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WELCOME

To the presentation
CHAPTER- 12
THE WHOLE PICTURE
The chapter covers

Internal Analysis
External Analysis
Stakeholder Analysis
Confirm or Change Goal
Formulating Strategy
Implementation
RULE 3: CORPORATE GOVERNANCE AS AN INTEGRAL PART OF THE STRATEGY PROCESS

The third Golden Rule is that good corporate governance requires an effective
strategic management process .
By this we mean that the company is organized and run according to rules which ;
Set a goal matching the duly considered expectations of the stakeholders.
Workout a feasible strategy to achieve the goal.
Put in place an organization which can carry out the strategy and attain the
goal.
Establish a control and reporting function to permit management to drive the
organization effectively.
A comprehensive strategic management model including corporate governance

Weighted
Stakeholder
stakeholder
analysis
model

Position Measure
Confirm or change Strategy Allocate resources
Goal (Point B) Analysis Performance
goal options
(Point A)

Report

External analysis Evaluate options


Result (Point B)

Business plan

Internal analysis
Select Strategy Evaluate progress

Vision Implement Monitor


Position analysis Formulate strategy

Check Modify Monitor

Golden Rules Ethics Goal Organization Reporting


Internal Analysis

Internal analysis will show the areas in which the company can improve and what
it is capable of potentially. By analyzing our resources, both internal and
external, an identifying the strengths and weaknesses of value chain, we
highlight GCGs current competitive positions .
In carrying out an internal analysis, we aim to:
Understand existing and potential resources available to GCG
Evaluate the businesss strategic capability
Assess its potential strengths and weaknesses
Identify opportunities for short term performance improvement within the
existing strategy
Internal analysis and strategic capability

Review all Highlight Analyze Compare Assess Strategic Identify


available key value and balance of capabilit key
resources resources chain benchmark resources yC issues

Use of Past Product Strengths


Those which performanc
These are the are likely to resources balance and
building blocks of e weaknesses
yield
the companies Cost
competitive Industry People Competitive
operations efficiency
advantage balance advantage
Best
Effectivenes practice Organizational
s of whole and cultural
operation balance

Including Control over


External value resources
chain
Highlight key resources
Review available external resources

This analysis aims to produce a statement of all the resources available to GCG. These will cover:
a) Trading contracts
b) Customers
c) Shareholders
Highlights :
This analysis will start to highlight those resources which are likely to confer a distinctive
competitive advantage in the market place. For instance these might be:
Shareholders
Bankers
Employees
Suppliers
Customers
Local community
Analyze Value Chain

All organization in an industry have a similar value chain and will be profitable so long
as revenues exceed costs. Management should understand both their own value
chain and those of their competitor. It will not in itself help us understand how
well these resources are being employed which is key to success of a strategy.
Primary activities
Supporting activities
In the following these approach, we will therefore:
Identify our primary and support activities
Identify sources of competitive advantage
Assess cost efficiency, and
Analyze the effectiveness of the whole operation
The Value Chain
Analyze Value Chain
Identify primary activities
We will group these into five main areas:
Supply chain management
Operations
Distribution
Marketing and sales
Customer services

Indentify support activities


There are three main areas to assess:
Organization/ Management
Human resources
Technology
Analyze Value Chain
Identify cost or value drivers
These are factors which seem likely to sustain competitive advantage. To do this we need to:
Look for key linkage, specially in the internal value chain
Look for links between primary activities
Watch lack of harmony between primary activities
Look for links between primary and support activities
Assess linkage between support activities
Assess sub-optimization

Assess cost efficiency


These cost or value drivers should then be checked for efficiency using the standard tools of:
Economics of scale
Supply cost
Product process design
The experience curve/ relative market share
Analyze Value Chain
Analyze effectiveness of whole operation
Customer satisfaction is of primary importance so it important to know whether we achieving this, paying special attention to cost and
value drivers in the analysis. To do so we ask some types of questions. They are:
Basic questions:
How well do our goods and services match needs of our customer?
Is the cost of unique features recovered in higher prices?
Are supporting services up to customers expectation?
Are communication systems to customers adding value before, during and after the sale?
Are we customer oriented when measuring performance? Are targets based on accounting/budgeting rather than value?
More general questions:
Is GCC creating value throughout the system?
Do we Have our priorities clear?
Do we have complete over our resources?
To what extent can we evaluate and influence the creation of value?
What use can be made of :
-vertical integration
-central specialization
-Total Quality Management
In the analysis of GCCs value chain, the interests of our various stakeholders will become apparent, and using the information gained
here we can develop ways in which their particular expectation can be better addressed.
Compare and benchmark

We have used the value chain approach to understand and assess how well the company is managing its
activities to sustain its competitive advantage. This will give an insight into how the relationships
with the various groups of stakeholders has evolved which can be illuminating. We will make three
broad comparisons :
a) Past performance
Financial Ratios
-Turnover/capital employed
-Sales/employee
Nonfinancial measures
- Quality and service level
-Geographical distribution and customer profile
- employee age skill level
b) Industry
c) Best practice
Assess balance of resources

We have considered the resources available to the business and the they are
developed into producing and selling the companys products and services
through its value chain and have compared the trends over a number of
years, both internally and its relation to its competitors. The three aspects to
this examination are:
Product balance
People balance
Organizational / cultural balance
Identify key issues

The last part of the internal analysis is to pull out the key issues from all the
detailed analysis and express them into summary analysis.
a) Strengths and weakness
b) Competitive advantage
Next

Next presenter is : Taslima Akter Sonia


External Analysis

Definition:
Aims to:
Understand our business environment
Evaluate GCG within its industry structure
Summaries the key issues which will enable us to assess our competitive position
Congruence of goals

Understanding the business environment and the position and pespectives of


various stakeholder groups is a key element in ensuring continuing congruence
of goals
Congruence of goals:

Right goal or appropriate goal


Goal which properly reflect the
expectation of the stakeholder
The external analysis:

Influence on Competitors
Nature of the Structure of the Competitive Identify
the and the
marketplace marketplace position key issues
marketplace marketplace

-static vs changing -PEST analysis -Competitor analysis Market


-simple vs complex -Scenaio planning -Closest competitors segmentation
Nature of the market place

To assess the nature of the marketplace, how stable and predictable is the
marketplace is measured. Two important measurers are:
Static vs Changing
Simple vs Complex
Influence on the marketplace
Two analytical techniques:
1. PEST analysis:
Political/legal Economic

Monopolies legislation Business cycles


Environmental protection laws GNP trends
Taxation policy Interest rates
Foreign trade regulation Money supply
Employment law Inflation
Government stability Unemployment
Disposable income
Socio-cultural Technological

Population demographics Government spending on research


Income distribution Government and industry focus of
Social mobility technological effort
Lifestyle changes New discoveries/development
Consumerism Technological transfer speed
Levels of education Rate of opbsclescence
2. Scenario Planning: the longer-term effect of major trends.
Applying a small number of key assumptions to the industry
Showing the impact on the overall market and main competitors
Analyze the structure of the competitive
environment
Porter model
Key question arising

What are the key forces at work?


Are there any underlying forces driving change?
What are the likely changes?
How do these affects particular competitors and the competitive position.
Know our competitors

Competitor analysis: for each competitor we must try to determine ans


document:
The objective of that organization
Its resource strengths
Its performance record
Its current strategy
Its underlying core beliefs or guiding principles
Strategic group analysis:
Select two o three sets of characteristics
Assess the ease of mobility between one group to another
Assess likely market changes or strategic opportunities
Identify key issues

Opportunities and threats:


Market segmentation:
Define the market in terms of appropriate factors. eg, characteristics, purchase situation,
preference for product characteristics
Assess the attractiveness of different market segments.
Assess the existing and potential relative market share in each segment
Assess the benefits of focusing in one or more segments.

Competitive advantage: summarizes our position relative to our compititors


with the objective of identifying weakness and sources of competitive
advantage.
Next

Next Presenter is : Imtiaz Mahbub


Stakeholder Analysis
Stakeholder Analysis is a systematic way to analyze stakeholders by their
power and interest. High power, high interest stakeholders are Key Players.
Low power and low interest stakeholders are least important.
Stakeholder Survey
Ethics: Goal
Corporate social responsibility does the Congruence of goal- Does the companys
company behave responsibly towards all goal reflect the expectations of all the
its stakeholders? Particularly: stakeholders? Particularly:
* Environment/human rights issues, * Stakeholders present and future desire
Support from local community/society, from GDG.
Honesty, fair treatment of staff
Organization Reporting:
Structure- Does it protect the interest of
Information- Is there information being
its various stakeholders and have open
passed through these channels which is
channels of communication with them?
sufficient and accurate enough to satisfy
Particularly:
all the stakeholders? Particularly:
* Management style and culture,
* Transparency, trading results, future
operational effectiveness and efficiency,
plans etc.
accountability.
The Questionnaire

Ethics Goal

How does GCG rate on What are the stakeholders


environmental/human rights issues? expectation?

How does GCG rate on support for


Are they aware of GCGs agreed goal?
local community/society?

How does GCG rate on honesty/fair


Do they approve of them?
treatment?
The Questionnaire(Contd)

Organization Reporting

What are the stakeholders views on the


effectiveness of the organization in How much do stakeholder know
achieving a proper balance of the about GCG?
interest of all the stakeholders?(
Structural side) Is it enough, or would they like to
know more?
What channels do stakeholders know
about to communicate with GCG? Can/do they get information when
Do they use these channels? they want it?
Frequencies

At this stage all we have is truly raw data, which we can use for diagnostic
purposes.
All the figures must be kept for the model within the grouping used in
research. Before averaging between groups is done, to arrive at overall, and
more meaningful figures, these groups will have to go through the weighting
process, with the help of information from internal and external analysis.
Weighting
The weighting process is based on the premise that individuals will exercise influence
through belongings to one or more groups which share their expectations. Through
these groups they will attempt to influence the organizations strategy.
There will always be conflicts of expectations between the various interested parties.
Compromise have to be made, and it is important to understand the expectations of
different stakeholder groups and to weigh these in terms of the power they exercise.
The key to the whole stakeholder approach is that we keep in mind at all times:
A good balance of power
The overall survival of the company
The common goal.
The Power/Influence matrix

The Power/Influence Grid, which is also known as the Power/Influence


Matrix in stakeholder management ,is a simple tool helps you
categorize project stakeholders by the power and influence they have
on the project. The Power/Influence grid helps you focus on the key
project stakeholders who can make or break your project. In turn, this
helps you in stakeholder prioritizations.
The Power/Influence matrix

High Propensity to Act Low

Will Act May Act Unlikely to Act


High Has power A1 A2 A3

Ability to Could get power B3 B2 B3


Influence

Low Cant get power C1 C2 C3


Mapping

With all the scores weighted and in place in the model structure we are
effectively constructing, we can now plot this data in charts which clearly
show how well or poorly GCG is performing on a number of different issues.
These helps to compare and adjust the weighting to reflect fundamental
principles ( Balance, survival and common goal) of stakeholder approach.
Continuously monitor the whole process.
Next

Next presenter is MD. Zakir hossain


Confirm or Change Goal

The last three stages have comprised the position analysis which has enabled
us to understand where we are now. Here we can look again at the board goal
decided on in the goal discussion meeting to see if:
We have the necessary strategic capability to achieve it
It is feasible given the nature of the marketplace
It reflects congruence of the expectations of all our stakeholders.

The Key influences before making a decision the first step is the SWOT analysis.
Market attractiveness and business
strength
Business strength Market attractiveness

Market Share Market size


Sales force Market growth rate
Marketing Cyclicality
Customer service Competitive structure
R&D Barriers to entry
Manufacturing Industry profitability
Distribution Technology
Financial resources Inflation
Image Regulation
Breath of product line Workforce availability
Quality/ reliability Social issues
Managerial Competence Environmental issues
Political issues
Legal issues
SWOT Analysis
Findings from internal analysis
Strengths Weakness
Good sales force Low market share
Excellent customer services Poor R & D
Effective marketing Narrow product range
Good image for quality reliability Some manufacturing and distribution
Active stakeholder support inefficiencies
User choosers Lack of stakeholder support
Loyal staff User passives
Community endorsement Undecided stakeholders (abstainers)
Findings from external analysis
Opportunities Threats
Market large enough for segmentation Market dominated by a few large players
Reasonable market growth rate Expensive technology
High availability of skilled workers Increasing regulation for smaller players
Established market with high barriers to entry Profitability uncertain
Potential stakeholder support Active stakeholder opposition
Confidence of bank Pressure groups
New supplier deal Militant shareholders
SWOT Analysis and stakeholder
Findings from stakeholder analysis
Findings views
from internal analysis
Loyal customer base
Strengths Weakness
Findings from stakeholder
analysis
Pleased with staff Good sales force Low market share
Excellent customer services Poor R & D
Incentive schemes,
Effective marketing Narrow product range Not significance number
sense of belonging Good image for quality reliability Some manufacturing and distribution
Active stakeholder support inefficiencies
User choosers Lack of stakeholder support Concerned with recent
Good image through local Loyal staff User passives proposals
sponsorship Community endorsement Undecided stakeholders (abstainers)
Findings from external analysis
Findings from stakeholder
Findings from stakeholder analysis Opportunities Threats analysis
Happy to offer new overdraft Market large enough for Market dominated by a few large
Arrangements segmentation players Not aware of any active
Reasonable market growth rate Expensive technology rejection
High availability of skilled Increasing regulation for smaller
Keen to work closely with company workers players
Established market with high Profitability uncertain Not happy with reject proposals
To increase effectiveness
barriers to entry Active stakeholder opposition
Potential stakeholder support Non-user rejections
Confidence of bank Pressure groups
New supplier deal Militant shareholders
Stakeholder views

In studying the information, our choice of the type of goal and strategy is
clear.
Reputation of quality and reliability and excellent customer service make
customers loyal to the company.
Large growing market dominated by a few big companies putting pressure
through effective cost leadership.
We can effectively dominate Niche market.
Sound balance sheet strengthened our position.
Co-operative new supply arrangements improve the whole value chain.
We have a loyal workforce which believes in us.
Next

Next Presenter is : Mahmudul Hassan


Formulating Strategy
Strategy: Strategy is the direction and scope of an organization over
the long-term within a challenging environment to meet the needs
of markets and to fulfil stakeholder expectations. This has three
steps.
Generating Evaluate and Choose
strategy to assess various appropriate
achieve goal option options

1. Generating Strategic Options: We will generate more than one


option. There are three parts to the process of developing strategic
options-
- The basis of the strategy.
- The direction
- The alternative methods.
Formulating Strategy
a) Generic Strategies: Michael Porter showed 3 basic strategies
which help a business to achieve sustainable competitive
advantage. This is shown on the diagram-
Competitive advantages

Lower cost Differentiation


Broad Target
Cost leadership Differentiation
Competitive
Scope Focus
Narrow Target
Formulating Strategy

i) Cost leadership - where a business aims to be the lowest cost


producer in its industry.
ii) Differentiation - Differentiation involves making your products
or services different and more attractive than those of your
competitors.
iii) Focus - Focus strategies concentrate on particular niche market
by understanding the dynamic markets and the unique needs of
customers. One can use cost focus or differentiation focus.
Formulating Strategy
b) Directions for strategy and methods of development- Now we
will look at the different direction in which we can develop our
strategy. We limit ourselves for each different direction. There are
three options for that development:
i) In-house development-which may offer greater development of
expertise and control but which may prove more expensive.
ii) Acquisition of the desired business or products- which may
be cheaper in the short term but may hold more risk
iii) Joint ventures or alliances- which have become more populer
in recent years.
Formulating Strategy
Evaluating strategic options and selecting strategy- The process of
evaluating and selecting the strategy is all about determining which plan is
most likely to get GeG from point A (where we are now) to point B (where we
won't to be). In this strategy we must:
- Decide the suitability of the various available strategic options.
- Determine the appropriate detailed criteria by which to assess and rank
these options. Let measures will be selected for this, such as-
- Market Share
- Growth in shareholders' fund
- Return in sales
- Customer satisfaction
- Employee development
- Industry reputation
Next

Next presenter is : Samiul Sunny


Strategy
Implementation

Rush to Action ????????


Or
Think Before you do????????
Prior to Implementation Stage

Consider & Examine 3 things before jumping into effective


implementation of strategy

# Present position Point A

1. Clear Objectives
2. Business Definition
3. Competition Scenario
4. Acquisition and Allocation of necessary Resources
5. Implementation Route
# Desired Future position Point B

If Point A is clearly defined and investigated then


Point B would be desired

# Cumulative Strategy gained from A&B together


Point C ( Finalized
Strategy )
Checklist Stage

Decorum the chronological path for making the run into the filed
smooth

** Allocate Resources
** Organizational Change
** Business Plan
** System to Monitor Progress
** Project Management Process
** Long term Strategy Evaluation
Planning to Allocate Resources
Corporate Level

# Ensure the needed resources for various units.


# Pre-Plan for any uncertainty
Business level

# Develop
value chain and allocate resources as per
requirements and importance.
# Emphasize on the important operational level
Stakeholder Level

# Satisfy
the stakeholders with resource
allocation strategy information
Planning Organizational change

Logical Evaluation of Present business


practices.

Learn from the past experience ( Positive &


negative )

Put in place the suggested and agreed


modifications.
Framing Business Plan

1. Mission Statement 8. Procurement


2. Goals 9.InformationSystems
3. Role in the group 10. Organization
4. Overall strategy statement 11. Finance
5. Products and Services 12. Assessment of Risk
6. Marketing 13. Implementation
Plan
7. production
Monitoring and Reporting

Monitor the governance system


Monitor implementation and maintenance
process
Maintain efficient decision making process
Monitor the flow of information
Regular
monitoring of mechanism and
improvement from implementation
Project Management

Successful implementation and desired


efficient results through modules
derivation.
Deliverable Model

## Establish a basis for measurement

## Categorized delivery and time management

## Mechanism to measure progress

## Continue the module


Benefits Model

Measurethe outcome ( both positive and


negative )

Suggest any changes

Valuing and Benefitting the stakeholders


equally.
Controls

Management Responsibility and Authority structures


Implementation teams
Asset and other resource controls
Software control tools
Financial Controls
Cost management mechanisms
Work plans and schedules
Detailed action responsibilities
Appropriate reporting systems
Review

Check Milestones

Review the deliverable model

Attention to stakeholders
Long-term Strategy Evaluation

Continuous Review
** External and Internal factors
** Stakeholders weighting model reconsideration
** Performance Measure
** Corrective Actions
Two Challenges
# Potential changing Business Environment
# Success can be inherited by Business nature
Long-term Review

# Inconsistency Checkout
# Consideration of all factors
# Strategies are being suit in the marketplace or not
Thank You