NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Strategic Management

1. Strategic Management crucially define and determine the long term performance of a business entity. This
is with reference to, Nokia, who lost its pace in the smartphone race. As quoted by source:

“Nokia has been long the market leader in the mobile phone market and with its enormous reach and
huge customer base, had successfully created significant entry barriers for any new player as such. Its
Symbian OS being the backbone of the whole success story contributed to a great deal in its higher
perceived ease of use. Customers used to enjoy the features, thanks to highly simplified GUI. It ruled the
middle and low end market for long. But, Nokia did a blunder and lost its market share.
In the context of above case, define the term strategic management, discuss, what are the three major
challenges to strategic management and specifically point out in relation to Nokia among the three
challenges, out of these challenges which challenge hit hard to the Business Giant.

ANS:- Strategic management is the underway process of planning, monitoring, analysing and assessment
o f all necessities an organization needs to meet its goals and objectives. Changes in business
environments will require organizations to constantly assess their strategies for success.
It is all about identification and description of the strategies that managers can carry so as to achieve
better performance and a competitive advantage for their organization.

PHASES OF STRATEGIC MANAGEMENT

P H A S E S O F S T R A T E G IC

There are four phases of strategic management they are as follows:-

BASIC FINANCIAL
M AN AG EM EN T

PLANNING

FORECAST BASED
PLANNING

EXTERNALLY
ORIENTED PLANNING
STRATEGIC PLANNING
 BENEFITS OF STRATEGIC MANAGEMENT

Strategic management has now became an important part of any business organisation. Framing of a
strategy and its implementation in the right way helps a firm to survive in the business environment. .
The major benefits of strategic management are:

 Provides direction – Strategic management helps to define the company’s

aim and helps the company to work in a particular direction in an
assemble manner. It helps management to focus on the bigger scenario to
avoid deviation from the actual goal.
 Helps adapt to changes – The management needs to respond quickly to
the challenges coming their way to avoid any hurdle. Strategic
management helps the company to be proactive, adapt to changes, and
take actions accordingly.
 Measures success – With the help of strategic management, an
organisation can understand the direction, set individual employee
objectives, and evaluate their performances to measure the overall
progress.
 Helps in survival – With the persistant state of competition and changes in
the business environment, it often becomes organisations with a weak
strategy framework to survive in the long run. Strategic management helps
tackle this challenge and thus enhances the business’s perpetuital.


Q2) Reliance Industries Limited is a Fortune 500 company and the largest private sector corporation
inIndia.
RIL, have evolved from being a textiles and polyester company to an integrated player
across energy, materials, retail, entertainment and digital services. In each of these
areas, they are committed to innovation-led, exponential growth. It’s clearly evident
that RIL has adopted parenting strategy. Discuss the concept of corporate parenting.
Discuss the analytical steps which are crucial in developing corporate parent strategy.
Conclude how Corporate parenting or parenting strategy is more beneficial when
compared against portfolio based corporate strategy

Ans:- Corporate parenting :- Corporate parenting focus at the relationship between

the head office and these SBUs and in particular at how to add value to the
individual business units. These questions are particularly relevant if the firm
has grown through addition rather than the organic growth.

Three Ananlytical steps to Develop a Corporate parenting are as follows:-

1. Examine each business unit in terms of its strategic factors: People in the
business units probably identified the strategic element when they were
bringing about the business strategies for their units. One most likely
approach is to establish center of excellence throughout the corporation. A
center of excellence is “an organizational unit that epitomise a set of
capabilities that has been explicitly recognized by the firm as an important
source of value creation, with the intention that these capabilities be
leveraged by or disseminated to the other parts of the firm.

2. Examine each business unit in terms of areas in which performance can be improved: .
A parent company having world-class proficency in such areas could improve
the unit’s performance. The corporate parent can also transfer some people
from one business unit who have the desired skills to other unit that is in demand
of those skills. People at corporate headquarters may, because of their
experience in many industries, spot areas where improvements are possible that
even people in the business unit may not have noticed.

3. Analyze how well the parent corporation fits with the business unit (or target firm): . To
analyze how well the parent corporation fits with the business unit. For this, the
corporate parents should must ask whether it has the characteristics that
properly fit in the parenting opportunities in each business unit. It also must ask
whether there is a misfit between the parent’s characteristics and the critical success
factors of each business unit.

Benefits of corporate planning over portfolio based corporate strategy

 First, portfolio planning distortion the reality of competition by keeping eye on just two
dimensions when investigating a company’s operations within an industry. Many
dimensions are important to consider before making strategic decisions, not just two.
Second, portfolio planning can also generate motivational problems among
employees.whereas corporate planning doesn’t
 portfolio analysis fails to allocate with the question of what industries a corporation should
enter or how a corporation can attain synergy among its product lines and business
units.whereas Corporate parenting creates corporate strategy by focusing on the core competencies
of the parent corporation and on the value created from the bond between the parent and its
businesses
portfolio planning does not help in identifying new opportunities. Because this tool only
deals with existing businesses, it cannot reveal what new industries a firm should consider
entering.
corporate strategy is useful not only in deciding what new businesses to acquire but also in
choosing how each existing business unit should be best managed.

Q3) General Electric (GE) is well known for its extraordinary competency in management development.

a. Discuss how the terms capabilities, competency and distinctive competency differs from each other.
Also, with reference to the VRIO Framework of analysis, highlight the four questions which any
strategist might have examined in relation to GE for evaluating its extraordinary competency in
management development.
b. Describing VRIO Framework with reference to GE
- Valuable
- Rareness
- Imitability
- Organizatio

Ans:- ). Capabilities check with a corporation’s ability to use its resources. They contains business processes and
rou- tines that manage the interaction among resources to show inputs into outputs
A capability is functionally based and is resident during a particular function. Thus, there are marketing
capabilities, manufacturing capabilities, and human resource management capabilities. When these capabilities are
constantly being changed and reconfigured to create them more adaptive to an uncertain envi-
ronment, they're called dynamic capabilitie.s

A competency may be a cross-func- tional integration and coordination of capabilities.

Distinctive competency :-When unique resources and/or core compe- tencies are superior to those of the
competition, they're called distinctive competencies. for instance, General Electric is well-known for its distinctive
competency in management development. Its executives are sought out by other companies hiring top managers.

Resources and capabilities are only valuable if they supply the organization a capability to form extraordinary

returns. The resource-based approach could be a well- researched, very effective means of analyzing resources and
capabilities so as to see which could provide the organization with real competitive advantages. The approach used
today has its roots in works by Wernerfelt in 1984 followed by an efficient operationalization by Jay Barney who
first proposed a VRIN framework that he later developed into the VRIO framework of study,
proposing four inquiries to evaluate a firm’s competencies:

Valuable: Does it provide customer value and competitive advantage?

Rareness: Does only 1 other competitor or preferably do no competitors possess it at relatively the identical level?
Imitability: Do the competitors have the financial ability (viewed within the widest sense) to imitate?
Organization: is that the firm organized to use the resource?
If the solution to every of those questions is yes for a selected competency, it's considered to be a strength and
thus a particular competence.

Valuable-In order for a resource/capability to be, valuable it must allow the organiza- tion to either charge more for
its offerings than competitors do for theirs or have a lower cost structure than those of the competitors.  this is
often generally accom- plished by providing a price proposition for the customer that exceeds that of the
competitors.

Rareness:- Any R/C that passes both Valuable and Rareness should be examined for competitor’s ability to imitate.
If a corporation incorporates a true competitive advan- tage, it's likely that competitors will look to search out some
way to match what's being offered within the market either by imitating it or attempting to substitute for it.

- Imitability is that the rate at which a firm’s underlying resources, capabilities, or core competencies may
be duplicate
t