Strategic Management

Session 1: 05/12/2022

© McGraw-Hill Education.

How to Make Strategic Trade-Offs (HBP - H0723U)

Trade-offs: objective, scope, domain

Example 1: Firm pursues growth or size profitability? (Amazon.in)

Example 2: Focus on institutional clients ignore retail customers? (ABB)

Example 3: Economy of scale idiosyncratic customer needs? (McD vs Sub)

What do we mean by strategy?

What is our present situation?

Business environment and industry conditions

Where do we want to go from here?

How are we going to get there?

How to position the firm in the marketplace Train baristas to serve a wide variety of Foster commitment to corporate
specialty coffee drinks that satisfy responsibility
How to attract customers individual customer preferences in a
Expand the number of Starbucks stores
customized way
How to compete against rivals domestically and internationally
Emphasize store ambience and
Broaden and periodically refresh in-
elevation of the customer experience at
store product offerings
Starbucks stores
How to capitalize on opportunities to grow the business Fully exploit the growing power of the
Purchase and roast only top-quality
Starbucks name and brand image with
coffee beans
How to respond to changing economic and market conditions out-of-store sales
 Vision:-

Company Statements AMEX Mission:- Become essential to our customers by providing differentiated
products and services to help them achieve their aspirations.

MISSION: Why we exist (guiding light) Values

We deliver for our customers
VALUES: What we believe in and how we will behave We respect people
We care about communities
VISION: What we want to be
We make it great
STRATEGY: What our competitive game plan will be We need different views

IMPLEMENTATION : How we will monitor and implement that plan

We win as a team

Difference between vision and mission Infy

Vision: future Vision:- To be a globally respected corporation that provides best-of-breed business

solutions, leveraging technology, delivered by best-in-class people

Mission: describes the scope and purpose of its present
Mission:- To achieve our objectives in an environment of fairness, honesty, and

A vision statement describes where the company aspires to be upon achieving its courtesy towards our clients, employees, vendors and society

mission.

The ideal mission statement The ideal vision statement

Specifies the buyer needs it seeks to satisfy
Identifies the customer groups or markets it is endeavoring to serve
Specifies its approach to pleasing customers
Sets the firm apart from its rivals
Future Focused
organization will be like in several years.
Directional. Serves as guide to organizational plans and strategies.
Specific. Clear and focused enough to shape decision-making.
Flexible. Flexibility allows the directional course to be adjusted as market,
customer, technology circumstances change.
Graphic. Paints a clear picture of where the company is headed

The ideal vision statement (Cont.) Linkedin

Values-Based. Implies the set of values that are required to support the
Vision:
organization.
Challenging. Inspires members of the organization to do great things and Create economic opportunity for every member of the global workforce.
achieve a higher level of standards.
Mission:
Unique and Memorable. Highlights what makes the organization different
and why it matters.
Inspiring. Appealing and engages people to commit to a cause.
 Strategic Intent
Go for
organizational
Update transformation,
Managers modify strategy in response to: operational if required
definitions
Changing market conditions Motivate and
inspire
employees
Advancing technology towards the
Align targets
Fresh moves of competitors organizational
resources &
competencies
Shifting buyer needs
Set feasible
Emerging market opportunities target(s)

New ideas for improving the strategy

Characteristics of Strategies at Different Levels

Strategic fit model

Don't Confuse Strategy with Lofty Goals (H071O5)

Current strengths and opportunities
Problem:
Fixed mindsets
Dynamic environments
Resource acquisition

Evolution of Strategic Management Specifications of a theory of business (Drucker)

The assumptions about environment, mission, and core competencies

Specifications of a theory of business (Drucker, 1994)
must fit reality.
Transaction Cost Economics (Williamson, 1989)
The assumptions in all three areas have to fit one another.
Agency Theory (Eisenhardt, 1989)
The theory of the business must be known and understood throughout
Stakeholder Theory (Freeman, 1999) the organization.

The theory of the business has to be tested constantly.

Transaction Cost Economics (Williamson) Principal-Agent Theory (Eisenhardt)

Decision-makers determine strategies of companies by measuring

transaction costs for companies.

Transaction costs = costs of running an economic system

= Production costs + Costs of (planning + experimenting + after-sales +
resolving disputes)

Make vs buy decision

 Stakeholder Theory (Freeman)

Thank You!

Recap

Strategic Management Resource based view

Dynamic Capability
Session 2: 07/12/2022
Core Competencies

Internal factor evaluation matrix

Value chain (linear economy) Value chain (circular economy)

Value Pool / Value Pool /

Profit Pool Profit Pool
Value Pool / Competitive advantage:
Profit Pool

- Porter

Firm infrastructure

Legal

General Management

Administrative

Accounting

Finance

Public Relations

Human resource management Technology development

Hiring Research and development

Training IT management

Organizational Culture Cybersecurity

Organizational Structure Use of technology / MIS

Employee Relationships

Procurement Example

Finding new external vendors,

Maintaining vendor relationships,

Negotiating prices

Quality control
Class Activity 2: Group # will map the value chain activities in a
company of their choice from the following industries, respectively:

1. Automobiles (Not Maruti Suzuki) 6. Healthcare

2. Bank and Financial Services 7. Hospitality
3. Construction 8. IT / e-comm
Thank You!
4. Consumer Goods 9. Metals and mining
5. Energy oil & gas 10. Pharmaceuticals

Strategic Management 12 of the top 25 billionaires

made their fortunes creating
low cost businesses achieved strong and sustained
success with a low cost strategy
better before cheaper;
Session 3: 12/12/2022 revenue before costs

Kumar, N. (2006). "Strategies to fight low cost Goddard, J. (2014). "The fatal bias."
rivals." Harvard Business Review Business Strategy Review

Basic types of competitive advantage Porter s Generic Strategies

Broad target
market Lowest cost Differentiation
leadership

Competitive Stuck in the

Scope Middle

Focus Focus
Cost Differentiated
Narrow target
market

Cost Basis of Competitive Advantage Differentiation

Cost Leadership
Differentiation

Cost Leadership emphasizes producing standardized products at a very low per-unit cost for
consumers who are price-sensitive Type 3: Differentiation is a strategy aimed at producing products and

Type 1: low-cost strategy that offers products or services to a wide range of customers at services considered unique industry-wide and directed at consumers
the lowest price available on the market
who are relatively price-insensitive
Type 2: best-value strategy that offers products or services to a wide range of customers at
the best price-value available on the market
 Exercise: Based on your understanding about the soap
Focus brands from Hindustan Unilever Ltd., where do you
envisage they sit on the generic strategies matrix?

Type 4: low-cost focus strategy that offers products or services to a niche group of

customers at the lowest price available on the market

Type 5: best-value focus strategy that offers products or services to a small range of

customers at the best price-value available on the market

References: https://www.hul.co.in/brands/

Lowest cost Differentiation

leadership Case 3: AutoNiche Inc.: Facing Up To Disruption (HBSP - W20901)
Broad
target
market

Competitive
Stuck in the Characterize automotive service business. How AutoNiche has developed
Middle
Scope
competitive advantage?

Narrow
target
market Focus Focus recruitment, & talent management?
Cost Differentiated

Differentiation
What strategic options should Chung consider for the business?
Cost
Basis of Competitive Advantage

Strategic Management

Thank You! Session 4: 14/12/2022

Basic types of competitive advantage only one low-cost player

Broad target lower costs than some but not all competitors can enable a firm to stick
market Lowest cost Differentiation around and compete for a while, but it
leadership
Playing to Win (Lafley & Martin)
Competitive Stuck in the
Scope Middle

Focus Focus stuck in the middle probably suffers from a blurred corporate culture and
Cost Differentiated
Narrow target
market
Michael Porter
Cost Basis of Competitive Advantage Differentiation
 Exercise: Classify the personal care brands from ITC Ltd. into three strategic groups

Strategic groups

Better insight into the market structure

Drives strategic options

Reference: https://www.itcportal.com/businesses/fmcg/personal-care-products.aspx

Strategic choices Strategic choices

Integration Strategies Intensive Strategies

Forward Integration Market Penetration Strategy

involves gaining ownership or increased control over distributors or retailers seeks to increase market share for present products or services in present
markets through greater marketing efforts
Backward Integration
Market Development
strategy of seeking ownership or increased control of a firm's suppliers involves introducing present products or services into new geographic areas
Horizontal Integration Product Development Strategy

a strategy of seeking ownership of or increased control over a firm's competitors seeks increased sales by improving or modifying present products or services

Diversification Strategies Defensive Strategies

Retrenchment
Related Diversification
regroups through cost and asset reduction to reverse declining sales and profits
value chains possess competitively valuable cross-business strategic fits Divestiture
selling a division or part of an organization
Unrelated Diversification
often used to raise capital for further strategic acquisitions or investments
value chains are so dissimilar that no competitively valuable cross-business Liquidation
relationships exist
 Defensive Strategies Defensive Strategies

Retrenchment
occurs when an organization regroups through cost and asset
reduction to reverse declining sales and profits
also called a turnaround or reorganizational strategy
Liquidation
selling all of a company s assets, in parts, for their tangible worth
can be an emotionally difficult strategy

s basic distinctive competence

Ansoff Matrix
Case 2: Royal Enfield case

How Royal Enfield has developed competitive advantage?

What growth options are available for Royal Enfield?

Prioritize these growth options for Royal Enfield.

Strategic Management

Thank You! Session 5: 19/12/2022

SWOT: be SMART
Analytical framework Specific, Measurable, Achievable, Relevant, and Timed.
 The Internal-External (IE) Matrix
Indicative IE Matrix for Disney
2012 (in millions)
Segment Total Sales Total Income % Income
(1) Media Networks $19,426 $6,619 66%
(2) Parks and Resorts 12,920 1,902 19
(3) Studio Entertainment 5,825 722 7
(4) Consumer Products 3,252 937 9
(4) Interactive Media 845 (216) -2
Totals 42,278 9,964 100

IE Matrix (Example 2)
Confrontation Matrix

Application of Confrontation Matrix The Strategic Position and Action Evaluation

(SPACE) Matrix

4 quadrant framework that indicates whether aggressive,

conservative, defensive, or competitive strategies are
most appropriate for a given organization

Two internal dimensions (financial position [FP] and

competitive position [CP])
Two external dimensions (stability position [SP] and
industry position [IP])

Steps to Develop a SPACE Matrix

Select a set of variables to define FP, CP, SP and IP

Assign a numerical value ranging from +1 (worst) to +7 (best) to each of the variables that make up
the FP and IP dimensions. Assign a numerical value ranging from 1 (best) to 7 (worst) to each of
the variables that make up the SP and CP dimensions
Compute an average score for FP, CP, IP and SP
Add the two scores on the x-axis (CP & IP) and plot the resultant point on X. Add the two scores on
the y-axis (FP & SP) and plot the resultant point on Y. Plot the intersection of the new xy point.
Draw a directional vector from the origin of the SPACE Matrix through the new intersection point.
This vector reveals whether a firm or division should pursue aggressive, competitive, defensive or
conservative strategy
 Indicative SPACE Matrix Go aggressive

for Walt Disney

Application of BCG Matrix

Aim to

finance the question marks

The Grand Strategy Matrix

GE/McKinsey matrix - prioritization

The Quantitative Strategic Planning Matrix (QSPM)

Indicative Grand Uses inputs from IFE & EFE and matching results from BCG Matrix / GE McKinsey

Strategy Matrix Step 1: SWOT

for Disney Step 2: matching matrices : identify options

Determine the Attractiveness Scores (AS)

Compute the Total Attractiveness Scores

Compute the Sum Total Attractiveness Score

 Indicative Indicative
QSPM for QSPM for
Disney (1 of 4) Disney (2 of 4)

Indicative Indicative
QSPM for QSPM for
Disney (3 of 4) Disney (4 of 4)

Options:
(1) building a new Disney
park & upgrading all existing
Disney parks, and
(2) solidify contracts for both
college and pro sports

QSPM (Example 2) QSPM (Example 2) cont.

Real Data Company Revenue Market volume

CATEGORY 2017-18 2018-19 2019-20 2020-21 2021-22 2017-18 2018-19 2019-20 2020-21 2021-22

SAUCE 13,46,29,536 17,17,00,452 15,08,98,636 42,59,87,372 31,47,58,218 63,52,03,131 93,91,00,144 1,12,12,93,001 2,70,36,86,796 1,99,84,58,062

COOKING PASTE 29,90,08,098 26,30,75,610 38,79,29,763 47,12,64,471 35,77,31,129 1,73,67,75,552 1,15,30,32,000 1,01,63,64,440 2,49,77,39,819 1,61,05,93,316

KETCHUP 2,94,51,520 4,77,72,415 4,33,51,586 20,97,90,730 10,25,71,113 12,83,77,646 23,50,52,506 21,68,61,425 1,10,66,01,826 40,62,33,872

PAPAD 4,35,09,548 5,33,71,392 3,82,03,895 1,99,02,841 7,76,677 9,78,84,512 14,53,63,642 11,77,84,282 5,65,22,509 17,94,460

PASTA 7,61,89,739 7,89,22,169 7,86,82,071 10,07,33,763 4,29,27,745 42,81,11,438 75,30,96,662 62,16,40,872 45,43,99,919 28,87,59,395

INSTANT MIX 8,73,41,464 8,45,71,860 8,67,98,825 20,53,51,874 9,67,26,522 20,86,53,159 16,93,51,722 22,76,73,785 72,40,33,569 21,83,94,097

SOYA CHUNKS 14,17,36,214 16,97,87,003 17,63,38,325 27,36,52,300 20,50,54,846 86,78,64,348 72,90,25,180 88,53,59,612 75,84,94,300 37,62,38,019

VERMICELLI 9,97,75,819 11,48,56,655 12,60,13,299 14,99,11,594 11,57,77,305 81,33,46,624 45,18,20,754 91,09,28,556 61,93,22,655 45,70,65,619

SOUP - - 1,30,74,781 74,00,717 31,79,928 - - 1,32,15,648 62,12,460 17,05,939

POHA 5,61,325 - - - - 66,47,000 - - - -

Thank You!
BLENDED SPICES 14,36,74,816 19,95,53,245 14,52,12,762 20,47,35,469 22,54,93,622 13,97,29,813 40,64,40,895 33,09,45,622 26,14,17,513 27,08,41,632

BREAD 2,65,29,776 4,62,47,988 4,74,48,184 4,86,35,377 3,39,70,863 14,68,49,917 26,14,49,161 33,53,34,989 35,99,14,171 24,36,91,450

CORNFLAKES - - 1,95,42,530 5,00,22,931 3,24,27,008 - - 7,40,95,632 15,67,07,248 7,69,36,032

JUICE - - - 7,56,254 1,91,72,965 - - - 81,38,750 22,30,41,360

DALIYA 10,000 15,49,815 - - - 85,000 3,22,15,000 - - -

CHOCOS - - 3,04,60,944 2,49,13,415 3,02,48,293 - - 4,70,83,513 3,14,14,156 2,37,16,629

JAM 4,41,80,329 4,23,24,990 2,97,07,535 3,32,75,485 3,43,86,660 11,43,99,677 12,25,19,045 9,30,75,062 8,18,67,092 13,99,71,624

SPICES-CTC 21,37,58,284 12,66,12,321 13,37,10,004 7,93,48,031 9,41,40,702 68,33,25,520 61,31,24,424 54,58,47,200 26,16,71,283 15,95,26,050
 Organic Development

Strategic Management
Greenfield expansion
Session 6: 21/12/2022
capacity expansion at a new site such as setting up a new factory

Mergers & Acquisitions Strategic motives for M&As

A merger is the combination of two previously separate organisations, typically as more Extension of scope - in terms of geography, products or markets

or less equal partners. Tata Steel s US$12 Bn acquisition of Corus (2006)

An acquisition involves one firm taking over the ownership ( equity ) of another, hence Tata Motors US$2.3 Bn acquisition of JLR (2008)

the alternative term takeover . L&T s US$108 Mn acquisition of TAMCO MV Switchgear in Malaysia (2007)

Strategic motives for M&As Strategic motives for M&As

Consolidation (Horizontal Integration) increasing scale, efficiency and market power Capabilities enhancing technological know-how (or other competencies)

and to kill the competition -up Cruise Automation (2016) to develop

Vodafone Idea US$23 Bn merger (2018) self-driving cars

Strategic motives for M&As Strategic motives for M&As

Backward Integration to gain better control over suppliers, to assure supplies and to Forward Integration to gain direct access to customers, control over distribution

reduce procurement cost channels, increase margins

Disney-Pixar $7.4 Bn merger. Pixar specializes in designing and creating animation and Apple s acquisition of Zurich based virtual reality start-up Faceshift (2015)

Disney uses those animations to create and distribute films and merchandise

control its raw materials

 Financial motives for M&As Key Success Factors of M&As

tax efficiency reducing the combined tax burden.

Selecting the Right Target

Paying the right price

Asset stripping or unbundling selling off bits of the acquired company to maximise asset values.

Post-merger integration
selling them individually to repay the debt assimilated during the takeover.

Indicative Acquisition Search Process

Target Stand-alone assessment

Target choice in M&A

does the target firm strengthen or complement the acquiring

-estimate synergy)

is there a match between the management practices,

cultural practices and staff characteristics of the target and the acquiring firm?

Assessing
Strategic
Fit Target Valuation
Getting the offer price correct is essential:
Offer the target too little, and the bid will be unsuccessful.
Pay too much and the acquisition is unlikely to make a profit net of the
original acquisition price. ( the winner s curse ).
Acquirers do not simply pay the current market value of the target, but
also pay a premium for control .
 Target Valuation Synergy Identification

Target Valuation

Why Many M&A Fail Why Many M&A Fail

1. Integration difficulties 6. Managers overly focused on acquisitions

2. Inadequate evaluation of target 7. Too large an acquisition

3. Large or extraordinary debt 8. Difficult to integrate different organizational cultures

4. Inability to achieve synergy 9. Reduced employee morale due to layoffs and relocations

5. Too much diversification

Post Merger Integration

Case 3: Walmart - Flipkart case

What is the strategic advantage for Walmart to purchase Flipkart?

What are the key challenges for the acquisition to work?

Suggest how the challenges may be addressed.

 Strategic Management

Thank You! Session 7: 02/01/2023

Strategic Alliance
Two or more organisations share resources and activities to pursue a strategy
Key Motives

Scale alliances lower costs, more bargaining power and sharing risks

Access alliances partners provide needed capabilities (e.g. market access, distribution

outlets or licenses to brands)

Complementary alliances bringing together complementary strengths to offset the

Advantages of Strategic Alliances Factors that make an Alliance Strategic

Facilitates achievement of an important business objective

Helps build, sustain, or enhance a core competence or competitive advantage
risk sharing
Helps remedy an important resource deficiency or competitive weakness
Helps defend against a competitive threat, or mitigates a significant risk to a companys business
conditions Increases the bargaining power over suppliers or buyers
Helps open up important new market opportunities
a critical factor when speed is of the essence
Speeds development of new technologies or product innovations

Choosing between Organic, M&As and Alliances

Benefits of Strategic Alliances

Minimize the problems associated with vertical integration, outsourcing, and M&As

Are useful in extending the scope of operations via international expansion and diversification strategies

Reduce the need to be independent and self-sufficient when strengthening the firm s competitive position

Offer greater flexibility should a firm s resource requirements or goals change over time
Choosing between Organic, M&As and Alliances SA vs
M&A

Key to Successful Strategic Alliances

Common Mistakes in Strategic Alliances

Alliances between competitors often fail due to conflicts (Daimler-Chrysler debacle)

Alliances between two weak firms fail because the alliance still lacks the capabilities and

competencies of the stronger rivals (Vodafone-Idea)

Common Mistakes in Strategic Alliances Longevity of Strategic Alliances

Successful equity alliances are usually between firms with complementary resources and capabilities
Alliance by a weak firm with a strong firm, which often results in the stronger firm buying out (Eg: Uber & Spotify)
the weaker firm (Siemens Allis Chalmers US alliance)

Bootstrap alliance an alliance by a weak firm with a stronger firm with complementary

capabilities can succeed if there are protective Govt policies or if the weaker firm manages to

protect its core competencies (Alliances between Chinese and Foreign companies)

Comparing acquisitions, alliances, organic Comparing acquisitions, alliances, organic

development and outsourcing development and outsourcing
Urgency internal development may be too slow, alliances can accelerate the process Type of capabilities
but acquisitions and outsourcing are the quickest.

Uncertainty and Risk an alliance means risks are shared and thus a failure does not
Core capabilities For gaining core capabilities, M&As and organic development
mean the full cost is lost. M&As are the riskiest.
are the preferred options. For noncore capabilities, outsourcing is the best option.
Control Control is the best with organic development followed by acquisition,
strategic alliance and outsourcing.
Case 4: Jio-Facebook case

Why Jio and Facebook entered into the strategic alliance?

How Jio and Facebook may succeed in creating value through the strategic alliance?
Thank You!

Recap

Strategic Management
Session 08: 04/01/2023

44

WHY COMPANIES DECIDE TO Failures of International Business

ENTER FOREIGN MARKETS

To gain access to new To gain access to lower-

customers and meet cost inputs of production
current customer To further exploit core
needs competencies

To achieve lower costs through To gain access to

economies of scale, experience, and resources and capabilities
increased purchasing power located in foreign markets

Foreign Market Entry

CAGE Distance Framework (Ghemawat, 2001)
 Strategic Approaches
Diamond
Model of
National
Advantage

Why Governments Intervene in Trade

Economic Rationales

Fighting unemployment

Protecting infant industries

Promoting industrialization

Comparative position

Why Governments Intervene in Trade Instruments of Govt. control

Noneconomic Rationales Tariffs / excise duty

Maintaining essential industries Non-tariff

Promoting acceptable practices abroad Subsidies

Maintaining or extending spheres of influence Reciprocal requirements

Go local campaigns
Preserving national culture

Case 9: Jollibee: Bringing Filipino Fast Food to the World

(HBSP - IM1116)

expansion?

How can Jollibee augment its original business model to suit

Thank You!
European market?
 Strategic Management QUIZ 1

Session 09: 09/01/2023

60

Red Ocean Blue Ocean

Known market space Unexplored market space

High competition Untainted by competition

Zero-sum game Non-zero-sum game

Low profitability & growth High profitability & growth

61 62

Value innovation four factors

Blue ocean strategy
(Kim & Mauborgne, 2005)

Create new demand

Uncontested market space

Examples: GE-Wipro ECG machine;

Asus ROG smartphone

63 64

Strategy canvas
Grid

65 66
 Class Activity 3: Group # will apply ERRC Grid in a company of
Article 1 their choice from the following industries, respectively:

Blue ocean strategy: from theory to practice (Kim, 2005) 1. Automobiles 6. Healthcare

2. Bank and Financial Services 7. Hospitality

3. Construction 8. IT / e-comm
4. Consumer Goods 9. Metals and mining
5. Energy oil & gas 10. Pharmaceuticals

Summary

Thank You!

69

Strategic Management
Session 10: 11/01/2023
 Green innovations

Raw materials required

Energy required

Product life cycle

CavinKare case

What are the key characteristics of the Hair Colour industry?

How effective are CavinKare's approach and processes with respect to innovation in the
context of its strategy?

How CavinKare may outpace the growth of other companies in the hair-colour category?
Thank You!

Business Model

Strategic Management or develop is an understanding of some

and how competitors are or are

Session 11: 14/01/2023

Teece (2010). Business models, business strategy and innovation
 The key of business model Components of a business model

Problem and solution: Value proposition & Target market

Reinvent the customer value

Value creation system Customers Cost structure, Resources, Partnerships

Value
Dramatically redesign the end-to-end value Dramatically redefine the customer base
chain architecture or core technology Customer engagement & channels

Source: Adapted from Govindarajan, V., & Gupta, A. K. (2001). Strategic innovation: a conceptual roadmap

Fundamentals of business model

Components of a business model Market model: Deliver Value

Who? What?
(STP: segment; target; position) (Value proposition) Revenue
Model

Core Activities & Expansion Plan

Operating model: Create Value

Key metrics: Performance Measurement Cost

How? Where do you play in the value chain? Model
What are your key resources?

Revenue model: Revenue streams, Profit margin, Competitive advantage Economic model:
Capture Value
Key Relationships
(partners)

What is your value proposition?

Value
Value creation system Customers -expressive benefits
David Aaker brand marketing guru

IKEA Dramatically changed the Reasonable quality, Expanded the market for
entire value chain fashionable furniture at an
affordable price mass market

Southwest Fundamental change to Allowed you to fly at a price Expanded the market for
Airlines operating model point to comparable to driving flying made it reachable for
point vs. hub and spoke ordinary people

Zara Highly responsive value chain Allows people to keep up Created the fast fashion
with fast changing fashion market segment
fashion demand trends

Osterwalder & Pigneur (2010). Busines model generation

Example: fitness brand

We can add another dimension to the
Identity

Functional Emotional Self-expressive Social

A good workout Healthy Disciplined People who are health

World class equipment Makes me look & feel In shape conscious
Personal trainers for good Well-to-do Working professionals
customisation Sociable Healthy
Group exercise classes
 Exercise: Complete the business model canvas for Uber
[use your own insights & experience to complete the canvas]

Things to think about as you build out your

canvas:

Think about where you want to start to build

your canvas?

What surprised you using the canvas?

understand about Uber?

Uber Business Model Canvas

Types of business models

Manufacturer model

Distribution model

Retailer model

Franchise model

Renting / Leasing model

Types of business models Types of business models

Subscription model One-for-one model (social entrepreneurship)

Bundling model Peer-to-peer model

Freemium model Direct sales model

Razor blades model Affiliate marketing model
Servitization model
Agency-based model

Types of business models

Enterprise business model (B2B/B2G)

-market fit, experience disrupters
Direct-to-consumers model
work on experience-
Aggregator Model
For experience disrupters, what matters is offering experiences that surround the
Crowd Source Model

Fractionalization model Halligan, B. (2020). The experience disrupters.

Pay as Go (Utility) Model

 Innovation value chain

Functional value Experience value

Ideate Incubate Accelerate
offers significant economic and brand is pervasive, creating a hip,
cool factor
a flat $95 (lens + frame) promotes socially conscious Outside in Prototyping/fail fast Build
Open source Accelerators Acquire
Corporate ventures Discovery driven Partner
Fashion retail at reasonable price, Teaches women how to dress Inside out planning Leverage internal resources
handpicked by a personal fashion themselves Business model canvas & capabilities
Design thinking
advisor
element, minimal effort Employee engagement

1. Source: HBS Digital. Warby Parker

complexity in choice
2. HBS Digital: Stitch Fix

identifying friction points in CX

"Let's face it: All too often, life is a succession of hassles.

There's an endless array of frustrations, inconveniences,
complications, disappointments, and potential disasters
lurking in most of our daily experiences. Even very good
products and services have their weaknesses and drawbacks
Organisations that excel at demand creation examine the lives

study of the problems, large and small, that people

experience whenever they use their products
There is often a huge gap between what people buy and what
they truly want and need
Slywotzky, A., & Weber, K. (2011). The art of hassle map thinking

Kim & Mauborgne: Blue ocean strategy

Hassle map thinking : Netflix

Case 7: Hopes Critical Care

Develop a business model canvas for Hopes Critical Care.

Assess viability of the revenue projections for Hopes Critical Care.

Evaluate Dr. Jhawar's growth stragy targeting hospitals without ICU setups.

Strategic Management

Thank You! Session 12: 18/01/2023

 Digital Economy

Direct Network Effect Indirect Network Effect

A platform becomes more attractive for users as the total number of users An increased usage of one product or service results in increased usage of

on the same side of that platform grows. other product or service

Example: social networks (Facebook, LinkedIn) Example: Microsoft OS and MS Office

Platform economy Two-Sided Network Effect: Platforms

Business models based on digital platforms

Increase in usage by one side increases use from other side
Examples of disruption to traditional models (services):
Example: Uber, Paytm QR
Hospitality

Banking

Government

Network value - Laws of network effects

Network structures
Local Network Effect Success factors of platforms

The microstructure of an underlying network of connections Commoditized / differentiated supply (replicability)

Symmetry / asymmetry of supply & demand

Often influenced by the decisions of a small subset of users
Flexibility of location: local / global
Example: influencer marketing
Single tenancy / multi-tenancy (loyalty)

Transaction frequency & lifetime

Platforms dependency

Strength of Network Effects Dominant internet platforms

Network Clustering Limits construction of a unique value proposition

Risk of Disintermediation Platforms own the customer relationship

Platform-dependent businesses lose room to maneuver

Strategies for Thriving as a Platform-Dependent Business Competing in the Age of AI

Channel multi homing & Platform multi homing multiplexing Data pipeline / semiautomated process

Use the platform to market yourself Algorithms / predictions

Play the algorithm game / SEO Experimentation platform / model testing

Diversify income streams Infrastructure / connect to internal and external users

Case 8: (NPCI case)

One strategy What are the challenges and benefits of NPCI's co-operative model?
A clear architecture
Assess NPCI's impacts on Indian banking sector.
The right capabilities

focus Identify future opportunities for NPCI.

Multidisciplinary governance
 Strategic Management

Thank You! Session 13: 23/01/2023

Scenario: A chain of retail stores of a reputable
fashion brand is facing a decline in sales in Mumbai
over the past year. The chain has been in business for
10 years, and currently operates 12 stores in Mumbai.
Identify the reasons for the decline in sales and
develop a strategy to address the issue.
Data available
Sales data for the past year: monthly and category-wise (men's clothing,
women's clothing, accessories)
Customer survey (in-store): feedback on products, customer service, and
shopping experience
Data about promotional campaigns (free strolley): budget and performance
metrics

Strategy
Definition
Additional Data Required?
Implementation
(Christensen &
Raynor) Demographic data for the company's target market (age, gender, income,
education level)
Competitor data, including sales and marketing strategies of competitors in
the same industry (broad-view)

Strategy Execution
Types of Business
Transformation
(Pedersen & Ritter)
Achieving Strategic Clarity

Achieving Organizational Clarity

Building a Management System

 Scenario: internal promotion scheme

Thank You!

Scenario: internal promotion scheme

Strategic Management
Session 14: 25/01/2023

The Execution Trap

(Martin, 2010) 5 keys to successful
strategy execution
(Cote, 2020)
Flaw:

Strategy formulation and implementation taken separately

Case 9: Boeing vs Airbus case

Brief business models and market strategies of Airbus and Boeing.

Identify strategic interactions between Airbus and Boeing.

Evaluate alternative strategies from Airbus post failure of A380.

Thank You!
 Translating a Mission into Desired Outcomes

Strategic Management
Session 15: 27/02/2023

60

Strategy Maps Architecture of a Strategy Map

How the organization create value?

Financial perspective
Customer perspective
Internal perspective
Learning & growth perspective

61 62

The Financial Perspective The Customer-

Value Proposition

63 64

Identifying The Learning and Growth Perspective

Strategic
Internal
Business
Processes

65 66
 Knowledge Management Strategies

67 68

Thematic
Strategy Map analysis

69 70

Thank You!

71

Recap:

Strategic Management
Hierarchy of Aims

Session 16: 01/03/2023

 Strategy Evaluation Strategy Evaluation Criteria

Three basic activities: Consonance

1. Examine the underlying bases of a firm s strategy. Consistency
2. Compare expected results with actual results. Advantage
3. Take corrective actions to ensure that performance conforms to plans. Feasibility

Why Strategy Evaluation is More Difficult Today The Process of Evaluating Strategies

1. A dramatic increase in the environment s complexity Strategy evaluation should initiate managerial questioning of expectations and assumptions,
2. The increasing difficulty of predicting the future with accuracy should trigger a review of objectives and values, and should stimulate creativity in generating

3. The increasing number of variables alternatives and formulating criteria of evaluation.

4. The rapid rate of obsolescence of even the best plans
5. The increase in the number of both domestic and world events affecting organizations
6. The decreasing time span for which planning can be done with any degree of certainty
Evaluating strategies on a continuous rather than on a periodic basis allows benchmarks of
progress to be established and more effectively monitored.
Successful strategies combine patience with a willingness to promptly take corrective actions when
necessary.

Strategy-Evaluation Assessment Matrix

Have Major Changes Occurred Have Major Changes Occurred Has the Firm Progressed
Satisfactorily Toward Achieving Result
Position? Position? Its Stated Objectives?

No No No Take corrective actions

Strategy-
Evaluation
Yes Yes Yes Take corrective actions

Yes Yes No Take corrective actions

Yes No Yes Take corrective actions

Framework
Yes No No Take corrective actions

No Yes Yes Take corrective actions

No Yes No Take corrective actions

No No Yes Continue present strategic course

Reviewing Bases of Strategy Measuring Organizational Performance

1. How have competitors reacted to our strategies? Common quantitative criteria to make three critical comparisons:
2. How have competitors strategies changed?
3. Have major competitors strengths and weaknesses changed? 1. s performance over different time periods
4. Why are competitors making certain strategic changes? 2. Comparing the firm s performance to competitors
5. Why are some competitors strategies more successful than others?
6. How satisfied are our competitors with their present market positions and profitability? 3. Comparing the firm s performance to industry averages
7. How far can our major competitors be pushed before retaliating?
8. How could we more effectively cooperate with our competitors?
 Corrective Actions
Questions in Evaluating Strategies

1. -risk and low-risk projects?

2. -term and short-term projects?
3. -growing markets and fast-growing
markets?
4.
5.
6.
7. How are major competitors likely to respond to particular strategies?

Characteristics of an Effective Evaluation System Characteristics of an Effective Evaluation System

Strategy evaluation activities must be economical Activities should provide timely information
too much information can be just as bad as too little information
Activities should be designed to provide a true picture of what is happening
too many controls can do more harm than good
Activities should not dominate decisions
Activities should be meaningful

should specifically relate to a firm s objectives should foster mutual understanding, trust, and common sense

Contingency Planning Contingency Planning

Contingency Plans can be defined as alternative plans that can be put into effect if certain If demand for our new product exceeds plans, what actions should our firm take to meet
key events do not occur as expected. the higher demand?

If a major competitor withdraws from particular markets as intelligence reports indicate,
what actions should our firm take?
If our sales objectives are not reached, what actions should our firm take to avoid profit
losses?
If certain disasters occur, what actions should our firm take?
If a new technological advancement makes our new product obsolete sooner than expected,
what actions should our firm take?

Effective Contingency Planning Auditing

1. Identify both good and bad events that could jeopardize strategies. a systematic process of objectively obtaining and evaluating evidence regarding assertions
2. Determine when the good and bad events are likely to occur. about economic actions and events to ascertain the degree of correspondence between
3. Determine the expected pros and cons of each contingency event. these assertions and established criteria, and communicating the results to interested users
4. Develop contingency plans for key contingency events.

5. Determine early warning trigger points for key contingency events.

 Guidelines for Effective Strategic Management

1. Keep the process simple and easily understandable.

2. Eliminate vague planning jargon.
3. Keep the process non routine; vary assignments, team membership, meeting formats,
settings, and even the planning calendar.
4.
5. Do not allow technicians to monopolize the planning process.
Thank You!
6. To the extent possible, involve managers from all areas of the firm.

Performance Management Framework

Vision
Mission Strategy Map
Strategic Management Strategy
Key Performance
Indicators
Session 17: 06/03/2023 Company
Identifying strategy
Defining
Measuring
Monitoring
Reporting

Performance Management Component Performance Management Cycle

Performance management cycle

is continuous and consistent Plan and Execute
Performance
Management Set Measures and Target
Process
Reward and Coach
Performance Performance
Management Management STRATEGY
Infrastructure Culture

Logistic support and performance Culture that is based on

management administration performance accountability Monitor and Evaluate

Managing Performance with Balanced Scorecard

Alternative Approaches to Performance Evaluation
Objective: a performance metric to identify and improve various internal
business functions and their resulting external outcomes.

360-degree Feedback HR

Balanced Scorecard Strategy

Dr. Robert Kaplan and Dr. David Norton (HBR, 1992)
"The Balanced Scorecard

A year-long project involving 12 top-performing companies

 Example: Energy company

management of established goals; enabling managers to reallocate physical, financial and human

resources in order to achieve strategic objectives. More than a performance measurement tool,

-- Dr. Robert Kaplan and Dr. David Norton

Assessing the Need for a Balanced Scorecard (Niven, 2003) When to avoid Balanced Scorecard

4 Perspectives in Financial Perspective Strategy

Data
Balanced Scorecard If we succeed, how will
we look to our
sources
shareholders?

Customer Perspective
To achieve our vision,
how must we look to our
customers?

Internal Perspective
To satisfy our customers,
which processes must we
excel at?

Learning & Growth

Perspective

To achieve our vision, how

must our organization learn
and improve?

Performance Measures
What are we balancing

Balances financial and non-financial measures

Balances short and long-term measures
Balances performance drivers (leading indicators) with outcome measures (lagging indicators)
Leads to strategic focus and organizational alignment.
 Cascading Performance Measures

Strategy Map Framework

Strategy and Balanced Scorecard
Long-term Shareholder
Value
Mission Financial
Why We Cost Efficiency Revenue Growth
Exist Strategic
Strategy Outcomes
Map :
Translate the Satisfied Customer Price Quality Service Availability Brand
Vision Strategy Shareholders
What We Strategy :
Our Game Delighted
Want to Be
Plan Customers
Operations Customer Regulatory
Innovation
and Social
Excellent Internal Process Management Management Processes
Processes
Balanced Processes
Processes Processes

Values Scorecard :
Measure and Motivated
Important Focus Workforce Learning
& Growth
to Us Human Capital Organization Capital Information Capital

Balanced Scorecard Tools

https://balancedscorecard.org/software/balanced-scorecard-software/
https://corporater.com/
https://bscdesigner.com/
Reimagining the
Balanced Scorecard
for the ESG Era

Thank You!