Strategic management gtu module wise points

Asst. Professor Jay Padh- MBA dept.

Strategic Management

Q: Resource Based model and I/O Model

Resources

Resources are the inputs into a firm’s production process: such as

o Physical

o Organizational

o Capital

According to resource based model,

Differences in the firms’ performances are due to their unique resources rather than

their structural characteristics.

◦ The I/O Model of Above Average Returns

From 1960-80, it was believed that the external environment plays the vital role in

determining the strategy

Thus, the Industrial Organization (I/O) model focuses on external environment’s

influence on a firm’s strategic actions.

Key factors to decide the firm’s performance as per I/O model

o Economies of scale

o Barriers to market entry

o Diversification

o Product differentiation

◦ What Are the Stakeholders of a Business?

Any person or entity interested in a particular business is called a stakeholder.


They are affected by the business activity, and they may be part of the core decision-

making team.

Internal and external stakeholders may have different interests and priorities, possibly

leading to conflicts of interest.

◦ Kinds of Stakeholders

Internal stakeholders are owners, managers, and workers.

External stakeholders are the customers and the suppliers. The community in which

the organization does business also is a stakeholder.

All the stakeholders are not equal, and different stakeholders will have varying

considerations. These stakeholders can have direct or indirect stake in the

organization and in policy-making.

Q:Value Chain Analysis

A value chain is a chain of activities for a firm operating in a specific industry.

Products pass through all activities of the chain in order, and at each activity the

product gains some value.

The chain of activities gives the products more added value

starting with raw materials and ending with the delivered product

It is based on the notion of value-added at the link level. The sum total of link-level

value-added yields total value.

Six business functions of the Value Chain:

Research and Development

Design of Products, Services, or Processes

Production

Marketing & Sales

Distribution

Customer Service


Primary activities

Inbound Logistics

Operations

Outbound Logistics

Marketing and Sales

Service

Support activities

Procurement

Human Resource Management

Technology Development

General Administration

Q: SWOT analysis:

Internal factors:

Strengths

Weaknesses

External Factors:

Opportunities

Threats

Q:Vision vs. Mission

The vision is more broad and future oriented – the goal on the horizon

The mission is more focused – how you will get to the horizon


Q: PEST Analysis: it is the list of external factors affecting the business

Political

Environmental

Social

Economic

Q: Resources, Capacities, core competencies:

Resources

◦ How a firm procures the resources

Capacities

◦ How effectively a firm uses its resources

Competencies

◦ How uniquely the firm positions itself in terms of performance of its

product/service.

The collective strength of these three factors puts the firm a step ahead of its

competitors and gives the competitive advantage.

Q: Common types of Industry Key Success factors

Technology related KSFs

Expertise in particular technology (apple, Sony)

Expertise in scientific research (pharmaceuticals)

Ability to improve production process (ford motors)

Manufacturing related KSFs

High utilization of fixed assets

Access to attractive supplies of skilled labor


High labor productivity

Ability to manufacture or assemble products

Distribution related KSFs

A strong network of wholesale/dealers (amway)

Strong direct sales capabilities via internet

Marketing related KSFs

A well known respected brand name (reebok, Nike)

Courteous, personalized customer services

Customer guarantee and warranties

Clever advertising (pepsi, coke)

Skills and capability related KSFs

National or global distribution capabilities

Design expertise

Short delivery time capability

Other types of KSFs

Overall low cost

Convenient location

Ability to provide fast, convenient after sale services

patents

Q: Strategic group mapping

The technique for displaying the different market or competitive positions that rival

firms occupy in the industry.

Step 1: Analyze industry structure

Step 2: Map the strategic groups


Step 3:Measure the strength of barriers between groups

Step 4: Understand companies strategy with reference to groups’ interaction

Q: Six ways to achieve sustainable competitive advantage

1. Intellectual property

2. A dynamic product line, rather than a single product

3. Dramatic cost improvement for cause

4. Proven team with inside relationships

5.Lock on the market or customer base

6. Strong focus and differentiation

Q: Strategic and tactical actions

Strategic action:

◦ When a firm acts

Tactical action:

◦ When a firm responds to a strategic action.

Q: Likelihood of attack

First mover incentives

Second movers

Late movers


Q: Market Segmentation

Consumer Markets

◦ Demographic factors

◦ Socioeconomic factors

◦ Geographic factors

◦ Psychological factors

◦ Consumption patterns

◦ Perceptual factors

Industrial Markets

◦ End-use segments

◦ Product segments

◦ Geographic segments

◦ Common buying factor segments

◦ Customer size segments


Value-Creating Diversification

• Economies of scope (related diversification)

• Sharing activities

• Transferring core competencies

• Market power (related diversification)

• Blocking competitors through multipoint competition

• Vertical integration

• Financial economies (unrelated diversification)

• Efficient internal capital allocation

• Business restructuring


Value-Neutral Diversification

• Antitrust regulation

• Tax laws

• Low performance

• Uncertain future cash flows

• Risk reduction for firm

• Tangible resources

• Intangible resources

Value-Reducing Diversification

• Diversifying managerial employment risk

• Increasing managerial compensation

Q: Vertical Integration

• Backward integration—a firm produces its own inputs.

• Forward integration—a firm operates its own distribution system for delivering its

outputs.

Q: Operational Relatedness of diversification strategy:


Q. Three Types of Strategic Alliances

Joint Venture

Equity Strategic Alliance

Nonequity Strategic Alliance

Q: Reasons for Strategic Alliance:

Q: Business-Level Cooperative Strategies


Q:Corporate-Level Cooperative Strategies

Strategic management gtu module wise points

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