Notes Module 1 SM

Alibaba.
com
About Alibaba.com
• The company was founded in 1999 by 17 people led by Jack Ma, a former
English teacher from Hangzhou, China to support operation of B2B market
places.
• In Oct. 2000 Alibaba launched the Gold supplier membership service for
Chinese exporters.
• On November 6,2007, Alibaba.com debuted on the Hong Kong Stock exchange,
raising US$1.5 billion.
• By the second quarter of 2007, Alibaba.com was the largest online B2B
• e- commerce company in china.
• The English-language web site alibaba.com specializes in business-to-business
trades, especially for international buyers trying to contact Chinese sellers.
• Japan's Softbank was one of the earliest investors in Alibaba.
• On 18 September 2014, Alibaba's IPO priced at US$68, raised US$21.8 billion for
the company and investors making it the biggest U.S. IPO in history.
• Its purpose is to connect companies with suppliers and
manufacturers throughout the world.
• Alibaba specializes in trade between buyers and sellers.
• Headquarter Hangzhou, China
• Alibaba group revenue 158.3 billion.
• Alibaba has more than 40 million users
• It also reaches buyers and sellers in more than 240
countries around the world.
• It’s primary business is to serve the Chinese market with a
directory of the Chinese manufacturers.
• The company makes money from commissions on sales,
advertising and through fees for memberships and other
services.
What is the reason Why Alibaba.com is
succeed?
What exact they did to survive in

Globalized market?
What is difference between them and

their competitors?
Competitor of Alibaba
• JD.COM. JD.COM, Inc. is a major competitor of Alibaba in China's e-
commerce market. ...
• Amazon. ...
• EBay. ...
• Flipkart. ...
• Tencent.
Pricing and Membership Strategies
• Pricing: Alibaba uses a competitive pricing model where they
set the price of a product based on comparing what competitors
are pricing the same product. Pricing is one of the marketing
strategies that Alibaba deploys to set a low price in order to
increase sales and market share.
• Discount: Alibaba’s intent is to stimulate sales as well as

retaining customers through their discounting model. Discounts
are commonly offered on the company’s sites during festivals
and when customers make bulk purchases.
Pricing and Membership Strategies
• Free Membership: Earlier in Alibaba’s existence the
company offered new customers free membership to their
site as a tactic to attract new users. Once the company
reached a significant membership registration milestone it
withdrew its free membership and began charging
membership fees.
• Value-Added Services: Services such as shipping, instant

delivery, guarantees, and warranties are offered to help
increase the profitability of the product sale.
Strategic Management
• Introduction to the concepts of Strategy
and Strategic Management,
• Evolution of Strategic Management and
overview of Strategic Management
Process
• Classification and levels of Strategy
• Strategic Intent : Concept of Vision and
Mission
• Business Ethics & Corporate Social
Responsibility
Introduction
• STRATEGY
• Strategy is an Action Plan
• Features of strategy
• Strategy is a well defined roadmap of an
organization.
• It defines the overall mission, vision and direction
of an organization.
• The objective of a strategy is to maximize an
organization’s strengths and to minimize the
strengths of the competitors.
• Strategy, in short, bridges the gap between “where
we are” and “where we want to be”.
Strategic Management
Where are we now?
Where do we want to go?
How are we going to get

there?
Introduction
• The concept of strategy is central to understanding the process of strategic management.
The term ‘strategy’ is derived from the Greek word ‘strategia’, which means generalship-
the actual direction of military force, as distinct from the policy governing its
deployment. In business parlance, there is no definite meaning assigned to strategy. It is
often used loosely to mean a number of things.
A) Definitions:
• 1) Ansoff*:
• "Strategy is a rule for making decisions. Ansoff also distinguishes between policy and
strategy .A policy is a general decision that is always made in the same way whenever
the same circumstances arise.”
• 2) Alfred D. Chandler*:
• “Strategy can be defined as the determination of the basic long-term goals and
objectives of an enterprise, and the adoption of courses of action and the allocation of
resources necessary for carrying out these goals.“
Introduction
A) Meaning:
• Strategic management is a wide-ranging area that covers almost all the functional
areas of the organization. It is an umbrella concept of management that comprises all
such functional areas as marketing, finance & account, human resource, production
operation into a top level management discipline.
• B) Definitions:
• 1) Sharplin*:
• “Strategic management is the formulation and implementation of plans and carrying out
of activities relating to the matters which are of vital, universal or continuing importance
to the total organisation.”
• 2) Ansoff*:
• “Strategic management is a systematic approach to a major and increasingly important
responsibility of general management to position and relate the firm to its environment in
a way that will assure its continued success and make it sure from surprises.”
Classification and levels of Strategy
Different levels of Strategy
Levels Structure Strategy
Corporate Corporate Office Corporate

Level Strategy
Strategic Business
Business Unit SBU SBU SBU Level Strategy
A B C
Functional Finance Marketing Functional

Level Strategy
Operations Personnel
Levels of Strategy:
• 1) Corporate Level Strategy:
• Strategy at the corporate level is designated as corporate strategy. It is the top management plan to
direct and run the enterprise as a whole. Corporate level strategy represents the pattern of
entrepreneurial actions and intents underlying the organisation’s strategic interests in different
business, divisions, product lines, customer groups, technologies etc. Corporate strategy emphasizes
upon the fact that how one should manage the scope, mix and emphasis of various activities and
how the resources should be allocated over the different priorities of the corporation.
• 2) Business Level Strategy:
• For many companies which are dealing in number of product mix and dealing with different types of
market, for them a single strategy is not only inadequate but also inappropriate. The need is for
multiple strategies at different levels. In order to segregate different units or segments each
performing a common set of activities, many companies organize on the basis of operating divisions,
or simply divisions. The divisions may also be known as Profit Centers or Strategic Business Units.
• 3) Functional Level Strategy:
• Functional level strategy deals with a relatively restricted plan which provides the objectives for a
specific function. These objectives are
• 1) The allocation of resources among different operations within that functional area.
• 2) Enabling a co-ordination between them for an optimal contribution to the achievement of
business and corporate level objectives.
Corporate levels of Strategy
• Growth: expansion into new
products and markets.
• Stability: maintenance of the

status of the organization.
• Retrenchment: redirection of
the firm into new markets
• Combination:
3.3 Grand Strategies
A) Introduction:
Grand strategies are the master or business strategies, provide basic direction for strategic
actions Indicate the time over which long-range objectives are to be achieved. Firms involved
with multiple industries, businesses, product lines, or customer groups usually combine
several grand strategies.
B) Meaning:
Grand strategy is the set of strategic alternatives from which a firm chooses as it manages its
operations simultaneously across several industries and several markets. Grand strategies
are about decisions related to allocating resources among the different businesses of a firm.
C) Dimensions of Grand Strategies: Internal/extern

al Dimension
Active/passiv Related/unrela
Dimensions
e Dimension ted Dimension
Horizontal/ver
tical
Dimension
C) Dimensions of Grand Strategies:

1) Internal/external Dimension:
a) The internal dimension operates when an organisation adopts a strategy
independent of any other entity.
b) The external dimension operates when an organisation adopts a strategy in
association with another entity.
2) Related/unrelated Dimension:
a) The related dimension operates when an organisation adopts a strategy that is
related to its existing business definition of one or more of its businesses in terms of
their respective customer groups, customer functions, or alternative technologies.
b) The unrelated dimension operates when an organisation adopts a strategy that is
unrelated to its existing business definition of one or more of its businesses either in
terms of their respective customer groups. Customer functions, or alternative
technologies
C) Dimensions of Grand Strategies:
3) Horizontal/vertical Dimension:
a) The horizontal dimension operates when an organisation adopts a strategy which
results in sewing additional customer groups and/or satisfying other customer
functions in such a way that they complement the existing business definition of
one or more of its businesses.
b) The vertical dimension operates when an organisation adopts a strategy which
results in the expansion or contraction of the existing business definition of one or
more of its businesses in terms of the utilisation of alternative technologies.
4) Active/passive Dimension:
a) The active dimension operates when an organisation adopts an offensive strategy
in anticipation of environmental threats and opportunities.
b) The passive dimension operates when an organisation adopts a defensive strategy
as a reaction to environmental threats and opportunities.
3.4 Types of Grand Strategies
According to Glueck, there are four grand strategic alternatives: stability, expansion,
retrenchment and any combination of these three.
Stability Strategy
Growth Strategy
Types
Retrenchment
Strategy/
Defensive Strategy
Combination
Strategy
A) Stability Strategy:
a) Introduction:
Stability strategy is most likely to be pursued by small businesses or firms in a mature stage of
development. Stability strategies are implemented by 'steady as it goes' approaches to decisions.
b) Meaning:
Stability strategy implies continuing the current activities of the firm without any significant change in
direction. If the environment is unstable and the firm is doing well, then it may believe that it is better to
make no changes. A firm is said to be a stability strategy if it is satisfied with the same consumer groups
and maintaining the same market share, satisfied with incremental improvements of functional
performance and the management does not want to take any risks that might be associated with
expansion or growth. Stability strategies are the attempts made by an organisation at incremental
improvement of functional performance.
c) Types of Stability Strategies :
No-change Strategy
Profit Strategy
Pause / Proceed - with - Caution

Strategy
c) Types of Stability Strategies :
1) No-change Strategy :
This strategy indicates that the company has nothing to do new but to continue with the present
business definition. It means that there is no change in the present strategy.
2) Profit Strategy :
If the problem is short lived a firm may wait for some time to let it pass away with time. Till then, the
firm tries to sustain its profitability by artificial measures by adopting a profit strategy.
3) Pause / Proceed - with - Caution Strategy :
This is a strategy which is employed by the firm who wishes to test the ground before moving ahead
with a full-fledged grand strategy.
B) Expansion/Growth Strategies:
a) Types of Growth Strategies:
Expansion through Concentration
Expansion through Integration
Expansion through Diversification
Expansion through Co-operation
Expansion through Internationalization

I) Expansion through Concentration :
Concentration is a simple, first - level type of expansion grand strategy. It involves
converging resources in one or more of a firm's business in terms of its respective

customer needs, customer functions or alternative technologies in such a manner
that it results in expansion. Concentration strategies involve investment of
resources in a product line for an identified market with the help of proven
technology for expansion. Concentration is often the first - preference strategy for a
firm.
a) Benefits:
i) Concentration involves minimal organisational changes so that it is less threatening:
the managers of a firm are more comfortable staying with present businesses.
ii) It also enables the firm to master one or a few businesses and enable it to specialise
by gaining an in-depth knowledge of these businesses. I
iii) Managers face fewer problems when dealing with known situations. Systems and
processes within the firm are developed in such a way that people become familiar
with them.
iv) The decision-making process is under a lesser strain as there is a high level of
predictability.
b) Limitations:
i) Firstly, concentration strategies are heavily dependent on the industry. So adverse conditions
in an industry can and do affect firms if they are intensely concentrated.
ii) If an industry goes into are cession, the firm concentrated in it finds it too difficult to withdraw.
If an industry becomes too crowded with competitors its attractiveness decreases for the
existing players.
iii) Secondly, factors such as product obsolescence, fickleness of markets. and emergence of
newer technologies are threats to concentrated firms. A firm too heavily invested in either of
these will face risks.
iv) Thirdly, concentration strategies may result in doing too much of a known thing.
v) Finally, concentration strategies may lead to cash flow problems that may pose a dilemma
before a firm.
II) Expansion through Integration :
a) Introduction:
The horizontal dimensions and vertical dimensions of grand strategies are used to
define integration strategies. The present set of customer functions and customer
groups are the points of design of integration strategies.
b) Meaning:
Integration means combining activities to the present activity of a firm. Such a
combination may be done based on the value chain. So a firm may move up or
down the value chain to concentrate more comprehensively on the customer groups
and needs than it is already serving.
II) Expansion through Integration :
c) Types of Integration:
Vertical
1) Vertical Integration : Integration
This strategy is designed to combine all
stages of preparation, manufacturing and
marketing of a product. It covers the T
sources of raw materials, the intermediate
Y
operations and final marketing. Horizontal
2) Horizontal Integration:
P Integration
When an organization takes up the same E

type of products at the same level of S
production or marketing process, it is said
to follow a strategy of horizontal integration.
III) Expansion through Diversification :
a) Meaning:
Diversification strategies involve all the dimensions of strategic alternatives. It
may involve internal or external, related or unrelated, horizontal or vertical and
active or passive dimensions.
b) Definition:
1) Steins :
“Diversification is producing new products for new markets involving quite
different skills, process and knowledge from those associated with the present
products, services or processes.”
c) Types of Diversification Strategies :
Concentric
Diversification
T
Y
P Conglomerate
Diversification
E
S
c) Types of Diversification Strategies :
1) Concentric Diversification :
When an organisation takes up an activity in such a manner that it is related to the
existing business definition of one or more of a firm’s businesses, either in terms of
customer groups, customers functions or alternative technologies, it is called
concentric diversification.
2) Conglomerate Diversification :
When an organisation adopts a strategy, which requires taking up those activities,
which are unrelated to the existing business definition of one or more of its
businesses, either in terms of their respective customer groups, customer functions
or alternative technologies, it is called conglomerate diversification.
IV) Expansion through Co-operation :
Corporate strategies could take into account the possibility of mutual cooperation
with competitors while competing with them at the same time so that the market
potential could expand. The term co-operation expresses the idea of simultaneous
competition and co-operation among rival firms for mutual benefit. The central
point is complementary among the interests of rival firms. Mergers, takeovers or
acquisitions, joint ventures and strategic alliances are the types of co-operative
strategies at the corporate level.
V) Expansion through Internationalization:
International strategies are a type of expansion strategies that require firms to market
their products or services beyond the domestic or national market.
a) Types of International Strategies: Internati
onal
Strategy
Multi-
Transnati
domestic
onal Types
s
Strategy
Strategy
Global
Strategy
a) Types of International Strategies:
1) International Strategy:
Firms adopt an international strategy when they create value by transferring
products and services to foreign markets where these products and services are
not available. This is a simple strategy in the sense that an international firm, by
maintaining a tight control over its overseas operations.
2) Multi-domestics Strategy:
Firms adopt multi-domestic strategy when they try to achieve a high level of local
responsiveness by matching their products and services offerings to the national
conditions operating in the countries they operate in.
a) Types of International Strategies:
3) Global Strategy:
Firms adopt a global strategy when they rely on a low-cost approach based on
reaping the benefits of experience-curve effects and location economies and offering
standardized products and services across different countries.
4) Transnational Strategy:
Firms adopt a transnational strategy when they adopt a combined approach of low-
cost and high local responsiveness simultaneously for their products and services.
VI) Expansion through Cooperation:
The External expansion strategy could be of following types:
a) Merger Strategies:
A merger is a combination of two or more organizations. In it, one acquires the assets
and liabilities of the other in exchange of shares or cash.
1) Reasons for Mergers :

When there is merging of two organizations, one is buyer and the other is the seller.
Both have reasons for such merger. They can be given as follows:
i)for buyer :
a)To increase the value of the organizations stock.
b)To increase the growth rate and make a good investment.
c)To improve stability to earning and sales.
d)To balance, complete or diversify product line.
e)To reduce competition.
a) Merger Strategies:
2) Reasons for the Sellers:
1) To increase the value of the owner's stock and investment.
2) To increase the growth rate.
3) To acquire resources to stabilize operations.
4) To benefit from tax legislation.
5) To deal with top management succession problem.
2) Important Strategic Issues in Mergers:
Strategic issues relate to the commonality of strategic interests between the buyer
and seller firms. It is important to know the extent of merger which leads to positive
effects. The following issues are to be taken into consideration:
a) Analysis of the strategic advantages and distinctive competencies of the merging
firms.
b) A match between the objectives of the firms.
c) It should lead to the generation of strengths that would help the post-merger-
organisation to achieve its objectives in a better manner.
c) Types of Mergers:
Horizontal Mergers
Vertical Mergers
Concentric Mergers
Conglomerate Mergers
3) Types of Mergers:
1) Horizontal Mergers :
Horizontal mergers take place when there is a combination of two or more organizations in
the same business or of organizations engaged in certain aspects of the production or
marketing processes.
2) Vertical Mergers :
Vertical mergers take place when there is a combination of two or more organizations, not
necessarily in the same business. They create complementarily either in terms of supply of
material or marketing of goods and services.
3) Concentric Mergers :
Concentric mergers take place when there is a combination of two or more organizations
related to each other in terms of either customer functions, customer group or the alternative
technologies used.
4) Conglomerate Mergers :
Conglomerate mergers take place when there is a combination of two or more organizations
unrelated to each other, either in terms of customer functions, customer groups or alternative
technologies used.
b) Acquisition/ Takeover Strategies:
There are three ways of entering new markets or offering new products. They are
acquisition, internal development or co-operative ventures.
1) Reasons for Acquisition:
Acquisition is pursued when;
a) The product is in the maturity of decline stages of the product life cycle.
b) The company has little knowledge of the products or markets it wishes to develop.
c) The earliest entry is desirable.
d) There are few internal development skills within the company.
e) There is production capacity in the industry.
f) The costs do not need to be spread over time.
2) Stages of Acquisition:
There are six steps in the procedure of acquisition. They can be explained as follows:
a) Spell out the objective.
b) Indicate how the objective would be achieved.
c) Assess managerial quality.
d) Check the compatibility of business styles.
e) Anticipate and solve problems early.
f) Treat people with dignity and concern.
3) Advantages of Acquisition:
Acquisition offers the following advantages:
a) It ensures management accountability.
b) It offers easy growth opportunities.
c) It creates mobility of resources.
d) It avoids gestation periods and hurdles involved in new projects.
e) It offers a chance to sick units to survive.
f) It opens up alternatives for selective divestment.
4) Disadvantages of Acquisition:
a) Professionalism gets replaced by money power.
b) It does not create any real assets for society.
c) It is detrimental to the national economy.
d) It does not protect the interest of minority shareholders.
e) Avoidable stress and strains are created in the companies taken over or exposed to
the threat of takeovers.
c) Joint Venture/ Collaborative Partnership Strategies:
Joint venture occurs when at least two other firms create an independent firm.
1) Conditions for Joint Ventures :
Joint ventures may be useful to gain access to a new business mainly under four
conditions:
a) When an activity is uneconomical for an organisation to do alone.
b) When the risk of business has to be shared.
c) When the distinctive competence of two or more organizations can be brought
together.
d) When setting up an organisation requires surmounting hurdles, such as, important
quotas, tariffs, nationalistic - political interests and cultural roadblocks.
2) Types of Joint Ventures :
Joint ventures are common within industries and in various countries. But they are
especially useful for entering international markets. The type of joint ventures can be
given as follows:
a) Between two firms in one industry.
b) Between two firms across different industries.
c) Between an Indian firm and a foreign company in India.
d) Between an Indian firm and a foreign company in that foreign country.
e) Between an Indian firm and a foreign company in a third country.
3) Strategic Issues in Joint Ventures :
a) Joint ventures offer the advantages of achieving objective mutually by the
participating firms.
b) Eliminating, controlling or reducing competition may be of strategic importance and
can be brought about through joint ventures.
c) An increase in the market share can also be achieved.
d) Diversification strategies may be adopted by the participating firms if a joint venture
is planned across different industries.
e) If technology is crucial variable in strategy, then joint ventures with foreign companies
can be feasible.
4) Advantages :
a) It minimizes the risk.
b) It reduces an individual company's investment.
c) It creates opportunity to have access to foreign technology.
d) It facilitates broad-based equity participation.
e) It provides access to governmental and political support.
f) It facilitates entering new fields of business and synergistic advantages.
5) Disadvantages :
a) It creates problems in enquiry participation.
b) There are problems of foreign exchange regulations.
c) There may be problem of lack of proper coordination among participating firms.
d) There is a possibility of conflict among the partners.
d) Strategic Alliances :
1) Reasons for Strategic Alliances :
a) The main purpose of accepting strategic alliances is to enhance the firm's
organisational capabilities and thereby gain competitive or strategic advantage.
b) A company that has a successful product or service may wish to look for new
markets.
c) Strategic alliances are used to pool resources to gain economies of scale or make
better utilization of resources in order to reduce manufacturing costs.
d) Strategic alliances may be used to develop technological capability by leveraging the
technical expertise of two or more firms.
2) Principles of Managing Strategic Alliances :
a) A good start to a strategic alliance is to clearly define the strategy to be adopted. It
should be consistent with the corporate strategies of the partners.
b) Phasing Relationship Between the Partners. It means giving adequate time and
opportunity to the partners to know each other well.
c) When two firms come together in a partnership, it is absolutely important to blend
their cultures. A partnership is actually a joint effort of the people involved.
d) It is prudent to provide for an exit clause in case the alliance unfortunately does not
work or in case objectives are not achieved.
3) Advantages:
a) Helpful in enhancement of organisational capabilities
b) It facilitates access to new markets and new supply sources.
c) It facilitates use of latest technology and optimum utilisation of resources.
d) It creates a network of beneficial relationship.
e) It accelerates product introduction and overcome legal and trade barriers
expeditiously.
f) It may help to attain speed and timing in implementing strategies.
g) It facilitates imitation of new products and services quickly.
4) Disadvantages:
a) Lack of trust and commitment.
b) Perceived misunderstandings among partners.
c) Hasty implementation of plans.
d) Focusing on controlling the relationship rather than managing it for mutual benefit.
C) Outsourcing Strategies:
Outsourcing is the purchase of a value-creating activity from an external supplier. In
multiple global industries, the trend toward outsourcing continues at a rapid pace.
Sometimes, virtually all firms within an industry seek the strategic value that can be
captured through effective outsourcing. The automobile manufacturing industry is an
example of this.
a) Reasons for Outsourcing :

Cost Capacity
Cost Savings Improve Quality Knowledge Access to Talent
Restructuring Management
Reduce Time to Enhance Capacity Catalyst for Operational

Commoditization Contract
Market for Innovation Change Expertise
Risk
Venture Capital
Management
1) Cost Savings :
It follows of the overall cost of the service to the business. This will involve reducing the scope,
defining quality levels, re-pricing, re-negotiation, cost re-structuring.
2) Cost Restructuring :
Operating leverage is a measure that compares fixed costs to variable costs. Outsourcing changes
the balance of this ratio by offering move from fixed to variable cost and also by making variable
costs more predictable.
3) Improve Quality :
Achieve a step change in quality through contracting out the service with a new service level
agreement.
4) Knowledge :
It provides access to intellectual property and wider experience and knowledge.
5) Contract :
Services will be provided to a legally binding contract with financial penalties and legal redress. This
is not the case with internal services.
6) Operational Expertise :
It facilitates access to operational best practice that would be too difficult or time consuming to
develop in-house.
7) Access to Talent :
It facilitates access to a larger talent pool and a sustainable source of skills, in particular in science
and engineering.
8) Capacity Management :
Supplier provides an improved method of capacity management of services and technology where
the risk in providing the excess capacity.
9) Catalyst for Change :

An organisation can use an outsourcing agreement as a catalyst for major step change that cannot
be achieved alone. The outsourcer becomes a Change agent in the process.
10) Enhance Capacity for Innovation :
Companies increasingly use external knowledge service providers to supplement limited in-house
capacity for product innovation.
12) Reduce Time to Market :
The acceleration of the development or production of a product is possible through the additional
capability brought by the supplier.
12) Commoditization :
The trend of standardizing business processes, IT services and application services enabling
businesses to intelligently buy at the right price. It allows a wide range of businesses access to
services previously only available to large corporations.
13) Risk Management :
An approach to risk management for some types of risks is to partner with an outsourcer who is
better able to provide the mitigation.
14) Venture Capital :
Some countries match government funds venture capital with private venture capital for startups
that start businesses in their country.
b) Benefits :
1) Creates Opportunities :
Outsourcing creates opportunities for larger and smaller firms. Using focus business-level
strategies, companies concentrate on providing superior service to their customers in terms of
specific functions.
2) Seeks Value :
Outsourcing, a firm seeks the greatest value. It results in best work.
3) Advanced Technology :
Some companies can not afford to develop internally all the technologies that might lead to
competitive advantage in the future. Outsourcing facilitates them to use the advanced technologies.
4) Generates Resources :
Outsourcing is done in order to control costs. It generates resources that can be used to nurture
and support those firms’ design and marketing competencies
D) Retrenchment Strategies:
A strategic option which involves reduction of any existing product or services line along
with the level of objectives set below the past achievement is known as retrenchment
strategy. It is essentially a defensive strategy adopted as a reaction to operating
problems stemming from either internal mismanagement, unanticipated actions by
competitors or changes in market conditions.
Leadership Harvest or
Favourable Divest Quickly
or Niche
Unfavourable Niche Divest

Industry Conditions or Harvest Quickly
Has Competitive Lacks Competitive

Strength Strength
Fig 3.2: Strategies for Declining Industries

a) Variants of Retrenchment Strategy :
Turn Around Strategy
Divestment Strategy
Liquidation Strategy
a) Variants of Retrenchment Strategy :
1) Turn Around Strategy:
The turnaround strategy is often necessitated during recessionary conditions in an industry or in the
economy as a whole. More generally speaking, the turnaround strategy is called for when there is a
substantial or sustained down trend in the indicators of business performance which may be
caused by external factors and the absence of properly timed, fresh management input.
2) Divestment Strategy :
Sometimes it may not be possible for the organisation to carry on a particular line of business
because it does not offer any potential even after turn around action. In that case, the organisation
tries to get rid of that business by pursuing a divestment strategy.
3) Liquidation Strategy :
As extreme case strategy in which the organisation takes a decision to sell its entire business and
the radiation can be invested somewhere else in terminating an organisation’s existence either by
selling of its assets or by shutting down the entire operation. Obviously liquidating is the most
unattractive strategy, and it is normally used only when all fails.
b) Reasons for Adopting Retrenchment Strategy :
1) Poor Performance :
When a firm suffers from poor performance in terms of lower earnings and profits
and is unable to recover its position by any other means, it may be required to shut
down units of activity or segments of business which continue to be a drag on total
performance.
2) Threat of Survival :
When the survival of the firm is threatened by unanticipated problems in the product
market, the management may be under pressure from shareholders and employees
to improve performance by all means including cut back of operations.
b) Reasons for Adopting Retrenchment Strategy :
3) Redeployment of Resources :
When alternative investment opportunities promise higher returns, some of the
existing business units or segments of activity may be shed and resources thus
related utilised for increased profitability and growth.
4) Insufficiency of Resources :
To sustain and develop the satisfactory earnings position in a production market, it
may be necessary to deploy large financial resources.
5) For Better Management and Efficiency :
Retrenchment strategy can be used to secure better management and improved
efficiency.
E) Combination / Mixed Strategies:

The combination grand strategy is followed when an organisation adopts a mixture of
stability, expansion, and retrenchment either at the same time in its different businesses or
at different times in the same business with the aim of improving its performance.
a) Types of Combination strategies:
The types of combination strategies are as follows:
1) Simultaneous Combination or Sequentially:
A firm adopting the combination strategy may apply the combination either simultaneously
(across the different businesses) or sequentially. For instance, Tata Iron & Steel Company
(TISCO) had first consolidated its position in the core steel business, then divested some of its
non-core businesses.
2) Combination of Simultaneous and Sequential Strategies:
Over the years strategic changes at a large business group indicate that it has been
strengthening its manufacturing base and diverting its trading activities. Stability has been
aimed at in some of its divisions by retrenching the unprofitable products and services, while
major expansion has taken place·· the case of its industrial products and construction
business.
E) Combination / Mixed Strategies:
b) Steps in Combination Strategies:
1) First step is identification and analysis of business problem.

2) Second is selection of different elements from different strategies like stability, growth and
retrenchment.
3) Third is implementation of combination strategies.
4) Fourth is evaluation of Implemented strategy.
Growth Strategy
• Growth Strategy :Seeking to increase the organization’s
business by expansion into new products and markets.
• Types of Growth Strategies
Concentration
Vertical integration
Horizontal integration
Diversification
• Concentration: Focusing on a primary line of business and
increasing the number of products offered or markets served.
• These strategies involve trying to compete successfully only within a
single industry.
Market penetration
Market development
Product Development
• McDonald’s, Starbucks, and coca cola, Pepsi are firms that have
relied heavily on concentration strategies to become dominant players.
• Market penetration involves trying to gain additional share of a
firm’s existing markets using existing products. Often firms will rely
on advertising to attract new customers with existing markets.
• McDonald’s has pursued market penetration in recent years by using Latino themes within some of its
advertising. The firm also maintains a Spanish-language website at http://www.meencanta.com; the website’s
name is the Spanish translation of McDonald’s slogan “I’m loving’ it.” McDonald’s hopes to gain more
Latino customers through initiatives such as this website.
• Market development involves taking existing products and trying to

sell them within new markets. One way to reach a new market is to
enter a new retail channel.
• Starbucks, has stepped beyond selling coffee beans only in its stores and now sells beans in other grocery
stores. This enables Starbucks to reach consumers that do not visit its coffeehouses.
• Product development involves creating new products to serve
existing markets.
• McDonald’s has gradually moved more and more of its menu toward healthy
items to appeal to customers who are concerned about nutrition.
• King Gillette, an American businessman whose family hailed from France,

pioneered the safety razor that bears his family name. His company’s more recent
innovations in the razor market include Trac II (the first two-bald razor), Altra
(first razor with a pivoting head), Sensor (first razor with spring-loaded blades),
Mach 3 (first three-blade razor), and Fusion (first six-blade razor). Is the ten-blade
razor coming soon?
• Vertical Integration: Vertical integration is an expansion strategy where a company
takes control over one or more stages in the production or distribution of its products.
1). Backward vertical integration.
2). Forward vertical integration.
• Backward integration occurs when a company decides to buy another business that
makes an input product for the acquiring company's product. For example, a car
manufacturer pursues backward integration when it acquires a tire manufacturer.
• Forward integration occurs when a company decides to take control of some aspect of
the post-production process. So, that car manufacturer might acquire an automotive
dealership to sell the vehicles it produces.
• Ikea and forests in Romania. The Swedish furniture giant bought an 83,000 acre
woodland in northeastern Romania in 2015. It was the first effort the company made at
managing its own forest operations. IKEA said it purchased the forest in order to manage
wood sustainably at affordable prices
• Netflix produces its own content. Netflix (NFLX) is one of the most significant examples
of vertical integration in the entertainment industry. Prior to starting its own content
studio, Netflix was at the end of the supply chain because it distributed films and
television shows created by other companies. But Netflix realized it could generate more
revenue and be less dependent on others if it were to create its own programming. In
2013, the company released its first original content in the form of four new series
• Horizontal Integration: Combining operations with another
competitor in the same industry to increase competitive
strengths.
• Horizontal integration is an expansion strategy that involves the
acquisition of another company in the same business line.
• Example:
• Marriott and Starwood Hotels. Marriott International (MAR)
acquired Starwood in 2016, creating the world's largest hotel
company. While Marriott already had a solid presence in the luxury,
convention, and resort segments, Starwood's international presence
was very strong. The merger offered greater choice for consumers,
more opportunities for employees, and added value for shareholders.
The combined companies had approximately 5,500 hotels and 1.1
million rooms worldwide after the merger was completed
• Diversification:
• 1)Related Diversification: Expanding by merging with firms in
different, but related industries.
• 2) Unrelated Diversification: Growing by merging with firms in

unrelated industries where higher financial returns are possible
• Related (Concentric) Diversification (ii) Unrelated (Conglomerate)

Diversification
• Concentric diversification
• This method introduces closely related products to the existing
market. That is, similar products are added to the current product
line. Such a type of diversification brings the focus of a business to a
center point, thus concentric.
• For example, an automobile company adds a solar-powered car to
its eco-friendly auto line.
• Horizontal diversification
• Diversifying a product horizontally means introducing new but
unrelated offerings to the company’s product mix. Horizontal
diversification can also be adapted to launch complementary goods.
For instance, a clothing company launching its footwear line.
• Conglomerate diversification
• A business focuses on a completely different product line in this
strategy. Hence, this can be extremely risky. The company broadens
its scope and targets a different market.
• An example of this strategy in practice would be if an
established film company started selling home decor
products in addition to their films. In this scenario, they may
sell home decor with their logo on it or in signature colors
Corporate levels of Strategy
• Stability Strategy: A strategy that seeks to maintain the
status with the uncertainty of the environment, when the
industry is experiencing slow- or no-growth conditions.
• The stability strategy is the business strategy of any corporation that focuses on
maintaining the growth, earning, and current market position of the company. When a
company follows such a stability strategy, its focus is on the existing market and the
product.
Liquidation strategy
Section 33(3) of the Insolvency and
Bankruptcy Code, 2016. states that
on contravention of a resolution
plan approved by the adjudicating
authority, any person other than
the corporate debtor whose
interests are prejudicially affected
by the contravention may make an
application before the adjudicating
authority seeking a liquidation
order.
Business levels of Strategy
• A strategy that seeks to determine how an organization should
compete in each of its SBUs (strategic business units).
• At Business-level ALLOCATION of resources among Functional-

level an COORDINATE with the Corporate level to the
ACHIEVEMENT of the Corporate level OBJECTIVES
Business levels of Strategy
• Cost leadership: Attaining, then using the lowest
total cost basis as a competitive advantage.
• Differentiation: Using product features or

services to distinguish the firm’s offerings from
its competitors.
• Market focus: Concentrating competitively on a

specific market segment
Functional levels of Strategy
Evolution of Strategic Management
Phases in Strategic Management Process
Establishing Strategic Intent
vision, mission, business definition,
and objective.
Formulation of Strategies
Environmental Organisational
Appraisal Appraisal
SWOT Analysis
Corporate - level strategies
Business - level strategies
Strategic choice
Strategic plan
Strategic Implementatio
Project
Procedural
Resource allocation
Structural
Behavioural
Functional and operational
Strategic Evaluation
A) Phases in Strategic Management Process:
• 1) Establishing Strategic Intent:
• The foundation for the strategic management is laid by the hierarchy of strategic
intent. The process of establishing the hierarchy of strategic intent is very
complex. In this hierarchy, the vision, mission, business definition and objectives
are established. Formulation of strategies is possible only when strategic intent is
clearly set up. This step is mostly philosophical in nature. It will have long term
impact on the organization. Strategic intent is a high-level statement of the
means by which organization will achieve its vision. The hierarchy of strategic
intent lays the foundation for the strategic management of any organisation. The
elements in this phase are explained below:
a) The Vision:
b) Mission:
c) Defining the Business:
d) Setting Objectives:
• 2) Strategy Formulation:
• Strategy formulation refers to the process of choosing the most appropriate
course of action for the realization of organizational goals and objectives and
thereby achieving the organizational vision. The process of strategy formulation
basically involves seven main steps. Though these steps do not follow a rigid
chronological order, however they are very rational and can be easily followed in
same order. This phase of the strategic management process consists of the
following elements:
a) Environmental Appraisal :
b) Organisational Appraisal :
c) SWOT Analysis:
d) Corporate Level Strategies:
e) Business Level Strategies:
f) Strategic Choice :
g) Strategic Plan :
• 3) Strategy Implementation:
• Strategy implementation is the translation of chosen strategy into organizational
action so as to achieve strategic goals and objectives. Strategy implementation is
also defined as the manner in which an organization should develop, utilize,
and amalgamate organizational structure, control systems, and culture to
follow strategies that lead to competitive advantage and a better performance.
For the implementation of a strategy, the strategic plan is put into action through
following six sub-processes:
a) Project Implementation:
b) Procedural Implementation :
c) Resource Allocation:
d) Structural Implementation:
e) Behavioural Implementation:
f) Functional and Operational Implementation:
A)Phases in Strategic Management Process:
• 4) Strategy Evaluation:
• Strategy evaluation is as significant as strategy formulation because it
throws light on the efficiency and effectiveness of the
comprehensive plans in achieving the desired results. The managers
can also assess the appropriateness of the current strategy in today's
dynamic world with socio-economic, political and technological
innovations.
• Strategic Evaluation is the final phase of strategic management. This
is the last phase of strategic management process is strategic
evaluation. It appraises the implementation of strategies and
measures organisational performance.
1.4 Hierarchy of Strategic Intent
Effective strategic management begins with the management by clearly articulating

its vision for the future. The concept of strategic intent, popularized by Gary Hamel
and C.K. Prahalad (1989), refers to the purpose of the organization and the ends it
wishes to pursue. The strategic intent represents the organization’s belief about its
state of the future. The purpose or ends the organization wishes to pursue varies
from being really broad and long-term (vision and mission), to being narrow, with a
focus on the short or near-term (objectives of goals).
A) Meaning of Strategic Intent:

Prahlad and Hamel coined the term "strategic intent". It means an "ambitious
goal" of a firm to acquire a desired leadership position. A company exhibits
strategic intent when it relentlessly pursues an ambitious goal and concentrates
its full resources and actions on achieving that goal. Strategic intent is focused on
the ends, while the means are left to be flexible.
B) Attributes of Strategic
Intent:
The specific relationship
between the long-term
and short-term
intentions is described
in the hierarchy of
strategic intent.
B) Attributes of Strategic Intent:
1) Vision:
The vision of the organization refers to the broad category of long-term intentions that the
organization wishes to pursue. It is broad, all inclusive, and futuristic. As the word ‘vision’
suggests, it is an image of how the organization sees itself. It is in most cases, a dream; the
aspirations the organization holds for its future; a mental image of the future state. It might
therefore be difficult for the organization to actually achieve its vision even in the long-term,
but it provides the direction and energy to work towards it.
a) Definitions:
1) Kottler:
“Vision is a description of something (an organisation, a corporate culture, a business, a
technology or an activity) in the future.”
2) Miller and Dess:

“It is the category of intentions that are broad, all-inclusive and forward thinking.”
1) Vision:
b) Benefits of Vision:
According to Parikh and Neubouer, there are several benefits of having a vision. They are as follows:
i. Good vision is inspiring and exciting.
ii. Good vision helps in the creation of common identity and a shared sense of purpose.
iii. Good vision is competitive, original and unique. It makes sense in the market place, as it is practical.
iv. Vision represents a discontinuity, a step function and a jump ahead, so that the company knows what
it is to be.
v. Good vision represents integrity. It is truly genuine and can be used for the benefit of people.
vi. Good vision foster risk taking and experimentation.
vii. Foster long- term thinking.
viii. Good vision represents integrity: they are truly genuine and can be used to the benefit of the people.

1 )Vision:
c) Process of Envisioning:
Well-conceived vision
Core ideology Envisioned Future
Long- term audacious

Core Values goal, Brilliant
description of
achievements

1) vision:
c) Process of Envisioning:
The process of envisioning is a difficult one, According to Collins and Porras (1996), a well-conceived vision
consists of two major components: core ideology and envisioned future.
1) Core Ideology:
The core ideology defines the enduring character of an organization that remains unchangeable as
it passes through the variations of vectors such as technology, competition or management fads.
The core ideology rests on the core values (the essential and enduring tenets of an organization)
and core purposes (an organization’s reason for being).
2) Envisioned Future:
The envisioned future too consists of two components: a 10—30 year’s audacious goal and vivid
description of what it will be like to achieve that goal. The process of envisioning is shown in the
below figure.

2) Mission:
The mission statement makes the vision statement more tangible and comprehensible. In most cases, the
vision statement is just a slogan, a war cry, or even a short phrase containing superlatives.
a) Meaning:
Mission is a statement which defines the role that an organization plays in the society. It refers to the
particular needs of the society, for instance. Its information needs. A mission statement clearly specifies:
i. Why the organization exists, or the purpose?
ii. What differentiates the organization from others, or the identity?
iii. The basic beliefs, values, and philosophy of the organization.
b) Definitions:
Thompson:
”Mission is the essential purpose of the organisation, concerning particularly why it is in existence, the nature
of the business (es) it is in, and the customers it seeks to serve and satisfy.”

2) Mission:
c) Key Elements in Developing a Mission Statement:
Most organizations derive their mission statement from a particular set of tasks they are
called upon to perform in the light of their individual, national or global priorities. Following
are the key elements considered while developing a mission statement.
History of the Distinctive

Organization's
Organisation Competencies of the
Environment
Organisation

2) Mission:
c) Key Elements in Developing a Mission Statement:
1) History of the Organisation:
Each and every organisation, whether it is a manufacturing or service organisation, profit-
oriented or non-profit based, big or small, has its own history of objectives, policies,
working, and mistakes.
2) Distinctive Competencies of the Organisation:
A company can do or produce many things, but they should decide what it can do best and
more efficiently. Thus, organisation with such distinctive competencies can offer
advantages over similar organisation. They must have the competencies to capitalise the
opportunities offered by the markets and society.
3) Organisation’s Environment:
The opportunities and threats posed by the environment should be identified by
management, while developing a mission statement. For example - advanced technology in
communication industry can adversely affect on hotel industry or transport industry.
B) Attributes of Strategic Intent: It Should

2) Mission: Indicate How It Should be
Objectives are to Feasible
d) Characteristics of a Good
be
Mission Statement: Accomplished
It Should
It Should be
Indicate the
Precise
Major
Components of
Strategy
It Should be
It should be Clear
Distinctive
It Should be
Motivating

2) Mission:
d) Characteristics of a Good Mission Statement:
1) It Should be Feasible:
A mission should always aim high but it should not be an impossible statement. It should be
realistic and achievable; its followers must find it to be credible. But feasibility depends on
the resources available to work towards a mission.
2) It Should be Precise:
A mission statement should not be so narrow as to restrict the organization’s activities, nor
should it be too broad to make itself meaningless.
3) It Should be Clear:
A mission should be clear enough to lead to action. It should not just be a high-sounding set
of platitudes meant for publicity purposes. Many organizations do adopt such statements
(sometimes referred to as the corporate positioning statement) but probably they do so for
emphasizing their identity and character.

2) Mission:
d) Characteristics of a Good Mission Statement:
4) It Should be Motivating:
A mission statement should be motivating for members of the organization and of the society
and they should feel it worthwhile working for such an organization or being its customers.
5) It should be Distinctive:
A mission statement which is indiscriminate is likely to have little impact. If all scooter
manufacturers defined their mission in a similar fashion, there would not be much of a
difference among them.
6) It Should Indicate the Major Components of Strategy:
A mission statement, along with the organisational purpose should indicate the major
components of the strategy to be adopted.
7) It Should Indicate How Objectives are to be Accomplished:
Besides indicating the broad strategies to be adopted, a mission statement should also
provide clues regarding the manner in which the objectives are to be accomplished.

3 )Core Values:
Core values of the organization represent the commonly held beliefs, mindsets, and
assumptions that shape how work is done in an organization. They clearly specify the
organization’s and its members' enduring preference for a mode of conduct (in both their
business processes, and their relationship with business partners).
Core values are derived out of the organization’s mission statement(s), and aid in
differentiating the organization from others, apart from spelling out the organization‘s
expectations and intended behaviors of people.
Good core value statements clearly delineate the observable norms of behavior that reflect
the desired core values of the organization. For instance, an organization might have
‘customer responsiveness` as its core value, but without proper operationalization in terms
of observable norms of behavior, it might mean different things to different people.

4) Goals:
Goals provide the basis for action towards the achievement of the organization’s mission, in
the form of specific milestones. Goals are financial and non-financial, and specify the route
the organization takes to achieve its vision and mission. It is often seen that organizations
pursue a range at financial and non-financial goals, which are not always perfectly
consistent with one another.
The goals statement also specifies the relative priorities and trade-offs between the various
goals the organization intends to pursue. Goals that make the organization ‘stretch’ in order
to achieve them are called stretch goals, and are considered to be more effective in
extracting the best out of the people and the resources in control of the organization.

5) Objectives:
Objectives are operational definitions of the organization‘s goals. They provide the
measurable parameters for monitoring/evaluating the performance of the organization.
Objectives also include a time dimension that delineates the specific goals the organization
intends to achieve in defined periods.
By providing a series of time-bound objectives, the organization demonstrates how it can
move towards achievement of its goals, through consistently and periodically achieving its
objectives.
6) Plans:
Plans indicate the specific actions that will be taken by the organization in order to achieve
the objectives. Plans specify the roles members of the organization will perform, the
resource allocation across different organizational sub-units and departments, and
prioritize and schedule the various activities.

5) Objectives:
Objectives are operational definitions of the organization‘s goals. They provide the
measurable parameters for monitoring/evaluating the performance of the organization.
Objectives also include a time dimension that delineates the specific goals the organization
intends to achieve in defined periods.
By providing a series of time-bound objectives, the organization demonstrates how it can
move towards achievement of its goals, through consistently and periodically achieving its
objectives.
6) Plans:
Plans indicate the specific actions that will be taken by the organization in order to achieve
the objectives. Plans specify the roles members of the organization will perform, the
resource allocation across different organizational sub-units and departments, and
prioritize and schedule the various activities.
C) Difference between Mission and Vision:

No. Vision Mission
1) Category of intension's are broad, all inclusive and Mission is the fundamental, unique purpose that sets a
forward Thinking business apart from other firms of its type and identifies the
scope of its operations in product and market terms
2) It states aspirations for the firm without stating the It states how it would achieve the vision of the firm
means to achieve them
3) Vision is dream, little hazy and intangible Mission is clear, tangibalize, or concretizes vision.
4) It guides in formulation of mission. It guides in formulation of business definition, goals and

objectives.
5) It is futuristic in nature It is current in nature
6) Vision is a mental image of a possible and desirable Mission is enduring statement of philosophy and a creed
future stale of the organization. statement.
7) Vision answers the question " What we want to become" Mission answers the question ‘what is our business.".
D) Business:
Business is a typical economic activity with the object of earning an income i.e. profit.
a) Dimensions of Business Definitions:

According to Abell (1980; Abell and
Hammond, 1979), a business may be defined
by three dimensions:
1) Customer groups describe the categories of
customers, or whom the business satisfies.
2) Customer functions describe customer
needs, or what is being satisfied.
3) Technologies describe the way the firm
satisfies customer needs.
D) Business:
a) Dimensions of Business Definitions:
1) Customer Groups:
Defining customer groups requires understanding customers’ identities. Some common
dimensions for describing identity include geography, demography, socioeconomic class, life
style, personality characteristics (in a consumer goods situation), or user industry and size.
2) Customer Functions:
Products or services perform certain functions for customers. However, functions must be
separated conceptually from the way the function is performed (i.e., technology), as well as
the attributes or benefits that a customer may perceive as important criteria for choice. In
this sense, transportation is a function: a taxi is a way of performing the function; and price,
comfort, speed, and safety are the attributes or benefits associated with the choices.
3) Alternative Technologies:
Technologies describe the alternative ways in which a particular function could be performed
for a customer. Therefore, in this context, a technology represents the form of the solution to
the customer’s problem. If the function is transportation, the technologies might include
road, rail, and/ or sea travel.
E) Linking Objectives to Missions and Visions:
Mission and vision statements are sometimes accompanied by statements of enterprise
values sometimes referred to as philosophies. Such statements are not, however, integral
elements of either mission or vision statements. The trend is towards making statements
short and memorable, expanding and qualifying them with separate, detailed statements of
corporate and business objectives and strategies. Since most enterprises of any size now
have websites, it is easy to communicate these more comprehensive statements.
a) Enterprise Objectives:
Mission and vision statements require translation into tangible and specific enterprise
objectives to guide future actions and to provide milestones against which to assess
performance and progress. Objectives attract various names including aims, ends, goals and
targets, often used imprecisely. In popular usage, aims are the broadest or highest level, in
effect the enterprise mission, leading to more detailed goals, objectives and targets. To set
relevant, realistic objectives and targets requires clarity of aims and goals. Since aims and
objectives exist at different levels, they signal actions of different degrees of specificity.
F) Strategic Performance Management Process:
Key
Performance Key Success Key Result
Performance
Measurement Factors (KSFs): Areas (KRA):
Indicators

1) Performance Measurement:
The process of performance measurement considers collection, consolidation, and
distribution of performance data to compile the performance information. Such performance
information then gets related to the critical success factors (CSFs) and/or the performance
indicators (KPIs).
2) Key Success Factors (KSFs):
Key success factors (KSFs) or Critical success factors (CSFs) relate to the specific strategy
elements, product or service attributes resources, capabilities, competencies, and/or business
outcomes that influence a firm‘s profitability and/or survival in a particular industry. The KSFs
are, by definition, important for all firms in that industry to possess and pay attention to.
Major Sources of KSFs:
Rockart (1979) identified four major sources of KSFs:
a) Structure of the Industry:
b) Competitive Strategy, Industry Position, and Geographic Location:
c) Environmental Factors:
d) Temporal Factors:

3) Key Performance Indicators:
Performance indicators are well understood as being metrics or measures in terms of which
performance is measured, evaluated or compared. Key performance indicators (KPIs) are the
metrics or measures in terms of which the critical success factors are evaluated. What makes
the KPIs ‘key' is their relationship to the CSFs and ultimately, to the vision of the organization.
The company has to determine which combinations of metrics it would use to determine and
whether it is successful. KPIs thus, help to quantify critical success factors.
Benefits of KPI:
KPIs have gained importance as well as popularity in the corporate world as they have several
benefits as follows:
a) Helps in Shaping the Organisation:
b) Clear Understanding to Accomplish Objectives:
c) As a Motivational Factor:
d) To Measure Business Trends:
e) Easy in use:
f) Can be used as a Benchmarking tool:

4) Key Result Areas (KRA):
These are sometimes called Operational Objectives. There is no complete agreement on
what the key result areas of a business should be. They may differ for various enterprises.
These are normally short term objectives that have a time horizon of one or two years, and if
necessary are renewed from time no time.
They form the bread and butter of the organization. Generally, they are subservient to the
strategic Objectives and often to the Business Process Objectives. These are areas where
performance is essential for the ongoing success of the enterprise. In these areas,
managements normally attach financial objectives as well as operational objectives. Say if
Marketing/ Sales is a Key Result Area; it would have objectives that are financial as well as
those that relate to the measure of success in the market.
Case study
Meters Limited is a company engaged in the designing, manufacturing, and marketing of instruments like
speed meters, oil pressure gauges, and so on, that are fitted into two and four wheelers. Their current
investment in assets is around Rs. 5 crores and their last year turnover was Rs. 15 crores, just adequate
enough to breakeven. The company has been witnessing over the last couple of years, a fall in their
market share prices since many customers are switching over to a new range of electronic instruments
from the era of mechanical instruments that have been the mainstay of Meters Limited. The Company
has received a firm offer of cooperation from a competitor who is similarly placed in respect to product
range. The offer implied the following: (i) transfer of the manufacturing line from the competitor to Meters
Limited; (ii) manufacture of mechanical instruments by Meters Limited for the competitor to the latter's
specifications and brand name; and (iii) marketing by the competitor. The benefits that will accrue to
Meters Limited will be better utilization of its installed capacity and appropriate financial compensation for
the manufacturing effort. The production manager of Meters Limited has welcomed the proposal and
points out that it will enable the company to make profits. The sales manager is doubtful about the same
since the demand for mechanical instruments is shrinking. The Chief Executive is studying the offer.
Solve Case study
• Read the above case and answer the following questions:

• What is the divestment strategy? Do you see it being
practiced in the given case? Explain.
• What is stability strategy? Should Meters Limited adopt it?
• What is expansion strategy? What are the implications for
Meters Limited in case it is adopted?
• What are your suggestions to the Chief Executive?
Business ethics
• Business ethics as “the rules, principles, and

standards of deciding what is morally right or
wrong when working.”
• So, business ethics refers to the implementation

of appropriate business practices and policies in
the workplace.
Principles of Business ethics
Types of Business ethics
Tactical Combat Casualty Care

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Alibaba.

What exact they did to survive in

What is difference between them and

• Discount: Alibaba’s intent is to stimulate sales as well as

• Value-Added Services: Services such as shipping, instant

Where do we want to go?

How are we going to get

Corporate Corporate Office Corporate

Functional Finance Marketing Functional

• Stability: maintenance of the

C) Dimensions of Grand Strategies: Internal/extern

C) Dimensions of Grand Strategies:

C) Dimensions of Grand Strategies:

Pause / Proceed - with - Caution

Expansion through Concentration

Expansion through Integration

Expansion through Diversification

Expansion through Co-operation

Expansion through Internationalization

converging resources in one or more of a firm's business in terms of its respective

When an organization takes up the same E

1) Reasons for Mergers :

a) Reasons for Outsourcing :

Reduce Time to Enhance Capacity Catalyst for Operational

9) Catalyst for Change :

Unfavourable Niche Divest

Has Competitive Lacks Competitive

Fig 3.2: Strategies for Declining Industries

Turn Around Strategy

E) Combination / Mixed Strategies:

E) Combination / Mixed Strategies:

b) Steps in Combination Strategies:

1) First step is identification and analysis of business problem.

• Market development involves taking existing products and trying to

• King Gillette, an American businessman whose family hailed from France,

• 2) Unrelated Diversification: Growing by merging with firms in

• Related (Concentric) Diversification (ii) Unrelated (Conglomerate)

• At Business-level ALLOCATION of re- sources among Functional-

• Differentiation: Using product features or

• Market focus: Concentrating competitively on a

Effective strategic management begins with the management by clearly articulating

A) Meaning of Strategic Intent:

2) Miller and Dess:

B) Attributes of Strategic Intent:

Core ideology Envisioned Future

Long- term audacious

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent:

History of the Distinctive

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent: It Should

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent:

B) Attributes of Strategic Intent:

C) Difference between Mission and Vision:

4) It guides in formulation of mission. It guides in formulation of business definition, goals and

a) Dimensions of Business Definitions:

F) Strategic Performance Management Process: