Md.

Rejaur Rahman Mirdha

Kays-Uz-Zaman Md. Naziur Rahman Nafiz-Uz-Zaman Md. Betab Hossen Khalashey Mahabub Asif Bappy Syed Rafi Hasan Md. Reaz Bin Jafor Nadim Hossain Ankur Roy

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366 434 444 462 49(Others) 114434 114585 114453 114573

Definitions
Strategy : Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations. Strategic Management : The systematic analysis of the factors associated with customers and competitors and the organizations itself to provide the basis for maintaining optimum management practices. The objective of strategic managements to achieve better alignment of corporate policies and strategic priorities.

Levels and Types of Planning

Strategic Formulation
Strategic Formulation
Managers work to develop the set of strategies (corporate, divisional, and functional) that will allow an organization to accomplish its mission and achieve its goals.

Porter's Five Forces Model Formulating Business-Level Strategies Formulating Corporate-Level Strategies

Porter's Five Forces Model

Formulating Business-Level Strategies Low-Cost Strategy

Driving the organizations total costs down below the total costs of rivals.
Manufacturing at lower costs, reducing waste. Lower costs than competition means that the low cost producer can sell for less and still be profitable. Differentiation
Distinguishing the organizations products from those of competitors on one or more important dimensions.
Differentiation must be valued by the customer in order for a producer to charge more for a product.

Formulating Business-Level Strategies

Stuck in the Middle

Attempting to simultaneously pursue both a low cost strategy and a differentiation strategy. Difficult to achieve low cost with the added costs of differentiation. Focused Low-Cost
Serving only one market segment and being the lowest-cost organization serving that segment. Focused Differentiation Serving only one market segment as the most differentiated organization serving that segment.

Principal Corporate-Level Strategies

1. 2. 3. 4. Concentration on a single industry Vertical integration Diversification International expansion

Formulating Corporate-Level Strategies

Concentration in Single Business
Organization uses its functional skills to develop new kinds of products or expand its locations Appropriate when managers see the need to reduce the size of their organizations to increase performance

SWOT Analysis
SWOT analysis is a method for analyzing a business, its resources, and its environment.
SWOT is commonly used as part of strategic planning and looks at: 1. Internal strengths 2. Internal weaknesses 3. Opportunities in the external environment 4. Threats in the external environment
SWOT can help management in a business discover: What the business does better than the competition? What competitors do better than the business? Whether the business is making the most of the opportunities available? How a business should respond to changes in its external environment? The result of the analysis is a matrix of positive and negative factors for management to address:

SWOT Analysis
Strengths
Positive tangible and intangible attributes, internal to an organization. They are within the organizations control.

Weaknesses

S
O

W T

Factors that are within an organizations control that detract from its ability to attain the desired goal. Which areas might the organization improve?

Opportunities
External attractive factors that represent the reason for an organization to exist and develop. What opportunities exist in the environment, which will propel the organization? Identify them by their time frames.

Threats
External factors, beyond an organizations control, which could place the organization mission or operation at risk. The organization may benefit by having contingency plans to address them if they should occur. Classify them by their seriousness and probability of occurrence.

SWOT Analysis of Aarong

SWOT Analysis of Aarong

SWOT Analysis of Aarong

SWOT Analysis of Aarong

Strategy based on Product Life Cycle

Product life cycle :

The product life cycle is a model that shows how sales volume changes over the life of product. According to Straub & Athner, Product life cycle means the succession of phases including the introduction, growth, maturity and decline of product in its market.

Characteristics of PLC
1. Introduction stage
costs are very high slow sales volumes to start little or no competition demand has to be created customers have to be prompted to try the product makes no money at this stage

2. Growth stage
costs reduced due to economies of scale sales volume increases significantly profitability begins to rise public awareness increases competition begins to increase with a few new players in establishing market increased competition leads to price decreases

Characteristics of PLC
3. Maturity stage
costs are lowered as a result of production volumes increasing and experience curve effects sales volume peaks and market saturation is reached increase in competitors entering the market prices tend to drop due to the proliferation of competing products brand differentiation and feature diversification is emphasized to maintain or increase market share Industrial profits go down 4. Decline stage costs become counter-optimal sales volume decline prices, profitability diminish profit becomes more a challenge of production/distribution efficiency than increased sales

Planning and Implementing Strategy 1. Allocate implementation responsibility to the appropriate individuals or groups. 2. Draft detailed action plans for implementation. 3. Establish a timetable for implementation 4. Allocate appropriate resources 5. Hold specific groups or individuals responsible for the attainment of corporate, divisional, and functional goals.

Portfolio Strategy
Portfolio Strategy
Determines the mix of business units and product lines that will provide a maximum competitive advantage

Strategic Business Units

Autonomous businesses with their own identities but operating within the framework of the organization

BCG Growth-Share Matrix

The Boston Matrix:
A means of analysing the product portfolio and informing decision making about possible marketing strategies Developed by the Boston Consulting Group a business strategy and marketing consultancy in 1968 Links growth rate, market share and cash flow

Classifications of BCG
Stars :
Products in markets experiencing high growth rates with a high or increasing share of the market Potential for high revenue growth Worth spending money to promote Consider the extent of their product life cycle in decision making

Classifications of BCG
Cash Cows:
High market share Low growth markets maturity stage of PLC Low cost support High cash revenue positive cash flows

Classifications of BCG
Dogs:
Products in a low growth market Have low or declining market share (decline stage of PLC) Associated with negative cash flow May require large sums of money to support

Classifications of BCG
Question Mark (??):
- Products having a low market share in a high growth market - Need money spent to develop them - May produce negative cash flow - Potential for the future?