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Chapter 5 : Concepts and Context of

Business Strategy

Presented By:
Dipanshu | Mohd. Kamran | Pulkit Prajapati | Tejas Patil
Overview :
• Importance of nature of strategy and strategic planning in corporate
world.
• While corporate executives are responsible for creating corporate
and business unit strategies, marketers are responsible for
contributing in the planning process.
• Corporate strategy is associated with the type of businesses a
company wants to be in.
• Business unit strategy concerns a translation of corporate goals into
business unit goals and objectives.
Siemens Changes its Strategy
• In 1998, Siemens was making progress in productivity improvements
but its net income was falling and getting slim.
• CEO Heinrich von Pierer created a 10-point plan to revamp Siemens.
• The plan placed emphasis on growing business, such as
telecommunications and automotive electronics in which acquisitions
were also made.
• Siemens sold off its non-performing business lines and focussed on
innovation and customer focus approach while improving operational
efficiency.
• Siemens reshaped its organizational structure and working
relationships between its employees and restructured its rail
locomotive business supply chain by acquiring suppliers(backward
integration).
Two Key Strategy Ideas from Siemens
Example

• First, Siemens performed better than competitors during and after


the recession because of its portfolio of businesses.
• Second, part of von Pierer’s strategy focussed on changing the culture
of the company – changing the way Siemens does the business.
Elements of an Effective Strategy
• First, strategy involves setting goals and objectives
• Second, strategy involves gaining an understanding of the
environment in which the business operates.
• The third critical element is learning from experience.
• Fourth critical element is thinking.
Different Steps Involved in Strategy Making
• Step 1 : Setting goals and objectives.
• Step 2 : Analysis of the current situation.
• Step 3 : Strategy design and choice of the best strategy.
• Step 4 : Implementing plan design.
• Step 5 : Strategy implementation.
• Step 6 : Monitoring of environment and performance results.
• Step 7 : Analysis of variance from desired performance levels.
• Step 8 : Adjustments based on analysis of variance.
Strategic Resource Allocation
• Organizational resources like infrastructure, personnel, finances or
technologies are not limitless.
• So a major outcome of strategic planning process is to allocate finite
resources to opportunities that will have great benefit to
organization.
• Some tools
• The growth share matrix
• Multifactor portfolio matrix
The Growth share matrix