You are on page 1of 43



How good are you at
leveraging your knowledge
and skills so that you are
able to provide value to
your business and
How smart are you when it
comes to understanding
both the fundamentals of
the business and new
^ How well do you understand the art and craft of

› p  




^ nowledge explosion and internet revolution
have forced organisations to innovate.

^ here is an increased pressure from the

customers, shareholders and society.
^ lobalisation and liberalisation have opened
up new business opportunities.

^ panaging a business in the new economy requires
a different trategy.
^ nnovation and sustainability are the keys to

^ Delivering better value faster than competition

will determine the winner.

‰  p  
paruti uzuki is launching sedan izashi. he car is pitted
against Honda Civic, oyota Corolla and koda
aura. he
company will be looking to a new set of customers with
izashi. ll this is being done to create a different
perception about paruti.

^ nvironment is the key factor.

^ Changing market,
technology, buyer
behaviour, socio-
political conditions
and competition
require different
^ urvival and success of a business firm
depends on its adaptability.
^ o survive in the ever changing market, we
need strategy.

uccess is not about having the right
people, the right attitude, the right tools, the
right role models or the right organisation.

t is about the right trategy.

trategy sets the competitive
direction, strategy dictates product
planning, strategy tells how to
communicate internally and externally,
strategy tells us on what to focus.

trategy and marketing must be
combined. great marketing plan
without proper business strategy will
often fail.

åhat makes us unique and
what is the best way to put
that difference into the
minds of our customers and
prospects is trategy.

trategy is about pursuing

a course of action
different from competitors
and providing
superior value to particular
market segments.

tactic is an idea. tactic must have a competitive angle
in order to have a chance of success.

his does not necessarily mean a better product or service

but rather there must be an element of differentness.


åe need to distinguish between pursuing
practices that are good for any company
and pursuing a practice that is unique to a
particular organisation.

company may outsource many services
and call this a strategy.

merger is a step that may move you
towards a unique position, to have a

t is better for consumers that companies
have strategies. he more companies have
strategies, the more consumers have
unique choices.

åe want all companies to compete on

here is only one ideal way to compete and
the challenge is to be the first one to get

‰    ›

 is a s 46,900 crore engineering and infrastructure professionally

managed company. t has 64 businesses ranging from power to roads
to aerospace to switchgear. hese businesses are being converted into
9 operating units such as
^ ower equipment
^ Hydrocarbon
^ Heavy engineering
^ nfrastructure
^ Building and factories
^ petals and minerals
^ lectrical and automation products
^ lectrical construction
^ pachinery and industrial products

trategy is arrived at by thinking, imagining and planning.
trategic thinking requires us to do four things
^ hink realistically
^ hink creatively
^ hink big
^ hink continuously

 ›  › 

ealistic appraisal of the organisation
^ esources and capabilities

^ Business environment.

pany companies overestimated the demand for
goods and services purchased on the åeb. he
demand for åeb-available goods and services is
now only reaching the levels hoped for in 1999.

 ›  ›  

hink creatively means looking at new strategic
For centuries, people dreamed of being able to fly. åright
brothers worked on that dream and made it a reality.
oday we take flying in airplanes for granted.

 ›  › 
eople are not measured in inches or pounds or college
degrees or family background; they are measured by the
size of their thinking.
eam ano at ata pushed itself to find solutions. åhen budget
constraints, design restrictions, the rising costs of materials and
political agitation threatened to derail the project, they dug deeper.
Finally ano astonished the world and started a renaissance in
business thinking.

 ›  › 

hink continuously means done on a daily basis. he strategic thinker
has to think across several dimensions.
paking strategy is likened to conducting a music orchestra.
conductor knows his band, the musicians and their instruments. he
conductor knows that under his leadership, the band can produce
music of such quality that can stir the souls.

hus strategy is defined as the overall plan of an
organisation for deploying its resources within its
environment, to establish a favourable position,
that is, a targeted competitive position and satisfy
its long-term goals.


^ ncreasingly inconsistent environment
^ Familiar landmarks no longer serve as guide posts
^ Competitors, partners, suppliers and customers are
increasingly unpredictable
^ picro decisions influenced by macro parameters

Broadly factors that impact all businesses equally are called macro
factors and those that influence a specific business are called micro


Mur country͛s growth is fuelled by growing middle-class
population, young consumers and rising per-capita


ndia will become the third largest emitter of carbon
dioxide worldwide by 2015.


teadily the spending power of rural ndia is increasing. Combine
these factors with improved roads and other infrastructure, rural
growth story is scripting a new chapter.


Customers are going back to nature and thus demanding
herbal and natural therapies.

framework consists of
broad environmental factors that
impact almost all organisations.

i) olitical factors
^ Business cycles
^  D trends
^ nterest rates
^ poney supply
^ nflation
^ Unemployment
^ Disposable income

Business cycles

he five stages of the business cycle are growth,

peak, recession, trough and recovery.

 D trends
ross ational roduct,  is the total value of all final
goods and services produced within a nation in a particular
year, plus income earned by its citizens (including income of
those located abroad), minus income of non-residents
located in that country.

t is important to differentiate ross Domestic roduct from

ross ational roduct. D includes only and services
produced within the geographic boundaries of the country,
regardless of the producer͛s nationality.  does not
include goods and services produced by foreign producers,
but does include goods and services produced by ndian
firms operating in foreign countries.


he eserve Bank of ndia defines monetary
aggregates as:
eserve poney (p0): Currency in circulation +
Bankers͛ deposits with the B + ͚Mther͛ deposits
with the B  et B credit to the overnment +
B credit to the commercial sector + B͛s claims
on banks + B͛s net foreign assets +
overnment͛s currency liabilities to the public ʹ
B͛s net non-monetary liabilities.
p1: Currency with the public + Deposit money of the
public (Demand deposits with the banking system +
͚Mther͛ deposits with the B).
p2: p1 + avings deposits with ost office savings banks.


p: p1+ ime deposits with the banking system 
et bank credit to the overnment + Bank
credit to the commercial sector + et foreign
exchange assets of the banking sector +
overnment͛s currency liabilities to the public
ʹ et non-monetary liabilities of the banking
sector (Mther than ime Deposits).

p4: p + ll deposits with post office savings

banks (excluding ational avings

conomic factors
^ overnment stability
^ axation policy
^ Foreign policy
^ rade regulations and trade policy
^ ocial welfare policies
ocio-cultural factors
^ opulation demographics
^ ncome distribution
^ ocial mobility
^ Cultural diversity
ifestyle changes
^ ttitude towards work and leisure
^ Consumerism
evels of education
^ killed manpower availability

echnological factors
^ overnment spending on research and development
^ overnment and industry focus on technological efforts
^ ew discoveries, innovations and development
^ peed of technology transfer
^ ates of obsolescence

nvironmental factors
^ nvironmental protection laws
^ åaste disposal regulations
^ nergy consumption and production
^ Competition law


egal factors

^ ponopolies legislation
^ mployment law
^ Health and safety
^ roduct safety and liability regulations
^ xit policy

Businesses should:

^ identify new openings and opportunities

^ identify dangers and problems
^ identify whether there is any need to change