Download - SM Notes for IPCC
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SHORTEST TRICK FOR GETTING GOOD MARKS IN IT-SM
Summary Notes CA-IPCC
Please read your book first and after go through
these notes, it is writing in a summarizing manner,
when you read this at the time of revision, this will
help you. Best of luck for your exams. Yogesh Gupta
By:
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H T T P : / / Y O G E S H G U P T A R O H T A K . B L O G S P O T . C O M
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With Blessings of:
Dedicate to:
My family, My Teachers & my friends
Yogesh Gupta (Author)
While every effort has been taken avoid errors, the author and other his teachers,
knowledge partners, mentors, Gurus are not responsible for the consequences of
any action taken on the basis of this notes/book, because Im also a student. Any
suggestion, improvement, complaint are requested from you.
Mail me: [email protected]
ALL THE BEST
HAPPY READING
YOGESH GUPTA yogeshguptarohtak.blogspot.com
Fb.com/CAYogeshGuptaa
Mail me your review at: [email protected]
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YOGESH GUPTA
Student CA-Final, CS-Executive Bachelor in Buss. Admn.
Visit me at: yogeshguptarohtak.blogspot.com Write me at: [email protected]
Prepared by: Yogesh Gupta -Page No: 1- http://facebook.com/mr.yogeshgupta For more notes: [email protected] visit me at: http:// yogeshguptarohtak.blogspot.com
CHAPTER-1 (Business Environment)
ELEMENT OF BUSINESS ENVIRONMENT PORTERS MODEL OF COMPETITION
MICRO MACRO a. Threatness of new entrance, b. Threatness of new substitute,
c. Bargaining power of Buyers, d. bargaining power of Suppliers, Rivalry among
current players
a. Customer b. Suppliers c. Organizational employees d. Competitors e. Market f. Intermediaries
1. Government 2. Economic conditions 3. Legal setup 4. Political setups 5. Technological changes 6. Social 7. Culture 8. Global
CHAPTER-2 (Business Policy & SM) STRATEGY VISION MISSION
An analysis of situation & then planning and implementation of activities to achieve desired goals or objectives.
Road map to future, indicate the kind of company management, also specify the company intentions and capabilities. Include Mission Statement; define who we are and where are we now? (DEFINE PRESENTLY)
Element of company vision and future position & growth ambition, provide foundation to the future aim of Organization. (WHERE COMPANY WANT TO BE IN FUTURE)
OBJECTIVE OF BUSINESS [PGSES]
RELATIONSHIP BETWEEN ORGANISATION & ENVIRONMENT
COOPERATION IN COMPETITIVE ENVIRONMENT
a. Profitability, b. Growth, c. Stability,
d. Efficiency, e. Survival
a. Exchange of Information b. Exchange of resources c. Exchange of Power & influence
a. Cartelization, b. Kieretsu, c. Internal cooperation/Family owned
competition
PROCESS & FRAMEWORK OF SM STRATEGIC LEVELS IN ORGANIZATION
GENERAL STRATEGIC ALTERNATIVES
a. Forming vision & setting objectives b. Development strategy to achieve
vision & objectives. c. Implement & execution of strategy d. Feedback/making adjustments
overtime.
a. Corporate level b. Business level c. Function level
a. Stability b. Expansion c. Retrenchment d. Combination
GSA DECISION MAKING
1. Top mgmt involvement 2. Allocation of large resources 3. Impact on long run 4. Future oriented 5. Multifunctional 6. Internal & External
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SUPER NOTES FOR IPCC
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CHAPTER-3 (Strategic Analysis)
STRATEGIC ANALYSIS ISSUES SHOULD BE CONSIDERS
STRATEGIC ANALYSIS
After formulating vision, mission & objectives of the org., it is necessary to dissect the external and internal environment of the org. to formulate a long term strategy to achieve these mission & objectives. This is not only a talking event of managers, where managers can get some creative & innovative thinking & opinions only, but also takes decisions about the pursuing of strategy in external & internal environment. Two most important analysis of external & internal environment are:
Industry and competitive analysis Analysis of org. SWOT, capabilities, internal resources.
Timeline (Result of small decisions) Balance (between internal potentials&
opportunities) Risk (which is included in business i.e.
Short term or long term and Internal or external)
SITUATION ANALYSIS ANALYSIS OF EXTERNAL & INTERNAL ENVIRONMENT
MEANING ELEMENTS IN SA Situation analysis tries to identify the risk & access their consequences.
Product Analysis
Competition Analysis
Distribution Analysis
Environment Analysis
Opportunities & Issues
SWOT ANANLYSIS INDUSTRY AND COMPETITIVE ANALYSIS FACTORS:
Strength-Inherent Capabilities Weakness-Inherent weakness Opportunities-favorable situation Threats- unfavorable situation
Significant of SWOT Analysis: Logical framework Relationship/comparative
analysis Strategy Identification.
Dominant economic feature of industry.
Nature & strength of competition Trigger of change Identifying strongest & weakest
positioned cos Likely strategic moves of rivals. Key factors for competitive success. Financial attractiveness of industry
TOWS Matrix PORTFOLIO ANALYSIS
Developed by: Heinz Weihrich Its a comparison of SW of an
org. with T.O. of org.
External
Opportunities (O)
External Threats
(T)
Internal Strength
(S) SO
Maxi-maxi strategy
ST Maxi- Mini strategy
Internal
Weakness (W) WO
Mini-maxi strategy
WT Mini- Mini strategy
TOWS Matrix
Meaning: Manage set of product, business units & companies. Concepts:
a. Strategic Business Unit- (SBU is a unit of the company that has a separate mission & objectives, which can be planned independently from other cos business)
b. Experience cycle- (EC also known learning curve is based on the commonly observed phenomenon that avg. cost per unit decrease at the cumulative production)
c. Product life cycle-(every product passes through a life cycle from Introduction to Decline stage. PLZ is an S shaped curve.)These are: i) Introduction ii) Growth iii) Maturity iv) Decline
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SUPER SUMMARY NOTES
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PORTFOLIO ANALYSIS MODEL Boston Growth Share Matrix- BCG Matrix
Ansoffs Product market Growth Matrix
ADL Matrix GE/McKinsey Model
Display the various business units on a graph of the market growth rate vs. market share
relative to competitors.
Relative Market Share
---> (cash generation)
High Low
High Star Question
mark
Low Cash Cows
Dogs
(^cash usage)
Existing Product
New Product
Existing market
Market
Penetration
Product
Development
New market
Market Development
Diversification
Attempt to growth matrix suggest a
businesss attempts to grow depend on whether it market new or existing with as
well new or existing product.
Developed by Arthur D. Little. ADL analyzes portfolio on two dimensions first on industry
measurement is an identification of PLC of industry.
Industry VS FIRM
FIRM INDUSTRY
Introduction Dominant
Growth Strong
Maturity Favorable
Decline Tenable
Weak
High Medium Low
Hig
h
Invest Invest Protect
Mediu
m
Invest Protect Harves
t
Low
Protect Harvest Divest
Market
Growth
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SUPER NOTES FOR IPCC
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CHAPTER-4 (Testing-General & Automated control)
Grand Strategy
Stability Expansion
Intensification
Market Penetration
Market Development
Product Development
Diversification
Verticle Integration
Forward Backward
Concentric Diversification
Conglomerate Diversification
Retrenchment Combination
CORPORATE STRATEGY (CS)
STAGES OF CORPORATE STRATEGY
FORMULATION-IMPLEMENTATION
PROCESS
STRATEGIC ALTERNATIVES REASON FOR ADOPTING
GRAND STRATEGY
Every company/
corporate form a strategy known as CS.
It is a consist of competitive moves and
approaches to achieve successful performance of co. (Choice of business, market,
product) Mix of pro-active
and re-active strategy.
1. Developing strategic
vision. 2. Setting objective: Used
balance card approach. 3. Crafting & Designing a
strategy: Firstly check SW of org, secondly
competitors, thirdly determine the customer
needs. 4. Strategy
Implementation & Execution: Its like a management process.
5. Monitoring Evaluation review.
A. Cost Leadership- Produce at low cost for consumers, who is
price sensitive. Implement
then, when consumers do not
care brand to brand or large
number of buyers with
bargaining power. B. Differentiation- Provide
unique and different goods
from competitors. Charge from
customers for differentiation
and gain customers loyalty. C. Focus- Focus on the special
group of customers or
geographical market or
product line segment.
1) Stability-Less Risky, people feel comfortable, environment faced
is relatively stable & expansion
may be being threatening. 2) Expansion- when environment
demands increasing in pace of
activity, psychology & strategist
feels that in expansion is more
growth, control over the market. 3) Retrenchment-Environment
threatening, management has no
longer wishes to remain in
business, either partly or wholly due to continuous losses.
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SUPER SUMMARY NOTES
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CHAPTER-5 (Formulation Of Functional Strategy)
KEY FUNCTION STRATEGY
MARKETING FINANCE PRODUCTION LOGISTIC R&D HUMAN RESOURCES
This function satisfies the need of org. for which org. is formed i.e. serving customer. Mktg. always looks for long term profits and growth rather than immediate profit. Key Marketing Strategic Elements: Expanded
Marketing Mix-Addition to traditional 4Ps new are: people, physical evidence, process
Marketing Analysis-Identify environment O&T, analyze co. SW to determine the best opportunities.
Market Planning- involve deciding
that will help the co. attains its strategic obj.
Dealing with marketing environment-must carefully analysis
for avoiding the threats and gain opportunities.
Acquiring capital or source of funds, projected financial statement and Budget, mgmt & uses of funds, evaluate worth of business. Three approaches for Evaluation of Net Worth of Business: Determine Net
worth/ Stockholder equity, after that, add/less the value of goodwill and overvalued &
undervalued of assets.
Future Benefits, (Rule of Thumb)-5to 10 times of firms current year profits.
Based on 3 methods-
1. Base selling price of similar co. per unit of its capacity. 2. price earning ratio method:
X 5
3. Outstanding Share method:
No of share O/S X
MP per share +
Premium.
Production system concerned with capacity, location, design, and sequence of working. Production What to produce? How to produce? For whom to produce?
Production Strategy related to operation planning and controls are concerned with aggregate production planning, material supply, inventory, cost & quality management and maintenance of plant & equipment.
Flow of goods & material from source to destination i.e. suppliers to customer. Right materials are available at right place at a right time at right quality at right cost to the customers. Logistic Strategy helps in saving the cost. Effective logistic strategy can help business in: Cost saving Reduced
inventory holding time
Improve delivery time
Customer satisfaction
Competitive advantage
Developing new products
Improve old products
Designing technology
Proper technique to use Raw Material.
Three approaches to applying R&D strategy:
First firm to market new technology products
Innovative imitator of successful products.
Low cost produced by mass producing products.
Biggest challenge is to control Human alteration. The approx quarter of the profit consume for employee satisfaction and assurance or motivating them. HR Strategy cant be executed if there:
Social & analytical problems,
Attitude problem, Non-supportive
approach of top mgmt.
Following points are to be considered :
Selection & recruitment,
training, appraisal of
performance, compensation
Strategic role of HR Manager: Providing purposed directions, creating competitive atmosphere, facilitation of change, diversification of workforce, building core competency, development of work culture & ethics.
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SUPER NOTES FOR IPCC
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CHAPTER-6 (Strategic Implementation & Control)
INTER RELATIONSHIP BETWEEN STRATEGY FORMULATION &
IMPLEMENTATION
PRINCIPAL COMBINATION OF EFFICIENCY AND EFFECTIVENESS
FORWARD & BACKWARD
LINKAGE
FO
RM
ULA
TIO
N
Sound A B Flawed C D
Weak Excellent
IMPLEMENTATION
A: lack of experience, lack of leadership B: Best C: Business Model redesigning and implement readjustment D: have to do redesign their strategy before readjusting their implementation skills.
OP
ER
AT
ION
MA
NA
GE
ME
NT
Efficient 1 2
Inefficient 3 4
Effective Ineffective
STRATEGIC MANAGEMENT
A: Thrives and succeed B: Die Slowly C: Survive D: Die Quickly.
Strategy formulation changes in the org. for implementation in form of:
org. structure style of leadership flexibility to adapt new tech. etc.
STRATEGIC BUSINESS UNIT ( SBU) THE VALUE CHAIN ANALYSIS (VCA)
Grouping of businesses which are related. Purpose is to provide effective strategic planning treatment to each one of its
product/services. Concept is relevant to multi-product, multi-business enterprises.
Characteristics: Single business or collection of related business which offer scope for independent
planning & which might feasibility stand alone from the rest of org. He has own set of competition. Has a manager who is responsible for strategic planning & profit performance. Resource allocation
The company can gain competitive advantages not just beating its competitors, but discovering what the customers want and exceeding customer expectations. This is done by VCA.
Orgnaisational Structure
Functional Structure
CEO
General Manger -Accounts
General Manger-
Marketing
General Manger- HR
Multi divisonal
CEO
Division-1
Manager
Manager
Division-2
SBU
President
Corporate R&D
Corporate HR
SBU 1
D1
D2
SBU 2 SBU 3
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SUPER SUMMARY NOTES
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CHAPTER-7 (Reaching Strategic Edge)
BUSINESS PROCESSING REENGINEERING (BPR)
BENCHMARKING TOTAL QUALITY
MANAGEMENT (TQM) SIX SIGMA
BPR is redesigning of business process to achieve dramatic changes in the processes, in term of cost, time, performance quality and responsiveness to customers. Principle of BPR:
Single point responsibility
If work is paralleled then, there should be perfect co-ordination & common database.
Need of BPR: Because of
Outdated process Time & cost Need of IT Sub System view
Process/Steps in BPR:
1. Determine Obj. 2. Identifying customers
need 3. Study the existing
process 4. Formulate & redesign
of process 5. Implement to
redesigned process.
Benchmarking is an approach of setting goal & measuring productivity based on the best industry practice. Its provides standards against which performance can be measured. Process/Steps:
1. Planning 2. Data compilation 3. Analysis 4. Comparison 5. Reporting
6. Review
Include three terms: Total, Quality & Management TQM is mgmt approach for the org., centered on quality, based on the participation of all its members and aiming at long-term success through customer-satisfaction, and benefits to all members of org. and to society.
Principle in TQM:
1. Commitment 2. Culture 3. Continuous
Improvement 4. Co-Operation 5. Customer-focus 6. Control 7. Cross-functional 8. Cause analysis 9. Change 10. Concept of team.
Six Sigma provides the highest standard for the quality control of products and processes. Six sigma is a thorough and disciplined methodology that uses data & statistical analysis to measure & improve a companys products quality by identifying & eliminating DEFECTS in mfg. & service related process. Commonly defined six sigma standard 3.4 defects per million parts or 99.99966% of products manufactured are defect free. SS efforts target 3 main areas:
1. Improve Customer satisfaction 2. Reducing process cycle time 3. Reducing defects.
Two methodology of Six sigma:
1. DMAIC (for existing products) Define, Measure, Analyze, Improve, Control
2. DMADV (for new products) Define, Measure, Analyze, Design, Verify.
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About the Author: Hey friends, myself Yogesh Gupta, pursuing Chartered Accountancy
and company secretary Course. Im not so much minded as some other people; I just share my notes which help me in cracking my exams. I passed senior
secondary in 2008 in first division, after I passed Graduation Degree in
Business Administration (BBA) in June 2011.
There are some difficulties in my life thats why I CA after
senior secondary. But Jo bhi hota hai, ache ke liye hi hota hai, to mujhe is
baat ki koi tensions nahi hai. In December, 2010 in passed CA-CPT & CS-Foundation in first attempt, In November 2011; I gave both groups for CA-
IPCC, but only one group was cleared. So, I wrote papers in May 2012 for
Group-2, and cleared also second group. In December 2012, also clear the CS-
Executive in first sitting. Now, turn of crack inter stage of CShope for the best.
I also feel happy in preparing notes for my friends & studymates. Im
always working on my motto sirf apne liye hi to sab jeete hm different
so, kuch dusro ke liye b kru!
Im also a student, and Im always waiting for yours reviews. If you have any complaint or suggestion about it, so please feel free to write me.
[email protected] http://fb.com/mr.yogeshgupta
http://fb.com/CAYogeshGuptaa http://yogeshguptarohtak.blogspot.com