Market Scenario & BSNL status - training.bsnl.co.in · •Strategy Formulation •Strategy...
Transcript of Market Scenario & BSNL status - training.bsnl.co.in · •Strategy Formulation •Strategy...
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E5-E6 CSSS/PA/PS
STRATEGY CONCEPTS
WELCOME
• This is a presentation for the E5-E6 CSSS/PA/PS for the
Topic: Strategy Concepts .
• Eligibility: Those who have got the Upgradation from E5
to E6.
• This presentation is last updated on 15-3-2011.
• You can also visit the Digital library of BSNL to see this
topic.
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© For internal circulation of BSNLonly
AGENDA
• Concept of Strategy
• Strategy Management
• Strategy Formulation
• Strategy Evaluation
• Strategy Characteristics
• The Strategy Hierarchy
• Reasons why strategy fails
• Conclusion
Concept of Strategy
• Basically strategy is a plan of action
designed to achieve a particular goal
Strategy is different from Tactics:
– Tactics: concerned with the conduct of an
engagement
– Strategy: concerned with how different
engagements are linked
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Concept of Strategy
Strategy management is the conduct of drafting,
implementing and evaluating cross-functional
decisions that will enable an organization to
achieve its long-term objectives
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Concept of Strategy
A course of action aimed at ensuring that the
firm will achieve its objectives by matching its
internal resources and skills with the
environmental opportunities and risks it faces
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Concept of Strategy
Strategy is the process of:
Specifying the organization's mission, vision and
objectives
Developing policies and plans
Allocating resources to implement the policies and
plans
Strategic management is an ongoing process that
evaluates and controls the business and the industries in
which the company is involved
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Strategic Management
Strategic Management basically seeks to answer
the question:
How and why do some firms outperform others?
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Why Strategic Management ?
• Provides a framework for thinking about the
―business‖
• Creates a fit between the organization and its
external environment.
• Provides a process of coping with change and
organizational renewal
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Why Strategic Management ?
• Fosters anticipation, innovation, and excellence
• Facilitates consistent decision-making
• Creates organizational focus
• Acts as a process of organizational leadership.
• Finally and most importantly: To help the
organization to succeed (outperform) against its
competition!!
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Strategy Formulation
1. Situation Analysis
2. Self Evaluation
3. Competitor Evaluation
4. Objectives are set( Vision, mission etc)
5. Placement and execution of required resources e.g.
financial, manpower, operational support, time,
technology support
6. Distributing the specific tasks
7. Strategy is drawn to achieve these objectives
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SWOT Analysis
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Strategy Evaluation
Three key success criteria:
1.Suitability: (Would it work?)(Economic)
2.Feasibility: (Can it be made to work?)
(Resources: people, money, time)
3.Acceptibility:(Will they work it?)(Stakeholders)
(Return, Risk)
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Strategy Evaluation
Tools that can be used to evaluate
acceptability include:
– what-if analysis
– stakeholder mapping
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Approaches to Strategic Management
1. The Industrial organisation approach
2. The Sociological approach
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Strategic Management Techniques
• Bottom-Up
• Top-Down
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Strategy Characteristics
• Long range
• Broad resource allocation
• Less formalized
• Proactive
• Broad issues
• Senior managers
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The Strategy HierarchyLevels of Analysis
• Where to Compete?
• How to Compete?
• How to Contribute?
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Corporate
Strategy
Business
Strategy
Functional
Strategy
Choice of Products
Choice of Markets
Choice of Competitors
The Strategy Hierarchy
• An additional level of strategy is operational
strategy
• It is very narrow in focus and deals with day-to-
day operational activities such as scheduling
criteria.
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Portar’s 5 Forces Model
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Reasons why strategy fails:
• Failure to understand the customers
• Inability to predict the environmental reactions
• Overestimation of resource competence
• Coordination failure
• Political interference
• Lack of senior management commitment
• Lack of Employee commitment
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Reasons why strategy fails:
• Underestimation of time requirements
• No Persuasion
• Failure to manage change
• Poor communication
• Lack of motivation in the orgaisation
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Competitive Advantage
• Competition provides the rationale for strategy without competition, strategy is of no concern.
• The essence of strategy is the interdependence of competitors—or the establishment of sustainable competitive advantage over rivals.
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Competitive Advantage
It is achieved by:
Product Differentiation
Discovering new and better ways to compete in
an industry
Innovation
Understanding the value chains of its suppliers,
channels, and buyers
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The Linearity Trap
The elements of strategic management –
(i) Reaching consensus on corporate objectives
(ii) Developing a plan for achieving the objectives
(iii) Allocating the resources required to implement
the plan are not Linear.
Formulation and implementation of strategy must
occur side-by-side rather than sequentially
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Conclusion
• "Strategy is the direction and scope of an
organization over the long-term: which achieves
advantage for the organization through its
configuration of resources within a challenging
environment, to meet the needs of markets
and to fulfill stakeholder expectations".
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