TOWARDS A FRAMEWORK FOR STRATEGIC ANALYSIS

1. TOWARDS A FRAMEWORK FOR STRATEGIC ANALYSIS • Objectives: • To assess perspectives of strategy • To outline the importance of strategy • To define the concept of strategy • To understand the strategic management process

2. STRATEGIC MANAGEMENT: RELEVANCE INDUSTRY, BUSINESS AND ECONOMIC CYCLES ARE HIGHLY VOLATILE, UNSTABLE, DYNAMIC AND TURBULENT THERE HAS BEEN A PARADIGM SIFT FROM PROGECTIONISM → LIBERALIZED REGIME

3. STRATEGIC MANAGEMENT: RELEVANCE LIBERALISATION/ GLOBALIZATION: CRITICAL COMPONENTS Delicensing And Deregulation Liberalization Of Trade Reduction In Direct And Indirect Tariffs PSU Disinvestment And Privatization Inflow of FDI/ FII Investments THE CONSEQUENCES Integration of World Markets Free Movement Of Capital, Labour, Goods And Services Promotion of Trade and Investments and reduced Entry And Trade barriers Vulnerable To Social, Political, and Economic Shocks Aggravate Competition

4. STRATEGIC MANAGEMENT: RELEVANCE STRATEGIES TO BE “CUSTOMER CENTRIC” OPPORTUNITIES TO BE “DISCOVERED AND EXPLOITED” DESPTE IMMENSE AN DFIERCE COMPETITION. “POTENTIALLY DANGEROUS” TO FULFILL ALL ASPECTS OF CUSTOMER NEEDS AND EXPECTATIONS STRATEGIES → “CREATE AND ADD VALUE”

5. POST LIBERALIZATION SCENARIO PRE LIBERALIZATION SCENARIO STRATEGIC MANAGEMENT: RELEVANCE • Liberalized Market • Reduced restrictions • Reduced Tariffs • Low Entry Barriers • Severe Competition Protected Market High Restrictions High Tariffs/ Regulation Competition Limited 3 Things to Remember: Strategies to Survive Strategies to Grow and Excel Strategies to Sustain

6. Morrison and Lee (1989) • Strategy formulation involves knowing: • The competitive environment • How to allocate resources • How to structure organizations • How to implement plans • Being able to react to events STRATEGIC MANAGEMENT: USEFUL APPROACHES

7. Johnson and Scholes (1999) 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 changing environment to meet the needs of markets and to fulfill stakeholder expectations. STRATEGIC MANAGEMENT: USEFUL APPROACHES

8. Thinking strategically – the three big strategic questions • Where are we now? • Where do we want to go? • How will we get there? STRATEGIC MANAGEMENT: USEFUL APPROACHES

9. Where are we now? • Involves thinking strategically about the company’s external market environment and its internal situation & capabilities • 2. Where do we want to go? • Involves thinking strategically about what top management wants the company to be like in 5-10 years (levels of performance, financial and strategic outcomes) • 3. How will we get there? • Involves thinking about what strategy the company should pursue to perform successfully and get from where it is to where it wants to go STRATEGIC MANAGEMENT: USEFUL APPROACHES

10. MINTZBERG VIEW: THE CRITICAL 5 Ps • PLAN → A consciously intended course of action, a guideline, or set of guidelines to deal with a situation • PATTERN → A stream of actions, a consistency of behaviour • PLOY → SPECIFIC MOVES TO OUTWIT AND OUTSMART RIVALS AND COMPETITORS • POSITION → In a market or competitive environment (niche), a sort of eco-system where some browse off one segment, and others browse off another • PERSPECTIVE→Reflects a firm’s ingrained way of seeing the world, as in corporate culture, dominant ideology, individual’s personality

11. Why corporate strategy is important • Corporate strategy involves the entire organization • Corporate strategy is likely to concern itself with the survival of the business as a minimum objective and the creation of value added as a maximum objectives • Corporate strategy covers the range and depth of the organization's activities • Corporate strategy directs the changing and evolving relationship of the organization with its environment • Corporate strategy is central to the development of sustainable competitive advantage • Corporate strategy is crucial to adding value STRATEGIC MANAGEMENT: USEFUL APPROACHES

12. Levels of strategy (1) Corporate Level strategic decisions are concerned with: • Overall purpose and scope • Adding value to shareholder investment portfolio issues • Resource allocation between SBUs • Structure and control of SBUs • Corporate financial strategy STRATEGIC MANAGEMENT: USEFUL APPROACHES

13. Levels of strategy (2) Business Unit strategy is concerned with: • Competitive strategy • Developing market opportunities • Developing new products/ services • Resource allocation within the SBU • Structure and control of the SBU STRATEGIC MANAGEMENT: USEFUL APPROACHES

14. Levels of strategy (3) Operational Strategies are concerned with: • The integration of resources, processes, people and skills • Implementation of strategy STRATEGIC MANAGEMENT: USEFUL APPROACHES

15. The Various Levels of Strategic Management Process • Top Management Decision by Corporate Board Members/ conglomerates/ groups • Mergers/ Acquisitions • Expansion & Diversification • Product Portfolio Mize • Divestiture • Alliances & Partnerships • Collaborative Strategies Corporate Level Strategy SBU Level Strategy

16. The Various Levels of Strategic Management Process • Decision of Business Heads/ Unit Managers Comprising the following • Increase in MKT Share (%) • Change in Product Portfolio • Improve Financial Performance • Positioning Strategy • All Business functions to BE Interrelated • HR Strategy • Marketing Strategy • IT & communication • Financial Strategy • Supervision and Control of • Business functions • Business Processes SBU Level Strategy Functional Level Strategy Operational Level Strategy

17. INTERNAL RESOURCES/ CAPABILITY ETOP STRATEGIC MANAGEMENT: PROCESS LINK WITH OBJECTIVES. GOALS/ PURPOSE STRATEGY ACTION PLANS ORGANIZATIONS TO POSSSESS DUAL CAPABILITY

18. ORGANIZATIONS TO POSSSESS DUAL CAPABILITY • Build and sustain competitive advantage • Earn above average profits STRATEGIC MANAGEMENT: PROCESS MISSION VISION CSO (Common Shared Objectives) OBJECTIVES STRATEGIC INTENT FORMULATION OF ACTION PLANS IMPLEMENTATION OF ACTION PLANS AUDIT REVIEW

19. A → ANALYSIS D → DESIGN I → IMPLEMENTATION A → AUDIT Suitable Framework for formulation implementation and control on strategy THE STRATEGIC MANAGEMENT PROCESS • A → ANALYSIS • Analyze and Define External Conditions • The PEST ENVIRONMENTAL SCAN • COMPETITOR ANALYSIS • Identifying Competitive Conditions • Assessing Degree and Structure of Conditions and Competition • PORTERS FIVE FORCES MODEL → INDUSTRY COMPETITIVENESS • VALUE CHAIN ANALYSIS

20. INTERNAL SCANNING • Allocation of Resources • Capability and Competency Mapping • Strategic Group Mapping/ GIA • Performance Bench Marking • SWOT Analysis • CSFs • Core Vs Distinctive Competency THE STRATEGIC MANAGEMENT PROCESS

21. D DESIGN/ FORMATION OF STRATEGY • Design Strategic Action Plans based on external environmental conditions and internal resource mapping • PORTER’S → Generic Strategies • Integrated Strategic Approach • Hyper competition in Fast Cycle Sectors • Early Mover Advantage Sustain Ability • Traditional Grand Strategies • Expansion Market Diversity • Diversification Product Diversity THE STRATEGIC MANAGEMENT PROCESS

22. BCG Growth Share Matrix and ILC Model • Strategic Options Under Various Industry Settings • International Level Strategy • Turn Around Strategy • Consolidation and Restructuring Options • Mergers/ Acquisition Synergies and Value Addition THE STRATEGIC MANAGEMENT PROCESS

23. I → IMPLEMENTATION/ EXECUTION • Corporate Governance and Ethics • Strategic Leadership • Change Management • Organization Structure and controls • HRM Initiatives • Revamp of Process, Systems, Resources and Facilitating Strategic Change (Critical 7 S’s MODEL) THE STRATEGIC MANAGEMENT PROCESS

24. A → AUDIT • Performance Measurement and Audit • Periodic Monitoring and Evaluation • Classify Yardsticks and Measure for Corporate Success • Identify Critical Gaps/ Issues • Introduce Course Corrective Actions • Continuous Cyclical Process • The Balanced Scorecard Model • NGOs/ VOs → THE STRATEGIC MANAGEMENT PROCESS • Corporate Social Responsibility • Evaluation → Schemes/ Programs