TOPICS • SWOT Of Individual Company And Industry /Sector • Multiple Potential • Personal SWOT• Sustenance Excellence Relevance Significance Framework • Personal Goals • Personal Vision • Aspire To Inspire • Business Environment Analysis• SWOT Of Company/organization • Core Competence• Value Chain • Competitive Advantage• Value Proposition • Value Curve• Vision • SWOT of industry /sector• Routes to competitive advantage• Road map to world class organization• Vision of my company •

Permanent questions for Business

How will we Create value?

How will weCapture value?

How will weDeliver value?

Exercise

• What is your value proposition of your company

Exercise

• What is your value proposition

WINDOWS TO THE SELF

Known to OthersUnknown to Self

Known to OthersKnown to self

Known to selfUnknown to Others

Known to OthersUnknown to Self

Known to OthersKnown to self

Known to selfUnknown to Others

UNKNOWN TO SELFUNKNOWN TO OTHERS

HIDDEN POTENTIAL REVEALED THROUGH MULTIPLE POTENTIAL ANALYSIS

Known to OthersUnknown to Self

Known to OthersKnown to self

Known to selfUnknown to Others

Known to OthersUnknown to Self

Known to OthersKnown to self

UNKNOWN TO SELFUNLNOWN TO OTHERS

Known to selfUnknown to Others

HUMAN POTENTIAL ENHANCEMENT FRAMEWORK

• Multiple Potential• Multiple Intelligence • Awareness is the first step• Practice • Mastery

OPP

STRENGTH

WEAKNESS

OPPORTUNITIES

THREATS

PERSONAL SWOT ANALYSIS

PERSONAL STRENGTH WEAKNESS

STRENGTHS• Physical• Mental • Leadership• Communication • Knowledge• Vision • Focus • Empathy• Thinking • Skills • SelfManagement

WEAKNESSES • Physical• Time management • Lack of focus• Procrastination• Self doubt • Nagging self criticism •

Which is a better option

1 .Strength to excellence or 2.Weakness to excellence First is better It is ShorterLess resistance More enjoyable More feasible More productive

In apex move from macro to micro

• We start from you

CRITICAL SUCCESS FACTORS

PORTFOLIO OF SKILLS UNIQUE SKILLS HAVING COMPETITIVECURRENT CAPABILITIES ADVANTAGE

CORE COMPETENCE = CONGRUENCE = COMPETITIVE ADVANTAGE

GOALS WORTH ACHIEVING MISSIONS IN LIFE = STRATEGIC INTENTS

AIMLESS LIFE IS A GOALLESS DRAW

IF YOU DON’T KNOW WHERE YOU ARE GOING YOU WILL END UP SOMEWHERE ELSE

WHAT IS YOUR GOAL

INSEARCH OF SUSTENANCE

INSEARCH OF EXCELLENCE

INSEARCH OF RELEVANCE

IN SEARCH OF SIGNIFICANCE

INSEARCH OF SUSTENANCE

INSEARCH OF EXCELLENCE INSEARCH OF SIGNIFICANCE

INSEARCH OF RELEVANCE

"A bag of tools”• Isn't it strange, that princes and kings,

and clowns that caper in sawdust rings,and even folks like you and me, are builders for eternity?

To each is given a bag of tools,a shapeless mass and a Book of Rules;and each must make 'ere life has flown,a stumbling block or a stepping stone.

ROLE VISION / MISION / GOALS

SON/ DAUGTER

HUSBAND / WIFE

FATHERMOTHER

PROFESSIONAL

LEADER

FRIEND

FRIEND TO SELF

LOCAL ACTIVIST

REVOLUTIONARY

MEMBER OF SOCIETY

SPIRITUAL SEEKER

MISSIONS IN LIFE =GOALS WORTH LIVING FOR

GOALS WORTH LIVING FOR ARE GOALS WORTH DYING FOR

PERSONAL GOALS

INSEARCH OF SIGNIFICANCE 12345111111

INSEARCH OF EXCELLENCE 1234511

INSEARCH OF SUSTENANCE 12345

INSEARCH OF RELEVANCE12345

PERSONAL VISION STATEMENT

ASPIRE TO INSPIRE

FROM FOLLOWERS TO LEADERSARE WE

I choose to live so that which came to me as seed goes to the next as blossom, and that which came to me as blossom, Goes on as fruit.

THERE ARE NO LIMITS TO IMPROVEMENT

Business environment analysis

OPP

STRENGTHFLEXIBILITY

WEAKNESSEXECUTION

GREAT OPPORTUNITIES

SERIOUSTHREATS

MEGATRENDS FORCES SHAPING THE WORLD

ECONOMIC

SOCIAL/POLITICAL/REGULATORY GLOBALIZATION

ENVIRONMENTAL CONCERNS

RESOURCES INCLUDING ENERGY

TECHNOLOGYFLUX

INCREASING EXPECTATION

BUSINESS ENVIRONMENT ANALYSIS

• Factors/trends affecting business• Megatrends• PEST analysis • Framework for outside-in thinking• Current environment

MEGA TRENDS IMPACT ON SECTOR /INDUSTRY1 Globalization

2 Liberalization of Indian economy

3 Economic growth and spatial dispersal

4 Demographic Changes Population growth and urbanization

5 Scarcity of fossil fuels and natural resources and Rise of alternative sources of energy new materials

6 Rapid advancement and spread of information and communication technology

7 Lifestyle changes Rising levels of education Fashion Media

8 Climate Change and Environmental concerns

9 Transparency and regulatory Environment

10 Rise of services

SPREADING INNOVATION THROUGH CREATIVITYTECHNIQUE OF MULTIPLE PERSPECTIVE THROUGH MULTIPLE ANALOGY

TRANSFERRING ESSENCE FROM SOURCE DOMAIN TO TARGET DOMAIN

MEGA TRENDS IMPACT ON YOUR BUSINESS

1 Globalization

2 Liberalization of Indian economy

3 Economic growth and spatial dispersal

4 Demographic Changes Population growth and urbanization

5 Scarcity of fossil fuels and natural resources and Rise of alternative sources of energy new materials

6 Rapid advancement and spread of information and communication technology

7 Lifestyle changes Rising levels of education Fashion Media

8 Climate Change and Environmental concerns

9 Transparency and regulatory Environment

10 Rise of services

SPREADING INNOVATION THROUGH CREATIVITYTECHNIQUE OF MULTIPLE PERSPECTIVE THROUGH MULTIPLE ANALOGY

TRANSFERRING ESSENCE FROM SOURCE DOMAIN TO TARGET DOMAIN

MEGA TRENDS FUNCTIONS

1 Globalization KNOWLEDGE MANAGEMENT

2 Liberalization of Indian economy SUPPLY CHAIN MANAGEMENT

3 Economic growth and spatial dispersal FINANCE

4 Demographic Changes Population growth and urbanization

FIRM INFRASTRUCTURE

5 Scarcity of fossil fuels and natural resources and Rise of alternative sources of energy new materials

HR MANAGEMENT

6 Rapid advancement and spread of information and communication technology

OPERATIONS

7 Lifestyle changes Rising levels of education Fashion Media

MANUFACTURING

8 Climate Change and Environmental concerns

IT /COMMUNICATION

9 Transparency and regulatory Environment LOGISTICS

10 Rise of services MARKETING /SALES /BRANDING

MULTIPLE PERSPECTIVE THROUGH MULTIPLE ANALOGY IMPACT OF MEGATRENDS ON FUNCTIONS

Automobile

India’s automotive industry

Largest three-wheeler market in the world

Between 2004-05 and 2009-10, domestic sales registered an annual average growth of 8.3%

Exports grew at an annual average growth of 20% between 2004-05 and 2009-10

2nd largest two-wheeler market in the world

Two-wheelers have the largest market share in India

In 2009-10, two-wheelers constituted 76.23% of the market

Annual average growth registered between 2004-05 and 2009-10- 10.3%

Growth drivers - increasing demand from rural areas – Two wheeler penetration to increase from 22% to 26% over next 5 years

Automobile

India’s Automotive industry

4th Largest passenger car market in Asia & 10th largest in the world

Passenger car sales in 2009-10 at 1.5 million units & exports at 4,41,710 units

Passenger car segment constitute 80% of the Passenger Vehicle Industry

Compact & Mini cars constitute 80% of the total volume

India to become hub for small car exports

4th Largest Commercial Vehicle Market

Annual average growth in market size over 2004-05 -2008-09 - 21%

Automobile

Opportunities

Manufacturing Auto components to meet domestic demand

Investment possible in key segments of auto components like engine and engine parts, transmission and steering parts, electrical parts, suspension and breaking parts

Nissan has identified India among the five low cost countries to manufacture its new generation compact cars

Research & DevelopmentHyundai intends to make India a hub for small car development

Development of new products that are environment friendly

Electrical Machinery

Growth of this sector is driven by

Increasing demand for power and electrification - A capacity addition of 78,700 MW has been proposed for the Eleventh Five Year Plan (2007–2012), translating to a higher demand for electrical machinery

Rapidly growing Industrial sector

Focus on investment in Infrastructure

The sector has been allowed 100 per cent foreign direct investment (FDI) through the automatic route

India also has many Special Economic Zones (SEZs) in the engineering sector.

Electrical Machinery Segments of Electrical Machinery

Generation Equipment

Transmission Equipment

Distribution Equipment

Boilers

Production stood at USD 2.1 billion in 2008–09

India is a net importer of boilers

Turbines & Generator Sets

In 2008–09, production of turbines and generators was valued at USD 874 million and USD 370 million

India is a net importer of turbines and a net exporter of generators

TransformersTransformer production in 2008–09 stood at 72 million KVA, with India being a net importer of transformers

Switch Gears & Control GearsProduction of switchgears and control gears stood at 17.8 million units in 2008–09

Electrical Machinery Nuclear Sector

Huge investment potential in Higher Capacity Thermal Units & Nuclear Reactors

The Government of India (GOI) proposes to add 3,380 MW of nuclear power capacity by 2012

With signing of nuclear agreements with different countries, India to become a major hub for manufacturing nuclear reactors and associated components

Consumer Durables

The size of the consumer durable and electronics sector is around USD 6.6 billionThe consumer durables sector grew by 26.2% in 2009-10 and in Q1 of 2010-11 recorded 29% growth Growth in Market Size between 2003-04 and 2007-08

Refrigerators - 81% Washing Machines - 68% Air Conditioning -217% Equipment

Market Potential can be visualized from the following Penetration Levels

Refrigerator use is around 18% of the population Washing machine 6% Air conditioner less than

2% Microwave oven around

1%

Food Processing India is the….

Largest producer of pulses, milk, cashew nuts, coconuts and tea in the world

Second largest producer of rice, wheat, sugar, ground nut and inland fish

Second largest producer of fresh vegetables and accounts for 15% of world production

Accounts for 10% of world fruit production, producing 41% of world mangoes and 23% bananas

However about 30-40% of the farm produce is wasted in the country

Food Processing India is the….

Food is the biggest consumption category in India with 31% of consumer’s wallet expenditure

Processed food market in India is at nascent stage of development

Food processing level for fruits and vegetables in India is just 2.2% compared to 65% in US and 23% in China

Industry is poised to reach USD 318 billion by 2020

Opportunities in Warehousing and cold development storagePackaging machinery technologyLab infrastructureDairy processingFood processing units for domestic sales/ exports

Tourism

2005 2006 2007 2008 2009E 2010E 2020E0

5000

10000

15000

20000

25000

30000

3882.6 4465.7 4921 6181.7 6008 6778.2

24252.4

Travel & Tourism Demand (INR billion)

Travel & Tourism contributed 8.6% to GDP in 2010, likely to increase to 9% by 2020

10% to employment in 2010

Government to increase investments in the sector to 9% of GDP

Over the next decade, demand for travel and tourism is expected to achieve an annualized growth of 9.2%

Tourism Opportunities

Hotel Infrastructure

In November 2009, there were about 1,25, 000 rooms available

55,000 new rooms expected to be added by 2013-14

Huge opportunities for investments budget hotels in Tier I & II cities which are buzzing with business activity

Wellness Tourism

India’s Wellness services market worth USD 2.9 billion & expected to grow at 30% per annum for the next 4-5 years

Tourism Opportunities

Rejuvenation Segment

Rejuvenation segment (spas, alternate therapies, ayurvedic treatments etc) to grow to INR 194.5 billion by 2014 from INR 43.7 billion in 2009

Fitness segment

Fitness segment (comprising gyms and slimming centers) to grow very fast, weight management category growing at CAGR of 13%

On-ground infrastructure

Huge opportunities for investment in building on-ground infrastructure like roads, rail connections, hotels, restaurants and other wayside amenities

Gems & Jewellery

India’s Current Advantage

Ability to deliver good quality at low costs

Cost of cutting diamonds in India is 7% of that in Belgium and 60% of that in China

The exports are expected to grow at CAGR of 15%, amounting to USD 58 billion by 2015 from current size of USD 25 billion

010203040506070

25

58

Gems & Jewellery Exports (USD billion)

Source: Unlocking the potential of India's Gems & Jewellery Sector, FICCI Technopak report

2009 2015

Raw Materials

Processed Raw Material- Low Value

Processed Raw Material –High Value

Mass JewelleryDesigner Jewellery

Branded Jewellery

India’s Current Dominant Position

Gems & Jewellery Value Addition Ladder

Opportunities

Gems & Jewellery

Chemicals

Chemical Sector including pharmaceuticals and petrochemical has an annual turnover of approximately USD 83 billion, which is equivalent to 5% of India’s GDP. It is the 12th largest in the world in terms of volume and third largest in Asia.

Major raw material component sources available in the country

Base chemicals is the largest segment accounting for ~53% of the total industry followed by pharmaceuticals with ~24%

Indian pharmaceutical industry is ranked 3rd in the world in terms of production volume and 14th in terms of domestic consumption value.

The Indian pharmaceutical industry was estimated at USD 19.4 Bn in FY09. Formulations account for ~65% and bulk drugs for the balance 35% in value terms.

Chemicals

India is the fourth largest producer of agrochemicals globally, after US, Japan and China.

Petrochemicals sector expected to grow 12.5 MMT by 2011-12

Investment potential about $ 17 billion

Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) are coming up in a number of Indian states. PCPIRs are specifically delineated investment regions with an area of around 250 sq km and planned investments greater than USD 15-20 Bn. Investments of over USD 280 Bn have been planned across the three approved PCPIRs –Bharuch, Visakapatnam and Haldia and three planned PCPIRs – Mangalore, Cuddalore and Paradeep.

Chemicals

Indian Biotechnology industry crossed the USD 3 billion mark in FY10 (including bio-services and bio-informatics), registering a year-on-year growth of 17%

The year-on-year growth of the biotech market is expected to accelerate driven by high demand for vaccines, biopesticides, biofertilizers, biodiesel and biotherapeutics in India as well as at the global level.

BioPharma segment grew at a CAGR of 11.9 % in 2009-10. It contributed $1.9 bn, accounting for 62 percent market share.

Construction The sector is among

fastest growing sectors

top 5 recipients of FDI

100% FDI permitted

Largest employers (including construction and facilities management)

The market value of real estate under construction projects crossed USD 100 billion in 2010 from USD 69.4 billion in end of 2006

Construction Opportunities

Residential Housing

Housing shortage to increase from more than 24 million units in 2007 to 26 million units by 2012.

Commercial

The demand for office space is expected to total 180 million sq feet by 2013

Retail

Cumulative Retail demand is expected to reach 43 million square feet by 2013. Around 46% of the estimated demand will be focused on tier I cities between 2009 and 2013

Infrastructure Roads and Highways

India has one of the largest road networks in the world, with a total length of 3.3 million km

During the XI th Plan around USD 65.4 billion is likely to be invested in the roads sector, of which 34% will be contributed by the private sector, which translates to 35,000 km over the next five years

The Government of India (GoI) has permitted 100% FDI in the road sector

Ministry of Road Transport and Highways has set a target of completion of 20 km of national highways per day

Infrastructure Telecom

One of the fastest growing sectors with over 15 million new subscribers being added to the network every month

Second largest wireless network in the world

India has emerge as the country which offers the lowest mobile tariffs across the globe.

While the mobile services space have seen exponential growth in urban areas, these have not yet reached the vast majority in rural areas with rural teledensity of approximately 27.8 percent, indicating huge untapped potential for the sector.

The rural market is expected to drive the next round of growth for the voice-based services, while data services will create the much needed churn within the maturing urban markets.

Infrastructure Telecom

Allotment of 3G spectrum and BWA licenses have been complete…. This will open multiple dimensions for wireless broadband, 3G services

Broadband is yet to reach a critical mass despite rapid growth; the numbers have risen from 6.98 million in August 2009 to 10.52 million by 31st October 2010, registering a growth of 55 percent on an annual basis. With subscriber penetration under 2 %, the sector has potential for aggressive growth in the future.

India to evolve as a hub for telecom equipment manufacturing – Several new home grown players are rapidly expanding their market presence

Infrastructure Power

A study by McKinsey called "Powering India: Road to 2017“ estimates India's power demand to increase to 315-335 GW by 2017

At present, India’s total installed capacity is 1,62,367 MW

Government of India projects an investment of USD 4.3 billion for renovation and modernization of various old power plants during 11th and 12th Five-Year Plans

Additionally, an investment of USD 213.7 billion is proposed for capacity addition of 78,700 MW in the 11th Plan (2007-12) and USD 235.1 billion to add over 94,431 MW in the 12th Plan

Immense opportunities exist for private sector participation in generation, transmission, distribution equipment

Infrastructure Railways

Railways are the lifeline of Indian economy and will have a larger role in future as the country grows

It is third largest network in the world

Government undertaking modernization and augmentation of railway infrastructure, improvement in passenger facilities and security PPP projects being initiated & identified

The sector expected to generate private investments worth USD 4.3 billion during Eleventh Five Year Plan

Vision : To develop DMIC as “global manufacturing and trading hub” supported by world class infrastructure and enabling policy framework.

• Mega infra-structure project worth USD 90 billion covering an overall length of 1483 KMs between Delhi and Mumbai

• First phase of the project is expected to come up by 2018

• Total of 24 nodes (11 Investment Regions & 13 Industrial Areas) identified in consultation with 6 state governments.

– 11 Investment Regions ~ 200 Sq km area (min)

– 13 Industrial Areas ~100 Sq km area

• Huge opportunities for various players across the value chain - power, transportation, equipment providers and internal infrastructure

Delhi Mumbai Industrial Corridor (DMIC)

LEVERAGING NEW TECHNOLOGY SECTORS

Innovating for next billion customers…..

Innovating in India for India/Emerging Markets

From product modification to product innovation…MNCs embracing the new “Made in India…value for money” paradigm to have mass appeal

Microsoft India has taken initiatives like language interface packs in 12 Indian languages. And Windows Live, includes e-mail, instant messenger, online storage, photo gallery and social networking in seven Indian languages

LG has launched low priced TV range “Cineplus” and “Sampoorna” for rural markets

GE developed an ECG machine, MAC 400, to serve the rural market. This is portable and costs about US$1,000

Following Tata Nano, global automakers giants such as GM, Nissan etc. have announced entry into the small car segment

Homeland Security

Growing focus on Homeland security in India in the backdrop of robust economic growth and an increasing threat of disruptive activities

India to become one of the major civil security markets in the world with expected cumulative spending of over USD 10 billion by 2017

By 2020 about 6 per cent of global procurement in the field of homeland security is expected to be emanated from India

Segments to witness growth: electronic security market & system integration, consultancy and training

Major opportunities exist in security related equipment such as Intrusion detection systems, vehicle scanners, entry barriers, detection devices, access control, surveillance, Supervisory control and data acquisition systems (SCADA)

Green Technology

India is committed towards ensuring an Eco friendly growth - The country targets to meet 15% of its energy requirement through renewable sources by 2020

Challenge for India harnessing renewable energy sources in terms of cost effectiveness & bring greater efficiency

Opportunities in

photovoltaic solar panels

highly efficient water heaters & batteries

next generation cars like hybrids and electrical cars

Animation & VFX

Source: FICCI-KPMG Media & Entertainment Industry Report

Estimated costs for 30 minutes of animated content

India Korea, Philippines North America

2D Hand drawn USD 45,000–50,000 USD 60,750 – 67,500 USD 180,000 – 200,000

3D USD 90,000 USD 121,500 USD 360,000

Backend production USD 200,000 USD 270,000 USD 800,000

Flash Animation USD 20,000 USD 27,000 USD 80,000

Size of India’s Animation & VFX industry USD 40.9 m in 2009 Estimated to reach USD 96.4 m by 2014While Indian studios are adept at 2D, 3D & flash animation, Stop motion capabilities are still in early stages of developmentWith 8 children channels focusing on broadcasting animated series, India is one of the largest animation consuming markets for televisionIn comparison to other countries providing high quality animation services, India offers significant cost arbitrage

Gaming

Gaming estimated to be the fastest growing sector in the Media and Entertainment Industry in the next 5 yearsGrowth Drivers

Mobile Gaming - Increasing telecom subscribers; Rollout of 3G & Increasing usage of mobile VASConsole Gaming - Young population; Rising disposable income & Move towards service oriented modelsOnline Gaming - Increasing broadband subscribers; Higher PC penetration & Strong marketing through social networks etc

Gaming Industry (USD million)

2009 2014 CAGR (2009 – 2014)

Mobile 3.7 29.6 51.6 %

Console 10.1 24 18.9 %

Online & PC 2.5 12.6 38.2 %

Total Industry Size 16.3 66.2 32.4 %

Source: FICCI-KPMG Media & Entertainment Industry Report

Examples of Strengths

• A strategy supported by good skills and expertise in key areas.

• A strong financial position; ample financial resources to grow the business.

• Strong brand name, image of company, reputation.• A widely recognized market leader and an attractive

customer base.• Ability to take advantage of economies of scale/scope or

learning and experience curve effects.• Proprietary technology/skills advantage, important patents.

Examples of Strengths contd

• Product innovation skills.• Cost advantages.• Strong advertising/promotion.• Proven skills in production/manufacturing.• A reputation for good customer service.• Well positioned company, better product quality relative

to competitors.• Wide geographic coverage and distribution capabilities.• Alliances/joint ventures with other companies.• Skilled work force, harmonious work environment.

Examples of Weaknesses

• No clear strategic direction.• Obsolete facilities/equipment/processes.• A weak balance sheet(poor financial capabilities),

debt burdened.• Higher overall unit costs.• Missing some key skills or competencies/lack of

management depth.• Poor sales/profits/growth.• Plagued with internal operating/manufacturing

problems.

Examples of Weaknesses contd.

• Falling behind in R&D.• Too narrow a product line.• Weak brand image/position/reputation.• Weaker dealer or distribution network.• Poor marketing skills.• Lots of underutilized plant capabilities.• Poor product quality.• Poor customer/market orientation.

Opportunities• Developments in science and technology.• Changes in markets on both a national and international scale.• Changes in government policy e.g. removal of international trade barriers. • Changes in social patterns, population profiles, lifestyle changes, etc.• Mergers, joint ventures or strategic alliances based on geopolitical and

public-private partnerships.• Non-investment or other reason leading to a market being vacated by a

competitor technology.• An unfulfilled customer need e.g. a specific data requirements or data

required for a particular geographical area.• Opportunities to add value and increase profit margin e.g. new business

models for the knowledge economy and information society.

Threats

• Changing demand.• Emergence of new technologies or innovative products and

services.• New regulations or increased trade barriers .• Government subsidies for competing technologies or

disadvantageous taxation e.g. gaseous emissions.• Competing technologies that blend better with societal and

technological trends.• Changing specifications for products and services.• Economic sustainability.

SWOT Analysis What to Look For

Potential Strengths Potential Weaknesses

Potential Company Opportunities

Potential External Threats

• Powerful strategy• Strong financial

condition• Strong brand name

image/reputation• Widely recognized

market leader• Proprietary technology• Cost advantages• Strong advertising• Product innovation

skills• Good customer service• Better product quality• Alliances or JVs

• No clear strategic direction

• Obsolete facilities• Weak balance sheet;

excess debt• Higher overall costs

than rivals• Missing some key

skills/competencies• Subpar profits • Internal operating

problems . . .• Falling behind in R&D• Too narrow product

line• Weak marketing skills

• Serving additional customer groups

• Expanding to new geographic areas

• Expanding product line• Transferring skills to

new products• Vertical integration• Take market share

from rivals• Acquisition of rivals• Alliances or JVs to

expand coverage• Openings to exploit

new technologies• Openings to extend

brand name/image

• Entry of potent new competitors

• Loss of sales to substitutes

• Slowing market growth• Adverse shifts in

exchange rates & trade policies

• Costly new regulations• Vulnerability to

business cycle• Growing leverage of

customers or suppliers• Reduced buyer needs

for product• Demographic changes

Combined Analysis

• The value chain and SWOT can be combined in different ways.

• The value chain analyses the business’s internal environment so it can be used in place of the strengths and weakness portion of the SWOT.

• Most often, the value chain is used in conjunction with SWOT, creating a comprehensive business analysis that incorporates both internal and external evaluation.

Core competence

Competencies vs. Core Competenciesvs. Distinctive Competencies

• A company competence is the product of organizational learning and experience and represents real proficiency in performing an internal activity

• A core competence is a well-performed internal activity that is central (not peripheral or incidental) to a company’s competitiveness and profitability

• A distinctive competence is a competitively valuable activity that a company performs better than its rivals

Company Competencies and Capabilities

• Stem from skills, expertise, and experience usually representing an– Accumulation of learning over time and– Gradual buildup of real proficiency in

performing an activity• Involve deliberate efforts to develop the ability to do

something, often entailing– Selection of people with requisite knowledge and expertise– Upgrading or expanding individual abilities – Molding work products of individuals into a cooperative

effort to create organizational ability– A conscious effort to create intellectual capital

Core Competencies: AValuable Company Resource

• A competence becomes a core competence when the well-performed activity is central to the company’s competitiveness and profitability

• Often, a core competence results from collaboration among different parts of an organization

• Typically, core competencies reside in a company’s people, not in assets on the balance sheet

• A core competence gives a company a potentially valuable competitive capability and represents a definite competitive asset

Types of Core Competencies• Expertise in building networks and systems to enable e-

commerce• Speeding new/next-generation products to market• Better after-sale service capability• Skills in manufacturing a high quality product• Innovativeness in developing popular product features• Speed/agility in responding to new market trends• System to fill customer orders accurately and swiftly• Expertise in integrating multiple technologies to create

families of new products

Distinctive Competence -- ACompetitively Superior Resource

# 1

• A distinctive competence is a competitively significant activity that a company performs better than its competitors

A distinctive competence Represents a competitively valuable

capability rivals do not have Presents attractive potential for

being a cornerstone of strategyCan provide a competitive edge in the marketplace

—because it represents a competitively superior resource strength

Strategic Management Principle

A distinctive competence

empowers a company to build

competitive advantage!

Examples: Distinctive Competencies • Sharp Corporation

– Expertise in flat-panel display technology • Toyota, Honda, Nissan

– Low-cost, high-quality manufacturing capability and short design-to-market cycles

• Intel– Ability to design and manufacture ever more

powerful microprocessors for PCs• Motorola

– Defect-free manufacture (six-sigma quality) of cell phones

Determining the CompetitiveValue of a Company Resource

• To qualify as the basis for sustainable competitive advantage, a “resource” must pass 4 tests

1. Is the resource hard to copy ?2. Does the resource have staying power -- is it

durable ?3. Is the resource really competitively superior ?4. Can the resource be trumped by the different

capabilities of rivals ?

Strategic Management Principle

Successful strategists seek to capitalize on and leverage a company’s resource strengths—its expertise, core competencies, and strongest competitive capabilities—by molding the strategy around the resource strengths !

VALUE CHAIN

• Value Chain • Competitive Advantage• Value Proposition • Value Curve

The Relationship Between SWOT and Value Chain

• In many cases, the SWOT method is an inadequate analysis of the internal business environment.

• Simply stating strengths and weakness gives a brief explanation of what the company does best and where there’s room for improvement, but the SWOT leaves out many of the details of the company’s operations.

• The value chain fills in some of the internal analysis gaps that SWOT leaves.

• Conversely, value chain analysis virtually ignores the external environment by examining only the needs and desires of customers.

• In many ways, SWOT analysis and the value chain give a more complete picture of the business environment when used together.

Peers

Value Chain Evolution

Platform Peers Aggregator

Inputs Manufacturer Marketer Distributor Retailer

Cheap information disintegrates value chainsof scope – integrated production becomes costly

Cheap coordination atomizes disintegrated value chains

Inputs, Manufacturing, Marketing, Distribution, Retail

Costly info and coordination integrates value activities – most economical way to produce

Peers

110

Suppliers

ManufacturerEnd User

Distributor

Retailer

Value-AddedReseller

CorporateReseller

THE TRANSITION IS FROM LINEAR value chain

111

Suppliers

ManufacturerEnd User

Distributor

Retailer

FinancingProvider

Publisher

Value-AddedReseller

CorporateReseller

NETWORK VALUE CHAIN

NETWORK VALUE CHAIN

VALUE CHAIN• Value chain captures the discrete activities a firm

performs in designing, producing, marketing and distributing its product.

• A tool to analyze competitive advantage: • How each activity is performed combined with its

economics will determine whether a firm is high or low cost relative to competitors.

• How each value activity is performed will also determine its contribution to buyer needs and hence differentiation.

Inbo

und

Logi

stics

Ope

ratio

ns

Out

boun

dLo

gisti

cs

Mar

ketin

gan

d Sa

les

Serv

ice

Firm infrastructure

HR Management

R & D

Procurement

SupportingActivities

PrimaryActivities

Business Value Chain

Products/Services

“A process can be seen as a ‘value chain’. By its contribution to the creation or delivery of a product or service, each step in a process should add value to the preceding steps.”

Rummler and Brache, Improving Performance

The Value Chain System for an Entire Industry

• Assessing a company’s cost competitiveness involves comparing costs all along the industry’s value chain

• Suppliers’ value chains are relevant because– Costs, quality, and performance of inputs provided by

suppliers influence a firm’s own costs and product performance

• Forward channel allies’ value chains are relevant because

– Forward channel allies’ costs and margins are part of price paid by ultimate end-user

– Activities performed affect end-user satisfaction

Inbo

und

Logi

stics

Ope

ratio

ns

Out

boun

dLo

gisti

cs

Mar

ketin

gan

d Sa

les

Serv

ice

Firm infrastructure

HR Management

R & D

Procurement

EnterpriseValue Chain

SupplierValue Chain

CustomerValue Chain

Inbo

und

Logi

stics

Ope

ratio

ns

Out

boun

dLo

gisti

cs

Mar

ketin

gan

d Sa

les

Serv

ice

Firm infrastructure

HR Management

R & D

Procurement

Inbo

und

Logi

stics

Ope

ratio

ns

Out

boun

dLo

gisti

cs

Mar

ketin

gan

d Sa

les

Serv

ice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

Inb

oun

dL

ogis

tics

Op

erat

ions

Out

bou

nd

Log

istic

s

Mar

ketin

gan

d S

ales

Ser

vice

Firm infrastructure

HR Management

R & D

Procurement

EnterpriseSupplierSupplier-1 Customer Customer+1

Value Chain Activities Of Pulp & Paper Industry

Timber farmingLogging

Pulp millsPapermaking

Printing & publishing

Value Chain Activities Of Home Appliance Industry

Parts and components manufactureAssembly

Wholesale distributionRetail sales

Value Chain Activities Of Soft Drink Industry

Processing of basic ingredients

Syrup manufacture

Bottling and can filling

Wholesale distribution

Retailing Kroger

Value Chain Activities Of Computer Software Industry

Programming

Disk loading

Marketing

Distribution

Competitive advantage

LOW-COST AND DIFFERENTIATION

• There are two basic types of competitive advantage• Low-cost• Differentiation.• Three generic strategies• Cost leadership• Differentiation,• Focus (cost and differentiation in a narrow segment).

The learning organization, the path to Sustainable competitive advantage

• Knowledge is the key differentiators • Leveraging implicit knowledge • Process needs and optimized • Resources need to synergized

FOR SUSTAINABLE COMPETITIVE ADVANTAGE, A RESOURCE MUST HAVE FOUR ATTRIBUTES

• It must be valuable, in the sense that it exploits opportunities and/or neutralizes threats in a firm's environment.

• It must be rare among a firm's current and potential competition.

• It must be imperfectly imitable.• Finally, there cannot be strategically equivalent

substitutes for this resource that are valuable but neither rare or imperfectly imitable.

PORTERS FIVE FORCE MODEL

Comparing the value chains• Comparing the value chains of competitors exposes

differences that determine competitive advantage.• Not only the activities themselves, but also how they interact

can be determinant. • These "linkages" are complex but when recognized and well

managed, they can create a differentiation advantage.• By selecting the appropriate strategy built on a creative value

chain to favor its competitive position within the industry and by creating mobility barriers, a firm could sustain above-average

Benchmarking Costs of Key Value Chain Activities

• Focuses on cross-company comparisons of how certain activities are performed and the costs associated with these activities

• Purchase of materials• Payment of suppliers• Management of inventories• Training of employees• Processing of payrolls• Getting new products to market• Performance of quality control• Filling and shipping of customer orders

Objectives of Benchmarking• Determine whether a company is performing particular value

chain activities efficiently by studying the practices and procedures used by other companies

• Understand the best practices in performing an activity—learn what is the “best” way to do a particular activity from those who have demonstrated they are “best-in-industry” or “best-in-world”

• Assess if company’s costs of performing particular value chain activities are in line with competitors

• Learn how other firms achieve lower costs• Take action to improve company’s cost competitiveness

What Determines Whether aCompany is Cost Competitive?

• A company’s cost competitiveness depends on how well it manages its value chain relative to how well competitors manage their value chains

• When a company’s costs are “out-of-line”, the “high- cost” activities can exist in any of three areas in the industry value chain

1. Suppliers’ activities 2. The company’s own internal activities 3. Forward channel activities

Activities, Costs, &Margins ofForwardChannelAllies &StrategicPartners

InternallyPerformedActivities, Costs, &Margins

Activities, Costs, &Margins ofSuppliers

Buyer/UserValueChains

From Value Chain Analysisto Competitive Advantage

• A company can create competitive advantage by managing its value chain to

– Integrate knowledge and skills of employees in competitively valuable ways

– Leverage economies of learning / experience– Coordinate related activities in ways

that build valuable capabilities– Build dominating expertise in a value chain activity

critical to customer satisfaction or market success

How Strong is the Company’s Competitive Position?

• The strength of a company’s competitive position in the marketplace hinges on

• Whether firm’s position can be expected to improve or deteriorate if present strategy is continued

• How firm ranks relative to key rivals on each industry KSF and relevant measure of competitive strength

• Whether firm has a sustainable competitive advantage or finds itself at disadvantage relative to certain rivals

• Ability of firm to defend its position in light of• Industry driving forces• Competitive pressures• Anticipated moves of rivals

Assessing a Company’s Competitive Strength versus Key Rivals

1. List industry key success factors and other relevant measures of competitive strength

2. Rate firm and key rivals on each factor using rating scale of 1 to 10 (1 = very weak; 5 = average; 10 = very strong)

3. Decide whether to use a weighted or unweighted rating system (a weighted system is usually superior because the chosen strength measures are unlikely to be equally important)

4. Sum individual ratings to get an overall measure of competitive strength for each rival

5. Determine whether firm enjoys a competitive advantage or suffers from a competitive disadvantage based on the overall strength ratings

MEGA TRENDS FUNCTIONS

1 Globalization KNOWLEDGE MANAGEMENT

2 Liberalization of Indian economy SUPPLY CHAIN MANAGEMENT

3 Economic growth and spatial dispersal FINANCE

4 Demographic Changes Population growth and urbanization

FIRM INFRASTRUCTURE

5 Scarcity of fossil fuels and natural resources and Rise of alternative sources of energy new materials

HR MANAGEMENT

6 Rapid advancement and spread of information and communication technology

OPERATIONS

7 Lifestyle changes Rising levels of education Fashion Media

MANUFACTURING

8 Climate Change and Environmental concerns

IT /COMMUNICATION

9 Transparency and regulatory Environment LOGISTICS

10 Rise of services MARKETING /SALES /BRANDING

MULTIPLE PERSPECTIVE THROUGH MULTIPLE ANALOGY IMPACT OF MEGATRENDS ON FUNCTIONS

ELEMENTS OF VALUE CHAIN

MY COMPANY RIVAL 1 RIVAL 2 RIVAL 3 RIVAL 4

1 KNOWLEDGE MANAGEMENT

2 SUPPLY CHAIN MANAGEMENT

3 FINANCE

4 FIRM INFRASTRUCTURE

5 HR MANAGEMENT

6 OPERATIONS

7 MANUFACTURING

8 IT /COMMUNICATION

9 LOGISTICS

10 MARKETING /SALES /BRANDING Overall strength rating

Competitive Strength Assessment Rating Scale: 1 = very weak; 5 = average; 10 = very strong

ELEMENTS OF VALUE CHAIN

MY COMPANY RIVAL 1 RIVAL 2 RIVAL 3 RIVAL 4

1 KNOWLEDGE MANAGEMENT

2 SUPPLY CHAIN MANAGEMENT

3 FINANCE

4 FIRM INFRASTRUCTURE

5 HR MANAGEMENT

6 OPERATIONS

7 MANUFACTURING

8 IT /COMMUNICATION

9 LOGISTICS

10 MARKETING /SALES /BRANDING Overall strength rating

Competitive Strength Assessment

WEIGHTED

Why Do a CompetitiveStrength Assessment ?

• Reveals strength of firm’s competitive position vis-à-vis key rivals

• Shows how firm stacks up against rivals, measure-by-measure—pinpoints firm’s competitive strengths and competitive weaknesses

• Indicates whether firm is at a competitive advantage / disadvantage against each rival

• Identifies possible offensive attacks (pit company strengths against rivals’ weaknesses)

• Identifies possible defensive actions (a need to correct competitive weaknesses)

Identifying the Strategic Issues• Is the present strategy adequate in light of

competitive pressures and driving forces?• Is the strategy well-matched to the industry’s future

key success factors? • Does the company need new or different resource

strengths and competitive capabilities?• Does present strategy adequately protect against

external threats and resource deficiencies?• Is firm vulnerable to competitive attack by rivals?• Where are strong/weak spots in present strategy?

Value proposition

SO… WHAT IS A VALUE PROPOSITION?

• Part of a firm’s business model• An element of strategy• A reflection of the value a firm offers its customers• And finally… A carefully crafted marketing message

– Communicates a clear point of differentiation– Is highly persuasive– Supports lead generation and sales– And more…

A VALUE PROPOSITION IS…

DEFINITION - VALUE PROPOSITION

• A value proposition describes why a customer should buy a product or service

• It targets a well defined customer segment • It convinces prospective customers that a

particular product or service will add more value or better solve a problem than competitive products or services

MICHAEL PORTER’S MODEL

A value proposition answers three questions:

Which customer

s?

Which needs?

What relativeprice?

WHAT END USERS AND CHANNELS?

WHICH PRODUCTS, SERVICES, FEATURES?

PREMIUM OR DISCOUNT?

147

For: List target customers or beneficiaries. Group them and ultimately define THE customer or beneficiary.

Who: Define the need or opportunity. What is critical issue?

The: Name your product, service or concept. Place the product, service, or concept into a generally understood category

That: Quantify the benefits of the product, service, or concept. Identify the single most compelling benefit

Unlike: List the competitors and competitive alternatives –

Our: Differentiate the product, service, or concept. Set it apart from the competition.

Creating your Value Proposition

Asserts the VALUE of the

offering

POSITIONS the value

What is the value proposition of the following companies

• Priyagold • Haldirams • Futures group • Flipkart• Micromax• Dr Lal PathLabs• Ghari chaap detergent • Hanung Toys & Textiles Limited• Kajaria Ceramics Limited

Visualising value propositions

• The concept of a Value Curve is to use a diagram to compare products on a range of factors by rating them on a scale from low to high.

• These can be features, benefits or ways in which a product is distributed or consumed.

• The combination of these various factors defines the product or service.

• Multiple Value Curves allow a visual comparison with competitive products and to unearth possible spaces or gaps in the market.

• By investigating the feasibility of these gaps .• It may be possible to identify changes to the product that

significantly alter the value proposition.

Value Curve Case Study : ING Direct

• ING is a global financial institution.• ING Direct is a sub-brand that covers consumer banking

products – the “Direct” refers to the direct-to-consumer aspect of the products.

• ING Direct started off with savings accounts – no branches, no ATM network, no peripheral products.

• This light model meant that ING had lower fixed and operational costs and combined with its clout in financial markets, it was able to offer interest rates significantly higher than that of competitors and do so with no account keeping fees.

• To start with, we put together a simple chart as shown below. On the y-axis we have a spectrum that ranges from “low” to “high”.

• On the x-axis we record a number of features or elements that define the product: the interest rate offered access to funds, channels for interaction and of course, fees.

• We show the ING Direct Savings Maximiser account in green• Traditional bank savings account in blue (the type where

funds are locked in for x number of months or years) • Current account in red where salary gets paid into and

from which funds can be accessed.

COMPARISON

Value Curve ING Direct• Looking at the Value Curve, it’s very obvious that the ING Direct offering differs greatly to its rivals.

By cutting out costly traditional elements such as a branch network, ATMs and additional banking products it is able to keep its business model simple and its costs down.

• It provides a stripped back interest bearing account with a higher rate of interest than rivals, and it does so with no fees. Note, on a Value Curve price is inverted – a “high” value means a great price – which is zero! A “low” value means a higher price. This inversion sometimes seems counter-intuitive, but think of it from the customer’s perspective – what price would make you happy?

• The rival savings account (in blue) also offers high interest rates, but these require the customer to commit funds for a period of time and so they have a low value in terms of access to funds and don’t really take advantage of the branch and ATM network.

• The competing current accounts are more accessible, but provide low interest rates and are also the most expensive accounts typically incurring monthly fees.

• Of course, ING Direct’s service isn’t for everyone. It’s reliance on internet and telephone access meant that in the early days it missed out on the less technically savvy consumer out there. But it has developed its product with particular individuals in mind and has gone from strength-to-strength as customers become more au fait with online banking. It has continued to refine the product over time with features such as bonus interest and recurring instalments. Its entire marketing message resonates with an audience that wants simple, fee-free, high interest offering.

Raise Reduce Create Eliminate • You’ve made the curve, now what?• Whether you are working on a new product development or you are refining an existing

product, Chan and Maugborne suggested four ways to alter a product based on Value Curve analysis. These are:

• Raise: Can any existing elements be enhanced or increased? ING Direct’s primary focus is on maximising the interest rate it offers to customers.

• Reduce: on the flip-side, are there any elements that can be reduced? These may be features that are of little value relative to their cost. With no branch network, ING Direct has a slightly reduced access to account compared to a current account – but the types of customers it caters for do not value a branch network highly for this product.

• Create: is there anything that can be introduced that to date has not been available within the market? A new feature that makes the product more effective in solving the customer’s problem. ING Direct introduced the ability for a portion of a regular salary to be automatically paid into the savings account.

• Eliminate: are there any elements to the product that add no real value to customers but are simply there as part of a status-quo. It’s perhaps very obvious that customers dislike monthly fees, but most banks need to charge these to cover their costs. However ING Direct was able to eliminate bank fees by cutting out costly elements such as a branch infrastructure.

Putting the Value Curve into practice

• Product must be both relevant and compelling for customers, and should be distinct from competitors in attributes that they value.

• Putting the Value Curve into practice• The Value Curve is sometimes criticised as simplistic, academic and

overlooking of less tangible factors (brand personality and so on). There’s also a risk to assuming that all customers want the same thing – as noted, there are multiple segments in any market. The inverting required when showing price can also cause confusion.

• That said, it’s an easy-to-use tool that pretty much anyone can understand just by looking at. If your product’s Value Curve closely follows that of your rivals, you will likely have a tough time differentiating it. Spend a bit of extra time identifying what values your target customers value most and you may be able to tweak your product (cut a little bit of this, add a little bit of that) and you will become more relevant and compelling.

THE BASIC QUESTION??

• PURPOSE OF A BUSINESS ENTITY!!• CUSTOMER• WHY DO CUSTOMERS EXIST?• THEY VALUE THE OFFERING THE EXISTENCE OF A BUSINESS DEPENDS ON WHAT

VALUE IT OFFERS TO CUSTOMERS

Tata MotorsINDIGOTITAN

WHAT THESE COMPANIES HAVE IN COMMON

EXPERIENCES OF AIR TRAVEL!!!

WHICH AIRLINES DO YOU PREFER AND WHY??

FLYING AIR INDIA: EXPERIENCES!!

ENSURE THAT YOU HAVE INSURANCEKEEP REQUIRED STUFF IN YOUR CABIN BEGGAGETAKE AN EARLY FLIGHT

BOOKING WINDOW WILL OPEN LATEENTERTAINMENTSTEWARD RESPONSESAFETY CONCERNS…

YOUR RESPONSE TO TRAVELLING BY NATIONAL CARRIER

• SAFETY CONCERNS• OLD AIRCRAFTS• POOR HOSPITALITY• HIGH COST OF TRAVEL• UNRELIABLE TIMINGS• ON BOARD ENTERTAINMENT• could not provide values to its customers as per their

expectations and• Value offered is less that cost of delivery

THE BLEEDING NATIONAL CARRIER

Technical faults delay AI flight

CAG report on CWG: AI slammed, Half

tickets remained unsold

Passengers hold dharna as pilot fails to turn up

That Air India is in serious difficulties is an open secret – Manmohan Singh

LOW COST AIRILES CHANGING THE GAME WITH NEW VALUE OFFERINGS

CASE OF INDIGO AIRLINES

IndiGo a leading Domestic & International Indian Airlines which offers always cheap affordable, on time and hassle free operation at the Low cost, ...

Competitive Pressure

Full

Serv

ice

Price

Low cost Carriers changing the game

Indigo

Breakdown of cost saving

0 5 10 15 20 25

Other operating costs

Flight crew

Cabin crew

Aircraft fuel and oil

Airport and ANS charges

Sales and reservations costs

Advertising and promotions costs

Station costs

Commission

Aircraft related costs

Passenger services costs

Cost per 000 RPK (£)

Full cost short haul airline

Low cost airline

THE VALUE CURVE

SAFE

TY

IN-FLIGHT S

ERVICES

CUISINE

GROUND SERVICES

ENTE

RTAINMEN

TCOST

PUNCTUALIT

Y

AVAILABILIT

Y

DESTIN

ATIONS

0

1

2

3

4

5

6

AIR INDIAJET AIRWAYSINDIGO

THE VALUE RADAR SAFETY

IN-FLIGHT SERVICES

CUISINE

GROUND SERVICES

ENTERTAINMENT

COST

PUNCTUALITY

AVAILABILITY

DESTINATIONS

0

5

AIR INDIAJET AIRWAYSINDIGO

TATA NANO

World's most low priced car, Tata Nano, with the price tag of Rs. 1 lakh is all here. Also called People's Car Tata Nano is the realization of a dream, car for the common man, seen by Ratan Tata, Chairman of Tata Group. Looking nice from the outside and promising to provide better from inside, the Tata Nano features are all set to change the modern face of the Indian automobile Industry.

SO WHAT HAVE WE LEARNT?

1. OFFER VALUE AS PER CUSTOMER EXPECTATIONS

2. DIFFERNTIATE VALUE THAN COMPETITION

3. OFFER NEW VALUES

EXERCISE!!

• 1. WHAT ARE THE VALUES OFFERED BY YOUR BUSINESS?

• 2. HOW YOU FARE BETTER THAN YOUR COMPETITORS IN VALUE YOU OFFER?

• HOW THE VALUE YOU OFFER IS DIFFERENT FROM OTHERS (COMPETITORS)?

VALUE CREATION AND DIFFERENTIATION:

CASEOF INDIAN RAILWAYS

MUMBAI PUNE INTERCITY EXPRESS

Expressindia » Cities » StoryShatabdi sulks as Expressway edges it outExpress News Service

Pune on the inaugural run of the Shatabdi Express a few years ago, amidst celebrations, it was to herald a new status symbol for the upper crust Pune-Mumbai travellers… promising to overpower the agonising road travel on the Pune-Mumbai NH4 and avoiding the inconvenience of air travel. The entirely air-conditioned Pune-Mumbai Shatabdi Express, the plush inter-city superfast day train was aimed at tapping professionals, high profile executives…,

Jinxed from the very beginning, the highly priced Shatabdi, could not garner enough patrons… Also, it apparently hampered some of the morning local train timings in Mumbai. .. Subsequently instead of leaving Pune in the morning and returning in the evening, it leaves Mumbai in the morning and arrives in Pune in the evening. The logic of this reversed role, was that, thanks to Pune being ear-marked as a potential Information Technology (IT) centre, many Mumbai professionals would be interested in visiting Pune for official work during the day and it would be also convenient for the race-goers during the Pune racing season.

However, its ultimate road to disaster seems to be the Pune-Mumbai Expressway, which was built at super speed and is now superseding the Shatabdi Express in terms of quick travel and time convenience. Several professionals and businessmen from both the cities have clearly disbanded the idea of travelling by this train for that matter, ever since the entire 92 km stretch has been opened to the public. Convenience they say, has come to the doorstep, since they do not have to abide by train arrival and departure timings

July 8, 2002

While other Pune-Mumbai trains have not faced the adverse fall-out after the birth of the expressway, it is the Shatabdi that has had to bear the maximum impact since the passenger profile comprised those who had the luxury of a personal car but could not steer it out, due to inconvenient road journey. Now, it is a mere two and a half to three hours of grand and smooth sailing journey between the two cities by road.

No wonder, the expressway has overpowered the Shatabdi as regards timings as well as convenience. Looks like, the alarming rate of mishaps and lately even organised robberies on the expressway have not proved to be deterrent for the commuters.

With the Shatabdi going just 30 per cent full since the last few months, the railway authorities have been compelled to salvage this white elephant, by making it more economically viable… Railway authorities have been reported to have stated that it should be converted into a ‘Janshatabdi’ like the Deccan Queen with AC chair cars as well as second class compartments. However, experts feel, it will become viable if the origin of journey is again reversed, that is, the train should leave Pune in the morning and come back in the evening, since the passenger traffic towards Mumbai is still very high in the mornings and not vice versa.

Railway authorities are also contemplating extending the train upto Solapur. However, experts say that, Solapur is mere administrative convenience since Solapur division falls under the central railways, and not passenger convenience…

QUESTIONS1. IN WHAT RESPECT THE SHATABDI WAS BETTER THAN ROAD TRAVEL IN THE

BEGINNING?

2. WHAT WERE THE PROBLEMS FACING MUMBAI PUNE SHATBDI TRAIN AFTER NEW EXRESSWAY?

3. WHERE IT WAS FAILING TO OFFER VALUE AS COMPARED TO ROAD SERVICES

4. WHAT SHOULD BE DONE TO MAKE THIS SERVICE A SUCCESS/WHAT SHOULD BE THE NEW VALUE OFFERINGS

MUMBAI PUNE SHATABDI: MISPLACED VALUE PROPOSITON

1. INADEQUATE AVAILABILITY OF BERTH/SEAT

2. LAST MINUTE CONFIRMATION

3. HIGH COST OF TRAVEL

4. POOR FLEXIBILITY OF BOARDING/DESTINATION

5. TIMINGS OF SERVICES/LIMITED SERVICES

6. HIGHER TOTAL TRANSIT TIME

COMFORT

ON JOURNEY MEALS/ENTERTAINMENT

SAFETY

AVAILABILITYCOST

JOURNEY TIME

FLEXIBILITY OF BOARDING

0

5

SHATABDICOOL CABS

THE VALUE RADAR

ROAD PICKUP POINTS

TRAIN STATION

Good news for Shatabdi commuters

TNN Mar 4, 2004, 01.47am IST

PUNE: Commuters have welcomed the Central Railway (CR) decision to introduce the Mumbai-Pune superfast intercity express in place of the Mumbai-Pune Shatabdi express.

Started in 1995, the Shatabdi had seen a very low passenger response due to its steep fares. The fares for the new train will be substantially lower.

The Mumbai-Pune superfast intercity express will have 12 coaches, including nine second-class coaches and an AC chair car. The service will commence March 15 and the timings of the train will remain the same — from Pune to Mumbai at 6 pm and from Mumbai to Pune at 6.50 am.

CR spokesman Suhas Lohakare said the decision was taken because of the low passenger response to the earlier air-conditioned train. "The train will be convenient for commuters as the journey will take only around three-and-a half hours," he said.

Code Station DistanceArr Time

Dep Time

Day of Arrival

State

CSTM Mumbai 0 Kilometers - 06:45 DailyMaharashtr

a

DRDadar

(Central)9 Kilometers 06:56 06:58 Daily

Maharashtra

TNA Thane34

Kilometers07:15 07:17 Daily

Maharashtra

LNL Lonavala128

Kilometers08:50 08:52 Daily

Maharashtra

PUNE Pune Junction192

Kilometers09:52 - Daily

Maharashtra

THE VALUE RADAR

COMFORT

ON JOURNEY MEALS/ENTERTAINMENT

SAFETY

AVAILABILITYCOST

JOURNEY TIME

FLEXIBILITY OF BOARDING

0

5

SHATABDICOOL CABSINTERCITY

THE VALUE CURVE

SAFE

TY

IN-FLIGHT S

ERVICES

CUISINE

GROUND SERVICES

ENTE

RTAINMEN

TCOST

PUNCTUALIT

Y

AVAILABILIT

Y

DESTIN

ATIONS

0

1

2

3

4

5

6

AIR INDIAJET AIRWAYSINDIGO

THE VALUE RADAR SAFETY

IN-FLIGHT SERVICES

CUISINE

GROUND SERVICES

ENTERTAINMENT

COST

PUNCTUALITY

AVAILABILITY

DESTINATIONS

0

5

AIR INDIAJET AIRWAYSINDIGO

Vision , Mission,, Values & Strategic Initiatives

Job Description Professional Dev.Individual

Mission, InitiativesPolicies, Procedures, Division/ Unit /Department

Values ,Mission, Vision andPolicies, Strategic Initiatives

Mobilizing Resources to Produce Competitive Advantage

Competitive Advantage

Strategic Assets and Market Achievements

Core and Distinctive Competencies

Competitive Capabilities

Resources

ROUTES TO COMPETITIVE ADVANTAGE

!OPERATIONALEXCELLENCE

STAKEHOLDER VALUE ENHANCEMENT

NEW PRODUCT DEVELOPMENT

ORGANIZATIONAL CAPABILITY

MISSION IMPOSSIBLE

SOLVING HOLONOMIC DUALS

WASTE INTO WEALTH

INTER-LOCKING

DESIGN OF EXPERIMENTS

ACCELERATED RADICAL CHANGE

NEW PRODUCT DEVELOPMENT

GENERATING AESTHETIC RESPONSE

BEING DIFFERENT

TRAINING IN CREATIVITY TECHNIQUES

LARGE SCALE INTERACTIVE PROCESS

ENCOURAGING DISSENT

TOLERATING AMBIGUITY

UNNAYAN NEW PROCESS DEVELOPMENT BIO MIMECTICS

SUSTAINABILITY

SYNERGIZING

ACCELERATED LEARNING

LEARNING ORGANIZATION

KNOWLEDGEEXCHANGE

INTERDISCIPLINARITY

SYNCHRONICITY SUCCESS MODE IMPACT ENHANCEMENT

CREATING SYNERGY

ENERGIZING TALENT RECOGNITION

COACHING

TALENT ENHANCEMENTMENTORING

SUGGESTION SCHEME

ENCOURAGE DIVERSITY

BRAIN-STORMING

KAIZEN

SGA

QUALITY CIRCLES

OPTIMIZINGRESOURCE RATIONALITY

CYCLE TIME REDUCTION

COST REDUCTION

ELIMINATING WASTE

S.M.E.D

S.M.E.J

S.M.E.T

JIT

KANBAN

TAKT TIME

TAGUCHI LOSS FUNCTION

ALIGNINGDOING RIGHT THINGS

PROCESS MAPPING

INTERNAL CUSTOMER SATISFACTION

VALUE STREAM MAPPING

PARETO PRINCIPLEDOUBLE ADOUBLE C

TOC PDCA PUBLIC SELF ASSESMENT

DOING THINGS RIGHT

MICRO PROCESS RELIABILITY ENHANCEMENTS

PROCESS CHECKLIST

POKE-YOKE ERROR DETECTIONERROR CORRECTION

PERSONAL CHECKLIST

VISUAL CHECKLIST

CALENDAR FOR IMPORTANT EVENTS

6 S 6Σ

ROAD MAP FOR WORLD CLASS ORGANIZATIONS

VISION OF MY COMPANY

SOCIAL /ECONOMIC /SUSTAINABILITY CONTRIBUTION 12345111111

GROWTH /BRAND /KNOWLEDGE GOALS 1234511

OPERATIONAL /MARGIN /PROFIT TARGETS 12345

ECO SYSTEM /ORGANIZATIONAL DEVELOPMENT12345

Thank You

Customer engagement

Data information Knowledge insight wisdom

THE WORLD IS FLAT FOR ONLINE MARKETS

Insights Defined

• “Insights are short statements based on a deep understanding of consumer attitudes and beliefs.”

• “Insights are unknown or overlooked knowledge about consumer behaviour and attitudes.”

• “Good insights are short statements that reflect a deep and clear understanding about consumers using words that a consumer would use.”

• “A great insight is a “deep discovery” about our consumer that can be leveraged to change behaviour or to grow a business.”

• “Good insights help to establish a connection between brands and consumers in fresh new ways.”

• “A great insight often gets the reaction - thank goodness, somebody finally understands me”.

•

How Do I Get Insights?

• 1. Know what you are looking for – understand and be clear what insights are and what they are not. Use and agree on good examples with support from market research professionals.

• 2. Define the focus for "insight mining" – decide what you are looking for and agree the areas of strategic interest and focus e.g. attitudes of 18-34 year olds to sun protection when they are on their beach holiday.

• 3. Get help from market research professionals – this doesn’t mean that you can’t look for insights yourself, but use professionals to guide and help you.

• 4. Use different tools – there are many ways to find new insights. For example, consumer observation in homes, accompanied shopping trips, focus group observations, one-on-one meetings, reading relevant consumer magazines, visiting on-line chat rooms, talking to trend experts, talking to category experts, re-reading market research reports with fresh eyes etc.

• 5. Get closer to your consumers – meet them and get close to your target audience; observe and understand the choices that they are making and not making. Try not to hide behind focus group mirrors!

• 6. Read between the lines – you are probably sitting on lots of insights from old market research reports. Read them again and read between the lines and ask why why why? Challenge and come up with your own theories that you can then test and explore.

• 7. Look below the surface – avoid taking the first answer your hear from a consumer as gospel. There are often big differences between what people say and what they actually do. Try and dig deeper and understand why a consumer makes the choices they do.

• 8. Explore the differences – look for differences and contradictions between one research report and another. Explore differences between different consumer behaviors. Have a challenging and questioning mind on your insight journey.

• 9. Look for quantity – once you get started, brainstorm potential new insights in a specific area and don’t judge your efforts too quickly…our experience indicates that you need to generate and write 20 potential insights to produce 2 or 3 that are really meaningful.

• 10. Keep discovering – finding insights doesn’t stop, so keep looking. Have a regular program in place to find new insights and give yourself time at the start of the innovation cycle to do this work. Consider using on-line tools to help your team capture and database new insights on a regular basis.

•

Strategy development

• Discovering core competence • Understanding Ecosystem • Evaluating competitive advantage • Goals • Strategic Intent • TOC• Alternatives • Choice • Roadmap • Channelizing strategy

Strategy development

• Helping participants to discovering the core competence their organization and themselves

• Deepen understanding of business ecosystem • Evaluating competitive advantage • Goals • Strategic Intent • Familiarize participants with TOC• Participants to develop Alternatives • Making rational Choice • Creating Roadmap • Channelizing strategy

VISION • VF Limited has acquired core competence in design and manufacture of engineering products like industrial valves and automotive

components. VF is the front end of an fully integrated value chain from mines to finished products. VF will use its unique presence in all segments of the value chain to offer better and better products at competitive costs to its customers . VF’s has developed competitive advantage in manufacturing especially in the areas of precision machining and casting in ferrous and non ferrous materials like steel and aluminum alloys. VF will continuously improve its competitive advantage to exploit the emerging opportunities in the areas of valve related products and automotive components.

• The evolutionary path of automotive products from VF will follow a product platform architecture from Cylinder heads ,Cylinder blocks , to internal combustion engines , onto vehicles like tractors ,mining ,construction equipment and battery operated vehicles and aerospace and aircraft components and subassemblies.

• Tomorrow’s cars ,trucks ,tractors and all automotive vehicle will have one thing in common “VF INSIDE”. There will be a VF component in all automobiles.

• VF will aim to move up the value chain by building state of the art valves and valve based oil and gas equipment using latest developments in material sciences and manufacturing processes . VF aims to become a leader in a valve technology through research and developments in the contributing technologies. VF has developed strong relationships with its customers by anticipating customer needs and exceeding them.. VF will leverage its extensive relationships with its customers to valve related products to newer products like seamless pipes, flanges, fasteners actuators ,pumps and services like EPC contracts ,maintenance of process equipments and as stockists of valve related equipment. This will offer single window solution to the customer creating opportunity for the customer to reduce transaction costs of dealing with multiple vendors. It will improve the competitive position of VF dramatically.

• VF will provide engineering solutions for non conventional energy equipment , this will be based on its design and manufacturing capabilities. The various capabilities developed by VF in executing its operations and projects will be made available to industry and organizations –these will include Marketing ,HR and Financial services.

• Aim to enhance valuation of VF by becoming a technology leader in the segments it operates .

MISSIONCONSOLIDATION, EXPANSION ,

GROWTH AND ENHANCEMENT OF VALUATIONS.

VF IS WORKING SIMULTANEOUSLY CONSOLIDATING ,EXPANDING CURRENT BUSINESS AND PURSUING

GROWTH OPPORTUNITIES

Time CONSOLIDAION EXPANSION Growth

STAGES OF GROWTH

• Priority I 200 crores By 2008-2009

• Priority II 300 crores by 2009-2010

• Priority III 500 crores by 2009-2011

• Consolidating the existing business

• Expanding the existing business

• Establish New Projects for growth

IN ORDER TO DO ALL THREE THE FOLLOWING ACTIVITIES ARE REQUIRED , MY ROLE IN THESE

ACTIVITIES IS DEFINED.

TASK

SIDEAS

CONCEPT

MARKET STUDY

BUSINESS PLAN

STRATEGY

PROJECT PLANNING

RESOURCING.

COMMISSIONING

IMPROVING THE VALUATIONS BY BRINGING IN THE BEST AVAILABLE KNOWLEDGE AND EXPERIENCEAND EXPERTISE .THIS WILL BE BASED ON THE MODEL OUTLINED IN WCO

c

My ROLE

DETAILING IDEAS TOCONCEPT BY INTERACTING WITH EXPERTS

WIDE ANGLE SCANNING TO SPOT NEW OPPORTUNITIES

ESTABLISH PLANNING AND MONITORING MECHANISM

GET DETAILED PROJECT REPORT PREPARED FROM INTERNAL OR EXTERNAL SOURCES

ORGANISE RESOURCES FROM INDIAN AND GLOBAL FINANCIAL SYSTEM

ENSURE TIMELY COMPLETION OF PROJECT BY STREAMLINING PROCESSES

ORGANISE MULTI LAYER MARKET STUDY ESTABLISH MARKET POTENTIAL

DECIDE STRATEGY FOR PROFITABLE ENTRY

OPERATIONS PLANNING

OPERATIONS MANAGEMENT

ORGANISE DETAILED OPERATIONAL PLANNING BASED ON SUCESSFUL MODEL AND DEVELOP

ORGANIZATIONAL COMPETANCE

ENSURE OPERATIONAL EXCELLENCE THROUGHPEOPLE ENGAGEMENT AND BEST PRACTICES

CONSOLIDATIONDivision Projected turnover for BASE

YEAR Investment required

1

2

3

4

5

ACTIONS INITIATED FOR CONSOLIDATION

• IMPLEMENTATION OF ELEMENTS OF FIRST LEVEL WCO STARTED.

• SYSTEM DEVELOPED FOR CLOSE MONITORING OF OPERATIONS.

• REGULAR REVIEW BEING DONE BY CORE TEAM AT VF.

• OPERATIONAL MANAGEMENT BEING STRENGTHENED BY INDUCTING SUITABLE TEAM.

Selecting members of a

Department & a Facilitator

Form a Quality Circle (Q.C.) &

nominate it with a name

Q.C. Members should have the

basic information regarding Quality

Circle

Classify the Problems, such as

– Technical, Economical, Safety,

etc. & Give preferences to

them on the basis of their necessity

Finding the data for the

problems from the source &

Inputs from the Facilitator

Identify, Define & List out the

Problems

Select a problem,

Analyse it & Find out the

optimum solution for that

problem

Presentation of problem and

solution to the MR

Implementing the solution &

Benefits accrued on

implementation

Provide the training to the Q.C. members

related to different charts

used & brain storming of Q.C.

members

ROAD MAP FOR QUALITY CIRCLE

Collect organization chart

of the division

Identify the various

departments in the division

Collect the process maps of the

Division and all the departments

Implement a service level agreement

between the service providers

and their customers

Collect the customer

requirements from all the

departments with the help of a

questionnaire.

Identify the internal customers

of all the departments

Give the feedback to the customers

Conduct a review of the

performance of the SLA

Plan for improving the performance

of services provided by each

department

Prepare action plan for each of

the customer department

ROAD MAP FOR INTERNAL CUSTOMER SATISFACTION

Management should motivate

employees to give suggestions

Employees should be

encouraged to give suggestions on regular basis.

Only when employees are motivated &

interested management

should consider the economic impact of the suggestions

Analysis of:1)Present Method2)Proposed Method3)Advantages

Interaction between the suggestion

scheme committee &

the suggestion giver.

Classification of Suggestions into

various domains.

Suggestions have to be put

to practical use

Feedback of the new method implemented

If there is scope for correction,

the method should be corrected.

Cost – calculation to

be done by the suggestion

scheme committee and

accounts department

ROAD MAP FOR SUGGESTION SCHEME

Organize the program committee consisting of HOD’s

Marketing of 5 s

Develop a plan for each S activity.

Implementation Team consists of a group of Members from each Dept.

Audit{HOD’s+ Members}

Provide training and education to team Member.

Allotment of days for execution of each S

Taking 5S movement to the Grass-root level

Review Meeting with the team members every day

Perform Self-Examination and Take Corrective Actions.

Evaluate the results of 5S.

ROAD MAP OF 5 S

MISSION IMPOSSIBLE

New Process Development

Waste Into Wealth

Inter-locking Design of Experiments

Radical Change

New Product Development

New Organization Development

9σ

BEING DIFFERENT

Suggestion Scheme

Brain-storming Kaizen SGA Innovations Inter-disciplinary Team

Solving Holonomic Duals

LEARING FROM OTHERS

Q.CD.F.M

Bench Marking Safety Environment Training Learning Techniques

Accelerated Learning

DOING THINGS BETTER

Cycle Time Reduction

6 Big Losses•Equipment•Failure•Setup & Adjustment Time•Idling & Minor Stoppages•Reduced speed•Defects in Process•Reduced yield from Start up

Eliminating Wasteful Activity

Optimization

Cost Reduction Energy Saving S.M.E.D

S.M.E.J

S.M.E.T

Technique of Industrial Engineering

JIT

KANBAN

TAKT Times

Line Balancing

Taguchi Loss Function

DOING RIGHT THINGS

Process Mapping Internal Customer Satisfaction

Value Stream Mapping

Pareto PrincipleDouble ADouble C

TOC PDCA

DOING THINGS RIGHT

6 S Personal Checklist

Process Checklist

Poke-Yoke Error DetectionError Correction

Micro Process Reliability Enhancements

Visual Checklist Calendar For Important Events

6σ

WCO

EXPANSION

• THE MOMENTUM GAINED BY CONSOLIDATION WILL BE CARRIED FORWARD BY PLANNING FOR EXPANSION IN ALL DIVISIONS SO AS TO CAPITALIZE ON THE EXISTING ENERGY LEVELS IN NEXT THREE YEARS .

• AN AMBITIOUS BUT ACHIEVABLE TARGET OF RS ------ CRORES IS BEING PLANNED THE DIVISION WISE BREAK UP WHICH IS AS FOLLOWS, THIS WILL REQUIRE AN INVESTMENT OF 44 CRORES WHICH WILL BE SPREAD OVER THREE YEARS.

• THE EXPANSION IS GOING TO BE DRIVEN BY TECHNOLOGY DEVELOPMENT BY VF AND ORGANIZING MANUFACTURE BY VENDORS AND SUBCONTRACTORS.

•

EXPANSION

• Capacity increase in auto machining division.• Utilizing full capacity of bvd.• Improving product mix in bvd.• Develop products in the area of pressure regulation and fire control in

bvd.• Alloy wheels in afd.• Cylinder head manufacture in afd.• Focus on providing additional ancillary services, such as valve

maintenance and repair.• New intelligent monitoring technology .• Design and manufacture hig pressure class valves , we are working on jv

with technology providers.• Outsourcing of low value components to vendors developed in chennai

and nagpur.• Develop alternate sources for steel castings

BUILD A BRAND

• WEBSITE• CD PRESENTATION • CATALOGUES• ADVERTISEMENT• EXHIBITIONS• PARTICIPATION IN CONFERENCES

INDUSTRY SEGMENT FOR EXPANSION

• POWER• FERTILIZERS• CHEMICAL• PAPER AND PULP• PHARMA• CO-GENERATION• SUGAR• FOOD & BEVERAGES• NUCLEAR POWER

INITIATIVES FOR INCREASING VALUATION

• OPERATIONAL EXCELLENCE.• TRANSFORMATION OF VF INTO A TECHNOLOGY DRIVEN COMPANY.• JV FOR ENGINEERING DESIGN SERVICES KALSI ENGINEERING A LEADING DESIGN FIRM IN THE AREA OF

VALVES.• ACQUISITION IN CHINA.• SIGNED NDA,S WITH COMPANIES MANUFACTURING BATTERY OPERATED• SIGNED NDA,S WITH WIND MILL MANUFACTURING COMPANY. • JV METSO OF FINLAND.• HR SERVICES COMPANY DISSCUSSIONS ON WITH NOBLE MANHATTAN OF UK.• MARKETING SERVICES COMPANY.• FINANCIAL SERVICES COMPANY DISSCUSSIONS ON WITH ACCELERATOR AND PARTER GROUP.• SETTING UP OF NON CONVENTIONAL ENERGY SEZ• MAHARASTRA CENTRE OF UNIVERSITY OF PETROLEUM ENERGY STUDIES.• FILING OF PATENTS FOR IDEAS AND TECHNOLOGIES BEING DEVELOPED.• STRUCTURED SYSTEM FOR NEW PRODUCT DEVELOPMENT .• CONTINUOUOS INNOVATION• WCO

IDEAS TO IPO• THINKING• IDEAS• CONCEPT• MARKET STUDY• STRATEGY.• BUSINESS PLAN.• RESOURCING.• PROJECT PLANNING• EXECUTION• COMMISSIONING• GENERATING PROFITS• IMPROVING PERFORMANCE

VF Business Strategy

DES

IGN

EN

GIN

EER

ING

S

ER

VIC

ES

MU

LTI

META

L C

APA

BIL

ITY

MAC

HIN

ING

FO

RGIN

G C

ASTI

NG

S

ALU

MIN

IUM

C

AS

TIN

GS

ASS

EM

BLY

OF V

ALV

ES

AN

D

AU

TO

MO

TIV

E S

UB

ASS

EM

BLY

MAIN PILLARS

AU

TO

MO

TIV

E C

OM

PO

NEN

TS

A

SEM

BLIE

S A

ND

PR

OD

UC

TS

IND

US

TR

IAL V

ALV

ES

MIN

ING

EQ

UIP

MEN

T

WIN

D M

ILLS

ON

SH

OR

E A

ND

O

FF S

HO

RE

RA

ILW

AY

CO

MP

ON

EN

TS

AN

D

EQ

UIP

MEN

TS

AN

D W

AG

ON

S

AER

OS

PA

CE

OIL

AN

D G

AS

EQ

UIP

MEN

T

MA

RK

ET

DEV

ELO

PM

EN

T

DES

IGN

QU

ALIT

Y

SY

STEM

S

INN

OV

ATI

ON

S

PEO

PLE

DEV

ELO

PM

EN

T

MA

NU

FAC

TU

RIN

G

EX

CELLE

NC

E

NEW PRODUCT DEVELOPMENT

Ideas having potential for commercialization.

1 New design of internal combustion engine , if successful will have huge potential market.

2.Development of multi port LPG valves which will reduce requirements of gas cylinders.

3.New design of electric motor which will offer faster acceleration for same size of motor for battery operated vehicle.

4.Off shore wind mills that will always have access to maximum wind velocity through out the year.

5.Valves designed for optimum fluid flow , these valves can reduce energy consumption end user industry by 1%.

6.A new design of generator which will run without a crankshaft an conventional rotary generator set.

Dding activiyies

• Audit sales process • Value adding activities • Locus of value • • Share of routine activities

Strategy development

• Permanent questions for Business• Inescapability of change • Helping participants to discovering the core competence their

organization and themselves • Deepen understanding of business and industry ecosystem • Evaluating competitive advantage • Goals and Strategic Intent • Familiarize participants with TOC for delta income and delta

expenditure • Participants to develop Alternatives • Making rational Choice • Creating Roadmap • Channelizing strategy

Developmental Experience

The Self The New Situation

Developmental Experience

The Self The New Situation

No Challenge

Challenge Too Great

A certain amount of challenge is crucial to development. Too little challenge and there is no growth. Too much challenge and the individual may revert to what they know well and will subsequently derail.

Assessment ~ Challenge ~ Support

SUPPORT

ASSESSMENT

CHALLENGE

A developmental

experience with lasting

impact

Data concerning the individual and their context

Information affirming the individual and their actions

The process of developing and

gaining knowledge, skills, and

abilities to meet the new

challenges.

• “A unique value proposition compared to competitors” - While this may sound trivial, it really isn’t. Many businesses simply try to be better than their competition, which typically results in products and services that are similar in nature. In consequence, differentiation strategies tend to be built on price alone. What really counts is to be different!

“A distinctive value chain embodying choices about how the organization will operate differently to deliver on its value proposition“ – To illustrate this point, he mentioned Nespresso as a good example: Nespresso's strategy is to offer uniquely high quality, easy-to-prepare single-serve espresso coffee at a premium price. It appeals to a consumers that want to feel good and special about themselves and intentionally discriminates convenience-sensitive consumers. Nespresso sets itself apart from other coffee brands along the entire value chain: From the large variety of available flavors to the use of individual proportioned capsules which are tailored to espresso machines manufactured by high-end machine vendors to the choice of sales channels: Capsules are sold only online or through exclusive boutique shops in major cities. Focused image-oriented media advertising completes the harmonious concept.

“Making clear tradeoffs, and choosing what not to do“ – Trade-offs occur when activities are incompatible because more of one thing necessitates less of another thing. Tradeoffs create the need to make a choice and are necessary to make a strategy sustainable against imitation by established rivals. IKEA provides a good examples of how making a clear choice and sticking with it can lead to success. For more than 60 years, the Swedish company serves customers who are happy to trade off service for cost. While they get furniture at a low price, they cannot customize designs, need to find the items they want to purchase themselves in large on-site warehouses, and need to assemble the furniture themselves.

“Activity choices across the value chain that fit together and reinforce each other“ – Porter argues that competitive advantage and sustainability does not grow out of a single activity, rather it is the result of an entire system of activities. All activities along the value chain need to be consistent and reinforce each other to lead to optimal outcomes. “Fit is leveraging what is different to be more different,” he says.

“Continuity of strategic direction” – Strategic continuity is essential to creating and sustaining competitive advantage. Important prerequisites for achieving continuity are the understanding of the strategy throughout the organization, the development of truly unique skills and assets related to the strategy, and the establishing of a clear identity with customers and other stakeholders. „Reinvention and frequent shifts in direction are costly and confuse the customer, the industry, and the organization,“ Porter is convinced. Instead, he advises businesses to “maintain continuity in the value proposition, but continuously improve how to realize it.” - See more at: http://www.solyp.com/en/news-and-alerts/blog/item/691-what-makes-a-strategy-successful-porter.html#sthash.whF1s4Ni.dpuf

MOTIVATIONAL SONGS

• 1.Kisi ki mushkarahoto ho nishar( Anadi) 2. Khud jiye to kya jiye ,tu jee ei jamane ke liye

3. Ye mere pyare vatan( Kabuliwala) 4.Jab koi bat bigad jaye , jab koi mushkil par jai

5.Chodo kal ki baten kal ki bat purani (Son of India) 6.Ruk Jana Nahin ( Imitihan) 7.Jindi ek safar hai suhana ( Andaz) 8.Chal Akela Chal Akela( Mela)1

MOTIVATIONAL SONGS

• 10. Allah ke bande (Waisa Bhi Hota Hai part II): 9. Yahan ke hum Sikandar (Jo Jeeta Wohi Sikandar): 8. Roobaroo (Rang De Basanti): 7. Aashayein (Iqbal): 6. Ek din bik jayega (Dharam Karam): 5. Dil na umeed to nahi (1942 – A Love Story): 4. Aao twist karein (Bhoot Bangla): 3. Ruk jana nahin (Imtihaan): 2. Zindagi ek safar (Andaz): 1. Gadi bula rahi hai (Dost):

How to Plot your value network

• Identify the position of your product, service or idea in the network;

• Identify where value is created• plot the value-creating relationships between the members by linking them –

look at your relationships with your suppliers, partners and customers; your partners’ relationships; your customers’ relationships;

• Identify all kinds of value: from commercial relationships to exchanges of knowledge and information, support, feedback, favours, etc.

VALUE PROPOSITION

• Provide Framework - Companies are able to describe the potential impact of their product or solution within a customer environment. An easy way to think of this is to ask yourself, 'What is the direct revenue enhancing, cost reducing, and strategic business benefits associated with your offering?' Providing customers with a business value framework is an effective way to capture attention and interest in moving to the next level.

• Predict Value - Your sales organization works with the customer to model the potential business impact and return on investment (ROI). This vastly reduces decision making time and helps generate a budget. With a compelling ROI, how can a competent decision maker not purchase from you knowing they are leaving money on the table?

• Deliver Value - Measure the previously forecasted business impact, identify where value is missing, and swiftly take corrective action. This is a powerful way to build customer loyalty and drive associated services and add-on sales opportunities.

• Share Value - Enter into shared risk, reward and gain arrangements. Most companies ultimately want to do business at this level when they are confident of the value being delivered to their customers, and want to maximize the amount of money earned from any client. However, you can think of these levels as 'stairs.' Take one step at a time when evolving your business value proposition, and don’t jump ahead until you’ve successfully mastered the previous levels.

• Flipkart which made online shopping popular in the country by letting customers pay in cash when they received in hand goods ordered online

• “choose my company, and we will meet your needs, solve your problem, or get you results in ways x y and z.”

• The word “value” refers to the intrinsic value your product or service offers to a specific market segment.

• VP is a persuasive argument for why your product or service is a must-have.

Components of Value Proposition• Market• Value propositions that relate to the organisation’s market or competitive situation, new product or

service introduction as well as the organisation’s marketing efforts such as awareness, public relations or image.

• Income• Value proposition that proposes to increase or sustain existing revenue. In addition new revenue

streams fall into this category.• Time• Value proposition that reduces the time it takes to achieve some organisational objective. • Institutional• Value propositions that deliver value to shareholders. • Cost• Value proposition leading to reduction in costs• Operational• Value propositions that deliver positive changes to the operational efficiency of the organisation• Risk• Value proposition that mitigates risk at a corporate, personal or project level

• Having a compelling value proposition, and then successfully delivering on that promise, is not just a 'nice to have' - it's the price of admission.

• Companies are constantly vying for decision makers' attention and the opportunity to sell their products or solutions. Unfortunately, once given the chance, many lose sales by failing to adequately communicate the business value in a way that compels a decision maker to act.

• While many sales and marketing staff tend to think of their value proposition in terms of discrete 'features,' 'functions' and 'benefits,' business decision makers often think in a completely different way.

• This means that in order to close more sales, you need to build a 'business' perspective in your value proposition.

• In an increasingly competitive environment, product managers face the challenge of finding ways to differentiate their products and services.

• Furthermore, as markets evolve over time, they split into multiple segments and it can be difficult to determine which factors are of most importance to customers.

244

Positioning Strategy StatementCompany’s (product name, relevant product category)

for

(market segment/market entry customer segment)

provides

Who need (succinct description of Company’s benefits/differentiator to market entry customer segment, matched to critical need)

unlike

Competitor and Product

which

Competitor’s product’s inability to address critical need of market entry customer segment

245

Positioning Strategy Statement: An Example

Microsoft’s Windows 95, the personal computer OS

for

business (or, corporate?) users

Who need to use

a variety of business SW applications to effectively perform their jobs

provides

an industry standard GUI that allows greater ease of use of major SW applications

unlike

the Mac OS

which

is not a industry standard

• The process of knowledge acquisition by an organization is intertwined with the content of organizational knowledge.

• Technical systems (e.g. data base and decision rules which accumulate, structure and codify knowledge), managerial systems (which are required for creating (e.g. through structuring of networks) and controlling (e.g. through incentive systems) knowledge and individual learning within an organization are closely intertwined.

• Based on this approach, it has been proposed that the theory on resources and the theory on learning (developed in relative isolation) be combined.

• A list of propositions synthesizing both approaches has been developed

• the two sources of firm heterogeneity (resources and mental models) are interrelated" which provides a new 'conceptual lens' for what [is meant by] 'managing'… Resource-based theory can provide the resource criteria for a sustainable competitive advantage, whereas organizational learning theory can show precisely how learning processes to utilize resources may be carried out.

• Resource-based theory may be strengthened by adding behavioral and cognitive decision-making biases and organizational implementation aspects as further impediments to imitation of a firm's resources and capabilities.

FACTORS/TRENDS AFFECTING YOUR BUSINESS

Factors affecting Your Business

• • • •

• • • •

• • • • • • • •

CRITICAL SUCCESS FACTORS

PORTFOLIO OF SKILLS CAPABILITIES GIVING COMPETITIVECURRENT CAPABILITIES ADVANTAGE

CORE COMPETENCE COMPETITIVE ADVANTAGE

GOALS WORTH ACHIEVING = STRATEGIC INTENTS

CREATING CUSTOMER VALUE

• The world around us • Emerging Business Models • Value chain • Transformation of value creation • Linear to networked value chain • Smile curve • Locus of value • The value curve

• The value radar

• The world is flat for online markets• S curve and J curve

Ecosystem analysis to think about Why do this exercise?

Cooperation with other players in the industry; How to overcome a possible weak position in a value chain through

cooperation and pooled resources with other members; Probable consequences for your business model; Partnerships that generate a “pull effect” on your customer base.

Why will this be useful?

• By identifying mutually beneficial (symbiotic) transactions and relationships, a value network approach may allow a start-up to overcome or work around barriers in the industry value chain that might otherwise be an impediment to the firm’s viability.

• Consequently, a value network may reveal ways that you can tap into competencies of other value providers and increase value for all parties, rather than giving most of the value to one powerful member of the chain.

• The combination of competencies can create a compelling new business model that will draw in more customers than the linear value chain approach.

• Look at the players and the relationships: can you identify ways to pool resources and competences with other members – i.e. to redraw relationships, or to add new partners/members or competencies- so as to respond to customer needs in an integrated way?

• Can you propose a set of inter-relationships that would create a win-win situation for all parties in the network?

• By introducing new partners and relationships, can you make the product more appealing or more accessible to your customer (while adding value for everyone involved)?

ECOSYSTEM ANALYSIS

Figure 4.1: Mobilizing Company Resources to Produce Competitive Advantage

Competitive Advantage

Strategic Assets and Market Achievements

Core and Distinctive Competencies

Competitive Capabilities

Company Resources

needs Paying capacity Options and alternatives

Physical Payment

Esteem Delivery

Social

Strategic Analysis Product-oriented Analysis Behavioral Analysis Financial Analysis Customer Oriented Analysis

Combining 9-Windows and SWOT Analysis

• The SWOT analysis idea is used across a wide range of technical and business areas as a means of scoping a given problem, opportunity or innovation situation. It attempts to get the person or team involved in the analysis to look at their situation from a number of different perspectives - namely, what are we good at, what are we not so good at, what are the things that could help us to become good, and what are the things that could stop us from becoming good.

• Combining this thinking approach with the 9-Windows offers a number of additional useful perspectives. Of particular interest in many situations are the idea of repeating the SWOT analysis in the 9-Windows ‘Future' positions and ‘super-system' positions. With regard to the ‘future' perspective, the idea of re-thinking the questions on opportunities and threats can be very important because it forces the team to think about not just what they think will happen in the future, but also what they think their competitors and the market will do. In a related manner, asking the same questions from a super-system perspective opens the eyes of the team to other industries beyond their own.

• By way of example of both, if we put ourselves in the position of a hypothetical car manufacturer struggling with the idea of developing a commercially viable electric car then, thinking about ‘threats' at the system level present (as a conventional SWOT analysis would), is likely to get us to think about what other car manufacturers are doing.

• This is likely to put us into a psychological inertia hole (Reference 3) that will focus our thinking onto hybrid vehicles and fuel cells. While this is undoubtedly necessary, it is far from certain that it is sufficient. Conducting the same SWOT analysis from the perspective of the super-system ought to point us at already viable electric transport systems like golf carts and postal delivery vans.

• According to Reference 4, it is more likely that these things will evolve and improve to take over the electric car market than anything developed by Ford or General Motors. Conducting the SWOT analysis from the ‘future' perspective would further force the inclusion of solar energy and battery technology evolution (and, probably as likely, evolutionary limits), and, at the future-super-system level, global warming, choking of road systems and development of better public transport systems.

• Thinking about the third ‘interface' dimension illustrated in Figure 1, it is interesting to note that the idea of integrating the SWOT analysis into the different hierarchical levels of ‘interfaces' (environment, behaviour, capability, belief, identity) and seeing how the analysis changes between different viewing perspectives (‘the map is not the territory' from Reference 1), is already established practice in certain forms of Neuro-Linguistic Programming (NLP) - see Reference 5 for example.

•

1) Installation 2) Repairs 3) Training4) Parts supply5) Product adjustment

3) Training Do you need to train your customers for better use of your product? If so, do you provide this training or are you outsourcing it? What are the trade-offs involved in this decision? How do the other activities that your company performs influence the level of knowledge needed to operate your product?

4) Parts supply How do you provide spare parts to your customers? Do your distributors or installers store some of these parts themselves? This choice must be consistent with the activities you perform in other parts of your value chain, such as outbound logistics, and sales and marketing.

5) Product adjustment

Is your product customised? What level of customisation do you provide? The activities involved in product customisation play a central role in deciding what type of target customer you are trying to reach.

Service

Service represents the fifth and final category of primary activity in your value chain. The service category comprises those activities geared towards maintaining the value of your product once it has been sold to the final customer.

Typical services activities include the following:

1) Installation Does your product need to be installed at the customer’s premises? What does the installation procedure involve? How effective is communication between the installation team and the outbound logistics division?

2) Repairs How do you manage repair activities? Does your organisation provide repairs or does it outsource? What type of warranty are you offering? Is this in tune with your overall strategy?

261

Critical Need

Driving the Buying Decision

Customer Segment

Problem(s)

Customer Buying

Decision

Strategy Evidence

Value Proposition Articulation

Competitive Differentiator(s)

Identification

Product/Solution(s)

Positioning Strategy Elements

Value/Rareness/Inimitability/Organizational orientations

• A strength is something a firm does well or a characteristic that enhances its competitiveness

– Valuable human assets– Valuable competencies or know-how– Valuable physical assets– Valuable organizational assets– Valuable intangible assets– Important competitive capabilities– An attribute that places a company in

a position of market advantage– Alliances or cooperative ventures with capable partners

Resource strengths and competitive capabilities are competitive assets !

For example, each of the following may be considered weaknesses:• lack of patent protection• a weak brand name• poor reputation among customers• high cost structure• lack of access to the best natural resources• lack of access to key distribution channels• lack of marketing expertise• undifferentiated products and service (i.e. in relation to your competitors)• location of your business• poor quality goods or services• damaged reputation

• Opportunities: • Our business sector is expanding, with many future opportunities for success• Our local council wants to encourage local businesses with work where possible• Our competitors may be slow to adopt new technologies

• Threats: • Will developments in technology change this market beyond our ability to adapt?• A small change in focus of a large competitor might wipe out any market position we achieve

• The consultancy might therefore decide to specialize in rapid response, good value services to local businesses. Marketing would be in selected local publications, to get the greatest possible market presence for a set advertising budget. The consultancy should keep up-to-date with changes in technology where possible.

Values offered – Quality of education• Practical/field assignments• Location (metro/non-metro) • Course offering - Full time/part time • Infrastructure/hostel/class rooms/library/computing facilities• Guest lectures/ Placement facilities • Research environment

Differentiation Developing expertise/focus on software• Specializing in a particular field of management

Different Good field exposure/ industry exposure• Interactive courses/ other colleges/foreign exchange programmes• Distance learning programs

BUSINESS SCHOOLS: VALUE OFFERINGSRank Reputation

Success of Placement

Quality of Placement

Infra Structure

Faculty Teaching Meth

Spec Adm. Eligi

1 85 90 90 78 86 80 68 44

2 78 79 80 73 80 76 59 53

3 83 84 87 77 85 82 68 50

4 74 80 83 69 79 74 62 41

5 65 69 66 66 68 67 59 39

6 74 76 78 72 75 77 64 49

7 77 79 79 71 78 76 58 52

8 58 65 59 54 61 56 49 39

9 70 77 82 74 84 80 62 44

10 49 51 53 53 55 50 48 28

Which Customers?• Consumer markets can be segmented by:

– Demographics– Geography– Psychographics– Behavioral– Sociocultural– Hybrids of the above

• B2B markets by:– Type of business (manufacturer, retailer, wholesaler, service

provider)– SIC / NAICS Code– Size of Business– Financial Strength– Number of Employees– Location– Structure– Sales Level