PART II

STRATEGY
FORMULATION
 VALUE CHAIN ANALYSIS
Value chain is a general term that refers to
a sequence of interlinked undertakings that
an organization operating in a specific
industry engages in.
 SUPPLY CHAIN MANAGEMENT
It consists of :
• Purchasing or supply management which includes the sourcing, ordering, and
inventory storing of raw materials, parts ,and services.
• Production and operation, also known as manufacturing and assembly
• Logistics which is the efficient warehousing, inventory tracking, order entry,
management, distribution and delivery to customers
• Marketing and sales which includes promoting and selling to customers.
 SUPPLY MANAGEMENT
The supply management is now popular term used for purchasing which
was formerly termed as procurement. It is key business function that is
responsible for:
1. Identifying materials and service needs
2. Locating and selecting suppliers; negotiating and closing contracts
3. Acquiring the needed materials, services, and equipment
4. Monitoring inventory stock keeping units
5. Tracking supplier performance
 PRODUCTION AND OPERATIONS
Are processes that transform operational input into output to satisfy
consumer needs and requirements. This transformational process of
manufacturing and assembly.
 THE LOGISTICS CIRCLE
Now a popular term in supply chain management , logistics management
Includes the supervision of certain sequential processes. These includes
the following:
• Warehousing
• Scheduling
• Dispatching
• Transportation
• Delivery
THE LOGISTICS CIRCLE
 MARKETING AND SALES
Products are produced and services are rendered for ultimate
release to customers. Therefore there is a need to market these
merchandise to interested buyers. Companies can adopt different
modes of marketing to attract and sell to customers. They can
study the unique purchasing patterns of buyers and determine
what will translate their desire for products into actual purchase.
 GROWTH STRATEGIES
The adoption and implementation of a growth strategy is one of the most
important considerations for every organization.
Growth Strategy is a mode adopted by an organization to achieve its
main objectives of increasing in volume and turnover.
 INTERNAL GROWTH STRATEGIES
Approaches adopted within the company. These broad growth strategies
can be any of the following:
• Market penetration
• Market development
• Product development
• Diversification
 COMPETITIVE STRATEGIES
Are essentially long-term action plans prepared with
the end goal of directing how an organization will
survive and compete. It includes the following:
• Low cost leadership Strategy
• Broad Differentiation strategy
• Best cost provider strategy
• Focused/market-niche lower cost strategy
• Focused/market-niche differentiation strategy
OTHER COMPETITIVE STRATEGIES
• Innovation Strategy
• Operational Effectiveness Strategy
• Economies of Scale
• Technology Strategy
 LIFE CYCLE STRATEGIES
The life cycle of any product/services refers to the lifespan that a
commodity/service undergoes from its introduction stage to its growth,
maturity, and decline stages.
Introduction

Product/Servi
Decline Growth
ces

Maturity
 STABILITY STRATEGIES
For organizations that are doing fine or are doing better in
their existing business, they may choose not to implement
any growth strategy. They may not want to apply any
competitive strategy and hence, decide to keep the status
quo.
 RETRENCHMENT STRATEGIES
When a company’s survival is threatened or when it is not competing
effectively, it usually takes time to sit down and review its current
situation. There are different modes of Dealing with this situation. They
are the following:
• Liquidation
• Divestment
• Turnaround Strategy
TURNOVER STRATEGY
FINANCES

PRODUCTION &
INFRASTRUCTURE
OPERATION

TURNAROUND
STRATEGIES

CLIMATE & PROUCTS &

CULTURE SERVICES