Developing Business Strategy

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    Group-3: Anita Archit Bharathi Jyotis Ab

    Strategy Development Proces

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    The MissionThe Vision

    Goal/Purpose

    Objective

    Strategy

    Strategy

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    Environmental analysis Industry Level Analy

    Two types of Analysis

    To determineenvironmental Threats

    to the companys

    present strategy andobjectives

    To determine theenvironmental

    Opportunities tocompany for achieving

    its objectives

    To determine andunderstand the MarketCompetitive structureand making decisions

    to anticipate it

    Steps of Analyzing the environment

    A

    P

    P

    R

    A

    I

    S

    A

    L

    A

    NA

    L

    Y

    S

    I

    S

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    External Environment (Macro)

    Political Environment

    Economic Environment

    Social Environment

    Supplier Environment

    Technological Environment

    Internal Environmen(Strategic Advantage

    Production Function

    Finance Function

    Marketing Function

    Operation Function

    Personnel Managem

    Types of Environment

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    External Environment

    Political EnvironmentChange in government policies affect

    company business

    Influences Supplier, Consumer &

    Competitor function

    Company face production constraint due

    to antitrust laws, fair trade decisions, tax

    rate, pollution & pricing policies

    Allocation of Product Research Grant to

    companies

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    External Environment

    Economic Environment Every market is unique and has elastic

    consumption pattern

    Microeconomics trends like Prime interest

    rate, Inflation rate, GNP, Disposal income,

    Propensity to spend etc.

    Changes in Wealth distribution or Wealth

    management pattern in the society

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    External Environment

    Social EnvironmentChange in values, beliefs, lifestyle, attitude, opinion creates

    potential for an organization. (Eg.- Women in the work forc

    Demographic change has implication on several business

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    External Environment

    Supplier EnvironmentChange in availability of Raw Materials

    and Sub-assemblies

    Change in price of Raw Materials

    Entry of new suppliers & exit of

    existing Big supplier

    Technological breakthrough in Raw

    Materials affecting companys

    Manufacturing process

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    External Environment

    Technological EnvironmentCost of Technology is very important

    Rate of change of technology influences

    the strategy formation

    Receptivity of New Technology by the

    public affects organizational strategy

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    Internal Environment

    Marketing Function Involves study of product market

    Brings together the Organization &

    the External environment

    Efficiency in bringing closer the

    various departments of the

    organization

    Tells about the Market share,

    strength in supermarkets, productquality, pricing etc.

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    Internal Environment

    Operation FunctionConcerned with production of goods

    and services

    Managing the Process thats converts

    the Input into output

    Maintains the level of Inventory

    Maintains long term relationship with

    the suppliers

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    Internal Environment

    Personnel ManagementManaging the most important

    Assets of the organization, the

    Employees

    Recruiting & training, providing faircompensation plans to the

    employees

    Maintain Fair terms and conditions

    to the employees

    Track recording of achieving

    Objectives

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    Industry Level Analysis

    Study Porters Five Forces Model To find out the number of firms

    in the industry & their respective

    market shares

    Major new products in themarket

    Shifts in Pricing structure of

    products

    Shifts in consumer Preference

    Change in PLC for the industry

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    Porters Five Forces Model

    IndustryCompetitors

    PotentialEntrants

    Buyers

    Substitutes

    Suppliers

    Threat of new

    entrants

    Bargaining of Buye

    Bargaining power

    of Suppliers

    Threat ofSubstituted products

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    Game Theory

    Game Theory proposed by John vonNeumann and Oskar Morgenstern

    by their book Theory of Games and

    Economic Behaviorin 1944

    Consist game elements like players,

    set of rules, actions, information,outcomes, payoffs & equilibrium

    Helps organization to overcome

    competition

    Organization can understand rivals

    behavior Helps to understand Business better

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    Game Theory

    Techniques which improve companyscompetitive instinct.

    o Fish bowl

    o Everybody brings his or her own views

    o Advocates of certain stay in the center ofthe Fish bowl

    o Advocates debate on their data and facts

    o Decision makers evaluate quality of facts,

    expose weak positions and analyze

    strategic options

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    Game Theory

    Techniques which improve companyscompetitive instinct.

    o Red team/ Blue team

    o Managers are put in charge of teams

    representing major competitors

    o Plan the strategies they would be use

    beat the organization

    o Increases organizational Competitive

    Intelligence

    o Quickens organizational reflexes bybuilding competitive awareness

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    Game Theory

    Techniques which improve companyscompetitive instinct.

    o Future Mapping

    o Way of looking at different scenario for

    Future

    o Looking at several alternative Futures or

    End States

    o Assign profanity to each states to identify

    the forces to determine whether that

    scenario actually unfoldo Identify actions with Biggest return and

    least Risk or both

    Future is here

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    Strategic Systems Planning (SSP) is used to study an organiza

    information needs, identify strategic opportunities and deve

    plan to address those information needs

    Strategic systems planning is always performed with an organiza

    senior management and is not undertaken as an end in itself.

    objective is to create action by implementing the Strategic SysImplementation Plan

    The system shows you how to develop a set of strategies

    action plans and to arrange them in such a way that vastly incr

    your chances of having a sustainable, profitable long term bus

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    Strategic Leadership provides thevision and direction for the growthand success of an organization. Tosuccessfully deal with change, allexecutives need the skills and toolsfor both strategy formulation and

    implementation. Managing changeand ambiguity requires strategicleaders who not only provide asense of direction, but who can alsobuild ownership and alignmentwithin their workgroups to

    implement change.

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    Is a term coined by James Brain Quinn in 1980 Constantly integrating the simultaneo

    incremental process of strategy formulation a

    implementation is the central art of effecti

    strategic management

    Implementing in large organization

    is complex and time consuming

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    General ConcernBroadcasting of an general idea

    Formal development of a change plan

    Use of a Crisis or Opportunity

    Adaptation

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    According to Peter Senge (1993)Learning Organization are:

    organizations where people continually exp

    their capacity to create the results they tdesire, where new and expansive patternsthinking are nurtured, where collective aspirais set free, and where people are continu

    learning to see the whole together.

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    STAGE 1: PREPERATIONSTAGE 2: PLANNING

    STAGE 3: RESOURCE DEVELOPMENT

    STAGE 4: IMPLEMENTAION

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    Before any process can begin, basic preparatmust be made. This includes making a commitment

    planning, enlisting appropriate personnel, gather

    data, getting necessary commitments, setting as

    appropriate calendar time, and determining the procto be used.

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    During the planning phase, or the actudevelopment phase, the strategy is formulate

    Various meetings are held that lead church membe

    to process the data and make decisions concernin

    strategic objectives, goals, and action plans. Thdirection for the church is set with specific actio

    that lead to fulfilling the desired intent.

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    Once the plan has been completed, necessary resou

    for implementation must be identified. This phase inclu

    identifying both existing resources and new resources tmust be secured, as well as determining how these resou

    are to be allocated. All of the resources will not be availa

    at the beginning of implementation. These resources

    include:

    The allocation of personnel to staff ministries, progra

    activities or events planned

    The development of a budget that resources the objecti

    goals and action plans

    The development of a calendar reflects the objectives, gand action plans

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    The final phase of strategy development is implementithe vision, taking action, and making it happen. One of tmost frustrating experiences in life is getting to the goline, yet failing to score. History reveals that the mocommon point of breakdown of strategy development is

    the point of implementation. Horror stories are legendaboth within the corporate world, as well as amoassociations and churches, of organizations that started tprocess but never completed it.

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    A systematic way to examine all activities a companyperforms and how they interact among themselves

    identify sources of competitive advantage Every companys value chain is composed of nine

    categories of activities (value addition steps) which cbe classified under two major headings:

    Primary activities- Connected with the physical creationthe firms product or services, its marketing, delivery &post sales service

    Support activities: which provide inputs for infrastructufor primary activities

    Helps to analyze strategic relevant internal activitiesthe competitive advantage

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    Primary Activities

    Support Activities

    Inbound Logistics

    Operations

    Outbound Logistics

    Marketing & Sales

    Service

    Firm Infrastructure

    Human resource

    Management

    Technology

    DevelopmentProcurement

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    Organisations response to the changing environment is often within the param

    of the organisations culture, which over time becomes more and more appare

    this respect, culture is traditionally seen as a preventative to change, which s

    strategy innovation and results in a momentum of that can lead to strategic dri

    This view therefore supports the assumption that strategic change must alwa

    accompanied by an appropriate cultural change.

    Eventually transformational change is required

    if the demise of the organisation has to be avoided.

    Changing Environ

    Unchanging organizational Culture and Activity

    Strategic Gap lead

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