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Art of war
So it is said that if you know your enemies and know yourself, you will win a hundred times in a hundred battles. If you only know yourself, but not your opponent, you win one and lose the next. If you do not know yourself or your enemy, you will always lose Sun Tzu 6 th. century BC
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BATTLE OF TRANSOXIANNA
CHENGIZ KHANS DEFEAT OF EMPEROR MOHAMMED II- AN EXAMPLE OF STRATEGY IN BATTLE
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STRATEGY-WHAT IS IT
DEF- A STRATEGY IS AN ACTION THAT MANAGERS TAKE TO ATTAIN ONE OR MORE OF THE ORGANIZATIONS GOALS. THE OVERRIDING GOAL IS TO ACHIEVE SUPERIOR PERFORMANCE RELATIVE TO RIVALS.
WHAT IT IS COMPETITIVE MOVES IN BUSINESS TO PRODUCE SUCCESSFUL PERFORMANCE MANAGERS GAME PLAN FOR RUNNING THE BUSINESS STRENGTHENING THE FIRMS COMPETITIVE POSITION ACHIEVING PERFORMANCE TARGETS SATISFYING CUSTOMERS
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ANOTHER PERSPECTIVE---Strategy is the direction and scope of an organization over a long term: which achieves sustainable competitive advantage for the organization through its configuration of resources within a changing environment,to meet the needs of markets and to fulfill stakeholder expectations.
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UNDERSTANDING STRATEGY
CENTRE OF GRAVITY DAVID VS GOLIATH SHWERPUNKT ARDANT DU PICQ OODA- THE HEART OF MANOUVRE
THEN SAUL DRESSED DAVID IN HIS OWN TUNIC. HE PUT A COAT OF ARMOR ON HIM AND A BRONZE HELMET ON HIS HEAD. DAVID FASTENED ON HIS SWORD OVER THE TUNIC AND TRIED WALKING AROUND BECAUSE HE WAS NOT USED TO THEM. I CANNOT GO IN THESEHE SAID TO SAUL BECAUSE I AM NOT USED TO THEM SO HE TOOK HIS STAFF IN HIS HAND, CHOSE FIVE SMOOTH STONES FROM THE STREAM, PUT THEM IN THE POUCH OF HIS SHEPHERDS BAG AND , WITH HIS SLING IN HIS HAND APPROACHED THE PHILISTINE---
Understanding strategy
Strategy as a set of actions arrived by accident or design Development of resources Delivering products or services that users find valuable Meeting shakeholder objectives and constraints Unique or distinctive features Renewing advantages as the environment changes Organization as an accumulation of knowledge and learning Organization as a bundle of resources
Unrealized strategy
Emergent strategy
WHAT IS CSR
CSR IS THE CONTINUING COMMITMENT BY BUSINESS TO BEHAVE ETHICALLY AND CONTRIBUTE TO ECONOMIC DEVELOPMENT, WHILE IMPROVING THE QUALITY OF LIFE OF THE WORKFORCE AND THEIR FAMILIES AS WELL AS OF THE LOCAL COMMUNITY AND SOCIETY AT LARGE. WORLD BUSINESS COUNCIL FOR SUSTAINED DEVELOPMENT
SOME FACTS
WHILE 94% OF THE COMPANIES BELIEVE THAT DEVELOPMENT OF CSR STRATEGIES CAN DELIVER REAL BUSINESS BENEFITS ONLY 11% MADE ANY SIGNIFICANT PROGRESS IN IMPLEMENTING STRATEGY IN THE ORGANIZATION CEOS ARE FAILING TO RECOGNIZE THE BENEFITS OF IMPLEMENTING CSR STRATEGIES DESPITE INCREASING PRESSURES TO DO SO CSR PROGRAMMES INFLUENCE 70% OF ALL CUSTOMER PURCHASING DECISIONS
philanthropic
Desired by society
ethical
Expected by society
legal economic
Required by society
Required by society
Levels of strategy
Corporate strategy Business strategy Functional strategy
HISTORY
ORIGINS FIRST AND SECOND INDUSTRIAL REVOLUTION WORLD WAR II THE 50S AND 60S THE 70S POST 1970S
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CONTRIBUTIONS TO STRATEGY
ANSOFFS MATRIX BCG AND THE EXPERIENCE CURVE PORTFOLIO ANALYSIS BCGS GROWTH SHARE MATRIX INDUSTRY- ATTRACTIVENESS AND BUSINESS STRENGTH MATRIX
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ANSOFF MATRIX
EXISTING PRODUCTS NEW PRODUCTS
EXISTING MKTS
MKT PENETRATION
PRODUCT DEVELOPMENT
NEW MKTS
MKT DEVELOPMENT
DIVERSIFICATION
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MARKET PENETRATION
AIM- TO MAINTAIN INCREASE IN SHARE OF CURRENT MARKET WITH CURRENT PRODUCTS TO SECURE DOMINANCE OF GROWTH MARKET OR RE-STTRUCTURE A MATURE MARKET BY DRIVING OUT COMPETITION INVOLVES INCREASE OF SALES OF EXISTING PRODUCTS TO EXISTING MKTS IF SATURATED- DIFFICULT GROWTH RISK MIN BUT SUCCESS ALSO LTD.
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MODUS OPERANDI
INCREASE USAGE BY EXISTING CUSTOMERS ATTRACT CUSTOMERS AWAY FROM RIVALS GAIN MARKET SHARE AT THE EXPENSE OF RIVALS DEVISE NEW APPLICATIONS ENCOURAGE NON BUYERS TO BUY. USE WHENSCOPE FOR SELLING MORE TO EXISTING CUSTOMERS MKT NOT SATURATED COMPETITORS SHARE FALLING INCREASED VOL LEADING TO ECONOMIES OF SCALE.
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MKT DEVELOPMENT
SELLING SAME PRODUCTS TO DIFFERENT PEOPLE ENTERING NEW MARKETS OR SEGMENTS WITH EXISTING PRODUCTS GAINING NEW CUSTOMERS/SEGMENTS/MARKETS CHANGES-NEW DIDTR CHANNELS/PRICING POLICY/NEW PROMOTIONAL POLICY USED WHENUNTAPPED MARKETS ARE BECKONING FIRM HAS EXCESS CAPACITY ATTRACTIVE CHANNELS TO ACCESS NEW MARKETS LACK OF FAMILIARITY WITH CUSTOMERS-FAMILIAR WITH PRODUCT
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PRODUCT DEVELOPMENT
DEVELOPMENT OF NEW PRODUCT-EXISTING MKTS NEW PRODUCTS IN THE FORM OF: REPLACEMENT FOR CURRENT PRODUCTS, INNOVATIONS,IMPROVEMENTS,PRODUCT LINE EXTENSIONS,NEW PRODUCTS TO COMPLIMENT EXISTING PRODUCTS ETC. USED WHEN-STRONG RAND D ,GROWING MKT,RAPID CHANGE,BUILD ON EXISTING BRANDS, COMPETITORS HAVE BETTER PRODUCTS
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DIVERSIFICATION
NEW PRODUCTS,NEW MARKETS. RELATED AND UNRELATED RISKY-TWO UNKNOWNS HORIZONTAL, VERTICAL AND CONCENTRIC.
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USES-ANSOFF MATRIX
FRAMEWORK TO EXPLAIN DIRECTION FOR STRATEGIC GROWTH IDEN AND ANALYSIS OF DIFFERENT GROWTH OPPORTUNITIES ENCOURAGES PLANNERS TO CONSIDER RETURNS/RISKS REAL WORLD DIFFERENT.
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EXPERIENCE CURVE
ACCUMULATED EXPERIENCE COMPETITORS COSTS INDUSTRY PRICES ECONOMIES OF SCALE LEARNING AND INNOVATION
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MASTER INNOVATORS
YLG- RAHUL BALACHANDRA MERU CABS- NEERAJ GUPTA RED BUS- PHANINDRA SAMA HUMMING BIRD- VIVEK MADAPPA AND VINOD THIMAYYA NET AMBIT- GIRISH BATRA MAHESH TUTORIALS- MAHESH SHETTY VORTEX RURAL ATM- L KANNAN
MARKET SHARE
STARS
LO
QUESTION MARKS
LO
x
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INDUSTRY ATTRACTIVENESS
HI HI
INVEST
BUSINESS STRENGTH
MED
SELECTIVE GROWTH
LO
GROW OR LET GO
SELECTIVE
MED
GROWTH
GROW OR LET GO
HARVEST
LO
GROW OR LET GO
HARVEST
DIVEST
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FACTORS CONSIDERED
INDUSTRY ATTRACTIVENESS Nature of competitive rivalry Bargaining power of suppliers /consumers Threat of substitute Products/new entrants Economic factors Financial norms Socio Political considerations
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Contd--BUSINESS STRENGTH Cost Position Level of differentiation Response time Financial strength Human assets Public approval
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PHASES OF STRATEGY
4. STRATEGIC MGT
1. FINANCIAL PLANNING
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QUESTIONS TO BE ANSWERED
WHERE ARE WE NOW? WHERE DO WE WANT TO GO? HOW DO WE GET THERE?`
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Change
Uncertainty is the only thing to be sure of If you dont like change, you are going to like irrelevance even less
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ORGANIZATIONAL DESIGN
Basic Structure Core Competence Information System and Technology Organizational Efficiency
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ORGANIZATIONAL CULTURE
Values and Beliefs Leadership Human Resource Systems Organizational Character.
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MISSION
CORE PURPOSE OF THE FIRM EFFECTIVE MAPPING OF A COURSE OF ACTION FOR THE NEAR FUTURE UNDERSTANDING THE NEEDS OF A COMPANYS PRIMARY STAKEHOLDERS ALIGNING CURRENT PROCESSES TO SUPPORT THE COMPANYS COMPETITIVE POSITIONING
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ATTRIBUTES
SHOULD CLEARLY ARTICULATE A PURPOSE SHOULD BE REALISTIC SHOULD SERVE THE BEST INTERESTS OF ALL STAKE HOLDERS CLEARY DIFFERENTIATES COMPANY FROM COMPETITION SEPARATES DIRECT COMPETITORS FROM SUBSTITUTES REFLECTION OF CORE COMPETENCY
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ESSENTIAL COMPONENTS
CUSTOMERS PRODUCTS AND SERVICES MARKETS TECHNOLOGY CONCERN FOR SURVIVAL, GROWTH WND PROFITABILITY BELIEFS,VALUES AND ASPIRATIONS SELF CONCEPT CONCERN FOR PUBLIC IMAGE CONCERN FOR EMPLOYEES
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MOTOROLA MISSION
TO HONORABLY SERVE THE NEEDS OF THE COMMUNITY BY PROVIVING PRODUCTS AND SERVICES OF SUPERIOR QUALITYAT A FAIR PRICE FOR OUR CUSTOMERS: TO DO THIS SO AS TO EARNAN ADEQUATE PROFIT WHICH IS REQUIRED FOR THE TOTAL ENTERPRISE TO GROW: AND BY DOING SO, PROVIDETHE OPPORTUNITY FOR OUR EMPLOYEES AND SHAREHOLDERSTO ACHIEVE THEIR PERSONALOBJECTIVES.
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WAL-MART
TO OFFER ALL OF THE FINE CUSTOMERS IN OUR TERRITORIES ALL THEIR HOUSEHOLD NEEDS--IN A MANNER THAT THEY CONTINUE TO THINK OF US FONDLY
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Mission- McDonalds
Key Market Contribution-To offer the fast food customer food prepared in the same high-quality manner worldwide,tasty and reasonably priced. Distinction- Delivered in a consistent, lowkey dcor and friendly atmosphere.
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VISION
INTUITIVE UNDERSTANDING OF WHAT A FIRM WANTS TO BECOME IN THE LONG TERM REFERENCE POINT FOR MAKING STRATEGIC DECISIONS DYNAMIC AND FLEXIBLE GIVES OUT THE PURPOSE AND THE VALUES OF THE FIRM IS INSPIRATIONAL
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BIOCON
TO BE AN INTEGRATED TECHNOLOGY ENTERPRISE OF GLOBAL DISTINCTION.
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TOYOTA
TO BECOME THE MOST SUCCESSFUL AND RESPECTED LIFT TRUCK COMPANY IN THE US
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Company SW
Industry OT
Competitive strategy
Values-key implementers
Societal expectations
Context-strategy
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TESTS OF CONSISTENCY
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NEW ENTRANTS
SUBSTITUTES
BUYERS
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INDUSTRY COMPETITION
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BARRIERS TO ENTRY/EXIT
LO LO
ENTRY BARRIERS HI, STABLE RETURNS HI, RISKY RETURNS LO, STABLE RETURNS EXIT BARRIERS
HI
LO RISKY RETURNS
HI
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SUPPLIERS
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SUBSTITUTES
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BUYERS
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NEW ENTRANTS
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COMPETITORS
COMPANY
COMPLEMENTORS
SUPPLIERS
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BARGAINING POWER
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PORTERS DIAMOND
chance
Firm strategy , structure and rivalry
Factor conditions
Demand conditions
govt
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NEW FACTORS
PHYSICAL KNOWLEDGE CAPITAL INFRASTRUCTURE
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CLUSTERS
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TYPES OF CLUSTERS
GEOGRAPHICAL CLUSTERS SECTORAL CLUSTERS HORIZONTAL CLUSTERS VERTICAL CLUSTERS FACTOR ENDOWMENT CLUSTERS TECHNICAL CLUSTERS
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