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MODULE 1

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1

INTRODUCTION & COURSE REVIEW

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2

CONCEPT OF STRATEGY

&

STRATEGIC MANAGEMENT

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PYRAMID OF BUSINESS POLICY

PROCEDURE AND STANDARD OPERATING PLAN

( Handlin in!"#in "$d%$' %$i!in !)*"#%$ !"#+lain*'

S,i++in *" -"$%in !")n*$i% .

FUNCTIONAL POLICIES

( Ma$/%*in' P$"d)!*i"n' R%%a$!,' Finan!%

Ma*%$ial & 0)ali* #ana%#%n* %*! .

MA3OR POLICY

Lin% "- 4)in%

( C"d% "- %*,i! .

SECONDRY POLICIES( S%l%!*i"n "- %"$a+,i!al a$%a'

#a5"$ !)*"#%$' #a5"$ +$"d)!* .

RULES

( D%li%$ "- +a !,%6)% 'l"i*%$in a$")nd +lan*' %!)$i*

S#"/in' )% "- !"#+an !a$ %*!.

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STRATEGY

7 GREE8 WORD STRATEGIA9 S!i%n!% "- )idin & Di$%!*in

7 COMPLE: PROCESSOF DETERMINING LONG TERM GOALS &

COURSE OF ACTIONS NEEDED TO BE CARRIED OUT' ALLOCATION OF

RESOURCES FOR CARRYING OUT THESE GOALS

MOVING FROM WHERE YOU ARE TO WHERE YOU WANT TO BE IN

NEAR FUTURE THROUGH A SERIES OF DECISIONS AND ACTIONS

7 PRE DETERMINED COURCE OF ACTION

7 HAS DEFINITE DIRECTION

7 SUSTAINABLE COMPETITIVE ADVANTAGE; D%li%$in )+%$i"$ al)% *"

*a$%* !)*"#%$ a* *,% a#% !"* "$ d%li%$in %6)al !)*"#%$

al)% a* l"

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STRATEGIC DECISION MA8ING7 SETTING REALISTIC GOALS; C,all%nin 4)* a!,i%a4l%

7 RATIONALITY; E=%$!iin 4%* !,"i!% a#"n al*%$na*i%

7 CREATIVITY; D%!ii"n !$%a*i% and "$iinal *,$"), 4$ain*"$#in

7 VARIABILITY ; E%$ i*)a*i"n i )ni6)%

7 DEMOGAFIC FACTORS; A% Ed)!a*i"n' In*%lli%n!%' Val)%

C"ni*i"n $i/ *a/in and !$%a*ii*

7 GROUP DECISION MA8ING; Pa$*i!i+a*i"n

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CONCERNS OF STATEGIC PLANNING

7 FUTURE

L"n *%$# dna#i! i i* !"n!%$n n"* da>*">da *a/7 GROWTH

Di$%!*i"n' %=*%n*' +a!% and *i#in "- $"#a$/%* !"+% and +"*)$%

7 STRATEGY

S*$a*% i i* !"n!%$n ? n"* *,% "+%$a*i"nal a!*ii*i%

7 INTEGRATION

In*%$a*i"n i i* !"n!%$n ? n"* a +a$*i!)la$ -)n!*i"n

7 CREATING CORE COMPETENCIES @ COMPETITIVE ADVANTAGE C$%a*in l"n *%$# ' )*aina4l% "$ania*i"nal !a+a4ili*

7 CORPORATE STRATEGY

In "n%

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ESTABLISHMENT OF

STRAT INTENTS

FORMULATION "-

STATEGIES

IMPLEMENTATION

OFSTRATEGIES

REVIEW'EVALUATION

CONTROL

VISION & MISSION *a*%#%n*' B)in% D%-ini*i"nAd"+*in B)in% M"d%l' S%**in G"al & O45%!*i%

C"nd)!*in SWOT' F"$#)la*in CORPORATE &

BUSINESS LEVEL S*$a*%i%' S*$a*%i! AnaliS*$a*%i! C,"i!%' S*$a*%i! Plan

A!*ia*in S*$a*%i%' D%inin S*$)!*)$%' S*%#&

P$"!%%' B%,ai"$al & F)n!*i"nal i#+l%#%n*a*i"n

And O+%$a*i"naliin *$a*%i%

P%$-"$#in S*$a*%i! Eal)a*i"n' E=%$!iin S*$a*%i!

C"n*$"l and R%-"$#)la*in S*$a*%i%

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STRATEGIC MANAGEMENTENVIRONMENT

SCANNING

STRATEGY

FORMATION

STRATEGYIMPLEMENTATION

EVALUATION

& CONTROL

E:TERNAL

SOCIETAL

TAS8

ENVIRONMETAL

INTERNALSTRENGTS

WEA8NESSES

7*$)!*)$%

7C)l*)$% ( B%li%-'

=+%!*a*i"n'Val)% .

7R%")$%' S/ill'

"#+%*%n!i%'8n"

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NATURE OF

INTERNATIONAL STRATEGIC MANAGEMENT

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SINGLE COUNTRY, EXPORT & INTERNATIONAL

STRATEGY

Y

THE CENTRE

SUBSIDIARY

SSUBSIDIARY

S1

SUBSIDIARY

S2SUBSIDIARY

S

FIRM A OPERATES

IN COUNTRY :

FIRM A

OPERATESIN COUNTRY :

E:PORT TO COUNTRY Y

SINGLE COUNTRY STRATEGY

INTERNATIONAL STRATEGY

E:PORT STRATEGY

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GLOBAL STRATEGY

THE CENTRESUBSIDIARY

S

SUBSIDIARY

S

SUBSIDIARY

S1SUBSIDIARY

S2

SUBSIDIARY

S

SUBSIDIARY

S

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LEVELS OF STRATEGY

&

EVOLUTIONOF


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HIERARCHY OF STRATEGY

CORPORATE STRATEGY

BUSINESS STRATEGY

FUNCTIONAL

STRATEGY

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STRATEGY AT DIFFERENT LEVELS

CORPORATE STRATEGY

PURPOSE OR MISSION

SHAREHOLDER VALUE

STA8EHOLDER INTEREST

ASPIRATIONAL

MEANS :

GOOD PARENTING SELECT PORTFOLIO

GUARD REPUTATION

COMPETITIVE STRATEGY

ATTAIN SUSTAINABLECOMPETITIVE ADVANTAGEBY:

LEVERAGING RESOURSES

DEVELOPING CAPABILITIES

AND

COMPETING ON COST'OR

DIFFERENTIATING OR

OCCUPYING A NICHE

OPERATIONAL

FUNCTIONALLEVELSTRATEGY

HR'FINANCE'PRODUCTN

MAR8ETING'0UALITY

E*!

F)n!*i"nal L%%l Mana%$

a$% $%+"ni4l% -"$;

d%%l"+in ann)al "45%!*i%

& ,"$* *%$# i#+l%#%n*a*i"nPlan

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HOW HAS STRATEGIC MANAGEMENT

EVOLVED

7 PHASE I; BASIC FINANCIAL PLANNING ;S%%/in 4%**%$ "+%$a*i"nal !"n*$"l 4*$in *" #%%* 4)d%*

PHASE II ; FORECAST BASED PLANNING ;S%%/in #"$% %--%!*i% +lannin -"$$"

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STRATEGIC MANAGEMENT PROCESS


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PROCESS

II II

ORG

CURRENTPERFORM

> ANCE

III V VI VII VIII

I:

REWOR8 AS

NEEDED

IV

MONITORING

INTERNAL

ANALYSISSTENGTHS

WEA8NESSES

REVIEW

BOARD OFDIRECTORS

&

TOP MGMT

IVE:T ENV

ANALYSIS

OPP THREATS

ORG

MISSION OB3ECTIVESSTRATEGIES

POLICIES

SELECTION

OFSTRATEGIC

FACTORS

REVIEW

REDEFINE MISSION

OB3ECTIVES

GENERATION

&EVALUATION

OF

STRATEGIC

ALTERNATIVES

IMPLEMENT BEST

ALTERNATIV

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MODULE 2

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TYPICAL VALUE CHAIN

OF A MANUFACTURED PRODUCT

RAW

MATERIAL

PRIMARY

MANUFFABRICATION

PRODUCT

PRODUCERDISTRIBUTOR RETAILER

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A CORPORATE VALUE CHAIN

TECHNOLOGY DEVELOPMENT (R&D'P$"!% & P$"d)!* D%%l"+#%n*

PROCUREMENT( P)$!,ain "- Ra< Ma*%$ial' Ma!,in%'S)++li%.

SUPPORT

ACTIVITIESPROFIT

MARGIN

INBOUND

LOGISTICS

(RAW MAT.

FIRM INFRASTRUCTURE

( G%nM#*'A!!")n*in'Finan!%' Pl.

HUMAN RESOURCE DEVELOPMENT( R%!$)i*#%n*' T$ainin' d%%l"+#%n* .

OPERATIONS

( Ma!,inin'

( A%#4l'

T%*in .

OUTBOUND

LOGISTICS

( Di*$i4)*i"n .

MAR8ETING

& SALES

( Ad* P$"#

> "*i"n .

SERVICES

( In*alla*i"n'

R%+ai$ .

PRIMARY ACTIVITIES

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VALUE CHAIN ANALYSIS7 Value Chain; Lin/%d %* "- al)% !$%a*in a!*ii*i%' 4%innin

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CORPORATE VALUE CHAIN7 F$a#%

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K

E:TERNAL ENVIRONMENT

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COMPANY AND ENVIRONMENT

MEN

MACHINEMATERIAL

METHODS

MONEY

INPUTS PROCESSES OUTPUTS

ENVIRONMENT

ENVIRONMENT

ACTIVITIES

OPERATIONS

PLANNINGMANUFACTURING

INSPECTION

PAC8ING

GOODS

SERVICESSALES

PROFITS

OB3ECTIVESGOALS

TARGETS FEEDBAC8CORRECTIVE

ACTION

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PEST FACTORS

POLITICAL TECHNOLOGICAL

ECONOMIC SOCIAL

PESTLE MATRI:

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PESTLE MATRI:POLITICAL

CURRENT@FUTURE LEGISLATION

SOCIAL

LIFESTYLE TRENDS DEMOGAPHICS

COMPANY ATTITUDES & OPINIONS

BRAND'COMPANY 'TECHNOLOGYIMAGE

CONSUMER BUYING PATTERNS

ETHNIC@RELIGIOUS FACTORS

TECHNOLOGICAL

TECHNOLOGY ACCESS'LICENSING'PATENTS MATURITY OF TECHNOLOGY

REPLACEMENT TECHNOLOGY @ SOLUTIONS

INNOVATION POTENTIAL

MANUFACTURING MATURITY & CAPACITY

LEGAL

INTERNATIONAL LAW EMPLOYMENT LAW

COMPETITIOM LAW

HEALTH & SAFETY LAW

REGIONAL LEGISLATION

ENVIRONMENTAL

ENVIRONMENTAL IMPACTENVIRONMENTAL LEGISLATION

ENERGY CONSUMPTION

WASTE DISPOSAL

ECONOMIC

REGULATORY BODIES

GOVT POLICIESGOVT TERM & CHANGE

ECONOMY SITUATION & TRENDS

TA:ATION

INTEREST & E:CHANGE RATES

MAR8ET & TRADE CYCLE

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CONSTITUENTS OF MICRO ENVIRONMENT

MICROENVIRONMENT

FINANCIALINSTITUTIONS

SUPPLIERS

MAR8ETING

INTERMEDIARIESCOMPETITION

REGULATORY

PROVISIONSIR CLIMATE

E> COMMERCE

S8ILLLEVEL

OF WOR8FORCE

MAR8ETS

TYPES &

DEMANDS

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ENVIRONMENTAL C%ANGES

/%IC% FORCE T%E FIRMS TO ADOPT STRATEGICPERSPECTIVE

7 CHANGES IN TECHNOLOGY

7 PROLIFERATION OF NEW PRODUCTS

7 FASTER COMMERCIALISATION OF NEW IDEAS

7 EMERGENCE OF GLOBAL FIRMS' MAR8ETS & BRANDS

7 CHANGING TASTES & PREFERENCES OF CUSTOMERS7 THE NEW AFFLUENCE OF CONSUMER

7 SOCIO>CULTURAL & POLITICO>LEGAL CHANGES

7 BUSINESS BOUNDRIES GETTING BLURRED

( DUE TO OVERARCHING TECNOLOGIES ; FASTER COMMUNICATION'INTERNET' E>GOVERNANCE & E>COMMERCE %*! .

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NE/ DEMANDS FIRMS %AD TO FACE( CONSE0UENT TO ENVIRONMENTAL CHANGES .

7 TO BE STRATEGICALLY ALERT

7 TO BE FUTURE > ORIENTED

7 TO BE ABLE TO TA8E RIS8S IN TAPPINGOPPORTUNITIES7 TO BE INSULATED ENOUGH AGAINST ENVIRONMENTAL

THREATS

7 TO DEVELOP COMPETENCE FOR ASSIMILATING CHANGESFASTER

7 TO RESPOND EFFECTIVELY AND MOREECONOMICALLY

( I* ,%l+ a"id ,a+,aa$d $%+"n% *" %ni$"n#%n*

P$"id% 4%* +"i4l% -i* 4%*

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J

INTERNAL ENVIRONMENT

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A SWOT CHEC8LISTINTERNAL STRENGT%S:

MANY PRODUCT LINES

BROAD MAR8ET COVERAGE

MANUFACTURING COMPETENCEGOOD MAR8ETING S8ILLSGOOD INVENTORY MANAGEMENTR&D

INFORMATION SYSTEMGOOD HUMAN RESOURCESBRAND E0UITY

COST ADVANTAGEAPPROPRIATE ORG STRUCTURE

APPROPRIATE CONTROL SYSTEMS

ABILITY TO MANAGE STRAT CHANGE

E*!

INTERNAL /EA0NESSES;

NARROW PRODUCT LINES

RISING MANUFACTURING COST

POOR MAR8ETING PLAN

POOR MATERIAL MANAGEMENT

INADE0UATE HUMAN RESOURCES

LOSS OF BRAND NAMELAC8 OFCORPORATE DIRECTION

LAC8 OF CORPORATE CONTROLPOOR FINANCIAL MANAGEMENT

INAPPROPRIATE ORG STRUCTURE

& CONTROL SYSTEMS

HIGH CONFLICTS' POLITICS E*!

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SWOT CHEC8LISTPOTENTIAL ENV1 OPPORTUNITIES

NEW MAR8ETA@BUSINESSES COST OF DIFFERENTIATION ADV

PROFITABLE NEW AC0UISITIONS

BRAND NAME CAPITAL IN NEW

AREAS R&D S8ILLS IN NEW AREAS

VERTICAL INTEGRATION>

( FORWARD@BAC8WARD.

DIVERSIFICATION

OTHERS

POTENTIAL ENV1 T%REATS

ATTAC8 ON COREBUSINESSES

INCREASE IN DOMESTIC@

FOREIGN COMPETITION

CHANGE IN CUSTOMERTASTE

BARRIERS TO ENTRY NEW OR SUBSTITUTE

PRODUCTS

INDUSTRY COMPETITION

SLOWDOWN IN ECONOMY

TA8EOVERS

LOWER MAR8ET GROWTH RATE

OTHERS

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MAC8ENIES S MODEL

STRATEGY

S8ILLS

STRUCTURE

SHARED

VISION

STAFF

SYSTEMS

STYLE

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MODULE

VISION'MISSION

&

BUSINESS DEFINITION

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12

STRATEGIC INTENTS

7 T" a!,i%% )!!%' "$ania*i"n ,a% *" +$i#a$il

-"!) "n ,i%$a$!, "- *$a*%i! in*%n* 9 Vii"n'

Mii"n' B)in% D%-ini*i"n' B)in% M"d%l' G"al

O45%!*i%

7 F$a#%

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CONCEPT OF STRETCH'LEVERAGE

& FIT

STRETC%; Mi-i* 4%*

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VISION

7 F)*)$% a"i(a'in"*,a* l%ad *" an in"i(a'in

7 Bai! & a* *,% *"+ "- ,i%$a$!, "- *$a*%i! in*%n*

7 A+i$a*i"n %=+$%%d a *$a*%i! in*%n* ,")ld l%ad *"

an %nd

7 T,i i

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GOOD VISION STATEMENTS

7 In+i$in & %=,ila$a*in

7 H%l+ in *,% !$%a*i"n "- a !"##"n id%n*i* and a ,a$%d

%n% "- +)$+"%

7 C"#+%*i*i%' "$iinal and )ni6)%

7 Ma/% %n% a *,%% a$% +$a!*i!al

7 F"*%$ $i/> *a/in and %=+%$i#%n*a*i"n

7 F"*%$ l"n *%$# *,in/in

7 T$)l %n)in%' $%+$%%n* in*%$i* and a$% #%an* *"4%n%-i* *a/%,"ld%$

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ENVISIONING PROCESS

A W%ll !"n!%i%d ii"n ,a 2 )a3( !)nen'"

41 C(e I-el.5; D%-in% %nd)$in !,a$a!*%$ "- an

"$ania*i"n *,a* $%#ain )n!,an%a4l% I* $%* "n

!"$% al)% & !"$% +)$+"%

21 En$i"ine- Fu'u(e; A l"n *%$#' *i#% 4")nd "al and

iid d%!$i+*i"n "-

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WHAT A VISION SHOULD AND SHOULDNT BE

7 A VISION SHOULD BE;

> An "$ania*i"n !,a$*%$ "- !"$% al)% & +$in!i+l%

> T,% )l*i#a*% ")$!% "- ")$ +$i"$i*i%' +lan and "al

> A +)ll%$ in*" *,% -)*)$%

> A $%-l%!*i"n "- In+i$% & #"*ia*% A VISION SHOULD NOT BE:

> A ,i, !"n!%+* *a*%#%n* "$ an ad%$*iin l"an

> A *$a*%@i%< -$"# *"+

> A ,i*"$ "- +$")d +a*

> A "-* 4)in% i)%

> Pai"nl%

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A FEW VISION STATEMENTS

VISION 2664 6F B%EL

A

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MISSION7 I* i +)$+"% @ $%a"n 4%,ind %=i*%n!% "- an "$ania*i"n7 D%$i%d -$"# VISION and $%-l%!* *,% !"$+"$a*i"n +,il""+, ' id%n*i*'

!,a$a!*%$ and i#a%

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FEW MISSION STATEMENTS

7 B%EL

T" 4% a l%adin %nin%%$in %n*%$+$i% +$"idin 6)ali**%# ""d and %$i!% in *,% -i%ld "- En%$'

T$an+"$*a*i"n ' Ind)*$' In-$a*$)!*)$% and "*,%$

+"*%n*ial a$%a

7 RANBAXYT" 4%!"#% $%%a$!, 4a%d In*%$na*i"nal +,a$#a

!"#+an

7 UTI

T" /%%+ *,% !"##"n #an in ,a$+%$ -"!) *" %n!")$a%ain and in%*#%n* ,a4i* a#"n *,%#

BUSINESS DEFINITION

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BUSINESS DEFINITION

7 D%-in%d al"n +a$a#%*%$

CUSTOMER GROUPS; WHOi 4%in a*i-i%d

CUSTOMER FUNCTIONS; WHAT i 4%in a*i-i%d

ALTERNATIVE TEC%NOLOGIES; HOW*,% n%%d i 4%in a*i-i%d

7 P$"id% +"

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E:AMPLES

EX:Ti)e 0eein. Bu"ine"":

C)*"#%$ G$")+; Indiid)al !)*"#%$ & Ind)*$ial C)*"#%$C)*"#%$ F)n!*i"n; Findin *i#%' R%!"$din *i#%' Uin *,%>a$* *%!n"l" aaila4l%

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GOALS & OB3ECTIVESGOALS:7 W,a* an "$ ,"+% *" a!,i%%@a!!"#+li, in a -)*)$% +%$i"d "- *i#% R%+$%%n* -)*)$% *a*% "$

")*!"#% "- an %--"$* +)* in n" S,"$* T%$# L"n T%$#( O$ *$anla*% i* +)$+"%

in*" l"n *%$# "al .

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OB3ECTIVE SETTING7 Un-e("'an-a8le7 Cn!(e'e& S+%!i-i! ( Sa 1 in!$%a% in al% .

7 Pe(i-i!i'5 ;R%la*%d *" *i#% -$a#% L"n T%$#' M%di)# & S,"$* *%$#7 Mea"u(a8le & C"n*$"lla4l%7 Challen.in.7 Di-- O45%!*i% #)* !((ela'e

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MODULE

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TOTAL GLOBAL STRATEGY

CORE BUSINESS STRATEGY1 DEVELOP CORE BUSINESS STRATEGY

2 INTERNATIONALISETHE STRATEGY

GLOBALISE THE

STRATEGY

C

O

U

NT

R

Y

A

C

O

U

NT

R

Y

B

C

O

U

NT

R

Y

C

C

O

U

NT

R

Y

D

C

O

U

NT

R

Y

E

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INTERNATIONAL STRATEGIES

PRESSURES

FOR

COST REDUCTION

PRESSURES FOR LOCAL RESPONSIVENESS

GLOBAL

STRATEGY

OFFERING STANDARDISED

PRODUCTS ; SERVICES

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