Strategic Management Mmm2003
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Strategic management ( all solved questions covering year 99 to 02) In a nut shell the total questions which will cover strategic management subject are 1) 2) 3) 4) Long range planning- step inputs & stages Porters 5 forces model attractiveness of Industry E G industry of your choice. Usefulness of Vision/mission- statement with E G . Parameters to formulate Vision/Mission BCG share growth matrix as a tool for/to evaluate business /strategic thrust , market share, market mix & functional strategies. Criticism /drawback Change management Factors /key elements How is it different from other management How to implement change mgmt.
Diversification with Indian example.. Different forms & their stated objectives Parameters to judge diversification Mergers & Acquisitions Why do companies opt for it State strategic objectives Steps in takeover process Offensive steps to target companies Hostile takeovers Differentiation Strategies/competitive strategy/competitive advantage with E g Strategic options for gaining competitive advantage Outline critical success factors & pitfall for each option. Outline steps in Strategic mgmt process To build /consolidate in a changing business scenario Key elements in the process/main frame work
Strategic audit Critical questions covered in the audit Methods to get information Aims & conclusion
Short notes Value chain analysis Product differentiation Strategic business units Competitive advantage- strategies Strategic audit Corporate objectives Global strategies Bench marking Diversification strategic option Strategies for Fragmented Industries Distinguish between Competency & core competency Vertical v/s horizontal integration Strategic alliance v/s joint ventures Supplier value chain v/s Forward value chain Star v/s cash cow in BCG matrix Entry v/s exit barriers Offensive v/s defensive strategies Strategies of market leader v/s market challenger. Divestment v/s demergers Portfolio mgmt & restructing diversification. Global v/s multi country operations Declining market v/s fragmented market.
Outline steps in Strategic mgmt process To build /consolidate in a changing business scenario Key elements in the process/main frame work
Ans) The term STRATEGIC MANAGEMENT refers to the managerial process of forming a) Strategic vision b) Setting objectives c) Crafting a strategy d) Enabling it to implement & execute the set strategy. e) Evaluating Performance As an ongoing process overtime one has to initiate whatever corrective adjustments that may be deemed necessary in the above parameters may be carried out Five components in the strategic management typically called as the 5-task framework process are
Develop Mission and vision
Develop Mission and vision
Implement and execute Strategy
a) Develop strategic vision : What is the long term direction where are we headed to as a company what type of future should we embrace in terms of technology/product/customer focus. What is the industry standing we wish to achieve in the next five years. Mangers need to take a hard look at the companies internal & external environment in order to arrive at views & conclusions on the future business scope & focus that it intends to pursue. This pursuit constitutes the strategic vision for a company & reflects on the managements aspiration for the organization & its business. The strategic vision generally helps direction setting & strategy making value enabling organization leader to make clear business courses in terms of resource allocation
& strategy to reach the company to its logical goal of being an industry leader.
b) Setting objectives :The purpose of setting objectives is to convert statements of strategic vision & business mission into specific result oriented targets which has to be achieved . Objective setting is required by all managers . Every functional unit in a company needs concrete & measurable performance target that contribute meaningfully towards achieving company objectives .All managers of each unit are held accountable for achieving them. Thus building a result oriented climate towards the enterprise . The objective may be defined as those relating to 1) 2) Financial Performance : That is profitability , results of which are extremely crucial for the long term health & survival of the firm. Strategic objective: Aims at achieving increased competitiveness & stronger business position that is gaining market share overtaking competitors on quality & service , achieving lower cots, improving technology & gaining International Exposure.
C) Crafting a Strategy :A corporate strategy represents the managements answers to the fundamental business objectives of an organisation. For e.g. Whether to concentrate on a simple business or have diversified portfolios Whether to focus on a market Niche of broad base the customer range. Whether to pursue competitive advantage based on lower cost or superior technology. How to respond to changing customer preferences What type of geographical markets needs to be covered. A strategy thus reflects managerial choices among its alternatives & signals focussed commitment to particular product markets , competitive approaches & ways of operating the enterprise . Hence strategy brings into play the critical issue of how the targeted results will be achieved .
Strategy continuously evolved & changed depending on continuously changing trends of technology , products , consumer & competition. Its not a one time event , that it needs to reform to adopt the changes from time to time & to prepare for tomorrows market & condition.
d) Implementing/Executing Strategy :The core task of the mgmt here is to develop an organisation capable of carrying out the strtegy in order to reach targeted objectives & product results . The process involves Allocating company resources I E people & funds. Establish policies & operating procedures. Continuously monitor & Fine tune performance & reform strategy wherever necessary Motivate people to pursue targeted objectives with a reward structure for achievement Create favorable company culture & work climate, conducive to successful implementation. Instituting the best practice & program with adequate leadership for continuos improvement. Hence strategy execution is fundamentally on action oriented process . The key task being Developing Competencies Budgeting Policy making Motivating Culture building & Innovative leadership. e) Evaluating performance :Many a times strategies may not be progress as expected or changes in internal circumstances from time to time require fine tuning & adjustments in the companys long term strategy . This may involve Revising budgets Changing policies Re-organizing & revamping activities Building new competencies & Changing personnel may be typical eg of managerial action to improve strategy through regular progress review. It is appropriate to point out that the role of strategy making doesnt rest solely with the CEO of the company. Every manager at his /her level is a strategy maker & implementers for the areas under his supervision . Lower down the hierarchy the strategy making is more specific & becomes broader as we move up the hierarchy.
q) Porters 5 forces model attractiveness of Industry E G industry of your choice Long run success of a company is largely dependant on crafting the right strategy. To do so the mgmt requires to undertake a solid analysis of the companys external environment & internal situation . The two most important consideration are Industrial competitive condition The firms own competitive capability , resources & market position. All oragnisation operate in a macro environment consisting of the economy at large , population lifestyle & value. Government regulations & technology factors . Even closer to that are the companys immediate industry & competitive business environment . The entire macro environment V/S the organisation may be depicted br the following figure.
Figure to be drawn
The economy at large
Legislation & regulation
Buyers New entrants
Society value and lifestyles
Structural attractiveness of an industry can be determined by undergoing a competitive force analysis involving identifying main sources of competitive pressures & their strengths , management can then devise successful strategies through a thorough understanding of an industries competitive character. The best method adopted was the five force model made by Michael porter to understand the state of Competition in an industry. Diagram to be drawnSubstitutes
Competition pressure from Outsiders offering substitutes
competitors Pressures Comp. Pressure created by rallying for Arising from
Suppler, seller Bargaining
better market position and advantage
Comp. Buyers Pressure buyer seller bargaining
Comp. Pressure from trait of new rivalsPotential entrants
This model is widely used technique of competition analysis.1)
Rivalry among Competing sellers intensity of rivalry among competing sellers depends on vigorously they employ tactics such as Lowering prices Improving with innovati