Assignment Ist 887 BP&M

Tutor –Prof.
Sasfder A khan
Q. No. 1: Develop your vision and mission statement for an organization

of your choice from broadcasting sector and compare your vision and
mission statement with the original vision and mission statement of that
organization?
NATIONAL PUBLIC RADIO PURPOSES:
Early in 1970, Bill Siemering — one of the organizers of

National Public Radio and later its first program director — put
together a "mission statement" for NPR. The statement
supported NPR's request for aid from CPB and went on to
define the network's first daily program, All Things Considered,
which debuted May 3, 1971.
Vision Statements and Mission Statements are the inspiring words chosen by
successful leaders to clearly and concisely convey the direction of the organization. By
crafting a clear mission statement and vision statement, you can powerfully
communicate your intentions and motivate your team or organization to realize an
attractive and inspiring common vision of the future.
“Mission Statements” and “Vision Statements” do two distinctly different jobs.
A Mission Statement defines the organization's

purpose and primary objectives. Its prime function is
internal – to define the key measure or measures of the
organization’s success – and its prime audience is the leadership team and
stockholders.
Vision Statements also define the organizations purpose, but this time they do so in
terms of the organization’s values rather than bottom line measures (values are guiding
beliefs about how things should be done.) The vision statement communicates both the
purpose and values of the organization. For employees, it gives direction about how
they are expected to behave and inspires them to give their best. Shared with
customers, it shapes customers’ understanding of why they should work with the
organization.
Implementation of Goals
Such statements of purpose are only platitudes and good intentions

unless there is the strong commitment, creative energy and specific
strategy to implement them. The detailed implementation of National
Public Radio is the responsibility of the President and his staff, but
some priorities and suggested approaches are necessary to help
answer the how and why of NPR.
M.SOHAIL AZAM/ AD511997

Tutor –Prof. Sasfder A khan
The priorities of NPR program development:
1. Provide an identifiable daily product which is consistent and reflects

the highest standards of broadcast journalism.
2. Provide extended coverage of public events, issues and ideas, and
acquire and produce special public affairs programs.
3. Acquire and produce cultural programs which can be scheduled
individually by stations.
4. Provide access to the intellectual and cultural resources of cities,
universities and rural districts through a system of cooperative
program development with member public radio stations.
5. Develop and distribute programs to specific groups (adult
education, instructional, modular units for local productions) which
meet needs of individual regions or groups.
6. Establish liaison with foreign broadcasters for a program exchange
service.
7. Produce materials specifically intended to develop the art and
technical potential of radio.
1. Provide an identifiable daily product which is consistent and

reflects the highest standards of broadcast journalism.
Because National Public Radio begins with no identity of its own it is

essential that a daily product of excellence be developed. This may
contain some hard news, but the primary emphasis would be on
interpretation, investigative reporting on public affairs, the world of
ideas and the arts. The program would be well paced, flexible, and a
service primarily for a general audience. It would not, however,
substitute superficial blandness for genuine diversity of regions,
values, and cultural and ethnic minorities which comprise American
society; it would speak with many voices and many dialects. The
editorial attitude would be that of inquiry, curiosity, concern for the
quality of life, critical, problem-solving, and life loving. The listener
should come to rely upon it as a source of information of
consequence; that having listened has made a difference in his
attitude toward his environment and himself.

There may be regular features on consumer information, views of

the world from poets, men and women of ideas and interpretive
comments from scholars. Using inputs from affiliate stations, for the
first time the intellectual resources of colleges and universities will
be applied to daily affairs on a national scale.
Philosophically, time is measured by the intensity of experience.

Waiting for a bus and walking through an art gallery may occupy
the same time duration, but not the same time experience.
Listeners should feel that the time spent with NPR was among their
most rewarding in media contact. National Public Radio will not
regard its audience as a "market" or in terms of its disposable
income, but as curious, complex individuals who are looking for
some understanding, meaning and joy in the human experience.
Represented in visual terms, the listener turning from a commercial
station to National Public Radio should sense a difference as that
between a shopper's newspaper and Consumer Reports; Teen
Magazine and Realities.
2. Provide extended coverage of public events, issues and

ideas, and to acquire and produce special public affairs
programs.
Broadcasting of public hearings and public affairs programs is not

just a "good thing to do" but a necessity for citizens in a democratic
society to be enlightened participants. The mechanistic instruction
about government we all recall from civics classes ill prepares
adults to know about the real legislative process and how to effect
change. Political scientist Fred Newmann wrote:
By teaching that the constitutional system of the United States

guarantees a benevolent government servicing the needs of all, the
schools have fostered massive public apathy.
He believes the legalistic curriculum should be "balanced if not

replaced by emphasis on the influence of personal motives and
ambitions, emotions (envy, hate, love, pride), political debts,
accidents and even honest mistakes in the formulation of public
policy." [Newmann, p. 545] This requires investigative reporting and
citizen participation during the decision-making process. Broadcasts
of public hearings are one of the best ways to hear the evidence
presented on proposed legislation and public radio might develop
some vehicle through local affiliates whereby citizens could indicate
their judgment to the decision makers. This coverage need not be
confined to Congressional Hearings but should apply to

governmental regulatory agencies as well. If no government body is

holding hearings on an important issue, National Public Radio could
sponsor its own debate to help define the problem and suggest
alternate solutions with the consequences of each explored.
Jack Gould, writing in the New York Times, testified that "radio
retains the enormous virtue of complete unobtrusiveness." In
reviewing coverage of congressional hearings he wrote:
Television, commercial or noncommercial, says it can attend a

hearing without causing any inconvenience; this is poppycock. The
glaring lights needed by National Educational Television, . . . are a
short cut to a raging headache when experienced morning and
afternoon. The hearing room was bathed in artificial incandescence,
little short of nuisance, and that some witnesses donned sun
glasses more confirmed the annoyance.
Because the cost of radio coverage is one-tenth television coverage,

Mr. Gould concluded "...it may well prove that radio will be the most
economical and consistent means for uniting a citizen with his
government in operation."
National Public Radio, through public affairs programs, would not

only call attention to a problem, but be an active agent in seeking
solutions. Hiring of minorities in the construction trades, for
example, is a complex social, racial problem. A thorough exposition
by all sides would be instructive, but to enable persons struggling
with this issue to speak on live radio with those who developed the
Philadelphia Plan and Chicago Plan, could actually help solve the
problem in many other communities and probably evolve a better
solution.
Everyone is aware that stopping environmental pollution is critical

for survival, but what can a single individual do to solve such a
massive problem? Not use detergents? Picket the local steel plant?
Organize — but for what, to do what? Obviously individuals and
groups must solve this, and shared information and cross
fertilization of ideas by live national radio could do much to speed
the process.
3. Acquire and produce cultural programs which can be

scheduled individually by stations.
Susan Sontag wrote, "Art today is a new kind of instrument, an

instrument for modifying consciousness and organizing sensibility."
Art is no longer a pleasant pastime for social elite, but at the core of

contemporary life. Understanding is both more essential and more

difficult. Without adequate background, the artist's message is
frequently unintelligible and we wander as one in the forest
unfamiliar with trail markings, unable to "read" the environment.
With the rapidity of change and decline of local theaters and
orchestras there is an equal need to preserve and transmit the
culture of the past. As the arts become less of a social occasion and
more of a personal experience, the role of radio as a creator and
transmitter should increase.
National Public Radio might use any of the following to make the
arts understandable and engaging.
 Listeners could gain a contemporary view of the world through

the eyes of a sensitive writer. National competitions might be
held to encourage new radio writers.
 Encourage, and provide facilities for leading writers of fiction and
dramatists to prepare new materials for radio.
 Standards of the radio art could be improved by broadcasting
regular criticisms of the medium.
 Young people could be introduced to the beauty of the medium
through materials prepared for in-school listening. Writers of
children's books could be commissioned to write for radio.
 Work cooperatively with National, State and local councils on the
arts and international agencies in developing greater
understanding and appreciation of the arts. For example,
reproductions collected from around the country of a period or
school of art could be printed and distributed through local
stations. Leading art historians could lead the listener viewer
through the book in a broadcast series.
 Stimulate local symphony orchestras, through national
broadcasts. Rather than a series of the New York Philharmonic,
there could be a concert series with a different local orchestra
each week performing what it does best.
 Compose and perform new works live across the country.
 Use the products of the National Center for Audio
Experimentation at the University of Wisconsin as a
contemporary esthetic experience and to help give the service a
unique identifiable sound.
 A sense of the cultural diversity could be achieved by programs
featuring the music of the different ethnic groups across the
country.
 Competitions could be sponsored to encourage new artistic uses
of the medium and to improve the quality of the product.

4. Provide access to the intellectual and cultural resources of

cities, universities and rural districts through a system of
cooperative program development with member public radio
stations.
One of the unique aspects of National Public Radio is that each

member station will have the potential of being an originator of
programs as well as a transmitter; it will be national in input as well
as distribution. Since the majority of member stations are part of
large universities or near urban areas, for the first time the best
intellectual resources of the country will be able to he effectively
used, quickly and easily, on a national scale. Many Americans
probably know only of one anthropologist, Margaret Mead, and one
historian, Arthur Schlesinger, Jr. Individual stations may contribute
short actualities, an interview of national interest, segments of a
longer special program, a complete program or program series or
help to arrange for a live discussion of one specialist with another in
a distant city. Stations should receive appropriate compensation for
their contributions.
Initially, many stations may lack the skilled personnel or experience

for some of the tasks necessary to implement this goal. Workshops
for production personnel should be provided so that standards of
excellence can be established and maintained. A significant by-
product of this goal will be the considerable upgrading of staff and
service of many local public radio stations.
5. Develop and distribute programs for specific groups (adult

education, instruction, modular units for local productions)
which may meet needs of individual regions or groups, but
may not have general national relevance.
The implementation of this priority will provide needed diversity of

programming to audiences presently served by some but not all
public radio stations. Through a tape distribution system, programs
from the national production center could be supplied to the public
radio stations without live interconnection service, as well as special
interest programs to member stations. Even though some stations
lack the staff and facilities to use the live network service, they
should receive a program service from National Public Radio which
can help strengthen their schedule and local service. The tape
service could include special documentaries and cultural programs
produced by member stations, the National Public Radio production
center, off air recordings of network programs, and materials
acquired from foreign sources.

Most public radio stations have developed several distinct program

services for specific audiences: farmers, elderly, blind, low income,
youth. These efforts could be furthered and supplemented by NPR
production on a national basis.
The largest specialized audience programming has been

instructional programs for in-school listening and continuing
professional education. Hundreds of thousands of youngsters
presently receive enrichment programs by radio and while many of
these must be designed for local school district curricula, some live
(a daily news background program for elementary pupils) and taped
programs drawn from national resources could strengthen this
important service. Similarly, the group of stations now providing in-
service training for health related professions could be expanded
and used to disseminate vital timely information to key health
centers across the country. An increasing number of stations will be
developing instructional programming on the side channel of FM
(SCA) while broadcasting general audience programs on the main
channel. With the unique technical versatility of radio two different
program services can be offered simultaneously.
Programs in the "by and for" specific cultural, ethnic minorities’

category could be developed. For example, there could be a linkup
of stations in urban areas with sizeable non-white audiences, or
student groups studying ecology, or groups with distinct lifestyles
and interests not now served by electronic media. As man pulls
himself out of the mass society to develop his unique humanness,
his minority identification (ethnic, cultural, value) becomes
increasingly important. This diversity is partially reflected in print
media, but has not been manifested in the electronic. A few of these
growing interests are reflected in the comparative circulation
figures for the periodicals listed below. The figures are taken from
Ayer's Directories based upon the previous year's circulation.
In order to provide minorities access to the medium, it is not only

important to establish the identity of that group, but essential if the
total population is to understand and appreciate the
interdependence of pluralism. In addition to the cognitive
information, these programs should help supply what Warren
Bennis calls the "need for affective education -- the cultivation of
competence in the emotional and interpersonal."
National Public Radio could also supply modular program units to

network stations which could be used in local news and public
affairs programs. For example, there may be congressional
testimony on pollution problems in Lake Michigan which would be of

interest to stations in that region. There may be interviews with

persons from a specific region or about regional issues. Some of the
material may be in rough form, outs of national productions or
actualities for local newscasts.
6. Establish liaison with foreign broadcasters for a program

exchange service.
Although presently overwhelmed by domestic problems, the

individual's role as a citizen of the world should not be overlooked.
International programs can be a source of cultural enrichment and
an effective means to further understanding among peoples around
the world. The speed and volume of international travel, economic
interdependence among nations makes this area of programming
more important than ever. In time/space, New York now is closer to
Asia than it was to Washington, D.C. at the turn of the century; a
plane can travel from New York to London in the same time as an
automobile or train travels across New York State. We not only
learn more about other peoples through international programs,
but also more about ourselves through the eyes of a distant
observer.
Contact can be established with the Canadian Broadcasting

Corporation, British Broadcasting Corporation, Australian
Broadcasting Commission and other international sources for
acquisition of programs of common interest.
In addition to the cultural fare usually associated with international

programs, there could be live interconnected broadcasts on aspects
of foreign policy and problems of common concern--development of
the north country of Canada, ecology of Lakes Erie and Ontario,
balance of payments, etc. National Public Radio could also be a
primary resource for programs on U.S. life for distribution to foreign
broadcasters.
7. Produce materials specifically intended to develop the art

and technical potential of radio.
There should be a close working relationship with the National

Center for Audio Experimentation at the University of Wisconsin to
apply the principles discovered there to the art of broadcasting.
Improving the art of the sound medium should be an on-going
concern at the production center just as newspapers and
magazines constantly improve the format and appearance of their
medium. The technical staff will be concerned with new
developments in studio and remote equipment and the

transmission of material by satellite. National Public Radio should

utilize the most advanced techniques of the medium, should
introduce new concepts and have the highest technical standards
in the field.
odfrey Featherstone, writing in the British publication Anarchy

suggests some of the potentials:
Using sounds alone, with no imposed pictures or rigid, linear print

tending to fragment and narrow thought processes and
imagination, can stimulate a habit of thinking in terms of dynamic
complexes of ideas or far-reaching constellations or "fields" of
imagery. Sound can tap the flow and structures of feelings of
ordinary people if they speak directly for themselves about their
lives' central experiences in actuality is made fuller, complex,
concrete through the tone, pace, rhythm, and stress of their speech
... Skillfully, tactfully and simply relating actuality material to song,
Charles Parker's Radio Ballads ... about the efforts, strengths, risks,
hardships discriminating wisdom rooted inmost people's working
lives did this with an impact greater than a multitude of political
propaganda efforts.
Vision and Mission: Seven Suggestions Why You Need Both
One of the most common questions that I’m asked is whether there
is any difference between a mission and a vision. It’s a question
that has a quick answer – yes!-with a whole lot of reasoning behind
it.
I’m always glad to be asked this question because it’s usually asked
by a thoughtful person who wants to do their best for their
organization. The person has likely been reading or talking to
someone who uses the words mission and vision or perhaps has to
fill out a form where they are required. People who ask this
question are actually aware that you need to have one if not both,
and care enough to find out which they should use.
I think there are good reasons why people talk about mission and
vision these days.
1. The awareness of mission and vision has three major

bases:
• There are many books, articles, conferences speakers that

speak in lay language about mission and vision. What used to

belong to researchers and high level consultants is now

everywhere for anyone.
• There are consultants aplenty who are trained to use one
or the other words and justify neither.
• Business models for non-profits use these words and there
continues to be a transference of what is good for the ‘for
profit’ sector to the ‘not for profit’ sector.
2. Funding requirements are now as never before asking for the

mission and vision to be filled in the blanks.
3. Semantics are more precise because people talk about it
more often. When we invent new words its because this is
important for communication. I think that the distinctions
between mission and vision are becoming more important.
4. There is a trend to making sure that a framework is in place.
People care more about how we do things right and are moving
away from the ‘just do it’ approach to one that requires a more
serious framework. The dot com hurry up and get going had its
place and lost it to be replaced by a calculated and considered
approach.
Here are 7 questions with answers that might help to provide more
rationale as to why an organization needs both a mission and a
vision:
What exactly are a mission and a vision?
A mission and a vision are statements that have been written to

guide certain actions and future states:
• A mission is what an organization does, its action; a vision is

what an organization would like to happen as a result of the
action that it does.
• Mission equals the action; vision is the ultimate result of the
action.
• Mission answers the question “What would not happen if we were
not here as an organization?” Or more positively, “What change
is achieved because we exist?
• Vision answers the question: “What are the results, the ends, the
consequences of our action?”
• Vision looks forward; mission looks at today.
Do we need both a mission and a vision?

Yes. You need to be able to tell yourself both what you do and why
to make sense of your work. I like Joel Barker’s quote from the
Power of Vision, a training video for organizations who need

examples about how individuals and organizations use vision for

their success. Vision without action is merely a dream. Action
without vision just passes the time. Vision with action can change
the world. If you have just a mission, the action written, - and not
the vision, you will not know where you’re going or if you have
arrived.
In an organization, vision is to leadership as mission is to
management. Can everyone be a leader? Can everyone be a
manager? No, but you need to have some of both leadership and
management.
How do we figure out two when one is hard enough to do?
Vision-creating is one of those things that people either love or hate
to do. If you are part of a team that is giving birth to a vision you
need to try and be creative about how you do this. This kind of
thinking, of visioning, takes time; takes lots of input from members
and other key stakeholders; and, I believe it takes a creative and
task-oriented facilitator to help it happen.
Which do we decide first - the vision or the mission?
Since the vision is the most difficult for most people to come up
with, I suggest that you find the mission first. Focus on the
answering the easiest question first – “what do we do?” which gives
you the mission, then answer the question – “what will happen as a
result of what we do? - which gives you the vision.
How often do we change the mission and vision?
A vision is tied to the strategic plan and may not change in much
less than 5 years if not more. A mission could change annually and
since it directs the annual or business plan, depends on the
external and internal changes. The mission could change in less
than 5 years as long as it still fits with the vision.
How do we know our vision and mission are right?
• People nod when you tell them what you do.
• People who are part of your organization can visualize
themselves and what they do in the vision and mission
statements.
• The mission and vision are still exciting to the creators the
morning after the retreat.
• The mission and vision make sense for our organization and fits
with all we say we are and do.
• There’s an irresistible pull of emotion in the center of us around
the vision – that makes us feel that it’s right.
How long are the vision and mission?
Vision and mission statements are just that – brief and concise. If
you are writing pages and pages you likely will cause confusion. On
the other hand, if you make the statements too short you are likely
writing a slogan. Try to keep the vision and mission statements

long enough to make sense and short enough for people to

remember, and say, easily.
Vision and mission statement are foundational parts of good
governance. Organizations which work at having both will find that
they will have no problem distinguishing between a vision and
mission and using them toward their success.

Q: 2 a) As a manager of any service organization, how would you

identify and analyze strategic gap?
In business and economics, gap analysis is a tool that helps a company to compare its actual
performance with its potential performance. At its core are two questions: "Where are we?" and "Where
do we want to be?" If a company or organization is not making the best use of its current resources or is
forgoing investment in capital or technology, then it may be producing or performing at a level below its
potential. This concept is similar to the base case of being below one's production possibilities frontier.
The goal of gap analysis is to identify the gap between the optimized allocation and integration of the
inputs and the current level of allocation. This helps provide the company with insight into areas which
could be improved. The gap analysis process involves determining, documenting and approving the
variance between business requirements and current capabilities. Gap analysis naturally flows
from benchmarking and other assessments. Once the general expectation of performance in the industry
is understood, it is possible to compare that expectation with the company's current level of performance.
This comparison becomes the gap analysis. Such analysis can be performed at the strategic or
operational level of an organization.
Gap analysis is a formal study of what a business is doing currently and where it wants to go in the future.
It can be conducted, in different perspectives, as follows:
1. Organization (e.g., human resources)

2. Business direction
3. Business processes
4. Information technology
Gap analysis provides a foundation for measuring investment of time, money and human resources
required to achieve a particular outcome (e.g. to turn the salary payment process from paper-based to
paperless with the use of a system). Note that 'GAP analysis' has also been used as a means for
classification of how well a product or solution meets a targeted need or set of requirements. In this case,
'GAP' can be used as a ranking of 'Good', 'Average' or 'Poor'. This terminology does appear in
the PRINCE2 project management publication from the OGC (Office of Government Commerce).
The need for new products or additions to existing lines may have emerged from portfolio analyses, in
particular from the use of the Boston Consulting Group Growth-share matrix, or the need will have
emerged from the regular process of following trends in the requirements of consumers. At some point a
gap will have emerged between what the existing products offer the consumer and what the consumer
demands. That gap has to be filled if the organization is to survive and grow.

To identify a gap in the market, the technique of gap analysis can be used. Thus an examination of what
profits are forecasted for the organization as a whole compared with where the organization (in particular
its shareholders) 'wants' those profits to be represents what is called the 'planning gap': this shows what
is needed of new activities in general and of new products in particular.
The planning gap may be divided into three main elements:
Usage gap
This is the gap between the total potential for the market and the actual current usage by all the
consumers in the market. Clearly two figures are needed for this calculation:
 market potential
 existing usage
 Current industrial potential
[edit]Market potential
The maximum number of consumers available will usually be determined by market research, but it may
sometimes be calculated from demographic data or government statistics. Ultimately there will, of course,
be limitations on the number of consumers. For guidance one can look to the numbers using similar
products. Alternatively, one can look to what has happened in other countries.[citation needed] The increased
affluence of all the major Western economies means that such a lag can now be much shorter.
at least the maximum attainable average usage (there will always be a spread of usage across a range of
customers), will usually be determined from market research figures. It is important, however, to consider
what lies behind such usage......
[edit]Existing usage
The existing usage by consumers makes up the total current market, from which market shares, for
example, are calculated. It is usually derived from marketing research, most accurately from panel
research such as that undertaken by the Nielsen Company but also from ad hoc work. Sometimes it may
be available from figures collected by government departments or industry bodies; however, these are
often based on categories which may make sense in bureaucratic terms but are less helpful in marketing
terms.
The 'usage gap' is thus:
usage gap = market potential – existing usage
This is an important calculation to make. Many, if not most marketers, accept the existing market
size, suitably projected over the timescales of their forecasts, as the boundary for their expansion

plans. Although this is often the most realistic assumption, it may sometimes impose an
unnecessary limitation on their horizons. The original market for video-recorders was limited to the
professional users who could afford the high prices involved. It was only after some time that the
technology was extended to the mass market.
In the public sector, where the service providers usually enjoy a monopoly, the usage gap will
probably be the most important factor in the development of the activities. But persuading more
consumers to take up family benefits, for example, will probably be more important to the relevant
government department than opening more local offices.
The usage gap is most important for the brand leaders. If any of these has a significant share of the
whole market, say in excess of 30 per cent, it may become worthwhile for the firm to invest in
expanding the total market. The same option is not generally open to the minor players, although
they may still be able to target profitably specific offerings as market extensions.
All other gaps relate to the difference between the organization's existing sales (its market share)
and the total sales of the market as a whole. This difference is the share held by competitors. These
gaps will, therefore, relate to competitive activity.
[edit]Product gap
The product gap, which could also be described as the segment or positioning gap, represents that
part of the market from which the individual organization is excluded because of product or service
characteristics. This may have come about because the market has been segmented and the
organization does not have offerings in some segments, or it may be because the positioning of its
offering effectively excludes it from certain groups of potential consumers, because there are
competitive offerings much better placed in relation to these groups.
This segmentation may well be the result of deliberate policy. Segmentation and positioning are very
powerful marketing techniques; but the trade-off, to be set against the improved focus, is that some
parts of the market may effectively be put beyond reach. On the other hand, it may frequently be by
default; the organization has not thought about its positioning, and has simply let its offerings drift to
where they now are.
The product gap is probably the main element of the planning gap in which the organization can
have a productive input; hence the emphasis on the importance of correct positioning.
[edit]Competitive gap
What is left represents the gap resulting from the competitive performance. This competitive gap is
the share of business achieved among similar products, sold in the same market segment, and with
similar distribution patterns - or at least, in any comparison, after such effects have been discounted.

Needless to say, it is not a factor in the case of the monopoly provision of services by the public
sector.
The competitive gap represents the effects of factors such as price and promotion, both the absolute
level and the effectiveness of its messages. It is what marketing is popularly supposed to be about.
[edit]See also
 Capability (systems engineering)

 Gap analysis (conservation)
[edit]Market gap analysis

In the type of analysis described above, gaps in the product range are looked for. Another
perspective (essentially taking the "product gap" to its logical conclusion) is to look for gaps in the
"market" (in a variation on "product positioning", and using the multidimensional "mapping"), which
the company could profitably address, regardless of where the current products stand.
Many marketers would question the worth of the theoretical gap analysis described earlier. Instead,
they would immediately start proactively to pursue a search for a competitive advantage.
The SWOT analysis is an extremely useful tool for understanding and

decision-making for all sorts of situations in business and organizations.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.
Information about the origins and inventors of SWOT analysis is below. The
SWOT analysis headings provide a good framework for reviewing strategy,
position and direction of a company or business proposition, or any other
idea. Completing a SWOT analysis is very simple, and is a good subject for
workshop sessions. SWOT analysis also works well in brainstorming
meetings. Use SWOT analysis for business planning, strategic planning,
competitor evaluation, marketing, business and product development and
research reports. You can also use SWOT analysis exercises for team building
games. See also PEST analysis, which measures a business's market and
potential according to external factors; Political, Economic, Social and
Technological. It is often helpful to complete a PEST analysis prior to a SWOT
analysis. See also Porter's Five Forces model, which is used to analyse
competitive position.
A SWOT analysis measures a business unit, a proposition or idea; a PEST

analysis measures a market. A SWOT analysis is a subjective assessment of
data which is organized by the SWOT format into a logical order that helps
understanding, presentation, discussion and decision-making. The four

dimensions are a useful extension of a basic two heading list of pro's and
con's (free pro's and con's template here).
SWOT analysis can be used for all sorts of decision-making, and the SWOT
template enables proactive thinking, rather than relying on habitual or
instinctive reactions. The SWOT analysis template is normally presented as a
grid, comprising four sections, one for each of the SWOT headings:
Strengths, Weaknesses, Opportunities, and Threats. The free SWOT template
below includes sample questions, whose answers are inserted into the
relevant section of the SWOT grid. The questions are examples, or discussion
points, and obviously can be altered depending on the subject of the SWOT
analysis. Note that many of the SWOT questions are also talking points for
other headings - use them as you find most helpful, and make up your own
to suit the issue being analysed. It is important to clearly identify the subject
of a SWOT analysis, because a SWOT analysis is a perspective of one thing,
be it a company, a product, a proposition, and idea, a method, or option, etc.
Here are some examples of what a SWOT analysis can be used to assess:
 a company (its position in the market, commercial viability, etc)

 a method of sales distribution
 a product or brand
 a business idea
 a strategic option, such as entering a new market or launching a new product
 a opportunity to make an acquisition
 a potential partnership
 changing a supplier
 outsourcing a service, activity or resource
 an investment opportunity
Be sure to describe the subject for the SWOT analysis clearly so that people are
contributing to the analysis, and those seeing the finished SWOT analysis,
properly understand the purpose of the
SWOT assessment and implications.

SUBJECT OF SWOT ANALYSIS: (DEFINE THE SUBJECT OF THE
ANALYSIS HERE)

Strengths Weaknesses
 Advantages of proposition?  Disadvantages of proposition?
 Capabilities?  Gaps in capabilities?
 Competitive advantages?  Lack of competitive strength?
 USP's (unique selling points)?  Reputation, presence and reach?
 Resources, Assets, People?  Financials?
 Experience, knowledge, data?  Own known vulnerabilities?
 Financial reserves, likely returns?  Timescales, deadlines and
 Marketing - reach, distribution, pressures?
awareness?  Cashflow, start-up cash-drain?
 Innovative aspects?  Continuity, supply chain robustness?
 Location and geographical?  Effects on core activities,
 Price, value, quality? distraction?
 Accreditations, qualifications,  Reliability of data, plan
certifications? predictability?
 Processes, systems, IT,  Morale, commitment, leadership?
communications?  Accreditations, etc?
 Cultural, attitudinal, behavioural?  Processes and systems, etc?
 Management cover, succession?  Management cover, succession?
Opportunities
 Market developments?
 Competitors' vulnerabilities?
Threats
 Industry or lifestyle trends?
 Political effects?
 Technology development and
 Legislative effects?
innovation?
 Environmental effects?
 Global influences?
 IT developments?
 New markets, vertical, horizontal?
 Competitor intentions - various?
 Niche target markets?
 Market demand?
 Geographical, export, import?
 New technologies, services, ideas?
 New USP's?
 Vital contracts and partners?
 Tactics - surprise, major contracts,
 Sustaining internal capabilities?
etc?
 Obstacles faced?
 Business and product
 Insurmountable weaknesses?
development?
 Loss of key staff?
 Information and research?
 Sustainable financial backing?
 Partnerships, agencies,
 Economy - home, abroad?
distribution?
 Seasonality, weather effects?
 Volumes, production, economies?
 Seasonal, weather, fashion
influences?
Swot analysis example

This SWOT analysis example is based on an imaginary situation. The
scenario is based on a business-to-business manufacturing company, who
historically rely on distributors to take their products to the end user market.

The opportunity, and therefore the subject for the SWOT analysis, is for the
manufacturer to create a new company of its own to distribute its products
direct to certain end-user sectors, which are not being covered or developed
by its normal distributors.
Subject of SWOT analysis example: the creation of own
distributor company to access new end-user sectors not
currently being developed.
Strengths
 End-user sales control and
direction.
Weaknesses
 Right products, quality and
 Customer lists not tested.
reliability.
 Some gaps in range for certain
 Superior product performance vs
sectors.
competitors.
 We would be a small player.
 Better product life and durability.
 No direct marketing experience.
 Spare manufacturing capacity.
 We cannot supply end-users abroad.
 Some staff have experience of
 Need more sales people.
end-user sector.
 Limited budget.
 Have customer lists.
 No pilot or trial done yet.
 Direct delivery capability.
 Don't have a detailed plan yet.
 Product innovations ongoing.
 Delivery-staff need training.
 Can serve from existing sites.
 Customer service staff need training.
 Products have required
 Processes and systems, etc
accreditations.
 Management cover insufficient.
 Processes and IT should cope.
 Management is committed and
confident.
Opportunities Threats
 Legislation could impact.
 Could develop new products.
 Environmental effects would favour
 Local competitors have poor
larger competitors.
products.
 Existing core business distribution
 Profit margins will be good.
risk.
 End-users respond to new ideas.
 Market demand very seasonal.
 Could extend to overseas.
 Retention of key staff critical.
 New specialist applications.
 Could distract from core business.
 Can surprise competitors.
 Possible negative publicity.
 Support core business economies.
 Vulnerable to reactive attack by
 Could seek better supplier deals.
major competitors.
See also the free PEST analysis template and method, which measures a
business according to external factors; Political, Economic, Social and
Technological. It is often helpful to complete a PEST analysis prior to
competing a SWOT analysis.
See also Porter's Five Forces model.

More on the difference and relationship

between PEST and SWOT
PEST is useful before SWOT - not generally vice-versa - PEST definitely helps
to identify SWOT factors. There is overlap between PEST and SWOT, in that
similar factors would appear in each. That said, PEST and SWOT are certainly
two different perspectives:
PEST assesses a market, including competitors, from the standpoint of a
particular proposition or a business.
SWOT is an assessment of a business or a proposition, whether your own or
a competitor's.
Strategic planning is not a precise science - no tool is mandatory - it's a
matter of pragmatic choice as to what helps best to identify and explain the
issues.
PEST becomes more useful and relevant the larger and more complex the
business or proposition, but even for a very small local businesses a PEST
analysis can still throw up one or two very significant issues that might
otherwise be missed.
The four quadrants in PEST vary in significance depending on the type of
business, eg., social factors are more obviously relevant to consumer
businesses or a B2B business close to the consumer-end of the supply chain,
whereas political factors are more obviously relevant to a global munitions
supplier or aerosol propellant manufacturer.
All businesses benefit from a SWOT analysis, and all businesses benefit from
completing a SWOT analysis of their main competitors, which interestingly
can then provide some feed back into the economic aspects of the PEST
analysis.
The origins of the SWOT analysis model

This remarkable piece of history as to the origins of SWOT analysis was
provided by Albert S Humphrey, one of the founding fathers of what we know
today as SWOT analysis. I am indebted to him for sharing this fascinating
contribution. Albert Humphrey died on 31 October 2005. He was one of the
good guys.
SWOT analysis came from the research conducted at Stanford Research
Institute from 1960-1970. The background to SWOT stemmed from the need
to find out why corporate planning failed. The research was funded by the
fortune 500 companies to find out what could be done about this failure. The
Research Team were Marion Dosher, Dr Otis Benepe, Albert Humphrey,
Robert Stewart, Birger Lie.
It all began with the corporate planning trend, which seemed to appear first
at Du Pont in 1949. By 1960 every Fortune 500 company had a 'corporate
planning manager' (or equivalent) and 'associations of long range corporate
planners' had sprung up in both the USA and the UK.

However a unanimous opinion developed in all of these companies that

corporate planning in the shape of long range planning was not working, did
not pay off, and was an expensive investment in futility.
It was widely held that managing change and setting realistic objectives
which carry the conviction of those responsible was difficult and often
resulted in questionable compromises.
The fact remained, despite the corporate and long range planners, that the
one and only missing link was how to get the management team agreed and
committed to a comprehensive set of action programmes.
To create this link, starting in 1960, Robert F Stewart at SRI in Menlo Park
California lead a research team to discover what was going wrong with
corporate planning, and then to find some sort of solution, or to create a
system for enabling management teams agreed and committed to
development work, which today we call 'managing change'.
The research carried on from 1960 through 1969. 1100 companies and
organizations were interviewed and a 250-item questionnaire was designed
and completed by over 5,000 executives. Seven key findings lead to the
conclusion that in corporations chief executive should be the chief planner
and that his immediate functional directors should be the planning team. Dr
Otis Benepe defined the 'Chain of Logic' which became the core of system
designed to fix the link for obtaining agreement and commitment.
1. Values
2. Appraise
3. Motivation
4. Search
5. Select
6. Programme
7. Act
8. Monitor and repeat steps 1 2 and 3
We discovered that we could not change the values of the team nor set the
objectives for the team so we started as the first step by asking the appraisal
question ie what's good and bad about the operation. We began the system
by asking what is good and bad about the present and the future. What is
good in the present is Satisfactory, good in the future is an Opportunity; bad
in the present is a Fault and bad in the future is a Threat. This was called the
SOFT analysis.
When this was presented to Urick and Orr in 1964 at the Seminar in Long
Range Planning at the Dolder Grand in Zurich Switzerland they changed the
F to a W and called it SWOT Analysis.
SWOT was then promoted in Britain by Urick and Orr as an exercise in and of
itself. As such it has no benefit. What was necessary was the sorting of the
issues into the programme planning categories of:
1. Product (what are we selling?)
2. Process (how are we selling it?)
3. Customer (to whom are we selling it?)

4. Distribution (how does it reach them?)

5. Finance (what are the prices, costs and investments?)
6. Administration (and how do we manage all this?)
The second step then becomes 'what shall the team do' about the issues in
each of these categories. The planning process was then designed through
trial and error and resulted finally in a 17 step process beginning with
SOFT/SWOT with each issue recorded separately on a single page called a
planning issue.
The first prototype was tested and published in 1966 based on the work done
at 'Erie Technological Corp' in Erie Pa. In 1970 the prototype was brought to
the UK, under the sponsorship of W H Smith & Sons plc, and completed by
1973. The operational programme was used to merge the CWS milling and
baking operations with those of J W French Ltd.
The process has been used successfully ever since. By 2004, now, this
system has been fully developed, and proven to cope with today's problems
of setting and agreeing realistic annual objectives without depending on
outside consultants or expensive staff resources.
The seven key research findings

The key findings were never published because it was felt they were too
controversial. This is what was found:
1) A business was divided into two parts. The base business plus the
development business. This was re-discovered by Dr Peter Senge at MIT in
1998 and published in his book the 5th Dimension. The amount of
development business which become operational is equal to or greater than
that business on the books within a period of 5 to 7 years. This was a major
surprise and urged the need for discovering a better method for planning
and managing change.
2) Dr Hal Eyring published his findings on 'Distributive Justice' and pointed
out that all people measure what they get from their work and divide it by
what they give to the work and this ratio is compared to others. If it is not
equal then the person first re-perceives and secondly slows down if added
demands are not met. (See for interest Adams Equity Theory and the Equity
Theory
3) The introduction of a corporate planner upset the sense of fair play at
senior level, making the job of the corporate planner impossible.
4) The gap between what could be done by the organisation and what was
actually done was about 35%.
5) The senior man will over-supervise the area he comes from. Finance-
Finance, Engineering-Engineering etc.
6) There are 3 factors which separate excellence from mediocrity:
a. Overt attention to purchasing
b. Short-term written down departmental plans for improvement
c. Continued education of the Senior Executive

7) Some form of formal documentation is required to obtain approval for

development work. In short we could not solve the problem by stopping
planning.
In conclusion
By sorting the SWOT issues into the 6 planning categories one can obtain a
system which presents a practical way of assimilating the internal and
external information about the business unit, delineating short and long term
priorities, and allowing an easy way to build the management team which
can achieve the objectives of profit growth.
This approach captures the collective agreement and commitment of those
who will ultimately have to do the work of meeting or exceeding the
objectives finally set. It permits the team leader to define and develop co-
ordinated, goal-directed actions, which underpin the overall agreed
objectives between levels of the business hierarchy.
Q. 2) B. Select any firm from manufacturing sector;

discuss the general environment technology to leverage
human capital and knowledge?
Answer)
ANALYSIS OF COMPETITION
The third element of Strategic analysis is to look at the competitive
environment - what your Competitors are doing, where the next
technological developments are coming from and the general directions the
market is moving.

Competitive and environmental analysis

A competitive and environmental analysis of your markets should include all
the key influencing factors that affect the way in which you can compete. A
competitive review is important for two reason.
Firstly, even if you know what the customers want and have the resources to
meet the customers' demands, it may be that the competitive environment
means that it is not worth pursuing particular parts of the market for a whole
range of strategic reasons, such as the threat a price war, channel conflict,
or legal or ethical considerations.
Secondly, you need to know if your competitors are doing things better than
you are, or more dangerously, whether they are looking to change the basis
of competition in the market, for instance by moving to a direct sales model,
or by introducing some revolutionary new product or technology.
The main types of competitive analysis from a strategic point of view are:
 "The Five Forces"
 Benchmarking and competitive evaluation
Market Intelligence is the primary mechanism for gathering information
about competitors (although some may come from talking to customers in
your own market surveys). Notanant is our on-line market knowledge
system for collecting, sharing and managing customer and competitor
knowledge provided by Gegen CIS.
Five forces
The five forces come from Porter's famous framework and are:
 Power of Buyers
 Power of Suppliers
 Threat of substitutes
 Barriers to entry
 Competitors
The idea is that change in your market is likely to come as the basis of one of
these five areas. For instance, buyers may distort the market by forcing
prices down, or by deciding to take build products in-house.
In considering how these "forces" act on your markets, you get a picture of
issues such as channel conflict, threats from vertical integration, the impact
of regulatory change or the advent of new technology. You can also take a
view as to how you are or can affect the competitive situation for your own
benefit, rather than statically accepting the status quo.
Consequently it becomes possible to play around with different future
competitive scenarios and to use these to test different propositions to try
and guess how the market will change. Your strategy can then include
contingencies and responses to changes that might affect you, or changes
that you might make to the market.
BENCHMARKING

Benchmarking is used to ascertain how well you are doing against the
competition. Are there areas that you can learn from the competition? Are
there ideas in markets outside your own that would be worth bringing into
your market to give you a competitive advantage?
Your competitors can also be a source for information about the general
market. Their advertising and marketing is telling you something about the
messages and approaches that they think are applicable to your market. If
they have done their research, you can learn from their approaches.
One common issue that comes from looking at the competition is what do
you do about it? The options are:
 Ignore
 Fight
 Adopt
In practice, if there is merit in something new and you ignore it, it is likely to
bite you later. If you fight against it, you add to your costs potentially just to
save market share, rather than to win market share.
Consequently often adoption of the competition's good ideas is the best way
forward (although perhaps after a little fighting to test whether the ideas are
sound). Microsoft's Embrace and Extend and Intel's "Only the Paranoid
Survive" are good examples of companies that use the competition to keep
their products at the cutting edge.
Often there can internal cultural issues that mean this can be difficult to
accept. But learning from the competition, doesn't mean following the
competition. This approach, known as an "invest in your threats" strategy,
can be an extremely effective way of keeping up with and ahead of the
market.

Q3: Suppose you are running a large scale business

organization, how will you use the technology to leverage
human capital and knowledge?
Answer)
Businesses are racing to gain and sustain advantage in today's globally
competitive business environment. Digital age technology is rapidly shifting
where and how business is done. The pressure for profitability, to decrease
the cost of production and increase revenues, fuels the need to leverage all
of the sources of capital a company can access--including human capital.
HR's response has been to become HR strategic business partners. This is a
great and necessary step, but the stakes are high and we need to shift gears
faster--and think bigger! Either we move up the business value chain, or we
slide down it driven by the twin and intertwined forces of technology and
outsourcing that are already reshaping HR.
The term human capital management (HCM) is entering our lexicon of

change. Most use the term interchangeably with HR, but HCM can and should
be more than HR with a new name. HCM is a C-suite business discipline that
develops enterprise human capital strategies and ensures the human capital
portfolio is effectively managed. Just as the chief financial officer (CFO) is a
full senior partner in identifying and solving business issues from a financial
perspective, the chief human capital officer (CHCO) is a full senior partner in
identifying and solving business issues from a human capital perspective. As
C-suite members, the CFO and CHCO are accountable for overall enterprise
performance. Both also have responsibilities for enabling business operations
and the performance of their organizations.
HCM provides decision support by combining business and workforce

intelligence to the development of enterprise human capital strategies: how
to leverage people and their ideas effectively to achieve bottom-line
business goals such as growing the business, increasing market share,
margins, share price, and decreasing SG&A costs, as well as improving
business processes, benefiting from technology investments, and increasing
productivity.
The future of HR and the emergence of HCM are big topics. In this article we
touch on a few starter points, hoping to open up further dialogue.
Human Capital Management--Strategic Domains
Leadership Capital: Executive performance and credibility
Structural Capital: Governance, business structure, processes, and
technology
Workforce Capital: Employees, contingent labor, outsourcers,
suppliers, and partners
Cultural Capital: Ethics, values, relationships, and reputation

Intellectual Capital: Innovations, inventions, and knowledge

management
Leadership Capital: Strategy
Determining strategies for growth is a significant component of leadership

performance. Growing the business is as much a human capital decision as it
is a product/service and financial decision. Organic growth through
extending existing products, adding new products, opening sales channels or
expanding into new markets requires human capital resources. HCM
considers the state of the enterprise innovation engines, SG&A impact, and
the leadership and workforce options and costs of expanding and operating
in new channels, markets, or geographies.
Perhaps it is time to "buy" growth through a merger or acquisition (M&A).

Have you noticed when a major M&A deal is initially announced the stock of
the acquired company usually goes up and the stock of the acquiring
company goes down? Shareholder skepticism is justified, as many mergers
do not produce all the promised results. The wheeling and dealing of an M&A
is heady, but the aftermath is often simply a headache. If the M&A value
proposition is based on anything more than merely buying the tangible book
value assets and market footprint, then increased HCM due diligence and
preplanning for the post merger integration is critical before deal fever kicks
in.
STRUCTURAL CAPITAL: GOVERNANCE

Operating structure and governance exist to facilitate achievement of the
business goals in the current environment and at each stage of the business
life cycle. To be public or private, centralized, decentralized, or a holding
company should be based on how well the needs of the business are met
now, not on just the preferences of the current management team or what
worked in the past.
Structuring the board and senior leadership team, defining management

roles and responsibilities, designing total executive compensation packages
and employment contracts are among the most powerful domains of HCM,
and are currently under intense public and stakeholder scrutiny.
Public companies need a balance of internal power and controls between the
C-suite members and the board of directors. Without better corporate
discipline, plenty of regulatory and legislative bodies are ready to step in
with more regulations and legislation, and overreaching requirements, like
Sarbanes Oxley, will continue to drive up compliance costs. Part of that
balance could be a strong CHCO backed by a professional body of HCM
ethics and standards.
Workforce Capital Strategy and structure are only as valuable as the results
produced. The "make vs. buy" decision extends to more than products and

services. An employee-based workforce is only one of today's many choices.

HCM critically assesses the competitive advantage of any work done in-
house and explores an extended workforce portfolio to determine the
optimum mix of full- and part-time employees, contingent workers,
outsourced work, and suppliers or partners.
HCM includes influencing external workforce sourcing, contracting, and

management to ensure vendor capabilities and controls in areas such as
training, turnover, and incentive transparency, in addition to competitive
pricing and service levels.
In telecommunications, when a telemarketer's employees make bad sales in

your name ("slamming"), it is your company that will be in the news and pay
fines to regulatory agencies. If your customer care outsourcer has poor
training and high turnover, your company's customers will be dissatisfied
and perhaps lost. In business process outsourcing (BPO), you are buying
performance and results; you are not managing the vendor's processes, but
you do need to know that they are!
Offshoring work? HCM goes beyond labor arbitrage to review the decision
drivers and business implications of where work is done. Would an offshore
investment add needed HCM capability and flexible capacity? Would you
recommend expansion via a "captive," an acquisition, or an outsourcer? Do
the risk management calculations of using a low-cost country and weigh the
business impact of outsourcing back office, mid office, and front office work.
The question must be asked: Why use people at all? HCM looks for cost-
effective technology to enable direct access and self-service across the value
chain. Technology displacement of labor is a fact of life in most industries
(including HR). Use people where complexity, judgment, and personal
interaction add competitive advantage. Get ahead of the curve by ensuring
technology investments are made in alignment, managing the total cost of
labor and the value propositions of the business.
CULTURAL CAPITAL
Now more and more of a company's market value is in "intangibles" rather
than book value. Today's performance results and tangibles such as cash
and inventory on the balance sheet are easy to understand, measure, and
manage--at least easier than concepts that drive stakeholder actions
founded on beliefs about the future. Belief in the sustainability of profitable
growth and competitive advantage drives much of the intangible market
value. Perceptions about culture, operational values, ethics, and behaviors of
the leaders and the workforce influence customer, investor, and employee
decisions.

Effective cross-functional and organizational collaboration can increase

speed to market and in turn support external brand reputation. Cultural fit
supports strategic alignment and interdependence of action across
increasingly diverse people and places, businesses and supply chains.
Cultural compatibility between alliance partners, or the talent acquired in an
M&A, may mean the difference in finishing first or worst.
Intellectual Capital
Human capital management is about people and their ideas, and the
capability to leverage both in achieving business strategies and goals. A
great salesperson is a valued asset. But one salesperson can only reach and
serve so many clients, no matter how capable. People have built-in capacity
constraints. If you leverage the learning and competencies of the one to train
others or to improve staffing selection criteria, you can achieve a greater
level of performance for many.
The common thread across income from patents and new products,
proprietary processes that enable competitive advantage (think Wal-Mart
and eBay), or operational efficiencies that increase productivity and reduce
expense is people and the leveraging of their ideas to increase transferable
knowledge, repeatable results, and sustainable advantage.
What HCM Brings to the Table

Human capital decisions are made all the time in businesses. Why add HCM
as a discipline? Because a series of scattered one-off decisions may
suboptimize the overall workforce portfolio, and missteps with people in one
area often have negative public consequences for the whole company. The
CHCO does not own or make sole decisions in every area mentioned. The key
is to have the enterprise HCM strategic view and management of the total
cost of human capital led by a responsible and accountable senior leader
with the authority of a C-suite seat at the CEO's table.
HCM strategic decision support requires extensive authoritative external and

internal business and workforce intelligence with a credible understanding of
business financials and operations. The CHCO should be the first and most
informed source of what is going on externally with the world of work related
to your company, competitors, and industry. Internal business intelligence
requires data mining, metrics, and analytics. HR is too often well back in the
pack in terms of producing metrics at the business impact level. It is hard to
have business intelligence without intelligent IT systems and the analytic
capabilities to interpret the data. When upgrading the enterprise ERP or the
internal HR technology infrastructure, or embarking on comprehensive
platform outsourcing, be sure to design in (and invest in) the diagnostic and
reporting capabilities to identify, analyze, and measure performance of the
enterprise's use of human capital.

Where Does HR Fit? The Push and the Pull

We have been looking at the pull: the strategic aspects and advantages to
be gained, such as business growth, improved productivity, and profitability.
Leadership development and succession planning, talent management,
performance management, employee development, compensation, and
benefits are as important as ever. Depending on the company and culture,
the HCM elements may be led by HR, or the CHCO may be a separate office.
The push is on as well. HR technology that enhances employee and manager
self-services at less total cost is a win for our clients and customers, and HR
outsourcing is an increasingly viable option. But if HR technology is selected
piecemeal and if outsourcing is based only on cost cutting, you may end up
perpetuating treatment of HR as a cost center to be driven down to the
lowest cost. Done well, technology and outsourcing (or a centralized shared
services center) will free up more of HR to be strategic business partners.
But time availability does not equal HCM capability. These twin forces will
better serve HR and our businesses if they are part of an overall HR strategy
and transformation plan.
HCM is about the enterprise, about human capital options expressed in

dollars and data. This is a hot-seat position, not one for the faint of heart. Nor
is it a position for a cold, numbers-only bottom liner. Each race is run and
won, or lost, with real people with real lives. Trading the car I drive does not
hurt the feelings of the car--I have no obligation to it. Cutting jobs, adding
jobs, investing in a global extended workforce all carry obligations--moral,
financial, legal, political--and the entire enterprise network of customers,
employees, shareholders, and communities may be affected.
HCM is a cross-functional, cross-enterprise leadership discipline with

oversight and decision-making responsibility and accountability. It requires
business and financially savvy, technology-aware, data-embracing, senior
leaders who bring strategic human capital expertise, business intelligence,
and judgment to the C-suite table.
There is much overlap with HR, but there is a core difference. Today's HR
concentrates on employees and not enough on the broader workforce and
issues that impact the enterprise's success. HCM increases the scope to
include all of the sources of human capital, wherever they reside in the
human capital value chain.
The good news is that HCM is not yet fully defined. We can define it, shape it,
and bring it into creation--if we shift gears faster and think bigger!

Q4: For any government Organization in Pakistan, What

will be the challenges and implications for the strategy
development of Human Resource Management? Discuss in
detail.
Answer)
INFORMATION AND SERVICES
Government of Pakistan provides services in almost all departments of life. This
section is about facilitating citizen access to public services in a way that is
significantly more convenient than what has traditionally obtained. It is dedicated to
the management of information and services related to different departments of the
country.
The section provides accurate information on government policies, programmes,
services and activities, with a view to generating public support for these
government policies, programmes, services and activities, thereby creating the
environment of mutual success.
Why is HRM Strategy needed?

The HRM Strategy is the basic document of the HRM Function, which
describes the desired state of the human capital in the organization and the
desired state of the HRM Function.
The HRM Strategy has to be developed based on the overall business
strategy and it has fully followed the main initiatives included in the business
strategy. The HRM Management Team has to focus on the clear design and
definition of the HRM Strategy.
The HRM Strategy has two main goals:
• Helping the organization to understand to the priorities and initiatives of the
HRM Function;
• Helping to the employees of the HRM Function to prioritize the activities of
the function.
The HRM Strategy is the main document to make a good promotion of the
initiatives and plans of the HRM Function among the management population
in the organization. The HRM Strategy defines the final desired state of the
HRM Function and the way how to get there.
The managers can support the initiatives of the HRM Function when they
fully understand the whole concept and can provide the employees with the
correct explanation. The managers cannot support any activities, when they
do not know or understand the next steps to be taken.
The HRM Employees need the same as the managers. The HRM Strategy
provides HRM Employees with the common basis for the discussions with the
employees, managers and other members of the HRM Team. The employees
of the HRM have to find their place in the HRM Strategy and their own
possible contribution. The employees of the HRM Function can use the HRM

Strategy as the basis for their own development and the possibility to find
the gaps in their skills and competencies.
The main role of the HRM Strategy is to provide the basis for the decision
making in the HRM Function, but the role of the main communication tool of
the HRM Function is also very important.
SUCCESSFUL HR STRATEGY
HR Strategy is a much misused term in many HRM Departments. HR
Strategy is the basic document for Human Resources demonstrating the
most important goals in the future. It is derived directly from the Business
Strategy and must be agreed by the top management of the company.
HR Strategy is a document to show the employees in HRM and the rest of
the organization the main imperatives and key initiatives of Human
Resources to be achieved and how they will impact the whole organization.
HR Strategy can be completely new and innovative, but many times the HR
Strategy uses the basic blocks, which can be found on the market and
putting just different priorities. Generally, there are about 10 different HR
Strategies, which are used and the priorities and initiatives differ.
Also, the HR Strategy is very dependant on the sector, in which the
organization operates. The manufacturing company can have very different
HR Strategy from the financial institution.
HRM STRATEGIC CHALLENGES

The HRM Function has some strategic challenges, which will affect the
whole organization in the future. The strategic challenges will change the
organization of the HRM Function and its role in the organization.
The current role of the HRM Function is about providing services to the
organization and the managers are clear clients of the HRM Processes. The
HRM Function usually do not provide challenging questions and initiatives to
the organization and the business leaders do not have to worry about the
HRM Function as the salaries are paid correctly at every pay date defined by
the organization.
The main HRM Strategic Challenges can be defined in four main areas:
• Leadership Development;
• Management Development;
• Globalization;
• Outsourcing.
•
The Leadership Development is one of the biggest HRM Challenges. The
leadership development is the only way to secure the organization for the
future. The supply of the leaders is very limited and the organization has to
focus on the growth of the potential available inside the organization. The
HRM Function has to take the responsibility for the initiatives to identify and
grow the potential inside the organization and to secure the best potential to
stay in the organization. The leadership development initiatives are

extremely costly, but the organization has to recognize the need to invest in
such initiatives. This is a major HRM Challenge.
The line management is another HRM Challenge. The line management

is the main user and client of the HRM Value Added processes and they have
to be able to use the processes correctly. The HRM Function can be seen as
the enemy, but the HRM Challenge is to develop and train the line
management in the daily usage of the value added HRM Processes to make
the organization more efficient.
The globalization is another HRM Challenge. The HRM Function has to

make its policies, procedures and processes to work on the global level.
Currently, most of the HRM Policies is focused on the concrete country, but
the employees have to start to move from the country to another country
and the HRM Processes have to be able to support such a need in the
organization. The globalization has a huge impact on the HRM Function and
the it is usually not ready to take more responsibility in the movement of the
workforce around the Globe.
The outsourcing is the main issue for the HRM Function. The HRM Function
has to be able to outsource its non-core services for the organization and it
has to be able to keep the service level for the organization. The outsourcing
HRM Challenge is pretty huge as it requests a lot of standardization and
practice from the HRM Function.
IMPACT OF CORPORATE CULTURE ON HR STRATEGY

Corporate Culture is one of key elements for Human Resources. Corporate
Culture is a very difficult complex of corporate values, decision processes
and human behavior in each organization.
Generally, the Corporate Culture consists of 4 main building blocks:
• The attitudes,
• Experiences,
• Beliefs.
• Values
The Corporate Culture is not born, it evolves and develops over a longer period of
time and it is not created by the single person. The corporate culture forms the
norms in the organization. The corporate culture is the most important aspect, when
evaluating the formal and informal decision processes in different organizations.
The corporate culture with the stress on informal behavior of employees will
definitely lead to less formal decision processes and will support the quick reaction
to the external changes on the market.
It is not possible to say, that one Corporate Culture is better than the other
one. Each Corporate Culture is very unique and the external observer can
just make a judge about the general approach and stresses inside the
corporate culture.

HRM is responsible for recognizing the competitive advantages in the

corporate culture. On the job market the corporate culture can be an
excellent opportunity for the company to differ from the competitors. In case
the other competitors are really formal companies, the informal company
can win a lot of excellent candidates, just based on the fact of the informal
corporate culture.
HRM is many time responsible for corporate culture, but this is a nonsense.
The corporate culture is not set by Human Resources and it is not set by any
internal procedure. The corporate culture is set by the behavior of top
management and the potential change of the corporate culture is a very long
run, which fails many times as the top management does not demonstrate
the will to change the corporate culture by its own decisions and examples.
For Human Resources the corporate culture is a huge challenge to adjust

its own behavior and style – internally and externally. The corporate culture
is in many cases the most important factor to sell the organization as the
best employer in the neighborhood. For HRM, the corporate culture is a very
important input for setting the HR Strategy.
THE ORGANIZATIONAL CLIMATE
The organizational climate was defined by two psychologists ... Litwin and
Stringer. Later Mr. McClelland redefined their original version of the theory of
the organizational climate.
The whole concept of the organizational climate refers to the main 6 key
factors of the working environment.
Generally, the organizational climate is not a topic to ignore in the serious
business discussions as the studies conducted bring the amazing results. The
organizational climate has the overall impact of 33, 3% on the success of the
organization in the changing world around us.
The 6 key factors of the Organizational Climate
The organizational climate has 6 key elements:
• Flexibility – how free the employees are to innovate
• Responsibility – degree to which the employees feel free to work without
asking for the permission and guidance from the manager
• Standards – the sign the organization emphasizes the excellence, that the
goals for the employees are really high but attainable
• Rewards – the employees have to receive regular feedback and that they
are rewarded accordingly
• Clarity – the employees know, what is expected from them and how their
efforts relate to the organizational goals
• Team Commitment – the employees have to know they belong to the
winning team or the winning organization and that all of the employees work
towards the same goals or objectives.
The Organizational Climate Paradox

The manager or the leader cannot fulfill all the 6 key elements immediately.
But out of 6 key elements of the organizational climate, the three ones are
really key from the real beginning:
• Standards
• Clarity
• Team Commitment
When these three elements are not met, the motivation of employees is lost
and the position of the manager is in the danger as the team can start the
search for the informal leader. Also, you can read more about the corporate
culture as this is also very important for the organizational climate.

Q. 5: (A) How an International organization develop its

different strategies? Explain the factors effecting
international strategies.
Answer)
Globalization was the buzzword of the 1990s, and in the twenty first century,
there is no evidence that globalization will diminish. Essentially, globalization
refers to growth of trade and investment, accompanied by the growth in
international businesses, and the integration of economies around the world.
According to Punnett (2004) the globalization concept is based on a number
of relatively simple premises:
o Technological developments have increased the ease and speed of
international communication and travel.
o Increased communication and travel have made the world smaller.
o A smaller world means that people are more aware of events outside of their
home country, and are more likely to travel to other countries.
o Increased awareness and travel result in a better understanding of foreign
opportunities.
o A better understanding of opportunities leads to increases in international
trade and investment, and the number of businesses operating across
national borders.
o These increases mean that the economies around the world are more closely
integrated.
Managers must be conscious that markets, supplies, investors, locations,

partners, and competitors can be anywhere in the world. Successful
businesses will take advantage of opportunities wherever they are and will
be prepared for downfalls. Successful managers, in this environment, need
to understand the similarities and differences across national boundaries, in
order to utilize the opportunities and deal with the potential downfalls.
The globalization of business is easy to recognize in the spread of many

brands and services throughout the world. For example, Japanese electronics
and automobiles are common in Asia, Europe, and North America, while U.S.
automobiles, entertainment, and financial services are also common in Asia,
Europe, and North America. Moreover, companies have become
transnational or multinational-that is, they are based in one country but have
operations in others. For example, Japan-based automaker Honda operates
the largest single factory in the United States, while U.S. based Coca-Cola
operates plants in other countries including France and Belgium—with about
80 percent of that company's profits come from overseas sales.
During the early1990s, there were reasons to feel that globalization was
working. The economic success of Singapore, the rapid economic growth in
the Asian Tigers (as the Asian countries that grew rapidly were called), the
industrializing of countries, such as Brazil and Mexico, and a variety of other

positive economic events around the world suggested that the results of
globalization were indeed good for development in poorer countries, as well
as in richer ones. During the 1990s, the United States experienced one of its
most sustained periods of growth as well, and there was much talk of a "new
economy", based on globalization, which was immune to economic shocks
and recession.
Unfortunately, this rapid growth was not without consequences. The Seattle
meetings of the World Trade Organization turned into a fiasco, with anti-
globalization groups demonstrating against globalization on all fronts—from
animal rights to environmental concerns, poverty alleviation, and jobs for
Americans. The anti-globalization forces have not coalesced into a coherent
whole because they represent such diverse and often contradictory views.
The vehemence of their protests, however, makes it clear that globalization
is not a panacea for the world's problems. In addition, the Asian Tigers
suffered major economic setbacks in the late 1990s. In 2002, Argentina's
economy, which had been one of the stars of the 1990s, crashed, when the
country could no longer maintain its currency at par with the U.S. dollar.
Further problems occurred in the Triad economies. Japan, Europe, and the
United States, often referred to as the Triad, dominated international trade
and investment for much of the second half of the twentieth century. The
Japanese economy went into a severe period of recession and deflation in
the late 1990s, and in 2001 both the European and the U.S. economies took
a downward turn as well. In turn, the rest of the world was negatively
affected by the economic situation in the Triad. The terrorist attacks in the
United States in September, 2001, exacerbated this already negative
economic situation.
In developing appropriate global strategies, managers need to take the

benefits and drawbacks of globalization into account. A global strategy must
be in the context of events around the globe, as well as those at home.
International strategy is the continuous and comprehensive management

technique designed to help companies operate and compete effectively
across national boundaries. While companies' top managers typically
develop global strategies, they rely on all levels of management in order to
implement these strategies successfully. The methods companies use to
accomplish the goals of these strategies take a host of forms. For example,
some companies form partnerships with companies in other countries, others
acquire companies in other countries, others still develop products, services,
and marketing campaigns designed to

Table: 1 Differences between Domestic and International Strategy
Domestic Conditions Global Conditions
Factors
Culture Homogeneous Heterogeneous
Currency Uniform Different currencies and exchange rates
Economy Stable and uniform May be variable and unpredictable
Government Stable May be unstable
Labour Skilled workers available Skilled workers may be hard to find
Language Generally a single language Different languages and dialects
Marketing Many media, few restrictions May be fewer media and more restrictions
Transport Several competitive modes May be inadequate
Source: World Bank

Appeal to customers in other countries. Some rudimentary aspects of
international strategies mirror domestic strategies in that companies must
determine what products or services to sell, where and how to sell them,
where and how they will produce or provide them, and how they will
compete with other companies in the industry in accordance with company
goals.
The development of international strategies entails attention to other details

that seldom, if ever, come into play in the domestic market. These other
areas of concern stem from cultural, geographic, and political differences.
Consequently, while a company only has to develop a strategy taking into
account known governmental regulations, one language (generally), and one
currency in a domestic market, it must consider and plan for different levels

and kinds of governmental regulation, multiple currencies, and several

languages in the global market.
The most recent wave of globalization by U.S. companies began in the

1980s, as companies began to realize that concentrating on the domestic
market alone would lead to stagnant sales and profits and that emerging
markets offered many opportunities for growth. Part of the motivation for
this globalization stemmed from the lost market share in the 1970s to
multinational companies from other countries, especially those from Japan.
Initially, these U.S. companies tried to emulate their Japanese counterparts
by implementing Japanese-style management structures and quality circles.
After adapting these practices to meet the needs of U.S. companies and
recapturing market share, these companies began to move into new markets
to spur growth, enable the acquisition of resources (often at a cost
advantage), and gain competitive advantage by achieving greater
economies of scale.
The globalization of U.S. companies has not been without concerns and
detractors. Exporting U.S. jobs, exploiting child labor, and contributing to
poverty have all been charges laid at the doors of U.S. companies. These
charges have been accompanied by demonstrations and consumer boycotts.
Nor have U.S. companies been the only ones affected. Companies in the rest
of the developed world have globalized along with U.S. companies, and they
have also faced the sometimes negative consequences.
Interestingly, in the late twentieth and early twenty-first century, there has
also been a growth in international companies from developing and
transitional countries, and this trend can be expected to continue and
increase. Exports and investment from the People's Republic of China are a
notable example, but companies from Southeast Asia, India, South Africa,
and Latin America, to name some countries and regions, are making
themselves known around the world.
TYPES OF GLOBAL BUSINESS ACTIVITIES

Businesses may choose to globalize or operate in different countries in four
distinct ways: through trade, investment, strategic alliances, and licensing or
franchising. Companies may decide to trade tangible goods such as
automobiles and electronics (merchandise exports and imports).
Alternatively, companies may decide to trade intangible products such as
financial or legal services (service exports and imports).
Companies may enter the global market through various kinds of
international investments. Companies may choose to make foreign direct
investments, which allow them to control companies and assets in other
countries. In addition, companies may elect to make portfolio investments,

by acquiring the stock of companies in other countries in order to gain

control of these companies.
Another way companies tap into the global market is by forming strategic
alliances with companies in other countries. While strategic alliances come in
many forms, some enable each company to access the home market of the
other and thereby market their products as being affiliated with the well-
known host company. This method of international business also enables a
company to bypass some of the difficulties associated with
internationalization such as different political, regulatory, and social
conditions. The home company can help the multinational company address
and overcome these difficulties because it is accustomed to them.
Finally, companies may participate in the international market by either

licensing or franchising. Licensing involves granting another company the
right to use its brand names, trademarks, copyrights, or patents in exchange
for royalty payments. Franchising, on the other hand, is when one company
agrees to allow a company in another country to use its name and methods
of operations in exchange for royalty payments.
OVERVIEW OF INTERNATIONAL STRATEGY

DEVELOPMENT
Generally, a company develops its international strategy by considering its
overall strategy, which includes its operations at home and abroad. We can
consider four aspects of strategy: (1) scope of operations, (2) resource
allocation, (3) competitive advantage, and (4) synergy. The first component
encompasses the geographic locations—countries and regions—of possible
operations as well as possible markets or niches in various regions. Since
companies have limited resources and since different regions offer different
advantages, managers must select the markets that offer the company the
optimal opportunities.
The second component of the global strategy focuses on use of company

resources so that a company can compete successfully in the chosen
markets. This component of strategy planning also determines the relative
importance of various company functions and bases the allocation of
resources on the relative importance of each function. For instance, a
company may decide to allocate its resources based on product lines or
geographical locations.
Next, management must decide where the company can achieve

competitive advantage over other companies in the industry. Management
can identify their competitive advantage by determining what the company
does better (or can do better) than its competitors. Companies may realize
this advantage through a host of techniques such as using superior
technology, implementing more efficient organizational practices and

distribution systems, and cultivating well-known brands. This component of

the strategy involves not only identifying existing or potential areas of
competitive advantage but also developing a plan for sustaining areas of
competitive advantage. Finally, global strategy should involve establishing a
plan for the company that enables its various functions and operations to
benefit one another. For example, a company can use one line of products to
encourage sales of another line of products and thereby enabling different
parts of a business to benefit from each other.
Many companies are now outsourcing many of their operations

internationally. For example, if you call to get information on your credit
card, you may well be talking to someone in India or Mexico. Equally,
manufacturers often outsource production to low labor cost countries.
Concerns over ethical issues, such as slave and child labor, have led to
companies outsourcing under controlled conditions—offshore production
may be subject to surprise visits and searches and outsourced factories are
required to conform to specific criteria.
Stages of International Strategy

Development
Strategy development itself generally takes places in two stages: strategy
formulation and strategy implementation. When planning a strategy,
companies identify their international objectives and put together a strategy
that will enable them to realize their goals. During the planning stage
managers propose, revise, and finally ratify plans for entering new markets
and competing in them.
After a strategy has been agreed on, managers must take steps to have it
implemented. Consequently, this stage involves determining when to begin
global operations as well as actually starting operations and putting into
action the other components of the global strategy.
More specifically, the first stage—strategy formulation—entails analysis of

the company and its environment, establishing strategic goals, and
developing plans to achieve goals as well as a control framework. By
assessing itself and the global business environment, a company can
determine what markets, products, services, etc. offer opportunities for
growth. This process involves the collection of data on a company and its
environment, including information on global markets, regulation,
productivity, costs, and competitors. Therefore, the collection of data should
supply managers with economic, financial, political, legal, and social
information on various countries and their markets for different products or
services. Based on this information, managers can determine what markets
and products offer economically feasible opportunities for global expansion.

Once this analysis is complete, managers must establish strategic goals,

which are the significant goals a company seeks to achieve through a
particular pursuit such as entering a new regional market. These goals must
be practicable, measurable, and limited to a specific time frame. After the
strategic goals have been established, companies should develop plans that
allow them to accomplish their goals, and these plans should concentrate on
how to implement strategic plans. Finally, strategy formulation involves a
control framework, which is a process management uses to help ensure that
a company remains on the right course when implementing its strategic
plans. The control framework essentially responds to various developments
while the strategic plans are being implemented. For example, if sales are
lower than the projected sales that are part of the strategic goals, then a
company might increase its marketing efforts and temporarily lower its
prices to stimulate additional sales.
International Market Evaluation

While many aspects of international strategy and its formulation are similar
to their domestic counterparts, some key aspects are not, and hence call for
different methods and different kinds of information. Gaining knowledge of
international markets is one of these key differences—and a crucial part of
developing an international strategy. In order for a company to enter a new
market, capture market share, and thereby increase sales and profits, it
must know what that market is like. At a basic level, a company must
examine different markets, evaluate the advantages and disadvantages of
entering each, and select only the markets that show the greatest potential
for entry and growth.
When examining different international markets, a company should consider
the market potential, competition, regulation, and cultural factors of each.
Company managers can assess market potential by collecting data on the
gross domestic product (GDP), per capita GDP, population, transportation,
and other figures of various countries. This kind of information will enable
managers to determine the spending power of the consumers in each
country and determine if that spending power allows them to purchase a
company's

Table: 2 Differences between Domestic and International Strategy

GDP per Capita (2003 Estimate in

Country US$)
Luxembourg 55,100
United States 37,800
Norway 37,700
Bermuda 36,000
Cayman Islands 35,000
San Marino 34,600
Switzerland 32,800
Denmark 31,200
Iceland 30,900
Austria 30,000
Products or services. Managers also should consider the currency stability of

the different markets, which can be done by using documents from the home
countries to determine currency value and fluctuation over a period of years.
To select the best markets for entry, managers also should consider the
degree of competition within different markets and should anticipate future
competition in them as well. Determining the degree of competition involves
the identification of all the companies competing in the prospective markets
as well as their sizes, market shares, and prices. Managers then should
evaluate a prospective market by considering the number of competitors and
their characteristics as well as the market conditions—that is, whether the
market is saturated with competition and cannot support any new entrants.
Next, managers should evaluate the regulatory environment of the

prospective markets, since knowing tax, trade, and other related policies is
essential for a successful international business. This step entails
determining the respective tariffs and trade barriers of prospective markets.
Different types of trade barriers may influence the kind of business activity a
company chooses for a particular market. For example, if a prospective
market has trade barriers that restrict the entry of foreign-made goods, a
company might decide to access the market through foreign direct
investment and manufacture its products in that country itself. Ownership
restrictions also may limit a company's interest in a particular market; some
countries permit foreign companies to set up local operations only if they
establish a partnership with a local company. In addition, managers should
find out if prospective countries charge foreign companies higher taxes or if
they offer tax breaks and incentive to encourage economic development. A
final consideration companies must make concerning government is stability.
Since some countries have rough government transitions resulting from
coups and uprisings, companies must countenance the possibility of political
turmoil that could substantially disrupt business.

The last step in international market evaluation is the assessment of cultural

factors. To avoid difficulties associated with cultural differences, some
managers look for new markets that have cultural similarities to their home
market, especially for initial international market penetration endeavors.
Unlike market potential, competition, and regulation, cultural differences are
more difficult to evaluate. Nevertheless, managers must try to determine the
consumer needs and preferences in the prospective markets. Managers must
also account for cultural differences in labor relations such as worker
motivation, compensation, hours, etc. if planning foreign direct investment in
an overseas company. Moreover, a thorough understanding of a prospective
country's culture will greatly facilitate any kind of global business enterprise.
This cultural knowledge should include a basic understanding of a
prospective country's beliefs and attitudes, language and communication
styles, dress, food preferences and customs, time and time consciousness,
relationships, values, and work ethic. This kind of cultural information is
essential for developing an effective and realistic global strategy.
Since conducting primary research is labor intensive and time consuming,

managers may obtain preliminary information on prospective markets from
books such as Dun & Bradstreet's Guide to Doing Business Around the World
and Business Protocol: How to Survive and Succeed in Business, or the
Economist's "Doing Business in…" series, which list potential trade
opportunities, policies, etiquette, taxes, and so on for various countries.
After examining the prospective markets in this manner, managers are ready
to evaluate the advantages and disadvantages of each potential market. One
way of doing so is the determination of costs, advantages, and
disadvantages of each prospective market. The costs of each market include
direct costs and opportunity costs. Direct costs are those a company pays
when establishing a business in a new market, such as costs associated with
purchasing property and equipment and producing and shipping goods. An
Opportunity cost, on the other hand, refer to the costs associated with the
loss of other opportunities, since entering one market rules out or postpones
entering another because of a company's limited resources. Hence, the
profits that could have been earned in the alternative market constitute the
opportunity costs.
Each prospective market usually has a variety of advantages, such as the

possibility for growth, which will lead to greater revenues and profits. Other
advantages include relatively low material and labor costs, new technology
gaining strategic advantage over competitors, and matching competitors'
actions. However, each prospective market also usually has a number of
disadvantages, including opportunity costs, greater business complexity, and
potential losses stemming from unforeseen aspects of prospective markets

and from currency fluctuations. Other disadvantages might result from

potential losses associated with unstable political conditions.
Analysis of Two International Strategies
In the late 1990s after a significant amount of globalization had taken place,
business analysts began to examine the success of various strategies for
doing business in other countries. This examination led to the distinction
between various orientations of international strategies. The main distinction
was between multi-domestic (also called multi-local) international strategies
and global strategies. Multi-domestic international strategies refer to those
that address competition in each country or region on an individual basis,
whereas global strategy refers to addressing competition in an integrated
and holistic manner across country and regional boundaries. Hence, multi-
domestic international strategies attempt to appeal to the needs of
customers in different countries or regions, while global strategies attempt to
standardize products and marketing to work across boundaries. Instead of
relying on one of these strategies, multinational companies might adopt a
different strategy for different products or services. For example, a company
might use a global strategy for its electronics and a multi-domestic strategy
for its appliances.
Critics of the standardization approach argue that it makes two questionable

assumptions: that consumer' needs are becoming more homogenous
throughout the world and that consumers prefer high quality and low prices
over advanced features and functions. Nevertheless, standardized global
strategies have some significant benefits. Companies can reduce their
marketing expenditures, for example, if they use the same ads in all their
markets. PepsiCo, for example, uses the same televisions ads in all of its
national markets, saving an estimated $10 million a year. Besides marketing
savings, global strategies can lead to other kinds of benefits and advantages
in areas such as design, packaging, manufacturing, distribution, customer
service, and software development.
Some people argue that companies must customize their products or

services to meet the needs of various international markets, and hence must
use a multi-domestic strategy at least in part. For example, KFC planned a
standardized approach to its foray into the Japanese market, but the
company soon realized it had to change its strategy to meet the needs of
Japanese consumers and customize its operations in Japan. Consequently,
KFC introduced smaller pieces of foods to cater to a Japanese preference,
and located restaurants in crowded areas along with other restaurants,
moving away from independent sites. As a result of these changes, the fast-
food restaurant experienced stronger demand in Japan.
The development of regional trading blocs has promoted an emphasis

regional strategy as companies develop plans to take advantage of the
conditions within various trading blocs such as the North American Free

Trade Agreement (NAFTA), the European Union, the Asia-Pacific Economic

Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN).
In addition, the United States has signed 16 different trade agreements with
South American countries, creating a foundation for a trading bloc consisting
of all North and South American countries. Consequently, companies have
been establishing regional strategies designed around these trading blocs.
Nike, for example, established central warehouses for its European
distribution, just as it has a central warehouse for its U.S. distribution. This
strategy has enabled Nike to reduce its inventory, cut down on redundancy,
reduce costs, and enhance availability. In addition, News Corporation
originally relied on a global strategy with its STAR-TV satellite television
network; attempting to provide the same television shows across Asia in
English. The company quickly switched to a multi-domestic strategy,
providing programming in local languages after receiving low ratings and
advertising dollars with its first approach.
5: (b) Describe the growth of any international business

through related diversification and through unrelated
diversification.
Answer)
Diversification is a form of corporate strategy for a company. It seeks to

increase profitability through greater sales volume obtained from new
products and new markets. Diversification can occur either at the business
unit level or at the corporate level. At the business unit level, it is most likely
to expand into a new segment of an industry which the business is already
in. At the corporate level, it is generally and it is also very interesting
entering a promising business outside of the scope of the existing business
unit.
Diversification is part of the four main marketing strategies defined by the
Product/Market Ansoff matrix:
Ansoff pointed out that a diversification strategy stands apart from the other
three strategies. The first three strategies are usually pursued with the same
technical, financial, and merchandising resources used for the original
product line, whereas diversification usually requires a company to acquire
new skills, new techniques and new facilities.

The different types of diversification strategies

The strategies of diversification can include internal development of new products
or markets, acquisition of a firm, alliance with a complementary company, licensing
of new technologies, and distributing or importing a products line manufactured by
another firm. Generally, the final strategy involves a combination of these options.
This combination is determined in function of available opportunities and
consistency with the objectives and the resources of the company.
There are three types of diversification: concentric, horizontal and conglomerate:
Concentric diversification
This means that there is a technological similarity between the industries, which
means that the firm is able to leverage its technical know-how to gain some
advantage. For example, a company that manufactures industrial adhesives might
decide to diversify into adhesives to be sold via retailers. The technology would be
the same but the marketing effort would need to change. It also seems to increase
its market share to launch a new product which helps the particular company to
earn profit. However, there's one more example, Addition of tomato ketchup and
sauce to the existing "Maggi" brand processed items of Food Specialties Ltd. is an
example of technological-related concentric diversification.
Horizontal diversification
The company adds new products or services that are technologically or
commercially unrelated (but not always) to current products, but which may appeal
to current customers. In a competitive environment, this form of diversification is
desirable if the present customers are loyal to the current products and if the new
products have a good quality and are well promoted and priced. Moreover, the new
products are marketed to the same economic environment as the existing products,
which may lead to rigidity and instability. In other words, this strategy tends to
increase the firm's dependence on certain market segments. For example company
was making note books earlier now they are also entering into pen market through
its new product.
Another interpretation
Horizontal integration occurs when a firm enters a new business (either related or
unrelated) at the same stage of production as its current operations. For example,
Avon's move to market jewelry through its door-to-door sales force involved
marketing new products through existing channels of distribution. An alternative
form of that Avon has also undertaken is selling its products by mail order (e.g.,
clothing, plastic products) and through retail stores (e.g., Tiffany's). In both cases,
Avon is still at the retail stage of the production process.
Conglomerate diversification (or lateral diversification)

The company markets new products or services that have no technological or
commercial synergies with current products, but which may appeal to new groups
of customers. The conglomerate diversification has very little relationship with the
firm's current business. Therefore, the main reasons of adopting such a strategy are
first to improve the profitability and the flexibility of the company, and second to
get a better reception in capital markets as the company gets bigger. Even if this

strategy is very risky, it could also, if successful, provide increased growth and
profitability.
Why Diversification?
The two principal objectives of diversification are
1. Improving core process execution, and/or
2. Enhancing a business unit's structural position.
The fundamental role of diversification is for corporate managers to create value for
stockholders in ways stockholders cannot do better for themselves1. The additional
value is created through synergetic integration of a new business into the existing
one thereby increasing its competitive advantage.
Forms and Means of Diversification

Diversification typically takes one of three forms:
1. Vertical integration – along your value chain
2. Horizontal diversification – moving into new industry
3. Geographical diversification – open up new markets
Means of achieving diversification include internal development, acquisitions,
strategic alliances, and joint ventures. As each route has its own set of issues,
benefits, and limitations, various forms and means of diversification can be mixed
and matched to create a range of options.
Capitalizing on Core Competencies
Your company's core competencies – things that you can do better than your
competitors – can often be extended to products or markets beyond those in which
they were originally developed. Such extensions represent excellent opportunities
for diversification.
Any core competence that meets the following three requirements provides a viable
basis for your corporation to create or strengthen a new strategic business unit
(SBU):
1. The core competence must translate into a meaningful competitive
advantage.
2. The new business unit must have enough similarity to existing businesses to
benefit from your corporation's core competencies.
3. The bundle of competencies should be difficult for competition to imitate.
Case in Point Philip Morris

When it considered diversification targets, Philip Morris believed that the core
competence it had developed in marketing cigarettes could apply to other, similar
markets. Based on this belief, the company purchased Miller Brewing and then used
the Philip Morris marketing skills to move the Miller brand from seventh place to
second in its market.
Case in Point Toyota, Nissan, and Honda

In late 1980s, Toyota, Nissan, and Honda moved into adjacent market segments.
They launched luxury cars Lexus, Infinity, and Acura respectively to compete with
BMW and Mercedes. The Japanese cars were priced about one-third lower and had a
superior service network. The value proposition was solid enough to win over
potential and current BMW and Mercedes customers, despite the power of their
brands. Yet the Japanese also expanded this profitable segment as a whole

Case in Point GE
Jack Welch transformed GE from a purely manufacturing company into a more
diversified company with an increasingly important service component. In his 1996
annual report, Welch wrote: "Services is so great an opportunity for the Company
that our vision for the next century is GE that is 'a global service company that also
sells high-quality products.'" When asked if GE was going to become a more
product-oriented or service-oriented company, Welch replied, "It's got to be a big
combination... It's an integrated game." In 1996, GE Capital Services earned US$4
billion. In 2005, GE services agreements increased to $87 billion, up 15% from
2004. In particular, financial services revenues increased 12% to $59.3 billion.


Assignment Ist 887 BP&amp;M

Încărcat de

Informații document

Descriere originală:

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Assignment Ist 887 BP&amp;M

Încărcat de

Drepturi de autor:

Formate disponibile

Tutor –Prof.

Q. No. 1: Develop your vision and mission statement for an organization

NATIONAL PUBLIC RADIO PURPOSES:

Early in 1970, Bill Siemering — one of the organizers of

“Mission Statements” and “Vision Statements” do two distinctly different jobs.

A Mission Statement defines the organization's

Such statements of purpose are only platitudes and good intentions

M.SOHAIL AZAM/ AD511997

The priorities of NPR program development:

1. Provide an identifiable daily product which is consistent and reflects

1. Provide an identifiable daily product which is consistent and

Because National Public Radio begins with no identity of its own it is

M.SOHAIL AZAM/ AD511997

There may be regular features on consumer information, views of

Philosophically, time is measured by the intensity of experience.

2. Provide extended coverage of public events, issues and

Broadcasting of public hearings and public affairs programs is not

By teaching that the constitutional system of the United States

He believes the legalistic curriculum should be "balanced if not

M.SOHAIL AZAM/ AD511997

governmental regulatory agencies as well. If no government body is

Television, commercial or noncommercial, says it can attend a

Because the cost of radio coverage is one-tenth television coverage,

National Public Radio, through public affairs programs, would not

Everyone is aware that stopping environmental pollution is critical

3. Acquire and produce cultural programs which can be

Susan Sontag wrote, "Art today is a new kind of instrument, an

M.SOHAIL AZAM/ AD511997

contemporary life. Understanding is both more essential and more

 Listeners could gain a contemporary view of the world through

M.SOHAIL AZAM/ AD511997

4. Provide access to the intellectual and cultural resources of

One of the unique aspects of National Public Radio is that each

Initially, many stations may lack the skilled personnel or experience

5. Develop and distribute programs for specific groups (adult

The implementation of this priority will provide needed diversity of

M.SOHAIL AZAM/ AD511997

Most public radio stations have developed several distinct program

The largest specialized audience programming has been

Programs in the "by and for" specific cultural, ethnic minorities’

In order to provide minorities access to the medium, it is not only

National Public Radio could also supply modular program units to

M.SOHAIL AZAM/ AD511997

interest to stations in that region. There may be interviews with

6. Establish liaison with foreign broadcasters for a program

Although presently overwhelmed by domestic problems, the

Contact can be established with the Canadian Broadcasting

In addition to the cultural fare usually associated with international

7. Produce materials specifically intended to develop the art

There should be a close working relationship with the National

M.SOHAIL AZAM/ AD511997

transmission of material by satellite. National Public Radio should

odfrey Featherstone, writing in the British publication Anarchy

Using sounds alone, with no imposed pictures or rigid, linear print

Vision and Mission: Seven Suggestions Why You Need Both

1. The awareness of mission and vision has three major

• There are many books, articles, conferences speakers that

M.SOHAIL AZAM/ AD511997

belong to researchers and high level consultants is now

2. Funding requirements are now as never before asking for the

What exactly are a mission and a vision?

A mission and a vision are statements that have been written to

• A mission is what an organization does, its action; a vision is

Assignment Ist 887 BP&M

Assignment Ist 887 BP&M