01 Strategic Intent EVS App Value Chain
-
Upload
shangrilarestaurant -
Category
Documents
-
view
221 -
download
0
Transcript of 01 Strategic Intent EVS App Value Chain
-
8/9/2019 01 Strategic Intent EVS App Value Chain
1/60
Business Policy and StrategicManagement
A theoretical and PracticalPerspective
By Prof. Nikhil Rao
-
8/9/2019 01 Strategic Intent EVS App Value Chain
2/60
Sessions Main Topic
1 Introduction to BP/SM
Core concepts
Comprehensive Model of SM2 Strategic Intent
Formulation Of Strategies
a) Environment Appraisal
b) Organisational Appraisal
c) SWOT Analysis
3 d) Corporate Level Strategies
4 e) Portfolio Analysis
5 f) Business Level Strategies
6 Strategy Implementation
7 Functional Strategies
Marketing Strategies
8/9 Functional StrategiesFinancial Strategies
HR Strategies
Operational Strategies
10 Turnaround Management
Strategic Evaluation and Control
-
8/9/2019 01 Strategic Intent EVS App Value Chain
3/60
Business Policy
Defn :The study of the function and responsibility of
senior management , the crucial problems that affectsuccess in the total enterprise and the decisions thatdetermine the direction of the organization and shapeits future.
Context :
The problems of policy in business have todo with the choice of purposes , the moulding oforganizational identity and character, the continuousdefinition of what needs to be done and themobilization of resources for the attainment of goals
in the face of competition or adverse circumstances
-
8/9/2019 01 Strategic Intent EVS App Value Chain
4/60
MANAGEMENT
IS THE PROCESS OF DESIGNING AND MAINTAININGAN ENVIRONMENT IN WHICH INDIVIDUALS ,WORKING TOGETHER IN GROUPS , EFFICIENTLY
ACCOMPLISH SELECTED AIMS
FUNCTIONS OF MANAGEMENT :
)PLANNING
)ORGANIZING )STAFFING
)LEADING
)CONTROLLING
-
8/9/2019 01 Strategic Intent EVS App Value Chain
5/60
Definitions Of Management )Mary Follett :--The art of getting things done through
people.
)Peter Drucker :--- Managers give direction to theirorganizations, provide leadership and decide how to use
organizational resources to accomplish goals )Richard daft :;;-- Management is the attainment of
organizational goals in an effective and efficient mannerthrough planning, organizing , leading and controllingorganizational resources.
)Griffin : Management is a set of functions directed atthe efficient and effective utilization of resources in thepursuit of organizational goals.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
6/60
Key Points in Management
Efficient : using resources wisely and in a cost effective manner.
Effective : making the right decisions and successfullyimplementing them.
Planning:The management function concerned with defininggoals for future organizational performance and deciding onthe tasks and use of resources needed to attain them.
Organizing : The management function concerned withassigning tasks , grouping tasks into departments and allocatingresources to departments.
Leading : The management function that involves the use ofinfluence to motivate employees to achieve organizational goals.
Controlling : the management function concerned withmonitoring employees activities , keeping the organization ontrack toward its goals and making corrections if needed.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
7/60
Old Paradigm New Paradigm
Vertical Organization Learning
Organization
Forces on Organization
Markets Local, Domestic Global
Workforce Homogeneous Diverse
Technology Mechanical Electronic (Digital)
Values Stability, Efficiency Change, Chaos
-
8/9/2019 01 Strategic Intent EVS App Value Chain
8/60
Old Paradigm New Paradigm
Management Competencies
Focus Profits Customers,Employees
Leadership Autocratic Dispersed,empowering
Doing work By individuals By Teams
Relationships
Conflict, CompetitionCollaboration
-
8/9/2019 01 Strategic Intent EVS App Value Chain
9/60
Strategies
y comes from the Greek word Strategos meaning Artof the general
y Military used the word strategy to mean grand plans
made in the light of what it is believed an adversarymight or might not do.
y Defn of strategy :
y 1) General program of action and deployment ofresources to attain comprehensive objectives
y Alfred Chandler : Determination of the basic long termobjectives of an enterprise and the adoption of
course of action and allocation of resources necessary toachieve these goals.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
10/60
Glueck : A unified , comprehensive and integrated plan
designed to assure that the basic objectives of theenterprise are achieved
Michael Porter : : Developing and communicatingthe companys unique position, making trade-offs and
forging fit among activities.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
11/60
Corporate level
Division level
Business level
Functional level
-
8/9/2019 01 Strategic Intent EVS App Value Chain
12/60
ColourTV
Business
VCD/DVD
business
Consumerelectronics
Division
WashingMachine Refrigerator A/C
HomeAppliances
Division
FMCG
Division
LG
Corporateteam
-
8/9/2019 01 Strategic Intent EVS App Value Chain
13/60
Different levels of strategy
CORPORATE E E
si ss l
cti l
l l
Str t yls
Cor or t
S U
f ctional
S U
Operations arketing Personnel inance
S U S U
Corporate office
/ ead office
-
8/9/2019 01 Strategic Intent EVS App Value Chain
14/60
Strategic Management
Glueck : A stream of decisions and actions whichleads to the development of an effective strategy orstrategies o help achieve corporate objectives.
Hofer : The process which deals with thefundamental organizational renewal and growth withthe development of strategies , structures andsystems necessary to achieve such renewal and
growth and with the organizational systems neededto effectively manage the strategy formulation andimplementation processes.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
15/60
Strategic Management
Ansoff : A systematic approach to a major and
increasingly important responsibility of generalmanagement to position and relate the firm to itsenvironment in a way that will assure its continuedsuccess and make it secure from surprises.
Sharplin :
The formulation and implementation of plansand carrying out of activities relating to the matterswhich are of vital , pervasive or continuingimportance to the total organization
-
8/9/2019 01 Strategic Intent EVS App Value Chain
16/60
Strategic Management
Harrison :The process through which organizations
analyze and learn from their internal and externalenvironments, establish strategic direction , createstrategies that are intended to help achieveestablished goals and execute these strategies , all inan effort to satisfy key organizational stakeholders.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
17/60
Phases In SM
Establishing Strategic Intent
Formulation of strategies
Implementation of strategiesStrategic Evaluation and control.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
18/60
Establishing Strategic Intent
Vision , Mission, Business Definition and objectives
Formulation ofstrategies
EnvironmentAppraisal, Organizational AppraisalSWOT Analysis , Corporate Level Strategies
Business level Strategies , Strategic Choice
Strategy ImplementationProject, Procedural, ResourceAllocation
Structural, Behavioral, Functional and operational
Strategic Evaluation
S
T
R
A
T
E
G
I
C
C
O
N
T
R
O
L
Comprehensive Model of Strategic Management Process
-
8/9/2019 01 Strategic Intent EVS App Value Chain
19/60
Part A : Establishing Strategic Intent
Vision , Mission, BusinessDefinition and objectives
-
8/9/2019 01 Strategic Intent EVS App Value Chain
20/60
Establishing the hierarchy of strategicintent
1) Creating and communicating a vision : It servesthe purpose of stating what an organization wishes toachieve in the long run.
2) Designing a mission statement : The mission relatesan organization to society.
The essential purpose of the organization ,concerning particularly why it is in existence , the
nature of of the business it is in and the customers itseeks to serve and satisfy.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
21/60
ision and MissionAnheuser-Busch
vision:
T rough all ofourproducts,ser ices and relationships, we will add tolife's enjoy ent.
mission:
Be the world's beercompany
Enrich and entertain a global audience
Deli ersuperiorreturnsto ourshareholders
-
8/9/2019 01 Strategic Intent EVS App Value Chain
22/60
ision and Mission
Boeing
Mission Statement
To provide innovative, world-class, integrated technical data andtraining systems that enable our customers to operate at optimalperformance.
ision
To ensure that the integrated Instructional Systems and Training
Support organizations become our domestic and internationalcustomers' preferred supplier of training systems, systems support andequipment by providing innovative, world-class integrated products andservices that enable our customers to operate at optimal performance.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
23/60
ision and Mission
ONGCVision and mission:
To be a world-class Oil and Gas Company integrated in energybusiness with dominant Indian leadership and globalpresence.
HPCLVision:
"To be a leading world class company in hydrocarbons and energyrelated sectors with a global presence."
Mission:
"HPCL, along with its joint ventures, will be a fully integrated
company in the hydrocarbons sector of exploration andproduction, refining and marketing;
focusing on enhancement of productivity, quality and profitability;caring for customers and employees; caring for environment
protection and cultural heritage.It will also attain scale dimensions by diversifying into other
energy related fields and by taking up transnational operations
-
8/9/2019 01 Strategic Intent EVS App Value Chain
24/60
Vision and Mission
Infosys' Vision:
To be a globallyrespected corporation that provides
best-of-breed businesssolutions,leveragingtechnology, delivered by best-in-class people"
Infosys' Mission Statement :
"To achieve ourobjectivesin an environment of
fairness, honesty, and courtesytowards ourclients,
employees, vendors and society atlarge"
-
8/9/2019 01 Strategic Intent EVS App Value Chain
25/60
Vision and MissionTitan
Vision
To be the most desirable jewellery brand for Indianwomen
MissionWe will continuously create wealth for all our stakeholders,
by transforming the jewellery business and by being thegold standard in design, shopping experience and ethicalpractices.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
26/60
Vision and Mission
Birla Sunlife Mutual fund
Vision
To be the most trusted name in investment and wealthmanagement, to be the preferred employer in theindustry and to be a catalyst for growth and excellence
of the asset management business in India.
Mission
To consistently pursue investor's wealth optimization by :
Achieving superior and consistent investment results
Creating a conducive environment to hone and retaintalent
Providing customer delight
Institutionalizing system-approach in all aspects offunctioning
Upholding highest standards of ethical values at all
times
-
8/9/2019 01 Strategic Intent EVS App Value Chain
27/60
3) Defining the business : explains the businesses ofan organization in terms of customer needs ,
customer groups and alternate technologies
4) Setting objectives : what is to be achieved in agiven time period
-
8/9/2019 01 Strategic Intent EVS App Value Chain
28/60
Business definitions
Customer groups relate to who is being satisfied.
Customer needs describe what is being satisfied
Alternative technologies means how the need isbeing satisfied.
e.g
Whirlpool Refrigerators
Customer needs quick refrigeration
Customer groups--- individuals, institutions andexports
Technologies: high quality and latest from Whirlpool ,USA--- (6th sense )
-
8/9/2019 01 Strategic Intent EVS App Value Chain
29/60
Business definitions
e.g Maruti Suzuki
Customer function/needs transportation witheconomy and style (Maruti 800, Zen)
Customer Groups --- individuals (middle class andlower upper class), institutions(companies) andexport market.
Technology --- latest from Suzuki (MPFI, and
technology to meet Euro 2 /3 norms)
-
8/9/2019 01 Strategic Intent EVS App Value Chain
30/60
Setting Objectives
Objectives denote what an organization hopes toaccomplish in a future period of time.
Characteristics of objectives1) Should be understandable
2) should be quantifiable
3) should be time bound
4) should be measurable5) should be challenging
eg To increase market share from 10% to 25%in 2years
-
8/9/2019 01 Strategic Intent EVS App Value Chain
31/60
Part B :Formulation of strategies
Environment Appraisal, Organizational Appraisal
(SWOT Analysis) , Corporate
Level Strategies
Business level Strategies , Strategic
Choice
-
8/9/2019 01 Strategic Intent EVS App Value Chain
32/60
Environment Appraisal(Opportunities and Threat analysis)
Market Environment :1) Customer factors like needs , preferences,
perceptions, buying behavior etc.
2) product factors : demand , utility, features,lifecycle, price, place, promotion, differentiation ofproducts/services
3) Marketing intermediary factors : levels andquality of customer service, middlemen, logistics,
costs and financial intermediaries.4) Competitor related factors : different types ofcompetitors , entry level barriers , nature ofcompetition
-
8/9/2019 01 Strategic Intent EVS App Value Chain
33/60
Environment Appraisal
Technological Environment :
1) Sources of Technology : internal , external,
cost of acquiring technology, collaboration etc.2) technological development, stages of
development , change and rate of change oftechnology.
3) Communication and infrastructural technology
-
8/9/2019 01 Strategic Intent EVS App Value Chain
34/60
Environment Appraisal
Economic Environment :consists of macro-level factors related to the
means of production and distribution of wealth which
have an impact on the business of an organization.Some of the important factors operating inthe economic environment are:
1) The economic stage at which a country existsat a given point of time .
2)The economic structure adopted such ascapitalistic, socialistic or mixed economy.3) Economic policies such as
industrial, monetary and fiscal policies
-
8/9/2019 01 Strategic Intent EVS App Value Chain
35/60
Environment Appraisal
Economic planning such as 5 year plans, annual budgets etc.
Economic indices like GNP, GDP, rate ofsavings, exports , imports,BOP,disposable income etc.
Liberalization, Privatization,Globalization
-
8/9/2019 01 Strategic Intent EVS App Value Chain
36/60
Environment Appraisal
Regulatory Environment:
Policies related to licensing , foreign
investment,foreign stakesPolicies related to import and export
Policies related to PSU , small scale industries , sickindustries , development of backward areas ,
environment pollution , consumer protection
-
8/9/2019 01 Strategic Intent EVS App Value Chain
37/60
Environment Appraisal
Socio-cultural Environment :Demographic characteristics changing lifestyle
patterns , materialism, socio-cultural attitudes ,beliefs , values education levels , awareness of rights, work ethics.
The role of men, women, children and the aged infamily and society
-
8/9/2019 01 Strategic Intent EVS App Value Chain
38/60
Environment Appraisal
Supplier Environment :consists of factors related to the cost , reliability and
availability of the factors of production or service thathave an impact on the business of an organization. cost, availability and continuity of supply of raw materials ,
parts and components
cost and availability of finance for implementing projects
cost, availability of energy used in production
infrastructure support and bargaining power of suppliers andexistence of substitutes
cost , availability and dependability of human resources
-
8/9/2019 01 Strategic Intent EVS App Value Chain
39/60
Environment Appraisal
Political Environment :
Political philosophy , govts role in
business and its policies, intervention in economicand business development.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
40/60
Environment Appraisal
International Environment : Globalization ,its process , content and direction.
Global economic forces , organizations , blocs etc.Global trade and commerce , its process and trendsGlobal financial system , sources of finance andaccounting standards ---(US Generally Acceptedaccounting Practice)
Geopolitical situation , equations , alliances andstrategic interest of nations Global demographicpatterns and shifts.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
41/60
Environment Appraisal
Global human resource- nature and quality of skillsand expertise, mobility of personnel.
Global information systems , communication
networks and mediaGlobal technological and quality systems andstandards .
Global markets and competitiveness
Global legal system, adjudication and arbitrationmechanism
-
8/9/2019 01 Strategic Intent EVS App Value Chain
42/60
Organizational Appraisal(Strength and weakness analysis)
The appraisal of the external environment of a firmhelps it to think of what it might choose to do. Theappraisal of the internal environment enables a firm
to decide about what it can do.
Organizational capability could be understood interms of the strengths and weaknesses existing inthe different functional areas of the organization.
For ex. HR, Financing, Marketing, operationsetcetc
-
8/9/2019 01 Strategic Intent EVS App Value Chain
43/60
Financial Capability Factors
relate to the availability, usage and management offunds. Some of the important factors, which influencethe financial capability of any organization, are as
follows:
)Factors related to source of funds: Capital structure,working capital availability, reserves and surplus, andrelationship with lenders, bank and financial
institutions.
)Factors related to usage of funds: Capitalinvestment, fixed asset acquisition, current assets,loans and advances, dividend distribution andrelationship with shareholders.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
44/60
Financial Capability Factors
)Factors related to management of funds: Financialaccounting and budgeting systems, return and riskmanagement, tax planning, cost reduction and
control.Typical strengths that support financial capability
y Access to financial resources
y Excellent relationship with financial institutions
y
High level of credit worthinessy Low cost of capital
y Shareholders confidence
y Tax benefits due to govt. policies.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
45/60
Marketing Capability factors
relate to the 4Ps
)Product related factors: variety, differentiationetc.
)Price related factors: Pricing objectives andpolicies
)Place related: distribution, logistics, marketingintermediaries etc.
)Promotion related : Advertising, salespromotion, PR
-
8/9/2019 01 Strategic Intent EVS App Value Chain
46/60
Marketing Capability factors
Some of the typical strengths leading to marketingcapability are as follows:
y Wide range of quality products
y Brand name
y Effective distribution and sales promotion
y High decibel advertising
y
Effective MR and MISy Low prices
-
8/9/2019 01 Strategic Intent EVS App Value Chain
47/60
Operations Capability factors
relate to the production of products, use of rawmaterials etc.
1) Factors related to the production system: Capacity,location, layout, product design, degree of automationextent of vertical and backward integration etc.
2) Factors related to the operations and control system:
Production planning, material supplies (Purchase dept.),Inventory, quality control, maintenance and procedures
)Factors related to R & D system: Personnel,product development, patent rights, technicalcollaboration and support etc.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
48/60
Operations Capability factors
Typical strengths that support operationscapability
y High level of capacity utilizationy Favorable plant location
y Reliable source of supply
y Existence of good inventory control system
yAvailability of high calibre R&D personnely Technical collaboration with reputed firms
abroad.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
49/60
Personnel Capability
Personnel capability factors relate to the existenceand use of human resources and skills. Some of theimportant factors, which influence the personnel
capability of an organization, are as follows: )Factors related to the personnel system:
System of manpower planning, selection,development, compensation, communication,
appraisal, and procedures.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
50/60
Personnel Capability
)Factors related to industrial relations: Union-management relationship, safety, welfare,security, employee satisfaction etc.
)Factors related to organizational andemployees characteristics: Quality ofmanpower, availability of growth opportunitiesfor employees, working conditions etc.
h d d h i d f
-
8/9/2019 01 Strategic Intent EVS App Value Chain
51/60
Methods and techniques used forOrganizational Appraisal
)Internal analysis :
)Value chain analysis
)Quantitative analysis :1) Financial Analysis2) Non-Financial analysis
)Comparative analysis :
1)Historical Analysis2) Industry norms
3)Benchmarking
-
8/9/2019 01 Strategic Intent EVS App Value Chain
52/60
Michael Porters Value chain
Porter: divided the value chain of a manufacturing company into
)Primary activities :
y Inbound Logistics : Warehousing, Materials HandlingInventory control,Scheduling
y Operations : Manufacturing, Q.A, packaging,Assembly,maintenance
y Outbound Logistics : transportation, storage, order
processingy Marketing and sales: 4Ps
y Service: after sales service, training, installation
-
8/9/2019 01 Strategic Intent EVS App Value Chain
53/60
Michael Porters Value chain
)Support activities :
y Procurement : Purchasing, physical resources
y Human Resource Development: Recruiting, developing,
Retrenchment, training.y Technology Development
y Infrastructure: Staff functions, organizational designs,finance, accounting.
The profit margin and the inbuilt quality of the organization is adirect correlation of how effectively it manages its value chain.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
54/60
Quantitative Analysis
Financial Analysis:Traditional methods for evaluating financial
performance includes ratio analysis --- Financial
ratio analysis (current ratio, debt-equity ratio, ROIetc.) assesses the liquidity , profitability , leverageaspects of the organization.
-Modern techniques include EVA and ABC
-
8/9/2019 01 Strategic Intent EVS App Value Chain
55/60
Quantitative Analysis
EVA: Economic value added analysis: is the wealthan organization creates for its owners and isexpressed as the difference of the after tax
operating profits and the total cost of capital.
Activity based cost accounting: ABC identifies themajor activities in the value chain within thecompany and keeps a tab on the costs within each
activity. This helps in identifying the factors thatdetermine cost (cost drivers) and the areas wherecosts are actually incurred.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
56/60
Quantitative Analysis
Non Financial Quantitative analysis--
This includes
1) Employee turnover ratio2) Absenteeism
3) number of patents registered per quarter4) number of units produced per day
5) service calls per day6) service complaints per day etc.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
57/60
Comparative Analysis
Historical Analysis :The company compares its present performance
with its own past performance to see whether its
improving or not.Industry norms : The industry to which a businessbelongs is used for comparison . The companycompares parameters like cost structure, sales ,profit
margins etc. with that of the industry to see how itsfaring .
-
8/9/2019 01 Strategic Intent EVS App Value Chain
58/60
Comparative Analysis
BENCHMARKING
The practice of being humble enough to admit thatsomeone else is better at something and being wise
enough to learn how to match and even surpassthem at it
Competitive Benchmarking: direct comparison ofones own performance against the best competitors.
Generic Benchmarking: comparison of ones ownprocesses against the best practices anywhere in anytype of organization.
-
8/9/2019 01 Strategic Intent EVS App Value Chain
59/60
Organizational Capability Profile
Weakness normalstrength
-5 05
)Financial capability a)
b)
c)
)Marketing Capability
a)
b)
c)
-
8/9/2019 01 Strategic Intent EVS App Value Chain
60/60
Organizational Capability ProfileWeakness normal
strength
-5 05
)Personnel capability
a) b)
c)
)Operational Capability
a)
b)
c)
)General Management capability
From this the company arrives at the Strategic