smu mba 4 hr assignment mb0036-set1

SMU/MBA/ASSIGNMENT/MB0036/SET-1/L. C. CODE 0120

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Name SAM. C. B. DAVID

Role No. 520960228

L.C .No.00120

Master of Business Administration -MBA Semester IV

Subject Code – MB0036

Subject Name – Strategic Management & Business Policy

Assignment Set- 1

Q.1 Explain how strategies are formulated and implemented.?

Strategy Formulation and Implementation

It is the crux of the strategic management process. Strategy refers to the course of action desired to achieve the objectives of the enterprise. Formulation, together with its implementation, constitutes an integral part of the management activity. Managers use strategies for different purposes such as to overcome competition, to increase sales, to increase production, to motivate the employees to provide their best, and so on. Implementation of a strategy is a crucial task as the formulation of it. There may be a lot of resistance during the implementation process. It is necessary for the manager to be very tactful to involve the members of his group in the formulation of strategy to facilitate the implementation process.

Stages in Strategy Formulation and Implementation

a) Identification of mission and objectives

b) Environment scanning

c) Generic strategy alternatives

d) Strategy variations

e) Strategic choice


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f) Allocation of resources and formulation of organisational structure

g) Formulation of plans, policies, programmes and administration

h) Evaluation and control

1.5.2 Generic Strategy Alternatives

They refer to the strategy alternatives in broader terms. After the nature of the business of the firm is defined, the next task is to focus on the type of strategic alternative, in general, the firm should pursue. The strategist seeks to identify the right alternative through questions such as:

1. Should we get out of this business entirely?

2. Should we try to expand?

There are four strategy alternatives available to a firm or business:

a) To expand

b) To wind up or retrench

c) To stabilize, and

d) To continue its operations pertaining to its products, markets or functions.

a) Expansion strategy can be adopted in the case of highly competitive and volatile industries, particularly, if they are in the introduction stage of product / service life cycle.

b) Stability strategy is a better choice when the firm is doing well, the environment is relatively less volatile, and the product / service has reached the stability or maturity stage of the life cycle.

c) Retrenchment strategy is the obvious choice when the firm is not doing well in terms of sales and revenue and finds greater returns elsewhere, or the product / service is in the finishing stage of the product life cycle.

d) Combination strategy is not a new strategy as it combines the other strategies. However, it is to be noted that it is better to evolve individual strategies and combine them rather than trying to evolve a complex combination strategy which could be cumbersome with loss of precious business time. It is best-suited to multiple SBU firms in times of economic transition and also when changes occur in the product / service life cycle. If a firm realises that some of its main product lines have outlived their lives, it may not be profitable to continue investment in the same product or SBU. The firm may


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choose to withdraw its resources from this area (or SBU) (Retrenchment strategy) and follow an Expansion strategy in a new product area. Combination strategy is best suited when the firm finds that its product-wise performance is uneven, or all or most of its products differ in their future potential.

Generic Strategy Alternatives Expand Retrench Stabilise Combination Business

definition Pace Business

definition Pace Business

definition Pace Definition

or Pace Products Add new

products Find new ones

Drop old pro-ducts

De-crease product develop-ment

maintain Make package changes, quality improve-ments

Drop old while adding new products

Markets Find new territories

Pene-trate markets

Drop distribution chan-nels

Reduce market share

maintain Protect market shares, focus on market niches

Drop old customers while finding new customers

Func-tions Forward, vertical integra-tion

Increase capacity

Be-come cap-tive com-pany

De-crease process R&D

maintain Improve produc-tion efficiency

Increase capacity and improve efficiency

Generic Strategy Alternatives

Sometimes, a combination of a few or all of these strategies may be necessary. Any change must be contemplated considering what is to be done (Business definition) and the speed (Pace) with which it is to be done. Each of these alternatives has to be evaluated on its merits.


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Strategy Formulation and Implementation

Enterprise Strategist

General Environment

Mission & Objective

Industry & International Environment

Internal Factors

Generic Strategy Alternatives

Strategy variations

Strategic Choice

Allocate resources & Develop Organisational

Formulation of Plans, Policies, Programmes &

Administration

Evaluation & Control


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Q.2 Mr. Nandankumar wants to start a business of his own. He is seeking advice from a consultancy firm on how to go about it. If you were an employee of this consultancy firm, how would you guide him in preparing a business plan that would suit Nandankumar’s business?

The Different Phases of a New Business

A new business goes through phases in the business cycle (very similar to the stages of human life). The first phase – is the formation of an idea. A person – or a group of people join forces, centred around one exciting invention, process or service.

These crystallizing ideas have a few hallmarks:

They are oriented to fill the needs of a market niche (a small group of select consumers or customers), or to provide an innovative solution to a problem which bothers many, or to create a market for a totally new product or service, or to provide a better solution to a problem which is solved in a less efficient manner.

At this stage, what the entrepreneurs need most is expertise. They need a marketing expert to tell them if their idea is marketable and viable. They need a financial expert to tell them if they can get funds in each phase of the business cycle – and wherefrom and also if the product or service can produce enough income to support the business, pay back debts and yield a profit to the investors. They need technical experts to tell them if the idea can or cannot be realized and what it requires by way of technology transfers, engineering skills, know-how, etc. Once the idea has been shaped to its final form by the team of entrepreneurs and experts – the proper legal entity should be formed. A bewildering array of possibilities arises:

This decision is of cardinal importance. It has enormous tax implications and in the near future of the firm it greatly influences the firm’s ability to raise funds in foreign capital markets. Thus, a lawyer must be consulted who knows both the local applicable laws and the foreign legislation in markets which could be relevant to the firm.

This costs a lot of money, one thing that entrepreneurs are in short supply of free legal advice is likely to be highly appreciated by them.

When the firm is properly legally established, registered with all the relevant authorities and has appointed an accounting firm – it can go on to tackle its main business: developing new products and services. At this stage the firm should adopt Western accounting standards and methodology. Accounting systems in many countries leave too


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much room for creative playing with reserves and with amortization. No one in the West will give the firm credits or invest in it based on domestic financial statements.

A whole host of problems faces the new firm immediately upon its formation.

Good entrepreneurs do not necessarily make good managers. Management techniques are not a genetic heritage.

They must be learnt and assimilated. Today’s modern management includes many elements: manpower, finances, marketing, investing in the firm’s future through the development of new products, services, or even whole new business lines. That is quite a lot and very few people are properly trained to do the job successfully.

On top of that, markets do not always react the way entrepreneurs expect them to react. Markets are evolving creatures: they change, develop, disappear and re-appear. They are exceedingly hard to predict. The sales projections of the firm could prove to be unfounded. Its contingency funds can evaporate.

Sometimes it is better to create a product mix: well-recognized brands which sell well – side by side with innovative products.

This is a brief – and by no way comprehensive – taste of what awaits the new business and its initiator, the entrepreneur. You see that a lot of money and effort are needed even in the first phases of creating a business.

A person like you who is wishing to establish a new business will go to a government agency. In one office, you can find the representatives of all the relevant government offices, authorities, agencies and municipalities. You can present your case and the business that hyou wishes to develop. In a matter of few weeks you will receive all the necessary permits and licences without having to go to each office separately.

The advice to Nandankumar in preparing a business plan that would suit his business?

Having obtained the requisite licenses and permits and having registered with all the appropriate authorities – you can move on to the next room in the same building. Here you will receive a list of all the sources of capital available to you both locally and from foreign sources. The terms and conditions of the financing will be specified for each and every source. Example: EBRD – loans of up to 10 years – interest between 6.5% to 8% – grace period of up to 3 years – finances mainly industry, financial services, environmental projects, infrastructure and public services.

You can select the sources of funds most suitable for your needs – and proceed to the next room.


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The next room will contain all the experts necessary to establish the business, get it going – and, most important, raise funds from both local and international institutions. For a symbolic sum they will prepare all the documents required by the financing institutions as per their instructions.

But entrepreneurs in many developing countries are still fearful and uninformed. They are intimidated by the complexity of the task facing them.

The solution is simple: you can approach a tutor or a mentor . This tutor will escort with you from the first phase to the last.

He will be employed by the "One Stop Shop" and his role will be to ease life for the novice businessman. He will transform the person to a businessman. And then they will wish the entrepreneur: "Bon Voyage" – and may the best ones win.

There is an inherent conflict between owners and managers of companies. The former want, for instance, to minimize costs – the latter to draw huge salaries as long as they are in power.

In publicly traded companies, the former wish to maximize the value of the stocks (short term), the latter might have a longer term view of things. In the USA, shareholders place emphasis on the appreciation of the stocks (the result of quarterly and annual profit figures). This leaves little room for technological innovation, investment in research and development and in infrastructure. The theory is that workers who also own stocks avoid these cancerous conflicts which, at times, bring companies to ruin and, in many cases, dilapidate them financially and technologically. Whether reality lives up to theory, is an altogether different question.

Recent world events have challenged us to prepare to manage previously unthinkable situations that may threaten an organization’s future. This new challenge goes beyond the mere emergency response plan or disaster management activities that we previously employed. Organizations now must engage in a comprehensive process best described generically as Business Continuity. It is no longer enough to draft a response plan that anticipates naturally, accidentally, or intentionally caused disaster or emergency scenarios.

Q.3. a. What is the purpose of business continuity plan?

Today’s threats require the creation of an on-going, interactive process that serves to assure the continuation of an organization’s core activities before, during, and most importantly, after a major crisis event.

In the simplest of terms, it is good business for a company to secure its assets. CEOs and shareholders must be prepared to budget for and secure the necessary resources to make


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this happen. It is necessary that an appropriate administrative structure be put in place to effectively deal with crisis management. This will ensure that all concerned understand who makes decisions, how the decisions are implemented, and what the roles and responsibilities of participants are. Personnel used for crisis management should be assigned to perform these roles as part of their normal duties and not be expected to perform them on a voluntary basis. Regardless of the organization – for profit, not for profit, faith-based, non-governmental – its leadership has a duty to stakeholders to plan for its survival. The vast majority of the national critical infrastructure is owned and operated by private sector organizations, and it is largely for these organizations that this guideline is intended. ASIS, the world’s largest organization of security professionals, recognizes these facts and believes the BC Guideline offers the reader a user-friendly method to enhance infrastructure protection.

4.2.1 Key Words

Business Continuity Plan, Business Impact Analysis, Crisis Management Team, Critical Functions, Damage Assessment, Disaster, Evaluation and Maintenance, Mitigation Strategies, Mutual Aid Agreement, Prevention, Readiness, Recovery/Resumption, Resource Management, Response, Risk Assessment, Testing and Training.

4.2.2 Terminology

Alternate Worksite – A work location, other than the primary location, to be used when the primary location is not accessible.

Business Continuity – A comprehensively managed effort to prioritize key business processes, identify significant threats to normal operation, and plan mitigation strategies to ensure effective and efficient organizational response to the challenges that surface during and after a crisis.

Business Continuity Plan (BCP) – An ongoing process supported by senior management and funded to ensure that the necessary steps are taken to identify the impact of potential losses, maintain viable recovery strategies and plans, and ensure the continuity of operations through personnel training, plan testing, and maintenance.

Business Impact Analysis (BIA) – A management level financial analysis that identifies the impacts of losing an organization’s resources. The analysis measures the effect of resource loss and escalating losses over time in order to provide reliable data upon which to base decisions on mitigation, recovery, and business continuity strategies.

Contact List – A list of team members and key players in a crisis. The list should include home phone numbers, pager numbers, cell phone numbers, etc.


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Crisis – Any global, regional, or local natural or human-caused event or business interruption that runs the risk of (1) escalating in intensity, (2) adversely impacting shareholder value or the organization’s financial position, (3) causing harm to people or damage to property or the environment, (4) falling under close media or government scrutiny, (5) interfering with normal operations and wasting significant management time and/or financial resources, (6) adversely affecting employee morale, or (7) jeopardizing the organization’s reputation, products, or officers, and therefore negatively impacting its future.

Crisis Management – Intervention and co-ordination by individuals or teams before, during, and after an event to resolve the crisis, minimize loss, and otherwise protect the organization.

Crisis Management Center – A specific room or facility staffed by personnel charged with commanding, controlling, and coordinating the use of resources and personnel in response to a crisis.

Crisis Management Planning – A properly funded ongoing process supported by senior management to ensure that the necessary steps are taken to identify and analyze the adverse impact of crisis events, maintain viable recovery strategies, and provide overall coordination of the organization’s timely and effective response to a crisis.

Crisis Management Team – A group directed by senior management or its representatives to lead incident/event response comprised of personnel from such functions as human resources, information technology facilities, security, legal, communications/media relations, manufacturing, warehousing, and other business critical support functions.

Critical Function – Business activity or process that cannot be interrupted or unavailable for several business days without having a significant negative impact on the organization.

Critical Records – Records or documents that, if damaged, destroyed, or lost, would cause considerable inconvenience to the organization and/or would require replacement or recreation at a considerable expense to the organization.

Damage Assessment – The process used to appraise or determine the number of injuries and human loss, damage to public and private property, and the status of key facilities and services resulting from a natural or human-caused disaster or emergency.

Disaster – An unanticipated incident or event, including natural catastrophes, technological accidents, or human-caused events, causing widespread destruction, loss,


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or distress to an organization that may result in significant property damage, multiple injuries, or deaths.

Disaster Recovery – Immediate intervention taken by an organization to minimize further losses brought on by a disaster and to begin the process of recovery, including activities and programs designed to restore critical business functions and return the organization to an acceptable condition.

Emergency – An unforeseen incident or event that happens unexpectedly and demands immediate action and intervention to minimize potential losses to people, property, or profitability.

Evacuation – Organized, phased, and supervised dispersal of people from dangerous or potentially dangerous areas.

Evaluation and Maintenance – Process by which a business continuity plan is reviewed in accordance with a predetermined schedule and modified in light of such factors as new legal or regulatory requirements, changes to external environments, technological changes, test/exercise results, personnel changes, etc.

Exercise – An activity performed for the purpose of training and conditioning team members and personnel in appropriate crisis responses with the goal of achieving maximum performance.

Mitigation Strategies – Implementation of measures to lessen or eliminate the occurrence or impact of a crisis.

Mutual Aid Agreement – A pre-arranged agreement developed between two or more entities to render assistance to the parties of the agreement.

Prevention – Plans and processes that will allow an organization to avoid, preclude, or limit the impact of a crisis occurring. The tasks included in prevention should include compliance with corporate policy, mitigation strategies, and behavior and programs to support avoidance and deterrence and detection.

Readiness – The first step of a business continuity plan that addresses assigning accountability for the plan, conducting a risk assessment and a business impact analysis, agreeing on strategies to meet the needs identified in the risk assessment and business impact analysis, and forming Crisis Management and any other appropriate response teams.

Recovery/Resumption – Plans and processes to bring an organization out of a crisis that resulted in an interruption. Recovery/resumption steps should include damage and


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impact assessments, prioritization of critical processes to be resumed, and the return to normal operations or to reconstitute operations to a new condition.

Response – Executing the plan and resources identified to perform those duties and services to preserve and protect life and property as well as provide services to the surviving population. Response steps should include potential crisis recognition, notification, situation assessment, and crisis declaration, plan execution, communications, and resource management.

Risk Assessment – Process of identifying internal and external threats and vulnerabilities, identifying the likelihood of an event arising from such threats or vulnerabilities, defining the critical functions necessary to continue an organization’s operations, defining the controls in place or necessary to reduce exposure, and evaluating the cost for such controls.

Shelter-in-Place – The process of securing and protecting people and assets in the general area in which a crisis occurs.

Simulation Exercise – A test in which participants perform some or all of the actions they would take in the event of plan activation. Simulation exercises are performed under conditions as close as practicable to ‘‘real world’’ conditions.

Tabletop Exercise – A test method that presents a limited simulation of a crisis scenario in a narrative format in which participants review and discuss, not perform, the policy, methods, procedures, coordination, and resource assignments associated with plan activation.

Testing – Activities performed to evaluate the effectiveness or capabilities of a plan relative to specified objectives or measurement criteria. Testing usually involves exercises designed to keep teams and employees effective in their duties and to reveal weaknesses in the Business Continuity Plan.

Training – An educational process by which teams and employees are made qualified and proficient about their roles and responsibilities in implementing a Business Continuity Plan.

Vital Records – Records or documents, for legal, regulatory, or operational purposes, that if irretrievably damaged, destroyed, or lost, would materially impair the organization’s ability to continue business operations.


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b. Give a short note on mitigation strategies.

Mitigation Strategies – Implementation of measures to lessen or eliminate the occurrence or impact of a crisis.

Devise Mitigation Strategies

Cost effective mitigation strategies should be employed to prevent or lessen the impact of potential crises. For example, securing equipment to walls or desks with strapping can mitigate damage from an earthquake; sprinkler systems can lessen the risk of a fire; a strong records management and technology disaster recovery program can mitigate the loss of key documents and data.

Resources Needed for Mitigation

The various resources that would contribute to the mitigation process should be identified. These resources, including essential personnel and their roles and responsibilities, facilities, technology, and equipment should be documented in the plan and become part of ‘‘business as usual.’’

Monitoring Systems and Resources

Systems and resources should be monitored continually as part of mitigation strategies. Such monitoring can be likened to simple inventory management.

The resources that will support the organization to mitigate the crisis should also be monitored continually to ensure that they will be available and able to perform as planned during the crisis. Examples of such systems and resources include, but are not limited to:

· Emergency equipment

· Fire alarms and suppression systems

· Local resources and vendors

· Alternate worksites

· Maps and floor plans updated/changed due to construction and internal moves

· System backups and offsite storage.


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In the not so distant past, there was little difference between financial and strategic investors. Investors of all colors sought to safeguard their investment by taking over as many management functions as they could. Additionally, investments were small and shareholders few. A firm resembled a household and the number of people involved – in ownership and in management – was correspondingly limited. People invested in industries they were acquainted with first hand.

Q.4. Distinguish between financial investor and strategic investor.

As markets grew, the scales of industrial production (and of service provision) expanded. A single investor (or a small group of investors) could no longer accommodate the needs even of a single firm. As knowledge increased and specialization ensued – it was no longer feasible or possible to micro-manage a firm one invested in. Actually, separate businesses of money making and business management emerged. An investor was expected to excel in obtaining high yields on his capital – not in industrial management or in marketing. A manager was expected to manage, not to be capable of personally tackling the various and varying tasks of the business that he managed.

Thus, two classes of investors emerged. One type supplied firms with capital. The other type supplied them with know-how, technology, management skills, marketing techniques, intellectual property, clientele and a vision, a sense of direction.

In many cases, the strategic investor also provided the necessary funding. But, more and more, a separation was maintained. Venture capital and risk capital funds, for instance, are purely financial investors. So are, to a growing extent, investment banks and other financial institutions.

The financial investor represents the past. Its money is the result of past – right and wrong – decisions. Its orientation is short term: an "exit strategy" is sought as soon as feasible. For “exit strategy” read quick profits. The financial investor is always on the lookout, searching for willing buyers for his stake. The stock exchange is a popular exit strategy. The financial investor has little interest in the company’s management. Optimally, his money buys for him not only a good product and a good market, but also a good management. But his interpretation of the rolls and functions of "good management" are very different to that offered by the strategic investor. The financial investor is satisfied with a management team which maximizes value. The price of his shares is the most important indication of success. This is "bottom line" short termism which also characterizes operators in the capital markets. Invested in so many ventures and companies, the financial investor has no interest, nor the resources to get seriously involved in any one of them. Micro-management is left to others – but, in many cases, so is macro-management. The financial investor participates in quarterly or annual general shareholders meetings. This is the extent of its involvement.


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The strategic investor, on the other hand, represents the real long term accumulator of value. Paradoxically, it is the strategic investor that has the greater influence on the value of the company’s shares. The quality of management, the rate of the introduction of new products, the success or failure of marketing strategies, the level of customer satisfaction, the education of the workforce – all depend on the strategic investor. That there is a strong relationship between the quality and decisions of the strategic investor and the share price is small wonder. The strategic investor represents a discounted future in the same manner that shares do. Indeed, gradually, the balance between financial investors and strategic investors is shifting in favour of the latter. People understand that money is abundant and what is in short supply is good management. Given the ability to create a brand, to generate profits, to issue new products and to acquire new clients – money is abundant.

These are the functions normally reserved to financial investors:

Financial Management

The financial investor is expected to take over the financial management of the firm and to directly appoint the senior management and, especially, the management echelons, which directly deal with the finances of the firm.

1. To regulate, supervise and implement a timely, full and accurate set of accounting books of the firm reflecting all its activities in a manner commensurate with the relevant legislation and regulation in the territories of operations of the firm and with internal guidelines set from time to time by the Board of Directors of the firm. This is usually achieved both during a Due Diligence process and later, as financial management is implemented.

2. To implement continuous financial audit and control systems to monitor the performance of the firm, its flow of funds, the adherence to the budget, the expenditures, the income, the cost of sales and other budgetary items.

3. To timely, regularly and duly prepare and present to the Board of Directors financial statements and reports as required by all pertinent laws and regulations in the territories of the operations of the firm and as deemed necessary and demanded from time to time by the Board of Directors of the Firm.

4. To comply with all reporting, accounting and audit requirements imposed by the capital markets or regulatory bodies of capital markets in which the securities of the firm are traded or are about to be traded or otherwise listed.

5. To prepare and present for the approval of the Board of Directors an annual budget, other budgets, financial plans, business plans, feasibility studies, investment memoranda


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and all other financial and business documents as may be required from time to time by the Board of Directors of the Firm.

6. To alert the Board of Directors and to warn it regarding any irregularity, lack of compliance, lack of adherence, lacunas and problems whether actual or potential concerning the financial systems, the financial operations, the financing plans, the accounting, the audits, the budgets and any other matter of a financial nature or which could or does have a financial implication.

7. To collaborate and coordinate the activities of outside suppliers of financial services hired or contracted by the firm, including accountants, auditors, financial consultants, underwriters and brokers, the banking system and other financial venues.

8. To maintain a working relationship and to develop additional relationships with banks, financial institutions and capital markets with the aim of securing the funds necessary for the operations of the firm, the attainment of its development plans and its investments.

9. To fully computerize all the above activities in a combined hardware-software and communications system which will integrate into the systems of other members of the group of companies.

10. Otherwise, to initiate and engage in all manner of activities, whether financial or of other nature, conducive to the financial health, the growth prospects and the fulfillment of investment plans of the firm to the best of his ability and with the appropriate dedication of the time and efforts required.

Collection and Credit Assessment

1. To construct and implement credit risk assessment tools, questionnaires, quantitative methods, data gathering methods and venues in order to properly evaluate and predict the credit risk rating of a client, distributor, or supplier.

2. To constantly monitor and analyse the payment morale, regularity, non-payment and non-performance events, etc. – in order to determine the changes in the credit risk rating of said factors.

3. To analyse receivables and collectibles on a regular and timely basis.

4. To improve the collection methods in order to reduce the amounts of arrears and overdue payments, or the average period of such arrears and overdue payments.

5. To collaborate with legal institutions, law enforcement agencies and private collection firms in assuring the timely flow and payment of all due payments, arrears and overdue payments and other collectibles.


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6. To coordinate an educational campaign to ensure the voluntary collaboration of the clients, distributors and other debtors in the timely and orderly payment of their dues.

The strategic investor is, usually, put in charge of the following:

Project Planning and Project Management

The strategic investor is uniquely positioned to plan the technical side of the project and to implement it. He is, therefore, put in charge of:

· The selection of infrastructure, equipment, raw materials, industrial processes, etc.

· Negotiations and agreements with providers and suppliers

· Minimizing the costs of infrastructure by deploying proprietary components and planning

· The provision of corporate guarantees and letters of comfort to suppliers

· The planning and erecting of the various sites, structures, buildings, premises, factories, etc.

· The planning and implementation of line connections, computer network connections, protocols, solving issues of compatibility (hardware and software, etc.)

· Project planning, implementation and supervision

Marketing and Sales

1. The presentation to the Board an annual plan of sales and marketing including: market penetration targets, profiles of potential social and economic categories of clients, sales promotion methods, advertising campaigns, image, public relations and other media campaigns. The strategic investor also implements these plans or supervises their implementation.

2. The strategic investor is usually possessed of a brandname recognized in many countries. It is the market leaders in certain territories. It has been providing goods and services to users for a long period of time, reliably. This is an important asset, which, if properly used, can attract users. The enhancement of the brand name, its recognition and market awareness, market penetration, co-branding, collaboration with other suppliers – are all the responsibilities of the strategic investor.

3. The dissemination of the product as a preferred choice among vendors, distributors, individual users and businesses in the territory.


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4. Special events, sponsorships, collaboration with businesses.

5. The planning and implementation of incentive systems (e.g., points, vouchers).

6. The strategic investor usually organizes a distribution and dealership network, a franchising network, or a sales network (retail chains) including: training, pricing, pecuniary and quality supervision, network control, inventory and accounting controls, advertising, local marketing and sales promotion and other network management functions.

7. The strategic investor is also in charge of "vision thinking": new methods of operation, new marketing ploys, new market niches, predicting the future trends and market needs, market analyses and research, etc.

The strategic investor typically brings to the firm valuable experience in marketing and sales. It has numerous off the shelf marketing plans and drawer sales promotion campaigns. It developed software and personnel capable of analysing any market into effective niches and of creating the right media (image and PR), advertising and sales promotion drives best-suited for it. It has built large databases with multi-year profiles of the purchasing patterns and demographic data related to thousands of clients in many countries. It owns libraries of material, images, sounds, paper clippings, articles, PR and image materials, and proprietary trademarks and brand names. Above all, it accumulated years of marketing and sales promotion ideas which crystallized into a new conception of the business.

Technology

1. The planning and implementation of new technological systems up to their fully operational phase. The strategic partner’s engineers are available to plan, implement and supervise all the stages of the technological side of the business.

2. The planning and implementation of a fully operative computer system (hardware, software, communication, intranet) to deal with all the aspects of the structure and the operation of the firm. The strategic investor puts at the disposal of the firm proprietary software developed by it and specifically tailored to the needs of companies operating in the firm’s market.

3. The encouragement of the development of in-house, proprietary, technological solutions to the needs of the firm, its clients and suppliers.

4. The planning and the execution of an integration program with new technologies in the field, in collaboration with other suppliers or market technological leaders.


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Education and Training

The strategic investor is responsible to train all the personnel in the firm: operators, customer services, distributors, vendors, sales personnel. The training is conducted at its sole expense and includes tours of its facilities abroad.

The entrepreneurs – who sought to introduce the two types of investors, in the first place – are usually left with the following functions:

Administration and Control

1. To structure the firm in an optimal manner, most conducive to the conduct of its business and to present the new structure for the Board’s approval within 30 days from the date of the GM’s appointment.

2. To run the day to day business of the firm.

3. To oversee the personnel of the firm and to resolve all the personnel issues.

4. To secure the unobstructed flow of relevant information and the protection of confidential organization.

5. To represent the firm in its contacts, representations and negotiations with other firms, authorities, or persons.

7.9 Enforcement of Intellectual Property Rights

Q. 5 Give a note on enforcement of intellectual property rights.

Intellectual property rights are of limited value unless they are effectively enforced. Without enforcement, there are no real deterrents for infringers or

remedies for those whose rights are infringed. The legal authorities do have some role in enforcing intellectual property rights, but this is often limited, and for infringement of rights such as patents, plant breeders rights and trade secrets, you would normally have to take action yourself to take the infringing party to court. The same practical commercial considerations that apply to obtaining and managing IP rights also apply to enforcement – in some cases, the possibility of taking court action could act to encourage the infringing party to take out a licence to use your technology. This would save you the expense and the uncertainty of a protracted court case, and could provide you with a good financial return.


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The procedures for enforcement of IP rights differ widely between countries, because they have much more to do with the general legal system than other aspects of IP rights, such as examination and grant of rights by a patent office. The TRIPS Agreement has established some general principles for IP enforcement which are reflected in the laws of many countries, so this discussion will focus on the TRIPS provisions to give an overall picture of how enforcement operates.

One basic distinction in enforcement lies between more those IP infringements which tend to be infringed widely, potentially by many different people and on a large commercial scale, and general IP rights. In the first category are pirated copyright works and counterfeit trade mark goods.

TRIPS, for instance, specifies that the government or legal authorities need to have a more active role in dealing with these infringements than, say, for patents and plant breeders’ rights. So the state often has an active role in tracking down and prosecuting those who infringe copyright and trademark rights on a commercial scale, whereas for patents it is normally up to the patent holder or licensee to take an infringer to court.

7.9.1 Enforcement Measures Required by TRIPS

The TRIPS Agreement differs from earlier international intellectual property treaties in several ways; this includes having specific provisions for effective enforcement of IP rights in national laws. The main enforcement provisions in TRIPS include:

· The general obligations under the TRIPS Agreement, which relate to the provision of fair enforcement procedures.

· Civil remedies, including injunctions, damages and provisional measures.

· Criminal procedures, which are compulsory for intentional trade mark and copyright piracy on a commercial scale and optional for other kinds of intellectual property, such as patents.

· Special border enforcement measures to stop counterfeit trade mark and pirated copyright material coming into a country, border enforcement measures are optional for other kinds of intellectual property, such as patents.

7.9.2 General Enforcement Obligations under Trips

The TRIPS Agreement provides for a range of general obligations in relation to the enforcement of intellectual property rights. The purpose of these obligations is to ensure that the enforcement measures are effective, and that certain basic principles of due process are met, so that enforcement is fair and balanced, and does not impede legitimate trade.


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Remedies must be timely and deter further infringements

TRIPS requires that enforcement procedures permit effective action against any infringement of intellectual property rights, and that the remedies available are expeditious in order to prevent infringements. A legal system that enables timely initiation and execution of legal processes is particularly important for effective enforcement of intellectual property rights because the information that intellectual property protects is often easy to copy and spread quickly. The remedies available must also be severe enough to deter further infringements. These procedures must be applied in a way that avoids the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

Enforcement procedures must be fair.

TRIPS provides that enforcement procedures must be fair and equitable, and may not be unnecessarily complicated or costly, or entail unreasonable time-limits or delays. Decisions in enforcement cases must be based on the merits of a case. Decisions should preferably be in writing and reasoned, and be made available to the parties without undue delay. Decisions on the merits of a case must be based only on evidence in respect of which the parties were offered the opportunity to be heard.

Parties to a proceeding must have an avenue of appeal, unless the case was criminal in nature and the accused was acquitted. TRIPS does not require a special judicial system for the enforcement of intellectual property rights distinct from the normal court system. Finally, TRIPS creates no obligations with respect to the distribution of resources as between enforcement of intellectual property rights and the enforcement of law in general.

Example – enforcing a patented invention for making house paint.

For example, imagine that you own a patent for house paint that dries very quickly. It took you 8 years to develop the process and cost you thousands of dollars to patent your invention in Australia, the US and Indonesia. Just as you started to distribute the paint yourself in Australia you found out that your paint is being sold cheaply to the painting trade in Sydney by a company trading as Cheap Paints. You also suspect that Cheap Paints are exporting tins of infringing paint overseas. Obviously you need to take legal action against Cheap Paints to enforce your rights, otherwise, there would be no market left for you to get any financial return on your invention. The kinds of remedies you could take against Cheap Paints are set out in this unit.


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Q. 6. Give a note on complex systems behavior and creativity.

In studying Complex Systems, initially in physics and chemistry, it became clear that the key properties of ‘open’ systems, where flows of matter, energy and information can occur across their boundaries, were that they could undergo spontaneous transformations of structure and functionality. Instead of a ‘fixed’ mechanical system, this showed how systems came into being, and evolved over time, changing structurally, gaining, and sometimes shedding, complexity and qualities.

The study of Complex Systems therefore revealed a co-evolutionary process of a system and its environment in which successive change and adaptation each involved two separate steps:

· Discovering what to do (exploration and evaluation).

· Doing what has been decided (implementation).

And these two steps are radically different in nature.

In Complex Systems, the first step is ‘taken’ by the ‘non-average’ underlying elements within the system, while the second – the emergence of a transformed, functioning system – concerns new, effective ‘average’ behaviour of the elements. The successful co-evolution of a system with its environment therefore occurs through the dynamic interplay of the average and non-average behaviours within it. Successive instabilities occur each time that existing structure and organisation fail to withstand the impact of some new circumstance or behaviour. When this occurs, the system re-structures and becomes a different system, subjected in its turn to the disturbances from its own non-average individuals and situations. It is this dialogue between successive ‘systems’ and their own inner ‘richness’ that provides the capacity for continuous adaptation and change.

3.5 Creativity

Everyone in business is creative.

Some of most creative people are in manufacturing.

They actually CREATE products that change the world.

Some of the least creative people perhaps are in advertising.


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They spend most of their creative energy telling manufacturers that they…aren’t creative!

Salespeople Are Creative – They are natural born story-tellers.

Accountants are creative.

3.5.1 Best Creative Exercise Ever

Write down your ideas.

You have a ton every day.

But most of the time, you can’t remember them by the day’s end.

Don’t let spelling and grammar issues or relentless self-editing stop you.

Get your ideas on paper (Let someone else edit it.)

Go retro: Carry a notebook, pen, and calendar into your meetings.

Look up at people.

Story First, Technology Last.

Don’t invest in a presentation class called “How to Use PowerPoint”…. …until you’ve taken a class called “How to Tell Stories and Connect with Your Audience”.

3.5.2 A Simple Creative Exercise…

Simplify everything. Your life, your home, your office, your desk, your processes, vision, policy, procedures. Everything.

Fixing Problems is Creative.

Your job is to fix problems, not to complain.

Brainstorming

Don’t tell people that their ideas are bad, especially if you don’t have a better one.

It’s only your life’s work.

Never say, “It’s not my job to be creative.”


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How to Lose an Audience…

· Show your audience slides with columns of numbers.

· Refuse to tell them a story about the meaning of the numbers.

· Do not read your speech or presentation.

· Instead, read your audience.

How about a Show?

Try “giving a performance” instead of merely “giving a presentation.”

Everyone in Sales Knows…

· Tell stories.

· Don’t just provide data.

Avoid Meetings.

Do not attend more than two meetings a day, or else you will never get any real creative work done.

Get Fresh Ideas.

Leave the office building at least once a day.

Another Lame Excuse…

Designers should put more of their passion into designing great work, instead of endless (boring) discussions about the superiority of the Macintosh over the PC!

The Lame Excuse …

“I can’t [write/design/create] because I don’t have the latest [software/hardware/ upgrade]….”

You can’t let a machine take credit for your creativity.

And you can’t blame a machine for your creative failures, either.

Don’t Blame the Tool!


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The more you become a master of your particular creative form….

….the fewer tools you will use.

Master carpenters use fewer tools than novices.

So do cooks.

Use what works.

Creativity: Use it or Lose it.

Create something every day.

Creativity takes place every day, not once in a while.

It’s not rare.

It’s just been mystified – Own your creativity.

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