizational values develop
organizational norms, guidelines, or expectations that prescribe appropriate kinds of behavior by employees in
particular situations and control the behavior of organizational members towards one another."
Strong culture is said to exist where staff respond to stimulus because of their alignment to organizational
values. In such environments, strong cultures help firms operate like well-oiled machines, cruising along with
outstanding execution and perhaps minor tweaking of existing procedures here and there.
Conversely, there is weak culture where there is little alignment with organizational values and control
must be exercised through extensive procedures and bureaucracy. Where culture is strong—people do things
because they believe it is the right thing to do—there is a risk of another phenomenon, Groupthink. "Groupthink"
was described by Irving L. Janis. He defined it as "...a quick and easy way to refer to a mode of thinking that people
engage when they are deeply involved in a cohesive in-group, when members' strive for unanimity override their
motivation to realistically appraise alternatives of action." This is a state where people, even if they have different
ideas, do not challenge organizational thinking, and therefore there is a reduced capacity for innovative thoughts.
This could occur, for example, where there is heavy reliance on a central charismatic figure in the organization, or
where there is an evangelical belief in the organization’s values, or also in groups where a friendly climate is at the
base of their identity (avoidance of conflict). In fact group think is very common, it happens all the time, in almost
every group. Members that are defiant are often turned down or seen as a negative influence by the rest of the
group, because they bring conflict.
Innovative organizations need individuals who are prepared to challenge the status quo—be it group-think
or bureaucracy, and also need procedures to implement new ideas effectively.
Some Types of Culture

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There are different types of culture just like there are different types of personality. Researcher Jeffrey
Sonnenfeld identified the following four types of cultures.
Academy Culture
Employees are highly skilled and tend to stay in the organization, while working their way up the ranks.
The organization provides a stable environment in which employees can development and exercise their skills.
Examples are universities, hospitals, large corporations, etc.
Baseball Team Culture
Employees are "free agents" who have highly prized skills. They are in high demand and can rather easily
get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as investment banking,
advertising, etc.
Club Culture
The most important requirement for employees in this culture is to fit into the group. Usually employees
start at the bottom and stay with the organization. The organization promotes from within and highly values
seniority. Examples are the military, some law firms, etc.
Fortress Culture
Employees don't know if they'll be laid off or not. These organizations often undergo massive
reorganization. There are many opportunities for those with timely, specialized skills. Examples are savings and
loans, large car companies, etc.
Typologies of organisatonal cultures:

Several methods have been used to classify organizational culture. Some are described below:
Hofstede (1980) demonstrated that there are national and regional cultural groupings that affect the
behavior of organizations.
Hofstede looked for national differences between over 100,000 of IBM's employees in different parts of
the world, in an attempt to find aspects of culture that might influence business behavior.
Hofstede identified four dimensions of culture in his study of national influences:
 Power distance - The degree to which a society expects there to be differences in the levels of power. A
high score suggests that there is an expectation that some individuals wield larger amounts of power than
others. A low score reflects the view that all people should have equal rights.
 Uncertainty avoidance reflects the extent to which a society accepts uncertainty and risk.
 Individualism vs. collectivism - individualism is contrasted with collectivism, and refers to the extent to
which people are expected to stand up for themselves, or alternatively act predominantly as a member of the
group or organization. However, recent researches have shown that high individualism may not necessarily
mean low collectivism, and vice versa. Research indicates that the two concepts are actually unrelated. Some
people and cultures might have both high individualism and high collectivism, for example. Someone who
highly values duty to his or her group does not necessarily give a low priority to personal freedom and self-
sufficiency
 Masculinity vs. femininity - refers to the value placed on traditionally male or female values. Male values
for example include competitiveness, assertiveness, ambition, and the accumulation of wealth and material
possessions.
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So here let us take the Madras University Library. Here they are having the culture that
all the students cannot enter in to the library without prior permission. Especially for the doctorate students.
Because the research scholars from different areas that means from various geographical areas will be going to the
library to verify the library books. But they will not be allowed to enter in to the library, without the ID card and
the bonafide letter from the guide. At any point of time they will not allow the persons without these proofs. So
this is a culture which is being followed by the university people.
4) Select a multinational firm of your choice and determine its corporate-level and business unit-level
strategies. Support your answer with relevant data.
Let us take the Multinational Company that is Polaris which is having its branches all over the world is
following the Corporate-level and business unit-level strategies. It is not only that this company only follows
this but every company which tries to come up in the competitive market they have to have like these
strategies. So now let us concentrate about them in detail.
Definition of Corporate-Level Strategy
The overall corporate level strategy is concerned with the broad scope of an organization’s strategic
activities and the matching of these to the organization’s environment, its resources capabilities and the values and
expectations of its various stakeholders. It looks at the whole strategic scope of the enterprise. This is the “large
picture” view of the organization and includes deciding in which service or products markets to compete and in
which geographic regions to operate. For multi-business firms, the resource allocation process—how equipment,
funds, human resource and other resources are distributed—is typically established at the corporate level.
In addition, because market definition is within the scope of corporate-level strategists, the responsibility
for diversification, or the addition of new products or services to the existing product/service line-up, also falls
within the realm of corporate-level strategy. Likewise, whether to compete directly with other firms or to selectively
establish cooperative relationships—strategic alliances—falls within the realm of corporate-level strategy, while
needing ongoing input from business-level managers.
To further understand the broad meaning of corporate-level strategy, it is necessary to look at the three
levels of strategy.
What are the three levels of Corporate-Level Strategy
Corporate strategy
This strategy refers to the overall strategy for a diversified company. It is concerned with the mix of
businesses the company should compete in, and the ways in which strategies of individual units should be
coordinated and integrated.This is the highest strategy and is concerened with what businesses the firm is in or
should be in and how integrated these businesses should be with one another. An example would be diversification
into new product or geographic markets
7

Business strategy
It is concerned with market navigation and how each business attempts to achieve itsmission within its
chosen area of activity. Here strategy is about which products or services should be developed and offered to which
markets and the extent to which the customer needs are met whilst achieving the objectives of the organization. It
includes corporate planning at the tactical level and consists of the allocation of resources for complete operations.
Example of business strategy is attempts to secure competitive advantage in existing product or geographic markets
Functional strategy
The role of this strategy is mainly to support the firm’s corporate strategy and business strategy. It is
concern with how the different functions (marketing, production, finance, etc) support the corporate and business
strategies. Examples of functional strategy are information systems, human resource practices, and production
processes that facilitate achievement of corporate and business strategy.
The goals and objectives of a corporate level strategy is survival policy and overall long term direction. Its
strategic components are scope of business portfolio, financial, technological and organizational competencies.
Major decisions are concerend with financial policies and organizational policies.
All organizations should carry out some form of corporate level strategy to define where they are, where
they want to go and how organizations can best get there. The need forstrategic planning increases with the
complexity of the organization & the uncertainty and turbulence of its environment.
Strategy - what is strategy?

Overall Definition:
Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:
"Strategy is the direction and scope of an organisation over the long-term: which achievesadvantage for
the organisation through its configuration of resources within a challengingenvironment, to meet the needs
of markets and to fulfil stakeholder expectations".
In other words, strategy is about:
* Where is the business trying to get to in the long-term (direction)
* Which markets should a business compete in and what kind of activities are involved in such markets?
(markets; scope)
* How can the business perform better than the competition in those markets? (advantage)?
* What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be
able to compete? (resources)?
* What external, environmental factors affect the businesses' ability to compete? (environment)?
* What are the values and expectations of those who have power in and around the business? (stakeholders)
8

Strategy at Different Levels of a Business
Strategies exist at several levels in any organisation - ranging from the overall business (or group of
businesses) through to individuals working in it.
Corporate Strategy –
It is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is
a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making
throughout the business. Corporate strategy is often stated explicitly in a "mission statement".
Business Unit Strategy –
It is concerned more with how a business competes successfully in a particular market. It concerns
strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors,
exploiting or creating new opportunities etc.
Operational Strategy –
It is concerned with how each part of the business is organised to deliver the corporate and business-unit
level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.
How Strategy is Managed - Strategic Management
In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the
questions above.
In practice, a thorough strategic management process has three main components, shown in the figure
below:
Strategic Analysis
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This is all about the analysing the strength of businesses' position and understanding the important external
factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools,
including:
PEST Analysis - a technique for understanding the "environment" in which a business operates.
Scenario Planning - a technique that builds various plausible views of possible futures for a business
Five Forces Analysis - a technique for identifying the forces which affect the level of competition in an
industry
Market Segmentation - a technique which seeks to identify similarities and differences between groups of
customers or users
Directional Policy Matrix - a technique which summarizes the competitive strength of a businesses
operations in specific markets
Competitor Analysis - a wide range of techniques and analysis that seeks to summarise a businesses' overall
competitive position
Critical Success Factor Analysis - a technique to identify those areas in which a business must outperform
the competition in order to succeed
SWOT Analysis - a useful summary technique for summarising the key issues arising from an assessment of
a businesses "internal" position and "external" environmental influences.
Strategic Choice
This process involves understanding the nature of stakeholder expectations (the "ground rules"),
identifying strategic options, and then evaluating and selecting strategic options.
Strategy Implementation
Often the hardest part. When a strategy has been analysed and selected, the task is then to translate it into
organisational action. Business unit manager influence on corporate-level strategy formulation.
The distinction between corporate-and business-level strategy is a distinction as old, and as durable, as the
field of strategic management itself (Bowman and Helfat, 2001; Hofer and Schendel, 1978). This distinction
between levels of strategy is reflected in the multidivisional (M-form) structure of multibusiness corporations. The
M-form, according to Chandler (1962), allows the Chief Executive Officer (CEO) and the "corporate office" to
set corporate strategy, while delegating more detailed matters to the managers of business-specific subunits. It
might thus appear that, although these business unit managers may be formulators of business strategy, they are
implementers of corporate strategy.
Such appearances, however, may well be deceptive. The business unit managers
traditionally responsible for implementing corporate strategy may have more to do with its
formulation than conventional wisdom suggests. Bower's (1970) classic account of the resource
allocation process in multibusiness corporations includes examples of "upward influence."
Indeed, upward influence is the foundation of a stream of literature demonstrating the
importance in strategy formulation of bottom-up processes as well as top-down processes
(Burgelman, 1983; Floyd and Wooldridge, 1992; Wooldridge and Floyd, 1990).
10

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http://mbaignoumaterial.blogspot.

Please send your documents/contribution at kvrajan6@gmail.com .

MS-11 REFERENCE MATERIAL

SWOT Analysis - Tata Motors Limited

Please send your documents/contribution at kvrajan6@gmail.com .

Please send your documents/contribution at kvrajan6@gmail.com .

Difficulty & Moderately Challenging Suggestions:

Please send your documents/contribution at kvrajan6@gmail.com .

18. Open your doors and welcome hungry diners.

What is Your Restaurant Marketing Strategy?

Please send your documents/contribution at kvrajan6@gmail.com .

Some Types of Culture

Please send your documents/contribution at kvrajan6@gmail.com .

Baseball Team Culture

Typologies of organisatonal cultures:

Please send your documents/contribution at kvrajan6@gmail.com .

Definition of Corporate-Level Strategy

What are the three levels of Corporate-Level Strategy

Please send your documents/contribution at kvrajan6@gmail.com .

Strategy - what is strategy?

Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:

In other words, strategy is about:

* Where is the business trying to get to in the long-term (direction)

Please send your documents/contribution at kvrajan6@gmail.com .

Strategy at Different Levels of a Business

Business Unit Strategy –

How Strategy is Managed - Strategic Management

Please send your documents/contribution at kvrajan6@gmail.com .

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