Unit-1 ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
Definition: Te te!" #t!ategi$ "anage"ent i# %#e& to !efe! to te enti!e #$o'e of #t!ategi$-&e$i#ion "a(ing a$ti)it* in an o!gani+ation. Te fo,,oing #tate"ent# #e!)e a# a n%"e! of o!(a,e &efinition# of #t!ategi$ "anage"ent: St!ategi$ "anage"ent i# te '!o$e## of "anaging te &ete$tion of o!gani+ationa, "i##ion i,e "anaging te !e,ation#i' of te o!gani+ation to it# en)i!on"ent /0a"e# M. Higgin#. St!ategi$ "anage"ent i# &efine& a# te #et of &e$i#ion# an& a$tion# !e#%,ting in te fo!"%,ation an& i"',e"entation of #t!ategie# &e#igne& to a$ie)e te o2e$ti)e# of te o!gani+ation. Wat i# #t!ateg*3 O)e!a,, Definition: 4St!ateg* i# te &i!e$tion an& #$o'e of an o!gani+ation o)e! te ,ong-te!": St!ateg*5 a o!& of "i,ita!* o!igin5 !efe!# to a ',an of a$tion &e#igne& to a$ie)e a 'a!ti$%,a! goa,. In "i,ita!* %#age #t!ateg* i# &i#tin$t f!o" ta$ti$#5 i$ a!e $on$e!ne& it te $on&%$t of an engage"ent5 i,e #t!ateg* i# $on$e!ne& it o &iffe!ent engage"ent# a!e ,in(e&. St!ateg* at Diffe!ent Le)e,# of a B%#ine## St!ategie# e6i#t at #e)e!a, ,e)e,# in an* o!gani+ation - !anging f!o" te o)e!a,, %#ine## /o! g!o%' of %#ine##e# t!o%g to in&i)i&%a,# o!(ing in it. Co!'o!ate St!ateg* - i# $on$e!ne& it te o)e!a,, '%!'o#e an& #$o'e of te %#ine## to "eet #ta(eo,&e! e6'e$tation#. Ti# i# a $!%$ia, ,e)e, #in$e it i# ea)i,* inf,%en$e& * in)e#to!# in te %#ine## an& a$t# to g%i&e #t!ategi$ &e$i#ion-"a(ing t!o%go%t te %#ine##. Co!'o!ate #t!ateg* i# often #tate& $,ea!,* in a 4"i##ion #tate"ent4. B%#ine## Unit St!ateg* - i# $on$e!ne& "o!e it o a %#ine## $o"'ete# #%$$e##f%,,* in a 'a!ti$%,a! "a!(et. It $on$e!n# #t!ategi$ &e$i#ion# ao%t $oi$e of '!o&%$t#5 "eeting nee&# of $%#to"e!#5 gaining a&)antage o)e! $o"'etito!#5 e6',oiting o! $!eating ne o''o!t%nitie# et$. O'e!ationa, St!ateg* - i# $on$e!ne& it o ea$ 'a!t of te %#ine## i# o!gani#e& to &e,i)e! te $o!'o!ate an& %#ine##-%nit ,e)e, #t!ategi$ &i!e$tion. O'e!ationa, #t!ateg* te!efo!e fo$%#e# on i##%e# of !e#o%!$e#5 '!o$e##e#5 'eo',e et$. Ho St!ateg* i# Manage& - St!ategi$ Manage"ent ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
In it# !oa&e#t #en#e5 #t!ategi$ "anage"ent i# ao%t ta(ing 4#t!ategi$ &e$i#ion#4 &e$i#ion# tat an#e! te 8%e#tion# ao)e. In '!a$ti$e5 a to!o%g #t!ategi$ "anage"ent '!o$e## a# t!ee "ain $o"'onent#5 #on in te fig%!e e,o: St!ategi$ Ana,*#i# Ti# i# a,, ao%t te ana,*#ing te #t!engt of %#ine##e#9 'o#ition an& %n&e!#tan&ing te i"'o!tant e6te!na, fa$to!# tat "a* inf,%en$e tat 'o#ition. Te '!o$e## of St!ategi$ Ana,*#i# $an e a##i#te& * a n%"e! of too,#5 in$,%&ing: PEST Ana,*#i# - a te$ni8%e fo! %n&e!#tan&ing te 4en)i!on"ent4 in i$ a %#ine## o'e!ate# S$ena!io P,anning - a te$ni8%e tat %i,&# )a!io%# e,ie)a,e )ie# of 'o##i,e f%t%!e# fo! a %#ine## i)e o!$e# Ana,*#i# - a te$ni8%e fo! i&entif*ing i$ affe$t teto ,e)e, of $o"'etition in an& an in&%#t!* Ma!(et Seg"entationte - afo!$e# te$ni8%e i$ #ee(# i&entif* #i"i,a!itie# &iffe!en$e# eteen g!o%'# of $%#to"e!# o! %#e!# Di!e$tiona, Po,i$* Mat!i6 - a te$ni8%e i$ #%""a!i#e# te $o"'etiti)e #t!engt of a %#ine##;# o'e!ation# in #'e$ifi$ "a!(et# Co"'etito! Ana,*#i# - a i&e !ange of te$ni8%e# an& ana,*#i# tat #ee(# to #%""a!i#e a ESHWARI.S---LORAA BUSINESS ACADEMY Page <
%#ine##e#9 o)e!a,, $o"'etiti)e 'o#ition C!iti$a, S%$$e## a$to! Ana,*#i# - a te$ni8%e to i&entif* to#e a!ea# in i$ a %#ine## "%#t o%t'e!fo!" te $o"'etition in o!&e! to #%$$ee& SWOT Ana,*#i# - a %#ef%, #%""a!* te$ni8%e fo! #%""a!i#ing te (e* i##%e# a!i#ing f!o" an a##e##"ent of a %#ine##e# 4inte!na,4 'o#ition an& 4e6te!na,4 en)i!on"enta, inf,%en$e#. St!ategi$ Coi$e Ti# '!o$e## in)o,)e# %n&e!#tan&ing te nat%!e of #ta(eo,&e! e6'e$tation# /te 4g!o%n& !%,e#45 i&entif*ing #t!ategi$ o'tion#5 an& ten e)a,%ating an& #e,e$ting #t!ategi$ o'tion#. St!ateg* I"',e"entation Often te a!&e#t 'a!t. Wen a #t!ateg* a# een ana,*#e& an& #e,e$te&5 te ta#( i# ten to t!an#,ate it into o!gani#ationa, a$tion. Te Nat%!e of= St!ategi$ Define&: A!t #$ien$e o Manage"ent: f fo! "% ,ating5 i"' ,e "ent ing5 an& e )a ,% at ing5 $! o # #- f% n$t io na , & e$ i# io n# t at e na ,e a n o ! ga n i+ at io n t o a$ie )e it # o 2e $t i)e #. ESHWARI.S---LORAA BUSINESS ACADEMY Page >
A$ie)ing S%#taine& Co"'etiti)e A&)antage: 1. A&a'ting to $ange in e6te!na, t!en inte!na, $a'ai,itie# an& !e#o%!$e# 7. Effe$ti)e,* fo!"%,ating5 i"',e"enting = e)a,%ating #t!ategie# A&a'ting to Cange ?e* St!ategi$ Manage"ent @%e#tion#: Wat (in& of %#ine## #o%,& e e$o"e3 A!e e in te !igt fie,&# A!e te!e ne $o"'etito!# Wat #t!ategie# #o%,& e '%!#%e3 Ho a!e o%! $%#to"e!# $anging3 ESHWARI.S---LORAA BUSINESS ACADEMY Page
?e* Te!"#: i#ion State"ent Wat &o e ant to e$o"e3 Mi##ion State"ent Wat i# o%! %#ine##3 O''o!t%nitie# = T!eat# /E6te!na, Ana,*#i# of T!en&#: E$ono"i$ So$ia, C%,t%!a, De"og!a'i$En)i!on"enta, Po,iti$a,5 Lega,5 o)e!n"enta, Te$no,ogi$a, Co"'etito!# St!engt# = Wea(ne##e# /Inte!na,: T*'i$a,,* ,o$ate& in f%n$tiona, a!ea# of te fi!" Manage"ent Ma!(eting inan$eA$$o%nting P!o&%$tionO'e!ation# Re#ea!$ = De)e,o'"ent Co"'%te! Info!"ation S*#te"# ESHWARI.S---LORAA BUSINESS ACADEMY Page
Co"'!een#i)e #t!ategi$ "anage"ent "o&e,: Benefit# of St!ategi$ Manage"ent: inan$ia, Benefit#: * * * I"'!o)e"ent in #a,e# I"'!o)e"ent in '!ofitai,it* P!o&%$ti)it* i"'!o)e"ent Non-inan$ia, Benefit#: I"'!o)e& %n&e!#tan&ing of $o"'etito!# #t!ategie# Enan$e& aa!ene## of t!eat# Re&%$e& !e#i#tan$e to $ange Enan$e& '!o,e"'!e)ention $a'ai,itie# A&)antage# of Inte!nationa, O'e!ation#: F F F F A#o! e6$e## $a'a$it* Re&%$e %nit $o#t# S'!ea& !i#( o)e! i&e! "a!(et# Lo-$o#t '!o&%$tion fa$i,itie# ESHWARI.S---LORAA BUSINESS ACADEMY Page G
Di#a&)antage# of Inte!nationa, O'e!ation# F F F F Diffi$%,t $o""%ni$ation# Un&e!e#ti"ate fo!eign $o"'etition C%,t%!a, a!!ie!# to effe$ti)e "anage"ent Co"',i$ation# a!i#ing f!o" $%!!en$* &iffe!en$e# S$o'e of #t!ategi$ "anage"ent: 2. Con#ta,e a# &efine& te a!ea a&&!e##e& * #t!ategi$ "anage"ent a# 4te "anage"ent '!o$e##e# an& &e$i#ion# i$ &ete!"ine te ,ong-te!" #t!%$t%!e an& a$ti)itie# of te o!gani+ation4. Ti# &efinition in$o!'o!ate# fi)e (e* te"e#: Manage"ent '!o$e##. Manage"ent '!o$e## a# !e,ate to o #t!ategie# a!e $!eate& an& $ange&. Manage"ent &e$i#ion#. Te &e$i#ion# "%#t !e,ate $,ea!,* to a #o,%tion of 'e!$ei)e& '!o,e"# /o to a)oi& a t!eat toHoe)e!5 $a'ita,i+e o''o!t%nit*. Ti"e #$a,e#. Te #t!ategi$ ti"e o!i+on i# o ,ong. it on fo!an $o"'an* in !ea, t!o%,e $an e )e!* #o!t. St!%$t%!e of te o!gani+ation. An o!gani+ation i# "anage& * 'eo',e itin a #t!%$t%!e. Te &e$i#ion# i$ !e#%,t f!o" te a* tat "anage!# o!( togete! itin te #t!%$t%!e $an !e#%,t in #t!ategi$ $ange. A$ti)itie# of te o!gani+ation. Ti# i# a 'otentia,,* ,i"it,e## a!ea of #t%&* an& e no!"a,,* #a,, $ent!e %'on a,, a$ti)itie# i$ affe$t te o!gani+ation. Co"'onent# of a St!ateg* State"ent Te #t!ateg* #tate"ent of a fi!" #et# te fi!";# ,ong-te!" #t!ategi$ &i!e$tion an& !oa& 'o,i$* &i!e$tion#. It gi)e# te fi!" a $,ea! #en#e of &i!e$tion an& a ,%e'!int fo! te fi!";# a$ti)itie# fo! te %'$o"ing *ea!#. Te "ain $on#tit%ent# of a #t!ategi$ #tate"ent a!e a# fo,,o#: 1. St!ategi$ Intent An o!gani+ation;# #t!ategi$ intent i# te '%!'o#e tat it e6i#t# an& * it i,, $ontin%e to e6i#t5 '!o)i&ing it "aintain# a $o"'etiti)e a&)antage. St!ategi$ intent gi)e# a 'i$t%!e ao%t at an o!gani+ation "%#t get into i""e&iate,* in o!&e! to a$ie)e te $o"'an*;# )i#ion. It "oti)ate# te 'eo',e. It $,a!ifie# te )i#ion of te $o"'an*. St!ategi$ intent e,'# "anage"ent to e"'a#i+e an& $on$ent!ate on te '!io!itie#. St!ategi$ intent i#5 ESHWARI.S---LORAA BUSINESS ACADEMY Page J
noting %t5 te inf,%en$ing of an o!gani+ation;# !e#o%!$e 'otentia, an& $o!e $o"'eten$ie# to a$ie)e at at fi!#t "a* #ee" to e %na$ie)a,e goa,# in te $o"'etiti)e en)i!on"ent. A e,, e6'!e##e& #t!ategi$ intent #o%,& g%i&e#tee! te &e)e,o'"ent of #t!ategi$ intent o! te #etting of goa,# an& o2e$ti)e# tat !e8%i!e tat a,, of o!gani+ation;# $o"'eten$ie# e $ont!o,,e& to "a6i"%" )a,%e. St!ategi$ intent in$,%&e# &i!e$ting o!gani+ation;# attention on te nee& of inning in#'i!ing 'eo',e * te,,ing te" tat te ta!get# a!e )a,%a,e en$o%!aging in&i)i&%a, an& tea" 'a!ti$i'ation a# e,, a# $ont!i%tion an& %ti,i+ing intent to &i!e$t a,,o$ation of !e#o%!$e#. St!ategi$ intent &iffe!# f!o" #t!ategi$ fit in a a* tat i,e #t!ategi$ fit &ea,# it a!"oni+ing a)ai,a,e !e#o%!$e# an& 'otentia,# to te e6te!na, intent e"'a#i+e# on %i,&ing ne !e#o%!$e# an& 'otentia,# #oen)i!on"ent5 a# to $!eate#t!ategi$ an& e6',oit f%t%!e o''o!t%nitie#. 7. Mi##ion State"ent Mi##ion #tate"ent i# te #tate"ent of te !o,e * i$ an o!gani+ation inten&# to #e!)e it;# #ta(eo,&e!#. It &e#$!ie# * an o!gani+ation i# o'e!ating an& t%# '!o)i&e# a f!a"eo!( itin i$ #t!ategie# a!e fo!"%,ate&. It &e#$!ie# at te o!gani+ation &oe# /i.e.5 '!e#ent $a'ai,itie#5 o a,, it #e!)e# /i.e.5 #ta(eo,&e!# an& at "a(e# an o!gani+ation %ni8%e /i.e.5 !ea#on fo! e6i#ten$e. A "i##ion #tate"ent &iffe!entiate# an o!gani+ation f!o" ote!# * e6',aining it# !oa& #$o'e of a$ti)itie#5 it# '!o&%$t#5 an& te$no,ogie# it %#e# to a$ie)e it# goa,# an& o2e$ti)e#. It ta,(# ao%t an o!gani+ation;# '!e#ent /i.e.5 Kao%t e!e e a!e.o! in#tan$e5 Mi$!o#oft;# "i##ion i# to e,' 'eo',e an& %#ine##e# t!o%go%t te o!,& to !ea,i+e tei! f%,, 'otentia,. Wa,-Ma!t;# "i##ion i# KTo gi)e o!&ina!* fo,( te $an$e to %* te #a"e ting a# !i$ 'eo',e. Mi##ion #tate"ent# a,a*# e6i#t at to' ,e)e, of an o!gani+ation5 %t "a* a,#o e "a&e fo! )a!io%# o!gani+ationa, ,e)e,#. Cief e6e$%ti)e ',a*# a #ignifi$ant !o,e in fo!"%,ation of "i##ion #tate"ent. On$e te "i##ion #tate"ent i# fo!"%,ate&5 it #e!)e# te o!gani+ation in ,ong !%n5 %t it "a* e$o"e a"ig%o%# it o!gani+ationa, g!ot an& inno)ation#. In to&a*;# &*na"i$ an& $o"'etiti)e en)i!on"ent5 "i##ion "a* nee& to e !e&efine&. Hoe)e!5 $a!e "%#t e ta(en tat te !e&efine& "i##ion #tate"ent #o%,& a)e o!igina, f%n&a"enta,#$o"'onent#. Mi##ion #tate"ent a# t!ee "ain $o"'onent#-a #tate"ent of "i##ion o! )i#ion of te $o"'an*5 a #tate"ent of te $o!e )a,%e# tat #a'e te a$t# an& ea)io%! of te e"',o*ee#5 an& a #tate"ent of te goa,# an& o2e$ti)e#. eat%!e# of a Mi##ion a. . $. &. e. f. g. Mi##ion "%#t e fea#i,e an& attaina,e. It #o%,& e 'o##i,e to a$ie)e it. Mi##ion #o%,& e $,ea! eno%g #o tat an* a$tion $an e ta(en. It #o%,& e in#'i!ing fo! te "anage"ent5 #taff an& #o$iet* at ,a!ge. It #o%,& e '!e$i#e eno%g5 i.e.5 it #o%,& e neite! too !oa& no! too na!!o. It #o%,& e %ni8%e an& &i#tin$ti)e to ,ea)e an i"'a$t in e)e!*one;# "in&. It #o%,& e ana,*ti$a,5i.e.5 it #o%,& ana,*+e te (e* $o"'onent# of te #t!ateg*. It #o%,& e $!e&i,e5 i.e.5 a,, #ta(eo,&e!# #o%,& e a,e to e,ie)e it. ESHWARI.S---LORAA BUSINESS ACADEMY Page
7. i#ion A )i#ion #tate"ent i&entifie# e!e te o!gani+ation ant# o! inten&# to e in f%t%!e o! e!e it #o%,& e to e#t "eet te nee&# of te #ta(eo,&e!#. It &e#$!ie# &!ea"# an& a#'i!ation# fo! f%t%!e. o! in#tan$e5 Mi$!o#oft;# )i#ion i# Kto e"'oe! 'eo',e t!o%g g!eat #ofta!e5 an* ti"e5 an* ',a$e5 o! an* &e)i$e. Wa,-Ma!t;# )i#ion i# to e$o"e o!,&i&e ,ea&e! in !etai,ing. A )i#ion i# te 'otentia, to )ie ting# aea& of te"#e,)e#. It an#e!# te 8%e#tion Ke!e e ant to e. It gi)e# %# a !e"in&e! ao%t at e atte"'t to &e)e,o'. A )i#ion #tate"ent i# fo! te o!gani+ation an& it;# "e"e!#5 %n,i(e te "i##ion #tate"ent i$ i# fo! te $%#to"e!#$,ient#. It $ont!i%te# in effe$ti)e &e$i#ion "a(ing a# e,, a# effe$ti)e %#ine## ',anning. It in$o!'o!ate# a #a!e& %n&e!#tan&ing ao%t te an&o!gani+ation ai" of te o!gani+ation an& %ti,i+e# %n&e!#tan&ing an& nat%!e g%i&e te toa!&# a ette! '%!'o#e.ti# It &e#$!ie# tat to on &i!e$t a$ie)ing te "i##ion5 o te o!gani+ationa, f%t%!e o%,& a''ea! to e. An effe$ti)e )i#ion #tate"ent "%#t a)e fo,,oing feat%!e#a. . $. &. e. It "%#t e %na"ig%o%#. It "%#t e $,ea!. It "%#t a!"oni+e it o!gani+ation;# $%,t%!e an& )a,%e#. Te &!ea"# an& a#'i!ation# "%#t e !ationa,!ea,i#ti$. i#ion #tate"ent# #o%,& e #o!te! #o tat te* a!e ea#ie! to "e"o!i+e. In o!&e! to !ea,i+e te )i#ion5 it "%#t e &ee',* in#ti,,e& in te o!gani+ation5 eing one& an& #a!e& * e)e!*one in)o,)e& in te o!gani+ation. <. oa,# an& o2e$ti)e# A goa, i# a &e#i!e& f%t%!e #tate o! o2e$ti)e tat an o!gani+ation t!ie# to a$ie)e. oa,# #'e$if* in 'a!ti$%,a! at "%#t e &one if an o!gani+ation i# to attain "i##ion o! )i#ion. oa,# "a(e "i##ion "o!e '!o"inent an& $on$!ete. Te* $oo!&inate an& integ!ate )a!io%# f%n$tiona, an& &e'a!t"enta, a!ea# in an o!gani+ation. We,, "a&e goa,# a)e fo,,oing feat%!e#a. . $. &. e. Te#e a!e '!e$i#e an& "ea#%!a,e. Te#e ,oo( afte! $!iti$a, an& #ignifi$ant i##%e#. Te#e a!e !ea,i#ti$ an& $a,,enging. Te#e "%#t e a$ie)e& itin a #'e$ifi$ ti"e f!a"e. Te#e in$,%&e ot finan$ia, a# e,, a# non-finan$ia, $o"'onent#. O2e$ti)e# a!e &efine& a# goa,# tat o!gani+ation ant# to a$ie)e o)e! a 'e!io& of ti"e. Te#e a!e te fo%n&ation of ',anning. Po,i$ie# a!e &e)e,o'e& in an o!gani+ation #o a# to a$ie)e te#e o2e$ti)e#. o!"%,ation of o2e$ti)e# i# te ta#( of to' ,e)e, "anage"ent. Effe$ti)e o2e$ti)e# a)e fo,,oing feat%!e#ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
f. Te#e a!e not #ing,e fo! an o!gani+ation5 %t "%,ti',e. g. O2e$ti)e# #o%,& e ot #o!t-te!" a# e,, a# ,ong-te!". . O2e$ti)e# "%#t !e#'on& an& !ea$t to $ange# in en)i!on"ent5 i.e.5 te* "%#t e f,e6i,e. i. Te#e "%#t e fea#i,e5 !ea,i#ti$ an& o'e!ationa,. Di"en#ion# of St!ategi$ Manage"ent St!ategi$ "anage"ent '!o$e## in)o,)e# te enti!e !ange of &e$i#ion#. T*'i$a,,*5 #t!ategi$ i##%e# a)e #i6 i&entifia,e &i"en#ion#: St!ategi$ i##%e# !e8%i!e to'-"anage"ent &e$i#ion# St!ategi$ i##%e# in)o,)e te a,,o$ation of ,a!ge a"o%nt# of $o"'an* !e#o%!$e# St!ategi$ i##%e# a!e ,i(e,* to a)e #ignifi$ant i"'a$t on te ,ong-te!" #%$$e## of te fi!" St!ategi$ i##%e# a!e f%t%!e o!iente& St!ategi$ i##%e# %#%a,,* a)e "a2o! "%,tif%n$tiona, o! "%,ti%#ine## $on#e8%en$e# St!ategi$ i##%e# ne$e##itate $on#i&e!ing fa$to!# in te fi!"9# e6te!na, en)i!on"ent. I"'o!tan$e of #t!ategi$ "anage"ent: St!ategi$ "anage"ent %#e& to ',a* a &iffe!ent !o,e in "o!e '!e&i$ta,e ti"e# afte! te Se$on& Wo!& Wa!. St!ategi$ ',an# of te 'a#t %#%a,,* !ange < to *ea!#. So"e $o"'anie# $o%,& e)en a)e ',an# fo! 1 goo& *ea!#. Tat9# not 'o##i,e to&a* gi)en !a'i& e)o,%tion of o%! #o$iet*. Wat #ti,, "atte!# in #t!ategi$ "anage"ent ,ie# in te )a,%e of ',anning aea&. Te!e9# an o,& #a*ing tat if *o% fai, to ',an5 *o% a!e ',anning to fai,. B* a$ting on ti#5 #t!ategi$ "anage"ent a$t%a,,* gi)e# te o!gani+ation &i!e$tion5 a #en#e of i&entit* an& %nit* toa!&# at te %#ine## goa,. Te!ein ,a*# te $ontin%e& i"'o!tan$e of #t!ategi$ "anage"ent toa!&# %#ine## #%$$e##. E)e!* %#ine## a# a )i#ion an& a "i##ion. St!ategi$ "anage"ent ta(e# into $on#i&e!ation ot of te#e. St!ategi$ "anage"ent e,'# in a$ie)ing te o!gani+ationa, goa,# in an effe$ti)e an& effi$ient "anne!. I"'!o)e& #t!ategi$ "anage"ent '!o$e##e# "a* a,#o fa$i,itate te &e)e,o'"ent of te "o!e $o"',e6 "anage"ent #t!%$t%!a, tat a!e nee&e& a# fi!"# g!o. It a,#o e,'# fi!"# to a!ti$%,ate5 $o""%ni$ate an& "onito! te i"',e"entation of #t!ateg* %#ing a #*#te" inte!,in(e& it te ,ong-te!" )i#ion of te $o!'o!ation#. W* St!ategi$ Manage"ent i# #o i"'o!tant3 To&a* "anage"ent i# nee&e& in a,, t*'e# of o!gani+ation# !ega!&,e## of tei! #i+e5 at a,, o!gani+ation# ,e)e,# an& in a,, o!( a!ea#. Be$a%#e "anage"ent i# %ni)e!#a,,* nee&e&5 ESHWARI.S---LORAA BUSINESS ACADEMY Page 11
i"'!o)ing te a* an o!gani+ation i# "anage& i# one of te (e*# to #%$$e##5 an& te i"'o!tan$e of #t!ategi$ "anage"ent to a$ie)e ti# goa, i# !e$ogni#e& a!o%n& te o!,&. i)e# e)e!*one a !o,e Ma(e# a &iffe!en$e in 'e!fo!"an$e ,e)e,# P!o)i&e# #*#te"ati$ a''!oa$ to %n$e!taintie# Coo!&inate# an& fo$%#e# e"',o*ee# I"'o!tan$e: Li(e "entione& efo!e5 #t!ategi$ "anage"ent $an an& i,, inf,%en$e te o!gani+ation;# 'e!fo!"an$e. Tat;# * *o% $an a)e o!gani+ation# tat fa$e te #a"e en)i!on"enta, $on&ition#5 %t it &iffe!ent 'e!fo!"an$e ,e)e,# an& $on#i&e!ing !e$ent #t%&ie#5 te!e i# a 'e!fo!"an$e i&e e,ief tat tat te o!gani+ation;# tat %#e #t!ategi$ ',anning %#%a,,* a)e ette! one# tat &on;t. Anote! !ea#on tat #%''o!t# te i"'o!tan$e of #t!ategi$ "anage"ent a# to &o it te $ontin%a,,* $anging #it%ation tat o!gani+ation# fa$e te#e &a*#5 e$a%#e it e,'# "anage!# to e6a"ine !e,e)ant fa$to!# efo!e &e$i&ing tei! $o%!#e of a$tion5 t%# e,'ing te" to ette! $o'e it %n$e!tain en)i!on"ent#. ina,,*5 #t!ategi$ "anage"ent i# i"'o!tant "o#t o!gani+ation# a!e $o"'o#e& * &i)e!#e &i)i#ion# an& &e'a!t"ent# tat nee& to e $oo!&inate&5 e,#e te!e o%,& e no fo$%# on a$ie)ing te o!gani+ation9# goa,#. St!ategi$ Manage"ent P!o$e## M%$ $an e #ai& ao%t ti# '!o$e##5 %t e!e i9,, on,* '!e#ent te gene!a, #te'# to gi)e *o% an i&ea of at i# ti# a,, ao%t. Te #t!ategi$ "anage"ent $on#i#t# of #i6 #te'#: ESHWARI.S---LORAA BUSINESS ACADEMY Page 17
1. Mi##ion5 goa,# an& #t!ategie#: If *o% oog,e one of te e,, (no $o"'anie#5 an& #ea!$ tei! e#ite5 *o%9,, a,a*# fin& a #e$tion &e&i$ate& to tei! "i##ion. Tat9# e$a%#e e)e!* o!gani+ation nee&# a "i##ion. W*3 Be$a%#e it &efine# te o!gani+ation9# '%!'o#e5 tei! !ea#on fo! eing in %#ine##. It i# a,#o i"'o!tant to i&entif* goa,#5 e$a%#e te* a!e te fo%n&ation of ',anning an& gi)e "anage!# a a* to "ea#%!e te 'e!fo!"an$e tei! #%$$e##. ina,,*5 a "anage! nee&# to (no te o!gani+ation# #t!ategie#5 to e)a,%ate te" an& "a(e te ne$e##a!* $ange#. 7. E6te!na, Ana,*#i#: P!ett* #t!aigtfo!a!&. A "anage! nee&# to (no at te $o"'etition i# &oing5 to (no o te $%!!ent ,egi#,ation affe$t# te o!gani+ation9# a$ti)itie#...an& #o on. An e6te!na, ana,*#i# i# nee&e& to e6a"ine te $ange# o$$%!!ing en)i!on"ent5 inte o!&e! to a&a't toin#tea& to#e $ange#. Inte!na, Ana,*#i#: Noin ete "o)e to in#i&e of o!gani+ation5 of te <. o%t#i&e. a#i$a,,* in ti# #te' a "anage! a# to ana,*#e te o!gani+ation9# !e#o%!$e#5 $a'ai,itie#5 an& #'ot te #t!engt# an& ea(ne##e# in o!&e! to i"'!o)e i# &e$i#ion# /ti# i# a,#o (no a# SWOT ana,*#i#. >. o!"%,ate St!ategie#: Con#i&e!ing te !ea,itie# &e#$!ie& ao)e5 "anage!# fo!"%,ate $o!'o!ate5 %#ine## an& f%n$tiona, #t!ategie#. . I"',e"ent St!ategie#: So%n&# ,ogi$a, &oe#n9t it3 Afte! #t!ategie# a!e fo!"%,ate& te* "%#t e i"',e"ente&5 an& ,i(e in ote! a#'e$t# of ,ife5 a #t!ateg* i# on,* a# goo& a# it# i"',e"entation. . E)a,%ate te Re#%,t#: An& no te fina, #te' e!e e e)a,%ate te !e#%,t#. A "anage! #o%,& a#( i"#e,f if te i"',e"ente& #t!ategie# e,'e& te o!gani+ation to !ea$ tei! goa,#. St!ategi$ Manage"ent P!o$e## - Meaning5 Ste'# an& Co"'onent# Te #t!ategi$ "anage"ent '!o$e## "ean# &efining te o!gani+ation;# #t!ateg*. It i# a,#o &efine& a# te '!o$e## * i$ "anage!# "a(e a $oi$e of a #et of #t!ategie# fo! te o!gani+ation tat i,, ena,e it to a$ie)e ette! 'e!fo!"an$e. St!ategi$ "anage"ent i# a $ontin%o%# '!o$e## tat a''!ai#e# te %#ine## an& in&%#t!ie# in i$ te o!gani+ation i# in)o,)e& a''!ai#e# it;# $o"'etito!# an& fi6e# goa,# to "eet a,, te '!e#ent an& f%t%!e $o"'etito!;# an& ten !ea##e##e# ea$ #t!ateg*. St!ategi$ "anage"ent '!o$e## a# fo,,oing fo%! #te'#: 1. En)i!on"enta, S$anningEn)i!on"enta, #$anning !efe!# to a '!o$e## of $o,,e$ting5 #$!%tini+ing an& '!o)i&ing info!"ation fo! #t!ategi$ '%!'o#e#. It e,'# in ana,*+ing te inte!na, an& e6te!na, fa$to!# inf,%en$ing an o!gani+ation. Afte! e6e$%ting te en)i!on"enta, ana,*#i# '!o$e##5 "anage"ent #o%,& e)a,%ate it on a $ontin%o%# a#i# an& #t!i)e to i"'!o)e it. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
7. St!ateg* o!"%,ation- St!ateg* fo!"%,ation i# te '!o$e## of &e$i&ing e#t $o%!#e of a$tion fo! a$$o"',i#ing o!gani+ationa, o2e$ti)e# an& en$e a$ie)ing o!gani+ationa, '%!'o#e. Afte! $on&%$ting en)i!on"ent #$anning5 "anage!# fo!"%,ate $o!'o!ate5 %#ine## an& f%n$tiona, #t!ategie#. <.St!ateg* I"',e"entation- St!ateg* i"',e"entation i"',ie# "a(ing te #t!ateg* o!( a# inten&e& o! '%tting te o!gani+ation;# $o#en #t!ateg* into a$tion. St!ateg* i"',e"entation in$,%&e# &e#igning te o!gani+ation;# #t!%$t%!e5 &i#t!i%ting !e#o%!$e#5 &e)e,o'ing &e$i#ion "a(ing '!o$e##5 an& "anaging %"an !e#o%!$e#. >. St!ateg* E)a,%ation- St!ateg* e)a,%ation i# te fina, #te' of #t!ateg* "anage"ent '!o$e##. Te (e* #t!ateg* e)a,%ation a$ti)itie# a!e: a''!ai#ing inte!na, an& e6te!na, fa$to!# tat a!e te !oot of '!e#ent #t!ategie#5 "ea#%!ing 'e!fo!"an$e5 an& ta(ing !e"e&ia, $o!!e$ti)e a$tion#. E)a,%ation "a(e# #%!e tat te o!gani+ationa, #t!ateg* a# e,,a# it;# i"',e"entation "eet# te o!gani+ationa, o2e$ti)e#. Te#e $o"'onent# a!e #te'# tat a!e $a!!ie&5 in $!ono,ogi$a, o!&e!5 en $!eating a ne #t!ategi$ "anage"ent ',an. P!e#ent %#ine##e# tat a)e a,!ea&* $!eate& a #t!ategi$ "anage"ent ',an i,, !e)e!t to te#e #te'# a# 'e! te #it%ation;# !e8%i!e"ent5 #o a# to "a(e e##entia, $ange#. Co"'onent# of St!ategi$ Manage"ent P!o$e## St!ategi$ "anage"ent i# an ongoing '!o$e##. Te!efo!e5 it "%#t e !ea,i+e& tat ea$ $o"'onent inte!a$t# it te ote! $o"'onent# an& tat ti# inte!a$tion often a''en# in $o!%#. Ca!a$te!i#ti$# of St!ategi$ Manage"ent: 1. St!ateg* often "a(e# te &iffe!en$e eteen #%$$e## an& fai,%!e of a fi!". St!ategi$ "anage"ent i# a !an$ of "anage"ent tat #t%&ie# o to o!gani+e te #t!%$t%!e of a fi!"5 at '!o&%$t# te fi!" #o%,& #e,,5 o it #o%,& 'o#ition it#e,f in te "a!(et',a$e5 e!e it #o%,& get it# #%'',ie# an& ete! it nee&# to &iffe!entiate o! $o"'ete on $o#t#. St!ategi$ "anage"ent a,#o &ea,# it ote! i##%e#5 #%$ a# %"an !e#o%!$e# 'o,i$ie#5 e"',o*ee ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
$o"'en#ation ',an#5 $o"'etiti)ene## an& '!o&%$ti)it*. A $o%!#e in #t!ategi$ "anage"ent i# a 'a!t of "an* MBA '!og!a"#. 7. o Long-Te!" I##%e# St!ategi$ "anage"ent &ea,# '!i"a!i,* it ,ong-te!" i##%e# tat "a* o! "a* not a)e an i""e&iate effe$t. o! e6a"',e5 in)e#ting in te e&%$ation of te $o"'an*9# o!( fo!$e "a* *ie,& no i""e&iate effe$t in te!"# of ige! '!o&%$ti)it*. Sti,,5 in te ,ong !%n5 '!ofit#. tei! e&%$ation i,, !e#%,t in ige! '!o&%$ti)it*5 an& te!efo!e enan$e& Co"'etiti)e A&)antage o St!ategi$ "anage"ent e,'# "anage!# fin& ne #o%!$e# of #%#taina,e $o"'etiti)e a&)antage. E6e$%ti)e# tat a'',* te '!in$i',e# of #t!ategi$ "anage"ent in tei! o!( $ontin%o%#,* t!* to &e,i)e! '!o&%$t# o! #e!)i$e# $ea'e!5 '!o&%$e g!eate! $%#to"e! #ati#fa$tion an& "a(e e"',o*ee# "o!e #ati#fie& it tei! 2o#. Effe$t on O'e!ation# o oo& #t!ategi$ "anage"ent a,a*# a# a #i+a,e effe$t on o'e!ationa, i##%e#. o! e6a"',e5 a &e$i#ion to ,in( 'a* to 'e!fo!"an$e i,, !e#%,t in o'e!ationa, &e$i#ion# eing "o!e effe$ti)e a# e"',o*ee# t!* a!&e! at tei! 2o#. O'e!ationa, &e$i#ion# in$,%&e &e$i#ion# tat &ea, it 8%e#tion# #%$ a# o to #e,, to $e!tain $%#to"e!# o! ete! to o'en a $!e&it ,ine to te". O'e!ationa, &e$i#ion# a!e "a&e in te ,oe! e$e,on# of te o!gani+ationa, ie!a!$*. Sa!eo,&e!# o Managing te o!gani+ation in a #t!ategi$ fa#ion !e8%i!e# tat te inte!e#t# of #a!eo,&e!# e '%t at te ea!t of a,, i##%e#. Wete! te 8%e#tion at an& i# e6'an#ion into a ne "a!(et o! negotiating "e!ge!# an& a$8%i#ition#5 #a!eo,&e! )a,%e #o%,& e at te $o!e at a,, ti"e#. Co"'an*;# #t!ateg* an& it# %#ine## "o&e,: Peo',e i,, a,a*# #t!e## tat a)ing a e,, !e#ea!$e& %#ine## ',an i# (e* efo!e *o% #ta!t *o%! %#ine##. A,to%g $!eating a %#ine## ',an i# often an i"'o!tant #te' in te e)o,%tion of a %#ine##5 'a!ti$%,a!,* if *o% nee& finan$ing o! *o% a!e not e6'e!ien$e& at !%nning a %#ine##5 it i# not ne$e##a!i,* te e##entia, fi!#t #te'. Te!e a!e to (e* e,e"ent# tat #o%,& e $o"',ete& '!io! to te %#ine## ',an: * * Te %#ine## "o&e, Te #t!ateg* Wat i# a B%#ine## Mo&e,3 Wi,e te o!& "o&e, often #ti!# %' i"age# of "ate"ati$a, fo!"%,a#5 a %#ine## "o&e, i# in fa$t a #to!* of o a %#ine## o!(#. In gene!a, te!"#5 a %#ine## "o&e, i# te "eto& of &oing %#ine## * i$ a $o"'an* $an gene!ate !e)en%e. Bot #ta!t-%' )ent%!e# an& e#ta,i#e& $o"'anie# ta(e ne '!o&%$t# an& #e!)i$e# to te "a!(et t!o%g a )ent%!e #a'e& * a #'e$ifi$ %#ine## "o&e,. In tei! 'a'e!5 Te Ro,e of te B%#ine## Mo&e, in Ca't%!ing a,%e f!o" Inno)ation5 ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
Hen!* Ce#!o%g an& Ri$a!& S. Ro#en,oo" o%t,ine& te #i6 a#i$ e,e"ent# of a %#ine## "o&e,: 1. A!ti$%,ate te )a,%e '!o'o#ition te )a,%e $!eate& to %#e!# * %#ing te '!o&%$t 7. I&entif* te "a!(et #eg"ent to o" an& fo! at '%!'o#e i# te '!o&%$t %#ef%, #'e$if* o !e)en%e i# gene!ate& * te fi!". <. Define te )a,%e $ain te #e8%en$e of a$ti)itie# an& info!"ation !e8%i!e& to a,,o a $o"'an* to &e#ign5 '!o&%$e5 "a!(et5 &e,i)e! an& #%''o!t it# '!o&%$t o! #e!)i$e. >. E#ti"ate te $o#t #t!%$t%!e an& '!ofit 'otentia, %#ing te )a,%e $ain an& )a,%e '!o'o#ition i&entifie&. . De#$!ie te 'o#ition of te fi!" it te )a,%e neto!( ,in( #%'',ie!#5 $%#to"e!#5 $o"',e"ento!# an& $o"'etito!#. . o!"%,ate te $o"'etiti)e #t!ateg* o i,, *o% gain an& o,& *o%! $o"'etiti)e a&)antage o)e! $o"'etito!# o!too( 'otentia, ne ent!ant#. 0oan Mag!etta e! a!ti$,e W*Mag!etta B%#ine## Mo&e,# Matte! te $on$e't of te %#ine## "o&e, in a ,itt,e f%!te!. #%gge#t# e)e!* %#ine## "o&e, nee&# to 'a## to $!iti$a, te#t#5 te na!!ati)e te#t an& te n%"e!# te#t. Te na!!ati)e te#t "%#t te,, a goo& #to!* an& e6',ain o te %#ine## o!(#5 o i# te $%#to"e!5 at &o te* )a,%e an& o a $o"'an* $an &e,i)e! )a,%e to te $%#to"e!. Te n%"e!# te#t "ean# *o%! '!ofit an& ,o## a##%"'tion# "%#t a&& %'. At te "o#t a#i$ ,e)e,5 if *o%! "o&e, &oe#n;t o!(5 ten *o%! "o&e, a# fai,e& one of te to te#t#. To egin te "o&e,ing '!o$e## *o% nee& to a!ti$%,ate a )a,%e '!o'o#ition on te '!o&%$t o! #e!)i$e eing '!o)i&e&. Te "o&e, "%#t ten &e#$!ie te ta!get "a!(et. Te $%#to"e! i,, ten )a,%e te '!o&%$t on it# ai,it* to !e&%$e $o#t#5 #o,)e a '!o,e" o! $!eate ne #o,%tion#. A "a!(et fo$%# i# nee&e& to i&entif* at '!o&%$t att!i%te# nee& to e ta!gete& an& o to !e#o,)e '!o&%$t t!a&e-off# #%$ a# 8%a,it* )e!#%# $o#t. Yo% a,#o nee& to i&entif* o "%$ to $a!ge an& o te $%#to"e! i,, 'a*. Tin( of %#ine## "o&e,ing a# te "anage!ia, e8%i)a,ent of te #$ientifi$ "eto& - *o% #ta!t it a *'ote#i#5 i$ *o% ten te#t in a$tion an& !e)i#e en ne$e##a!*. Te %#ine## "o&e, a,#o ',a*# a 'a!t of a ',anning too, * fo$%#ing "anage"ent# on o a,, te e,e"ent# an& a$ti)itie# of te %#ine## o!( togete! a# a o,e. At te en& of te &a*5 te %#ine## "o&e, #o%,& e $on&en#e& onto one 'age $on#i#ting of: a &iag!a" o%t,ining o te %#ine## gene!ate# !e)en%e5 o $a# f,o# t!o%g te %#ine## an& o te '!o&%$t f,o# t!o%g te %#ine## an& a na!!ati)e &e#$!iing te '!o&%$t #e!)i$e $o"'onent#5 finan$ia, '!o2e$tion# o! ote! i"'o!tant e,e"ent# not $a't%!e& in te &iag!a". B%#ine## Mo&e,# an& St!ateg* It i# i"'o!tant to note tat $o"',eting a %#ine## "o&e, &oe# not $on#tit%te #t!ategi$ ',anning. St!ategi$ ',anning fa$to!# in te one ting a %#ine## "o&e, &oe#n;t $o"'etition. Wat i# #t!ateg*3 A$$o!&ing to te Co,,in# Eng,i# Di$tiona!*5 #t!ateg* i# Ka 'a!ti$%,a! ,ong-te!" ',an fo! #%$$e##4. o! o%! '%!'o#e#5 e i,, $on#i&e! te e##en$e of #t!ateg* a# a fo!"%,a fo! $o'ing it te $o"'etition. Co"'etiti)e #t!ateg* i# ao%t eing &iffe!ent an& te goa, fo! a $o!'o!ate #t!ateg* i# to fin& a 'o#ition in te in&%#t!* e!e te $o"'an* i# %ni8%e an& $an ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
&efen& it#e,f again#t "a!(et fo!$e#. To &o ti# te $o"'an* "%#t $oo#e a #et of a$ti)itie# tat $an &e,i)e! a %ni8%e "i6 of )a,%e. Ma!(et o!$e# an& St!ateg* Te &ete!"ination of a #t!ateg* i# !oote& in &ete!"ining o a $o"'an* #ta$(# %' again#t a#i$ "a!(et fo!$e#5 o it $an &efen& it#e,f again#t te#e fo!$e# an& o it $an inf,%en$e te#e fo!$e#. o!t%nate,*5 Mi$ae, E. Po!te! in i# a!ti$,e Ho Co"'etiti)e o!$e# Sa'e St!ateg* &efine& te#e "a!(et fo!$e# fo! %#. ?non a# Po!te!;# fo!$e# te* $on#i#t of: 1. Te in&%#t!* ti# i# te 2o$(e*ing fo! 'o#ition a"ong $%!!ent $o"'etito!#5 ti# $an $on#i#t# of '!i$e $o"'etition5 ne '!o&%$t int!o&%$tion o! a&)e!ti#ing #,%gfe#t#. 7. Te t!eat of ne ent!ant# - te #e!io%#ne## of te t!eat of ent!* &e'en&# on te a!!ie!# to ent!* an& !ea$tion f!o" e6i#ting $o"'anie#. Te!e a!e "a2o! a!!ie!# > to $o#t ent!*: 1 e$ono"ie# of #$a,e 7 '!o&%$t &iffe!entiation < $a'ita, !e8%i!e"ent# &i#a&)antage# in&e'en&ent of #i+e a$$e## to &i#t!i%tion $anne,# go)e!n"ent 'o,i$*. A ne $o"'an* i,, gene!a,,* a)e #e$on& to%gt# ao%t ente!ing an in&%#t!* if te in$%"ent a# #%#tantia, !e#o%!$e# to figt a$(5 te in$%"ent #ee"# ,i(e,* to $%t '!i$e# o! in&%#t!* g!ot i# #,o. <. Te t!eat of #%#tit%te '!o&%$t##e!)i$e# - #%#tit%te# $an ',a$e a $ei,ing on '!i$e# tat a!e $a!ge& an& ,i"it te 'otentia, of an in&%#t!*. >. Te a!gaining 'oe! of #%'',ie!# #%'',ie!# $an #8%ee+e '!ofitai,it* * in$!ea#ing '!i$e# o! ,oe!ing te 8%a,it* of te goo&#. . Te a!gaining 'oe! of %*e!# /$%#to"e!# - $%#to"e!# $an fo!$e &on '!i$e#5 &e"an& ette! 8%a,it*5 "o!e #e!)i$e o! ',a* $o"'etito!# off on ea$ ote!. On$e *o% a##e## o te "a!(et fo!$e# a!e affe$ting $o"'etition in *o%! in&%#t!* an& tei! %n&e!,*ing $a%#e#5 *o% $an i&entif* te %n&e!,*ing #t!engt an& ea(ne##e# of *o%! $o"'an*5 &ete!"ine e!e it #tan&# again#t ea$ fo!$e an& ten &ete!"ine a ',an of a$tion. P,an# of a$tion "a* in$,%&e: * Po#itioning te $o"'an* "at$ *o%! #t!engt# an& ea(ne##e# to te $o"'an*;# in&%#t!*5 %i,& &efen#e# again#t $o"'etiti)e fo!$e# o! fin& a 'o#ition in te in&%#t!* e!e fo!$e# a!e te ea(e#t. Yo% nee& to (no *o%! $o"'an*;# $a'ai,itie# an& te $a%#e# of te $o"'etiti)e fo!$e# Inf,%en$ing te a,an$e ta(e te offen#i)e5 fo! e6a"',e inno)ati)e "a!(eting $an !ai#e !an& i&entifi$ation o! &iffe!entiate te '!o&%$t. E6',oiting in&%#t!* $ange an e)o,%tion of an in&%#t!* $an !ing $ange# in $o"'etition. o! e6a"',e5 in an in&%#t!* ,ife-$*$,e g!ot !ate# $ange an&o! '!o&%$t &iffe!entiation &e$,ine# anti$i'ate #ift# in te fa$to!# %n&e!,*ing te#e fo!$e# an& !e#'on& to te". * * Te f!a"eo!( fo! ana,*+ing te in&%#t!* an& &e)e,o'ing a #t!ateg* '!o)i&e# te !oa& "a' fo! an#e!ing te 8%e#tion Kat i# te 'otentia, of ti# %#ine##34 Re$on$i,ing te B%#ine## Mo&e, an& St!ateg* I i,, %#e a #o!t e6a"',e to i,,%#t!ate te &iffe!en$e eteen a %#ine## "o&e, an& #t!ateg*. A,to%g *o% "a* tin( tat Wa,-Ma!t 'ionee!e& a ne %#ine## "o&e, on it# !oa& to #%$$e##5 te !ea,it* i# tat te "o&e, a# !ea,,* no &iffe!ent tan te one ?"a!t a# %#ing at te ti"e. B%t it a# at Sa" Wa,ton $o#e to &o &iffe!ent,* tan ?"a!t5 #%$ a# fo$%#ing on #"a,, ton# a# o''o#e& to ,a!ge $itie# an& e)e!*&a* ,o '!i$e#5 tat a# te ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
!ea, !ea#on fo! i# #%$$e##. A,to%g Sa" Wa,ton;# "o&e, a# te #a"e a# ?"a!t9#5 i# %ni8%e #t!ateg* "a&e i" a #%$$e##. St!ateg* o!"%,ation: INTRODUCTION It i# %#ef%, to $on#i&e! #t!ateg* fo!"%,ation a# 'a!t of a #t!ategi$ "anage"ent '!o$e## tat $o"'!i#e# t!ee 'a#e#: 1. Diagno#i#5 7. fo!"%,ation5 an& <. I"',e"entation. St!ategi$ "anage"ent i# an ongoing '!o$e## to &e)e,o' an& !e)i#e f%t%!e-o!iente& #t!ategie# tat a,,o an o!gani+ation to a$ie)e it# o2e$ti)e#5 $on#i&e!ing it# $a'ai,itie#5 $on#t!aint#5 an& te en)i!on"ent in i$ it o'e!ate#. o!"%,ation5 te #e$on& 'a#e in te #t!ategi$ "anage"ent '!o$e##5 '!o&%$e# a $,ea! of !e$o""en&ation#5 it 2%#tifi$ation5 a# ne$e##a!* te #et "i##ion an& o2e$ti)e# of te#%''o!ting o!gani+ation5 an& #%'',* tat te !e)i#e #t!ategie# fo! a$$o"',i#ing te". In fo!"%,ation5 e a!e t!*ing to "o&if* te $%!!ent o2e$ti)e# an& #t!ategie# in a*# to "a(e te o!gani+ation "o!e #%$$e##f%,. Ti# in$,%&e# t!*ing to $!eate 4#%#taina,e4 $o"'etiti)e a&)antage# -- a,to%g "o#t $o"'etiti)e a&)antage# a!e e!o&e& #tea&i,* * te effo!t# of $o"'etito!#. Te !e"ain&e! of ti# $a'te! fo$%#e# on #t!ateg* fo!"%,ation5 an& i# o!gani+e& into #i6 #e$tion#: T!ee A#'e$t# of St!ateg* o!"%,ation5 ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
Co!'o!ate-Le)e, St!ateg*5 Co"'etiti)e St!ateg*5 %n$tiona, St!ateg*5 Coo#ing St!ategie#5 an& T!o%,e#o"e St!ategie#. THREE ASPECTS O STRATEY ORMULATION: Te fo,,oing t!ee a#'e$t# o! ,e)e,# of #t!ateg* fo!"%,ation5 ea$ it a &iffe!ent fo$%#5 nee& to e &ea,t it in te fo!"%,ation 'a#e of #t!ategi$ "anage"ent. Te t!ee #et# of !e$o""en&ation# "%#t e inte!na,,* $on#i#tent an& fit togete! in a "%t%a,,* #%''o!ti)e "anne! tat fo!"# an integ!ate& ie!a!$* of #t!ateg*5 in te o!&e! gi)en. Co!'o!ate Le)e, St!ateg*: In ti# a#'e$t of #t!ateg*5 e a!e $on$e!ne& it !oa& &e$i#ion# ao%t te tota, o!gani+ation9# #$o'e an& &i!e$tion. Ba#i$a,,*5 e $on#i&e! at $ange# #o%,& e "a&e in o%! g!ot o2e$ti)e an& #t!ateg* fo! a$ie)ing it5 te ,ine# of %#ine## e a!e in5 an& o te#e ,ine# of %#ine## fit togete!. %#ef%, to #t!ateg* tin( of /at t!ee #o%,& $o"'onent# of g!ot $o!'o!ate ,e)e, #t!ateg*: /a !otIt o!i# &i!e$tiona, e o%! o2e$ti)e5 !anging f!o" !et!en$"ent t!o%g #tai,it* to )a!*ing &eg!ee# of g!ot - an& o &o e a$$o"',i# ti# / Po!tfo,io #t!ateg* /at #o%,& e o%! 'o!tfo,io of ,ine# of %#ine##5 i$ i"',i$it,* !e8%i!e# !e$on#i&e!ing o "%$ $on$ent!ation o! &i)e!#ifi$ation e #o%,& a)e5 an& /$ Pa!enting #t!ateg* /o e a,,o$ate !e#o%!$e# an& "anage $a'ai,itie# an& a$ti)itie# a$!o## te 'o!tfo,io -- e!e &o e '%t #'e$ia, e"'a#i#5 an& o "%$ &o e integ!ate o%! )a!io%# ,ine# of %#ine##. Co"'etiti)e St!ateg* /often $a,,e& B%#ine## Le)e, St!ateg*: Ti# in)o,)e# &e$i&ing o te $o"'an* i,, $o"'ete itin ea$ ,ine of %#ine## /LOB o! #t!ategi$ %#ine## %nit /SBU. %n$tiona, St!ateg*: Te#e "o!e ,o$a,i+e& an& #o!te!-o!i+on #t!ategie# &ea, it o ea$ f%n$tiona, a!ea an& %nit i,, $a!!* o%t it# f%n$tiona, a$ti)itie# to e effe$ti)e an& "a6i"i+e !e#o%!$e '!o&%$ti)it*. CORPORATE LEEL STRATEY Ti# $o"'!i#e# te o)e!a,, #t!ateg* e,e"ent# fo! te $o!'o!ation a# a o,e5 te g!an& #t!ateg*5 if *o% ',ea#e. Co!'o!ate #t!ateg* in)o,)e# fo%! (in&# of initiati)e#: Ma(ing te ne$e##a!* "o)e# to e#ta,i# 'o#ition# in &iffe!ent %#ine##e# an& a$ie)e an a''!o'!iate a"o%nt an& (in& of &i)e!#ifi$ation. A (e* 'a!t of $o!'o!ate #t!ateg* i# "a(ing &e$i#ion# on o "an*5 at t*'e#5 an& i$ #'e$ifi$ ,ine# of %#ine## te $o"'an* #o%,& e in. Ti# "a* in)o,)e &e$i&ing to in$!ea#e o! &e$!ea#e te a"o%nt ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
an& !ea&t of &i)e!#ifi$ation. It "a* in)o,)e $,o#ing o%t #o"e LOB9# /,ine# of %#ine##5 a&&ing ote!#5 an&o! $anging e"'a#i# a"ong LOB9#. Initiating a$tion# to oo#t te $o"ine& 'e!fo!"an$e of te %#ine##e# te $o"'an* a# &i)e!#ifie& into: Ti# "a* in)o,)e )igo!o%#,* '%!#%ing !a'i&-g!ot #t!ategie# in te "o#t '!o"i#ing LOB9#5 (ee'ing te ote! $o!e %#ine##e# ea,t*5 initiating t%!na!o%n& effo!t# in ea(-'e!fo!"ing LOB9# it '!o"i#e5 an& &!o''ing LOB9# tat a!e no ,onge! att!a$ti)e o! &on9t fit into te $o!'o!ation9# o)e!a,, ',an#. It a,#o "a* in)o,)e #%'',*ing finan$ia,5 "anage!ia,5 an& ote! !e#o%!$e#5 o! a$8%i!ing an&o! "e!ging ote! $o"'anie# it an e6i#ting LOB. P%!#%ing a*# to $a't%!e )a,%a,e $!o##-%#ine## #t!ategi$ fit# an& t%!n te" into $o"'etiti)e a&)antage# -e#'e$ia,,* t!an#fe!!ing an& #a!ing$anne,#5 !e,ate& te$no,og*5 '!o$%!e"ent ,e)e!age5 o'e!ating fa$i,itie#5 &i#t!i%tion an&o! $%#to"e!#. E#ta,i#ing in)e#t"ent '!io!itie# an& "o)ing "o!e $o!'o!ate !e#o%!$e# into te "o#t att!a$ti)e LOB9#. It i# %#ef%, to o!gani+e te $o!'o!ate ,e)e, #t!ateg* $on#i&e!ation# an& initiati)e# into a f!a"eo!( it Te fo,,oing t!ee "ain #t!ateg* $o"'onent#: g!ot5 'o!tfo,io5 an& 'a!enting. Te#e a!e &i#$%##e& in te ne6t t!ee #e$tion#. Wat So%,& e O%! !ot O2e$ti)e an& St!ategie#3 !ot o2e$ti)e# $an !ange f!o" &!a#ti$ !et!en$"ent t!o%g agg!e##i)e g!ot. O!gani+ationa, ,ea&e!# nee& to !e)i#it an& "a(e &e$i#ion# ao%t te g!ot o2e$ti)e# an& te f%n&a"enta, #t!ategie# te o!gani+ation i,, %#e to a$ie)e te". Te!e a!e fo!$e# tat ten& to '%# to' &e$i#ion-"a(e!# toa!& a g!ot #tan$e e)en en a $o"'an* i# in t!o%,e an& #o%,& not e t!*ing to g!o5 fo! e6a"',e on%#e#5 #to$( o'tion#5 fa"e5 ego. Lea&e!# nee& to !e#i#t #%$ te"'tation# an& #e,e$t a g!ot #t!ateg* #tan$e tat i# a''!o'!iate fo! te o!gani+ation an& it# #it%ation. Stai,it* an& !et!en$"ent #t!ategie# a!e %n&e!%ti,i+e&. So"e of te "a2o! #t!ategi$ a,te!nati)e# fo! ea$ of te '!i"a!* g!ot #tan$e# /!et!en$"ent5 #tai,it*5 an& g!ot a!e #%""a!i+e& in te fo,,oing t!ee #%-#e$tion#. !ot St!ategie# A,, g!ot #t!ategie# $an e $,a##ifie& into one of to f%n&a"enta, $atego!ie#: $on$ent!ation itin e6i#ting in&%#t!ie# o! &i)e!#ifi$ation into ote! ,ine# of %#ine## o! in&%#t!ie#. Wen a $o"'an*9# $%!!ent in&%#t!ie# a!e att!a$ti)e5 a)e goo& g!ot 'otentia,5 an& &o not fa$e #e!io%# t!eat#5 $on$ent!ating !e#o%!$e# in te e6i#ting in&%#t!ie# "a(e# goo& #en#e. Di)e!#ifi$ation ten&# to a)e g!eate! !i#(#5 %t i# an a''!o'!iate o'tion en a $o"'an*9# $%!!ent in&%#t!ie# a)e ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
,itt,e g!ot 'otentia, o! a!e %natt!a$ti)e in ote! a*#. Wen an in&%#t!* $on#o,i&ate# an& e$o"e# "at%!e5 %n,e## te!e a!e ote! "a!(et# to #ee( /fo! e6a"',e ote! inte!nationa, "a!(et#5 a $o"'an* "a* a)e no $oi$e fo! g!ot %t &i)e!#ifi$ation. Te!e a!e to a#i$ $on$ent!ation #t!ategie#5 )e!ti$a, integ!ation an& o!i+onta, g!ot. Di)e!#ifi$ation #t!ategie# $an e &i)i&e& into !e,ate& /o! $on$ent!i$ an& %n!e,ate& /$ong,o"e!ate &i)e!#ifi$ation. Ea$ of te !e#%,ting fo%! $o!e $atego!ie# of #t!ateg* a,te!nati)e# $an e a$ie)e& inte!na,,* t!o%g in)e#t"ent an& &e)e,o'"ent5 o! e6te!na,,* t!o%g "e!ge!#5 a$8%i#ition#5 an&o! #t!ategi$ a,,ian$e# -- t%# '!o&%$ing eigt "a2o! g!ot #t!ateg* $atego!ie#. Co""ent# ao%t ea$ of te fo%! $o!e $atego!ie# a!e o%t,ine& e,o5 fo,,oe& * #o"e (e* 'oint# ao%t a$8%i#ition#5 an& #t!ategi$ 1. ae!ti$a, Integ!ation: Ti# t*'e"e!ge!#5 of #t!ateg* $an e a goo& one if tea,,ian$e#. $o"'an* a# #t!ong $o"'etiti)e 'o#ition in a g!oing5 att!a$ti)e in&%#t!*. A $o"'an* $an g!o * ta(ing o)e! f%n$tion# ea!,ie! in te )a,%e $ain tat e!e '!e)io%#,* '!o)i&e& * #%'',ie!# o! ote! o!gani+ation# /4a$(a!& integ!ation4. Ti# #t!ateg* $an a)e a&)antage#5 e.g.5 in $o#t5 #tai,it* an& 8%a,it* of $o"'onent#5 an& "a(ing o'e!ation# "o!e &iffi$%,t fo! $o"'etito!#. Hoe)e!5 it a,#o !e&%$e# f,e6ii,it*5 !ai#e# e6it a!!ie!# fo! te $o"'an* to ,ea)e tat in&%#t!*5 an& '!e)ent# te $o"'an* f!o" #ee(ing te e#t an& ,ate#t $o"'onent# f!o" #%'',ie!# $o"'eting fo! tei! %#ine##. A $o"'an* a,#o $an g!o * ta(ing o)e! f%n$tion# fo!a!& in te )a,%e $ain '!e)io%#,* '!o)i&e& * fina, "an%fa$t%!e!#5 &i#t!i%to!#5 o! !etai,e!# /4fo!a!& integ!ation4. Ti# #t!ateg* '!o)i&e# "o!e $ont!o, o)e! #%$ ting# a# fina, '!o&%$t##e!)i$e# an& &i#t!i%tion5 %t "a* in)o,)e ne $!iti$a, #%$$e## fa$to!# tat te 'a!ent $o"'an* "a* not e a,e to "a#te! an& &e,i)e!. o! e6a"',e5 eing a o!,&-$,a## "an%fa$t%!e! &oe# not "a(e a $o"'an* an effe$ti)e !etai,e!. So"e !ite!# $,ai" tat a$(a!& integ!ation i# %#%a,,* "o!e '!ofita,e tan fo!a!& integ!ation5 a,to%g ti# &oe# not a)e gene!a, #%''o!t. In an* $a#e5 "an* $o"'anie# a)e "o)e& toa!& ,e## )e!ti$a, integ!ation /e#'e$ia,,* a$(a!&5 %t a,#o fo!a!& &%!ing te ,a#t &e$a&e o! #o5 !e',a$ing #ignifi$ant a"o%nt# of '!e)io%# )e!ti$a, integ!ation it o%t#o%!$ing an& )a!io%# fo!"# of #t!ategi$ a,,ian$e#. 7. Ho!i+onta, !ot: Ti# #t!ateg* a,te!nati)e $atego!* in)o,)e# e6'an&ing te $o"'an*9# e6i#ting '!o&%$t# into ote! ,o$ation# an&o! "a!(et #eg"ent#5 o! in$!ea#ing te !ange of '!o&%$t##e!)i$e# offe!e& to $%!!ent "a!(et#5 o! a $o"ination of ot. It a"o%nt# to e6'an&ing #i&ea*# at te 'oint/# in te )a,%e $ain tat te $o"'an* i# $%!!ent,* engage& in. One of te '!i"a!* a&)antage# of ti# a,te!nati)e i# eing a,e to $oo#e f!o" a fai!,* $ontin%o%# !ange of $oi$e#5 f!o" "o&e#t e6ten#ion# of '!e#ent '!o&%$t#"a!(et# to "a2o! e6'an#ion# -ea$ it $o!!e#'on&ing a"o%nt# of $o#t an& !i#(. ESHWARI.S---LORAA BUSINESS ACADEMY Page 71
<. Re,ate& Di)e!#ifi$ation /a(a Con$ent!i$ Di)e!#ifi$ation: In ti# a,te!nati)e5 a $o"'an* e6'an&# into a !e,ate& in&%#t!*5 one a)ing #*ne!g* it te $o"'an*9# e6i#ting ,ine# of %#ine##5 $!eating a #it%ation in i$ te e6i#ting an& ne ,ine# of %#ine## #a!e an& gain #'e$ia, a&)antage# f!o" $o""ona,itie# #%$ a# te$no,og*5 $%#to"e!#5 &i#t!i%tion5 ,o$ation5 '!o&%$t o! "an%fa$t%!ing #i"i,a!itie#5 an& go)e!n"ent a$$e##. Ti# i# often an a''!o'!iate $o!'o!ate #t!ateg* en a $o"'an* a# a #t!ong $o"'etiti)e 'o#ition an& &i#tin$ti)e $o"'eten$ie#5 %t it# e6i#ting in&%#t!* i# not )e!* att!a$ti)e. >. Un!e,ate& Di)e!#ifi$ation /a(a Cong,o"e!ate Di)e!#ifi$ation: Ti# fo%!t "a2o! $atego!* of $o!'o!ate #t!ateg* a,te!nati)e# fo! g!ot in)o,)e# &i)e!#if*ing into a ,ine of %#ine## %n!e,ate& to te one#. Te !ea#on# fo! to $on#i&e! ti# a,te!nati)e a!e '!i"a!i,* #ee(ing "o!e$%!!ent att!a$ti)e o''o!t%nitie# g!ot in i$ to in)e#t a)ai,a,e f%n&# /in $ont!a#t to !ate! %natt!a$ti)e o''o!t%nitie# in e6i#ting in&%#t!ie#5 !i#( !e&%$tion5 an&o! '!e'a!ing to e6it an e6i#ting ,ine of %#ine## /fo! e6a"',e5 one in te &e$,ine #tage of te '!o&%$t ,ife $*$,e. %!te!5 ti# "a* e an a''!o'!iate #t!ateg* en5 not on,* te '!e#ent in&%#t!* i# %natt!a$ti)e5 %t te $o"'an* ,a$(# o%t#tan&ing $o"'eten$ie# tat it $o%,& t!an#fe! to !e,ate& '!o&%$t# o! in&%#t!ie#. Hoe)e!5 e$a%#e it i# &iffi$%,t to "anage an& e6$e, in %n!e,ate& %#ine## %nit#5 it $an e &iffi$%,t to !ea,i+e te o'e&-fo! )a,%e a&&e&. Me!ge!#5 A$8%i#ition#5 an& St!ategi$ A,,ian$e#: Ea$ of te fo%! g!ot #t!ateg* $atego!ie# 2%#t &i#$%##e& $an e $a!!ie& o%t inte!na,,* o! e6te!na,,*5 t!o%g "e!ge!#5 a$8%i#ition#5 an&o! #t!ategi$ a,,ian$e#. Of $o%!#e5 te!e a,#o $an e a "i6t%!e of inte!na, an& e6te!na, a$tion#. a!io%# fo!"# of #t!ategi$ a,,ian$e#5 "e!ge!#5 an& a$8%i#ition# a)e e"e!ge& an& a!e %#e& e6ten#i)e,* in "an* in&%#t!ie# to&a*. Te* a!e %#e& 'a!ti$%,a!,* to !i&ge !e#o%!$e an& te$no,og* ga'#5 an& to otain e6'e!ti#e an& "a!(et 'o#ition# "o!e 8%i$(,* tan $o%,& e &one t!o%g inte!na, &e)e,o'"ent. Te* a!e 'a!ti$%,a!,* ne$e##a!* an& 'otentia,,* %#ef%, en a $o"'an* i#e# to ente! a ne in&%#t!*5 ne "a!(et#5 an&o! ne 'a!t# of te o!,&. De#'ite tei! e6ten#i)e %#e5 a ,a!ge #a!e of a,,ian$e#5 "e!ge!#5 an& a$8%i#ition# fa,, fa! #o!t of e6'e$te& enefit# o! a!e o%t!igt fai,%!e#. o! e6a"',e5 one #t%&* '%,i#e& in B%#ine## Wee( in 1 fo%n& tat 1 'e!$ent of a,,ian$e# e!e eite! o%t!igt fai,%!e# o! 4,i"'ing a,ong.4 Re#ea!$ on "e!ge!# an& a$8%i#ition# in$,%&e# a Me!$e! Manage"ent Con#%,ting #t%&* of a,, "e!ge!# f!o" 1 to 1 i$ fo%n& tat nea!,* a,f 4&e#t!o*e&4 #a!eo,&e! )a,%e an A. T. ?ea!ne* #t%&* of 11 "%,tii,,ion-&o,,a!5 g,oa, "e!ge!# eteen 1< an& 1 e!e J 'e!$ent fai,e& to $!eate 4#%#tantia, !et%!n# fo! #a!eo,&e!#4 in te fo!" of &i)i&en&# an& #to$( '!i$e a''!e$iation an& a P!i$e-Wate!o%#e-Coo'e!# #t%&* of G a$8%i#ition# o)e! "i,,ion f!o" 1> to 1G in i$ to-ti!&# of te %*e!9# #to$(# &!o''e& on anno%n$e"ent of te t!an#a$tion an& a ti!& of te#e e!e #ti,, ,agging a *ea! ,ate!. Man* !ea#on# fo! te '!o,e"ati$ !e$o!& a)e een $ite&5 in$,%&ing 'a*ing too "%$5 %n!ea,i#ti$ e6'e$tation#5 ina&e8%ate &%e &i,igen$e5 an& $onf,i$ting $o!'o!ate $%,t%!e# oe)e!5 ESHWARI.S---LORAA BUSINESS ACADEMY Page 77
te "o#t 'oe!f%, $ont!i%to! to #%$$e## o! fai,%!e i# ina&e8%ate attention to te "e!ge! integ!ation '!o$e##. A,to%g te ,a*e!# an& in)e#t"ent an(e!# "a* $on#i&e! a &ea, &one en te 'a'e!# a!e #igne& an& te* !e$ei)e tei! fee#5 ti# #o%,& e "e!e,* an in$i&ent in a "%,ti-*ea! '!o$e## of integ!ation tat egan efo!e te #igning an& $ontin%e# fa! e*on&. Stai,it* St!ategie# Te!e a!e a n%"e! of $i!$%"#tan$e# in i$ te "o#t a''!o'!iate g!ot #tan$e fo! a $o"'an* i# #tai,it*5 !ate! tan g!ot. Often5 ti# "a* e %#e& fo! a !e,ati)e,* #o!t 'e!io&5 afte! i$ f%!te! g!ot i# ',anne&. S%$ $i!$%"#tan$e# %#%a,,* in)o,)e a !ea#ona,e #%$$e##f%, $o"'an*5 $o"ine& it $i!$%"#tan$e# tat eite! 'e!"it a 'e!io& of $o"fo!ta,e $oa#ting o! #%gge#t a 'a%#e o! $a%tion. T!ee a,te!nati)e# a!e o%t,ine& in i$ te a$t%a, #t!ateg* a$tion# #i"i,a!5 %t &iffe!ing '!i"a!i,* in e,o5 te $i!$%"#tan$e# "oti)ating te $oi$e of aa!e #tai,it* #t!ateg* an& in te intention# fo! f%t%!e #t!ategi$ a$tion#. 1. Pa%#e an& Ten P!o$ee&: Ti# #tai,it* #t!ateg* a,te!nati)e /e##entia,,* a ti"eo%t "a* e a''!o'!iate in eite! of to #it%ation#: /a te nee& fo! an o''o!t%nit* to !e#t5 &ige#t5 an& $on#o,i&ate afte! g!ot o! #o"e t%!%,ent e)ent# - efo!e $ontin%ing a g!ot #t!ateg*5 o! / an %n$e!tain o! o#ti,e en)i!on"ent in i$ it i# '!%&ent to #ta* in a 4o,&ing 'atte!n4 %nti, te!e i# $ange in o! "o!e $,a!it* ao%t te f%t%!e in te en)i!on"ent. 7. No Cange: Ti# a,te!nati)e $o%,& e a $o'-o%t5 !e'!e#enting in&e$i#ion o! ti"i&it* in "a(ing a $oi$e fo! $ange. A,te!nati)e,*5 it "a* e a $o"fo!ta,e5 e)en ,ong-te!" #t!ateg* in a "at%!e5 !ate! #ta,e en)i!on"ent5 e.g.5 a #"a,, %#ine## in a #"a,, ton it fe $o"'etito!#. <. !a P!ofit# Wi,e Yo% Can: Ti# i# a non-!e$o""en&e& #t!ateg* to t!* to "a#( a &ete!io!ating #it%ation * a!tifi$ia,,* #%''o!ting '!ofit# o! tei! a''ea!an$e5 o! ote!i#e t!*ing to a$t a# to%g te '!o,e"# i,, go aa*. It i# an %n#ta,e5 te"'o!a!* #t!ateg* in a o!#ening #it%ation5 %#%a,,* $o#en eite! to t!* to &e,a* ,etting #ta(eo,&e!# (no o a& ting# a!e o! to e6t!a$t 'e!#ona, gain efo!e ting# $o,,a'#e. Re$ent te!!i,e e6a"',e# in te USA a!e En!on an& Wo!,&Co". Ret!en$"ent St!ategie# T%!na!o%n&: Ti# #t!ateg*5 &ea,ing it a $o"'an* in #e!io%# t!o%,e5 atte"'t# to !e#%#$itate o! !e)i)e te $o"'an* t!o%g a $o"ination of $ont!a$tion /gene!a,5 "a2o! $%ta$(# in #i+e an& $o#t# an& $on#o,i&ation /$!eating an& #tai,i+ing a #"a,,e!5 ,eane! $o"'an*. A,to%g &iffi$%,t5 en &one )e!* effe$ti)e,* it $an #%$$ee& in ot !etaining eno%g (e* e"',o*ee# an& !e)ita,i+ing te $o"'an*. Ca'ti)e Co"'an* St!ateg*: Ti# #t!ateg* in)o,)e# gi)ing %' in&e'en&en$e in e6$ange fo! #o"e #e$%!it* * e$o"ing anote! $o"'an*9# #o,e #%'',ie!5 &i#t!i%to!5 o! a &e'en&ent #%#i&ia!*. ESHWARI.S---LORAA BUSINESS ACADEMY Page 7<
Se,, O%t: If a $o"'an* in a ea( 'o#ition i# %na,e o! %n,i(e,* to #%$$ee& it a t%!na!o%n& o! $a'ti)e $o"'an* #t!ateg*5 it a# fe $oi$e# ote! tan to t!* to fin& a %*e! an& #e,, it#e,f /o! &i)e#t5 if 'a!t of a &i)e!#ifie& $o!'o!ation. Li8%i&ation: Wen a $o"'an* a# een %n#%$$e##f%, in o! a# none of te '!e)io%# t!ee #t!ategi$ a,te!nati)e# a)ai,a,e5 te on,* !e"aining a,te!nati)e i# ,i8%i&ation5 often in)o,)ing a an(!%'t$*. Te!e i# a "o&e#t a&)antage of a )o,%nta!* ,i8%i&ation o)e! an(!%'t$* in tat te oa!& an& to' "anage"ent "a(e te &e$i#ion# !ate! tan t%!ning te" o)e! to a $o%!t5 i$ often igno!e# #to$(o,&e!#9 inte!e#t#. Wat So%,& Be O%! Po!tfo,io St!ateg*3 Ti# #e$on& $o"'onent of $o!'o!ate ,e)e, #t!ateg* i# $on$e!ne& it "a(ing &e$i#ion# ao%t te 'o!tfo,io ,ine# of /LOB9# o! #t!ategi$ %#ine## %nit# /SBU9#5 not te $o"'an*9# of 'o!tfo,io of%#ine## in&i)i&%a, '!o&%$t#. Po!tfo,io "at!i6 "o&e,# $an e %#ef%, in !ee6a"ining a $o"'an*9# '!e#ent 'o!tfo,io. Te '%!'o#e of a,, 'o!tfo,io "at!i6 "o&e,# i# to e,' a $o"'an* %n&e!#tan& an& $on#i&e! $ange# in it# 'o!tfo,io of %#ine##e#5 an& a,#o to tin( ao%t a,,o$ation of !e#o%!$e# a"ong te &iffe!ent %#ine## e,e"ent#. Te to '!i"a!* "o&e,# a!e te BC !ot-Sa!e Mat!i6 an& te E B%#ine## S$!een /Po!te!5 1J5 a# a goo& #%""a!* of te#e. Te#e "o&e,# $on#i&e! an& &i#',a* on a to-&i"en#iona, g!a' ea$ "a2o! SBU in te!"# of #o"e "ea#%!e of it# in&%#t!* att!a$ti)ene## an& it# !e,ati)e $o"'etiti)e #t!engt Te BC !ot-Sa!e Mat!i6 "o&e, $on#i&e!# to !e,ati)e,* #i"',e )a!ia,e#: g!ot !ate of te in&%#t!* a# an in&i$ation of in&%#t!* att!a$ti)ene##5 an& !e,ati)e "a!(et #a!e a# an in&i$ation of it# !e,ati)e $o"'etiti)e #t!engt. Te E B%#ine## S$!een5 a,#o a##o$iate& it M$?in#e*5 $on#i&e!# to $o"'o#ite )a!ia,e#5 i$ $an e $%#to"i+e& * te %#e!5 fo! /a in&%#t!* att!a$ti)ene## /e.g5 one $o%,& in$,%&e in&%#t!* #i+e an& g!ot !ate5 '!ofitai,it*5 '!i$ing '!a$ti$e#5 fa)o!e& t!eat"ent in go)e!n"ent &ea,ing#5 et$. an& / $o"'etiti)e #t!engt /e.g.5 "a!(et #a!e5 te$no,ogi$a, 'o#ition5 '!ofitai,it*5 #i+e5 et$. Te e#t te#t of te %#ine## 'o!tfo,io9# o)e!a,, att!a$ti)ene## i# ete! te $o"ine& g!ot an& '!ofitai,it* of te %#ine##e# in te 'o!tfo,io i,, a,,o te $o"'an* to attain it# 'e!fo!"an$e o2e$ti)e#. Re,ate& to ti# o)e!a,, $!ite!ion a!e #%$ 8%e#tion# a#: Doe# te 'o!tfo,io $ontain eno%g %#ine##e# in att!a$ti)e in&%#t!ie#3 Doe# it $ontain too "an* "a!gina, %#ine##e# o! 8%e#tion "a!(#3 I# te '!o'o!tion of "at%!e&e$,ining %#ine##e# #o g!eat tat g!ot i,, e #,%ggi#3 A!e te!e #o"e %#ine##e# tat a!e not !ea,,* nee&e& o! #o%,& e &i)e#te&3 Doe# te $o"'an* a)e it# #a!e of in&%#t!* ,ea&e!#5 o! i# it %!&ene& it too "an* %#ine##e# in "o&e#t $o"'etiti)e 'o#ition#3 ESHWARI.S---LORAA BUSINESS ACADEMY Page 7>
I# te 'o!tfo,io of SBU9# an& it# !e,ati)e !i#(g!ot 'otentia, $on#i#tent it te #t!ategi$ goa,#3 Do te $o!e %#ine##e# gene!ate &e'en&a,e '!ofit# an&o! $a# f,o3 A!e te!e eno%g $a#-'!o&%$ing %#ine##e# to finan$e to#e nee&ing $a# I# te 'o!tfo,io o)e!,* )%,ne!a,e to #ea#ona, o! !e$e##iona!* inf,%en$e#3 Doe# te 'o!tfo,io '%t te $o!'o!ation in goo& 'o#ition fo! te f%t%!e3 It i# i"'o!tant to $on#i&e! &i)e!#ifi$ation )#. $on$ent!ation i,e o!(ing on 'o!tfo,io #t!ateg*5 i.e.5 o !oa& o! na!!o #o%,& e te #$o'e of te $o"'an*. It i# not a,a*# &e#i!a,e to a)e a !oa& #$o'e. Sing,e-%#ine## #t!ategie# $an e )e!* #%$$e##f%, /e.g.5 ea!,* #t!ategie# of M$Dona,&9#5 Co$a-Co,a5 an& BIC Pen. So"e of te a&)antage# of a na!!o #$o'e of %#ine## a!e: /a ,e## a"ig%it* ao%t o e a!e at e te" &o / $on$ent!ate# te of /$ te t!o%g tota, o!gani+ation5 !ate! tanan& #t!et$ing a$!o## "an* ,ine# ofeffo!t# %#ine## e6ten#i)e an&#-on e6'e!ien$e5 te $o"'an* i# "o!e ,i(e,* to &e)e,o' &i#tin$ti)e $o"'eten$e an& /& fo$%#e# on ,ong-te!" '!ofit#. Hoe)e!5 a)ing a #ing,e %#ine## '%t# 4a,, te egg# in one a#(et54 i$ i# &ange!o%# en te in&%#t!* an&o! te$no,og* "a* $ange. Di)e!#ifi$ation e$o"e# "o!e i"'o!tant en "a!(et g!ot !ate #,o#. B%i,&ing #ta,e #a!eo,&e! )a,%e i# te %,ti"ate 2%#tifi$ation fo! &i)e!#if*ing -- o! an* #t!ateg*. Wat So%,& Be O%! Pa!enting St!ateg*3 Ti# ti!& $o"'onent of $o!'o!ate ,e)e, #t!ateg*5 !e,e)ant fo! a "%,ti-%#ine## $o"'an* /it i# "oot fo! a #ing,e%#ine## $o"'an*5 i# $on$e!ne& it o to a,,o$ate !e#o%!$e# an& "anage $a'ai,itie# an& a$ti)itie# a$!o## te 'o!tfo,io of %#ine##e#. It in$,%&e# e)a,%ating an& "a(ing &e$i#ion# on te fo,,oing: P!io!itie# in a,,o$ating !e#o%!$e# /i$ %#ine## %nit# i,, e #t!e##e& Wat a!e $!iti$a, #%$$e## fa$to!# in ea$ %#ine## %nit5 an& o $an te $o"'an* &o e,, on te" Coo!&ination of a$ti)itie# /e.g.5 o!i+onta, #t!ategie# an& t!an#fe! of $a'ai,itie# a"ong %#ine## %nit# Ho "%$ integ!ation of %#ine## %nit# i# &e#i!a,e. COMPETITIE /BUSINESS LEEL STRATEY In ti# #e$on& a#'e$t of a $o"'an*9# #t!ateg*5 te fo$%# i# on o to $o"'ete #%$$e##f%,,* in ea$ of te ,ine# of %#ine## te $o"'an* a# $o#en to engage in. Te $ent!a, t!%#t i# o to %i,& an& i"'!o)e te $o"'an*9# $o"'etiti)e 'o#ition fo! ea$ of it# ,ine# of %#ine##. A ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
$o"'an* a# $o"'etiti)e a&)antage ene)e! it $an att!a$t $%#to"e!# an& &efen& again#t $o"'etiti)e fo!$e# ette! tan it# !i)a,#. Co"'anie# ant to &e)e,o' $o"'etiti)e a&)antage# tat a)e #o"e #%#tainai,it* /a,to%g te t*'i$a, te!" 4#%#taina,e $o"'etiti)e a&)antage4 i# %#%a,,* on,* t!%e &*na"i$a,,*5 a# a fi!" o!(# to $ontin%e it. S%$$e##f%, $o"'etiti)e #t!ategie# %#%a,,* in)o,)e %i,&ing %ni8%e,* #t!ong o! &i#tin$ti)e $o"'eten$ie# in one o! #e)e!a, a!ea# $!%$ia, to #%$$e## an& %#ing te" to "aintain a $o"'etiti)e e&ge o)e! !i)a,#. So"e e6a"',e# of &i#tin$ti)e $o"'eten$ie# a!e #%'e!io! te$no,og* an&o! '!o&%$t feat%!e#5 ette! "an%fa$t%!ing te$no,og* an& #(i,,#5 #%'e!io! #a,e# an& &i#t!i%tion $a'ai,itie#5 an& ette! $%#to"e! #e!)i$e an& $on)enien$e. Co"'etiti)e #t!ateg* i# ao%t eing &iffe!ent. It "ean# &e,ie!ate,* to&e,i)e! 'e!fo!"aa$ti)itie# o! to 'e!fo!" &iffe!ent a$ti)itie# tan$oo#ing !i)a,# to %ni8%e "i6&iffe!ent,* of )a,%e. /Mi$ae, E. Po!te! Te e##en$e of #t!ateg* ,ie# in $!eating to"o!!o9# $o"'etiti)e a&)antage# fa#te! tan $o"'etito!# "i"i$ te one# *o% 'o##e## to&a*. /a!* Ha"e, = C. ?. P!aa,a& We i,, $on#i&e! $o"'etiti)e #t!ateg* * %#ing Po!te!9# fo%! gene!i$ #t!ategie# /Po!te! 1J5 1J a# te f%n&a"enta, $oi$e#5 an& ten a&&ing )a!io%# $o"'etiti)e ta$ti$#. Po!te!9# o%! ene!i$ Co"'etiti)e St!ategie# He a!g%e# tat a %#ine## nee&# to "a(e to f%n&a"enta, &e$i#ion# in e#ta,i#ing it# $o"'etiti)e a&)antage: /a ete! to $o"'ete '!i"a!i,* on '!i$e /e #a*# 4$o#t54 i$ i# ne$e##a!* to #%#tain $o"'etiti)e '!i$e#5 %t '!i$e i# at te $%#to"e! !e#'on&# to o! to $o"'ete t!o%g '!o)i&ing #o"e &i#tin$ti)e 'oint# of &iffe!entiation tat 2%#tif* ige! '!i$e#5 an& / o !oa& a "a!(et ta!get it i,, ai" at /it# $o"'etiti)e #$o'e. Te#e to $oi$e# &efine te fo,,oing fo%! gene!i$ $o"'etiti)e #t!ategie#. i$ e a!g%e# $o)e! te f%n&a"enta, !ange of $oi$e#. A fift #t!ateg* a,te!nati)e /e#t-$o#t '!o)i&e! i# a&&e& * #o"e #o%!$e#5 a,to%g not * Po!te!5 an& i# in$,%&e& e,o: 1. O)e!a,, P!i$e /Co#t Lea&e!#i': a''ea,ing to a !oa& $!o##-#e$tion of te "a!(et * '!o)i&ing '!o&%$t# o! #e!)i$e# at te ,oe#t '!i$e. Ti# !e8%i!e# eing te o)e!a,, ,o-$o#t '!o)i&e! of te '!o&%$t# o! #e!)i$e# /e.g.5 Co#t$o5 a"ong !etai, #to!e#5 an& H*%n&ai5 a"ong a%to"oi,e "an%fa$t%!e!#. I"',e"enting ti# #t!ateg* #%$$e##f%,,* !e8%i!e# $ontin%a,5 e6$e'tiona, effo!t# to !e&%$e $o#t# -- ito%t e6$,%&ing '!o&%$t feat%!e# an& #e!)i$e# tat %*e!# $on#i&e! e##entia,. It a,#o !e8%i!e# a$ie)ing $o#t a&)antage# in a*# tat a!e a!& fo! $o"'etito!# to $o'* o! "at$. So"e $on&ition# tat ten& to "a(e ti# #t!ateg* an att!a$ti)e $oi$e a!e: Te in&%#t!*9# '!o&%$t i# "%$ te #a"e f!o" #e,,e! to #e,,e! Te "a!(et',a$e i# &o"inate& * '!i$e $o"'etition5 it ig,* '!i$e-#en#iti)e %*e!# ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
Te!e a!e fe a*# to a$ie)e '!o&%$t &iffe!entiation tat a)e "%$ )a,%e to %*e!# Mo#t %*e!# %#e '!o&%$t in #a"e a*# -- $o""on %#e! !e8%i!e"ent# Sit$ing $o#t# fo! %*e!# a!e ,o B%*e!# a!e ,a!ge an& a)e #ignifi$ant a!gaining 'oe! 7. Diffe!entiation: a''ea,ing to a !oa& $!o##-#e$tion of te "a!(et t!o%g offe!ing &iffe!entiating feat%!e# tat "a(e $%#to"e!# i,,ing to 'a* '!e"i%" '!i$e#5 e.g.5 #%'e!io! te$no,og*5 8%a,it*5 '!e#tige5 #'e$ia, feat%!e#5 #e!)i$e5 $on)enien$e /e6a"',e# a!e No!&#t!o" an& Le6%#. S%$$e## it ti# t*'e of #t!ateg* !e8%i!e# &iffe!entiation feat%!e# tat a!e a!& o! e6'en#i)e fo! $o"'etito!# to &%',i$ate. S%#taina,e &iffe!entiation %#%a,,* $o"e# f!o" a&)antage# in $o!e $o"'eten$ie#5 %ni8%e $o"'an* !e#o%!$e# o! $a'ai,itie#5 an& #%'e!io! "anage"ent of )a,%e $ain a$ti)itie#. So"e tatto ten& to fa)o! &iffe!entiation #t!ategie# a!e: Te!e a!e$on&ition# "%,ti',e a*# &iffe!entiate te '!o&%$t#e!)i$e tat %*e!# tin( a)e #%#tantia, )a,%e B%*e!# a)e &iffe!ent nee&# o! %#e# of te '!o&%$t#e!)i$e P!o&%$t inno)ation# an& te$no,ogi$a, $ange a!e !a'i& an& $o"'etition e"'a#i+e# te ,ate#t '!o&%$t feat%!e# Not "an* !i)a,# a!e fo,,oing a #i"i,a! &iffe!entiation #t!ateg* <. P!i$e /Co#t o$%#: a "a!(et ni$e #t!ateg*5 $on$ent!ating on a na!!o $%#to"e! #eg"ent an& $o"'eting it ,oe#t '!i$e#5 i$5 again5 !e8%i!e# a)ing ,oe! $o#t #t!%$t%!e tan $o"'etito!# /e.g.5 a #ing,e5 #"a,, #o' on a #i&e-#t!eet in a ton5 in i$ te* i,, o!&e! e,e$t!oni$ e8%i'"ent at ,o '!i$e#5 o! te $ea'e#t a%to"oi,e "a&e in te fo!"e! B%,ga!ia. So"e $on&ition# tat ten& to fa)o! fo$%# /eite! '!i$e o! &iffe!entiation fo$%# a!e: Te %#ine## i# ne an&o! a# "o&e#t !e#o%!$e# Te $o"'an* ,a$(# te $a'ai,it* to go afte! a i&e! 'a!t of te tota, "a!(et B%*e!#9 nee&# o! %#e# of te ite" a!e &i)e!#e te!e a!e "an* &iffe!ent ni$e# an& #eg"ent# in te in&%#t!* B%*e! #eg"ent# &iffe! i&e,* in #i+e5 g!ot !ate5 '!ofitai,it*5 an& inten#it* in te fi)e $o"'etiti)e fo!$e#5 "a(ing #o"e #eg"ent# "o!e att!a$ti)e tan ote!# In&%#t!* ,ea&e!# &on9t #ee te ni$e a# $!%$ia, to tei! on #%$$e## e o! no ote! !i)a,# a!e atte"'ting to #'e$ia,i+e in te #a"e ta!get #eg"ent ESHWARI.S---LORAA BUSINESS ACADEMY Page 7G
>. Diffe!entiation o$%#: a #e$on& "a!(et ni$e #t!ateg*5 $on$ent!ating on a na!!o $%#to"e! #eg"ent an& $o"'eting t!o%g &iffe!entiating feat%!e# /e.g.5 a igfa#ion o"en9# $,oting o%ti8%e in Pa!i#5 o! e!!a!i. Be#t-Co#t P!o)i&e! St!ateg*: /a,to%g not one of Po!te!9# a#i$ fo%! #t!ategie#5 ti# #t!ateg* i# "entione& * a n%"e! of ote! !ite!#. Ti# i# a #t!ateg* of t!*ing to gi)e $%#to"e!# te e#t $o#t)a,%e $o"ination5 * in$o!'o!ating (e* goo&-o!-ette! '!o&%$t $a!a$te!i#ti$# at a ,oe! $o#t tan $o"'etito!#. Ti# #t!ateg* i# a "i6t%!e o! *!i& of ,o-'!i$e an& &iffe!entiation5 an& ta!get# a #eg"ent of )a,%e$on#$io%# %*e!# tat i# %#%a,,* ,a!ge! tan a "a!(et ni$e5 %t #"a,,e! tan a !oa& "a!(et. S%$$e##f%, i"',e"entation of ti# #t!ateg* !e8%i!e# te $o"'an* to a)e !e#o%!$e#5 #(i,,#5 /an& 'o##i,* ,%$( to in$o!'o!ate %'- in #$a,ete feat%!e# at ,oe! $o#t$a'ai,itie# tan $o"'etito!#. Ti# #t!ateg* $o%,& e att!a$ti)e "a!(et# tat a)e ot )a!iet* in %*e! nee&# tat "a(e &iffe!entiation $o""on an& e!e ,a!ge n%"e!# of %*e!# a!e #en#iti)e to ot '!i$e an& )a,%e. Po!te! "igt a!g%e tat ti# #t!ateg* i# often te"'o!a!*5 an& tat a %#ine## #o%,& $oo#e an& a$ie)e one of te fo%! gene!i$ $o"'etiti)e #t!ategie# ao)e. Ote!i#e5 te %#ine## i# #t%$( in te "i&&,e of te $o"'etiti)e "a!(et',a$e an& i,, e o%t'e!fo!"e& * $o"'etito!# o $oo#e an& e6$e, in one of te f%n&a"enta, #t!ategie#. Hi# a!g%"ent i# ana,ogo%# to te t!eat# to a tenni# ',a*e! o i# #tan&ing at te #e!)i$e ,ine5 !ate! tan nea! te a#e,ine o! getting to te net. Hoe)e!5 ote!# '!e#ent e6a"',e# of $o"'anie# /e.g.5 Hon&a an& To*ota o #ee" to e a,e to '%!#%e #%$$e##f%,,* a e#t-$o#t '!o)i&e! #t!ateg*5 it #tai,it*. Co"'etiti)e Ta$ti$# A,to%g a $oi$e of one of te gene!i$ $o"'etiti)e #t!ategie# &i#$%##e& in te '!e)io%# #e$tion '!o)i&e# te fo%n&ation fo! a %#ine## #t!ateg*5 te!e a!e "an* )a!iation# an& e,ao!ation#. A"ong te#e a!e )a!io%# ta$ti$# tat "a* e %#ef%, /in gene!a,5 ta$ti$# a!e #o!te! in ti"e o!i+on an& na!!oe! in #$o'e tan #t!ategie#. Ti# #e$tion &ea,# it $o"'etiti)e ta$ti$#5 i,e te fo,,oing #e$tion &i#$%##e# $oo'e!ati)e ta$ti$#. To $atego!ie# of $o"'etiti)e ta$ti$# a!e to#e &ea,ing it ti"ing /en to ente! a "a!(et an& "a!(et ,o$ation /e!e an& o to ente! an&o! &efen&. Ti"ing Ta$ti$#: Wen to "a(e a #t!ategi$ "o)e i# often a# i"'o!tant a# at "o)e to "a(e. We often #'ea( of fi!#t-"o)e!# /i.e.5 te fi!#t to '!o)i&e a '!o&%$t o! #e!)i$e5 #e$on&"o)e!# o! !a'i& fo,,oe!#5 an& ,ate "o)e!# /ait-an&-#ee. Ea$ ta$ti$ $an a)e a&)antage# an& &i#a&)antage#. Being a fi!#t"o)e! $an a)e "a2o! #t!ategi$ a&)antage# en: /a &oing #o %i,&# an i"'o!tant i"age an& !e'%tation it %*e!# / ea!,* a&o'tion of ne te$no,ogie#5 &iffe!ent $o"'onent#5 e6$,%#i)e &i#t!i%tion $anne,#5 et$. $an '!o&%$e $o#t an&o! ote! a&)antage# o)e! ESHWARI.S---LORAA BUSINESS ACADEMY Page 7J
!i)a,# /$ fi!#t-ti"e $%#to"e!# !e"ain #t!ong,* ,o*a, in "a(ing !e'eat '%!$a#e# an& /& "o)ing fi!#t "a(e# ent!* an& i"itation * $o"'etito!# a!& o! %n,i(e,*. Hoe)e!5 eing a #e$on&- o! ,ate-"o)e! i#n9t ne$e##a!i,* a &i#a&)antage. Te!e a!e $a#e# in i$ te fi!#t-"o)e!9# #(i,,#5 te$no,og*5 an& #t!ategie# a!e ea#i,* $o'ie& o! e)en #%!'a##e& * ,ate!-"o)e!#5 a,,oing te" to $at$ o! 'a## te fi!#t"o)e! in a !e,ati)e,* #o!t 'e!io&5 i,e a)ing te a&)antage of "ini"i+ing !i#(# * aiting %nti, a ne "a!(et i# e#ta,i#e&. So"eti"e#5 te!e a!e a&)antage# to eing a #(i,,f%, fo,,oe! !ate! tan a fi!#t-"o)e!5 e.g.5 en: /a eing a fi!#t"o)e! i# "o!e $o#t,* tan i"itating an& on,* "o&e#t e6'e!ien$e $%!)e enefit# a$$!%e to te ,ea&e! /fo,,oe!# $an en& %' it ,oe! $o#t# tan te fi!#t-"o)e! %n&e! te '!o&%$t# ofa,,oing an inno)ato! a!e #o"eat an& &o not#o"e ,i)e$on&ition# %' to %*e! / e6'e$tation#5 t%# a $,e)e! fo,,oe! '!i"iti)e to in %*e!# aa* f!o" te ,ea&e! it ette! 'e!fo!"ing '!o&%$t# /$ te$no,og* i# a&)an$ing !a'i&,*5 gi)ing fa#t fo,,oe!# te o'ening to ,ea'f!og a fi!#t-"o)e!9# '!o&%$t# it "o!e att!a$ti)e an& f%,,-feat%!e& #e$on&- an& ti!&gene!ation '!o&%$t# an& /& te fi!#t-"o)e! igno!e# "a!(et #eg"ent# tat $an e 'i$(e& %' ea#i,*. Ma!(et Lo$ation Ta$ti$#: Te#e fa,, $on)enient,* into offen#i)e an& &efen#i)e ta$ti$#. Offen#i)e ta$ti$# a!e &e#igne& to ta(e "a!(et #a!e f!o" a $o"'etito!5 i,e &efen#i)e ta$ti$# atte"'t to (ee' a $o"'etito! f!o" ta(ing aa* #o"e of o%! '!e#ent "a!(et #a!e5 %n&e! te on#,a%gt of offen#i)e ta$ti$# * te $o"'etito!. So"e offen#i)e ta$ti$# a!e: !onta, A##a%,t: going ea&-to-ea& it te $o"'etito!5 "at$ing ea$ ote! in e)e!* a*. To e #%$$e##f%,5 te atta$(e! "%#t a)e #%'e!io! !e#o%!$e# an& e i,,ing to $ontin%e ,onge! tan te $o"'an* atta$(e&. ,an(ing Mane%)e!: atta$(ing a 'a!t of te "a!(et e!e te $o"'etito! i# ea(. To e #%$$e##f%,5 te atta$(e! "%#t e 'atient an& i,,ing to $a!ef%,,* e6'an& o%t of te !e,ati)e,* %n&efen&e& "a!(et ni$e o! e,#e fa$e !eta,iation * an e#ta,i#e& $o"'etito!. En$i!$,e"ent: %#%a,,* e)o,)ing f!o" te '!e)io%# to5 en$i!$,e"ent in)o,)e# en$i!$,ing an& '%#ing o)e! te $o"'etito!9# 'o#ition in te!"# of g!eate! '!o&%$t )a!iet* an&o! #e!)ing "o!e "a!(et#. Ti# !e8%i!e# a i&e )a!iet* of ai,itie# an& !e#o%!$e# ne$e##a!* to atta$( "%,ti',e "a!(et #eg"ent#. B*'a## Atta$(: atte"'ting to $%t te "a!(et o%t f!o" %n&e! te e#ta,i#e& &efen&e! * offe!ing a ne5 #%'e!io! t*'e of '!o&%$e tat "a(e# te $o"'etito!9# '!o&%$t %nne$e##a!* o! %n&e#i!a,e. %e!!i,,a Wa!fa!e: %#ing a 4it an& !%n4 atta$( on a $o"'etito!5 it #"a,,5 inte!"ittent a##a%,t# on &iffe!ent "a!(et #eg"ent#. Ti# offe!# te 'o##ii,it* fo! e)en a #"a,, fi!" to "a(e #o"e gain# ito%t #e!io%#,* t!eatening a ,a!ge5 e#ta,i#e& $o"'etito! an& e)o(ing #o"e fo!" of !eta,iation. ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
So"e Defen#i)e Ta$ti$# a!e: Rai#e St!%$t%!a, Ba!!ie!#: ,o$( a)en%e# $a,,enge!# $an ta(e in "o%nting an offen#i)e In$!ea#e E6'e$te& Reta,iation: #igna, $a,,enge!# tat te!e i# t!eat of #t!ong !eta,iation if te* atta$( Re&%$e In&%$e"ent fo! Atta$(#: e.g.5 ,oe! '!ofit# to "a(e ting# ,e## att!a$ti)e /in$,%&ing %#e of a$$o%nting te$ni8%e# to o#$%!e t!%e '!ofitai,it*. ?ee'ing '!i$e# )e!* ,o gi)e# a ne ent!ant ,itt,e '!ofit in$enti)e to ente!. Te gene!a, e6'e!ien$e i# tat an* $o"'etiti)e a&)antage $%!!ent,* e,& i,, e)ent%a,,* e e!o&e& * te a$tion# of $o"'etent5 !e#o%!$ef%, $o"'etito!#. Te!efo!e5 to #%#tain it# initia, a&)antage5 a fi!" "%#t %#e ot &efen#i)e an& offen#i)e #t!ategie#5 in e,ao!ating on it# a#i$ $o"'etiti)e #t!ateg*. Coo'e!ati)e St!ategie# Anote! g!o%' of 4$o"'etiti)e4 $oo'e!ation $o"'anie#. Te#e i$ $o%,& a)e e een g!o%'e& %n&e! teta$ti$# ea&ingin)o,)e of )a!io%# t*'e# ofa"ong #t!ategi$ a,,ian$e#5 &i#$%##e& to #o"e e6tent %n&e! Co!'o!ate Le)e, g!ot #t!ategie#. Te#e in)o,)e an ag!ee"ent o! a,,ian$e eteen to o! "o!e %#ine##e# fo!"e& to a$ie)e #t!ategi$a,,* #ignifi$ant o2e$ti)e# tat a!e "%t%a,,* enefi$ia,. So"e a!e )e!* #o!t-te!" ote!# a!e ,onge!-te!" an& "a* e te fi!#t #tage of an e)ent%a, "e!ge! eteen te $o"'anie#. So"e of te !ea#on# fo! #t!ategi$ a,,ian$e# a!e to: otain#a!e te$no,og*5 #a!e "an%fa$t%!ing $a'ai,itie# an& fa$i,itie#5 #a!e a$$e## to #'e$ifi$ "a!(et#5 !e&%$e finan$ia,'o,iti$a,"a!(et !i#(#5 an& a$ie)e ote! $o"'etiti)e a&)antage# not ote!i#e a)ai,a,e. Te!e $o%,& e $on#i&e!e& a $ontin%%" of t*'e# of #t!ategi$ a,,ian$e#5 !anging f!o": /a "%t%a, #e!)i$e $on#o!ti%"# /e.g.5 #i"i,a! $o"'anie# in #i"i,a! in&%#t!ie# 'oo, tei! !e#o%!$e# to &e)e,o' #o"eting tat i# too e6'en#i)e a,one5 / ,i$en#ing a!!ange"ent#5 /$ 2oint )ent%!e# /an in&e'en&ent %#ine## entit* fo!"e& * to o! "o!e $o"'anie# to a$$o"',i# $e!tain ting#5 it a,,o$ate& one!#i'5 o'e!ationa, !e#'on#ii,itie#5 an& finan$ia, !i#(# an& !ea! /& )a,%e-$ain 'a!tne!#i'# /e.g.5 2%#t-in-ti"e #%'',ie! !e,ation#i'#5 an& o%t-#o%!$ing of "a2o! )a,%e-$ain f%n$tion#. UNCTIONAL STRATEIES %n$tiona, #t!ategie# a!e !e,ati)e,* #o!t-te!" a$ti)itie# tat ea$ f%n$tiona, a!ea itin a $o"'an* i,, $a!!* o%t to i"',e"ent te !oa&e!5 ,onge!-te!" $o!'o!ate ,e)e, an& %#ine## ,e)e, #t!ategie#. Ea$ f%n$tiona, a!ea a# a n%"e! of #t!ateg* $oi$e#5 tat inte!a$t it an& "%#t e $on#i#tent it te o)e!a,, $o"'an* #t!ategie#. ESHWARI.S---LORAA BUSINESS ACADEMY Page <
T!ee a#i$ $a!a$te!i#ti$# &i#ting%i# f%n$tiona, #t!ategie# f!o" $o!'o!ate ,e)e, an& %#ine## ,e)e, #t!ategie#: So!te! ti"e o!i+on5 g!eate! #'e$ifi$it*5 an& '!i"a!* in)o,)e"ent of o'e!ating "anage!#. A fe e6a"',e# fo,,o of f%n$tiona, #t!ateg* to'i$# fo! te "a2o! f%n$tiona, a!ea# of "a!(eting5 finan$e5 '!o&%$tiono'e!ation#5 !e#ea!$ an& &e)e,o'"ent5 an& %"an !e#o%!$e# "anage"ent. Ea$ a!ea nee&# to &ea, it #o%!$ing #t!ateg*5 i.e.5 at #o%,& e &one in-o%#e an& at #o%,& e o%t#o%!$e&3 Ma!(eting #t!ateg* &ea,# it '!o&%$t#e!)i$e $oi$e# an& feat%!e#5 '!i$ing #t!ateg*5 "a!(et# to e ta!gete&5 &i#t!i%tion5 an& '!o"otion $on#i&e!ation#. inan$ia, #t!ategie# in$,%&e &e$i#ion# ao%t $a'ita, a$8%i#ition5 $a'ita, a,,o$ation5 &i)i&en& 'o,i$*5 an& in)e#t"ent an& o!(ing $a'ita, "anage"ent. Te '!o&%$tion o! o'e!ation# f%n$tiona, a&&!e## $oi$e# ao%t o an& e!e te '!o&%$t# o! #e!)i$e# i,, e #t!ategie# "an%fa$t%!e& o! &e,i)e!e&5 te$no,og* to e %#e&5 "anage"ent of !e#o%!$e#5 ',%# '%!$a#ing an& !e,ation#i'# it #%'',ie!#. o! fi!"# in igte$ in&%#t!ie#5 R=D #t!ateg* "a* e #o $ent!a, tat "an* of te &e$i#ion# i,, e "a&e at te %#ine## o! e)en $o!'o!ate ,e)e,5 fo! e6a"',e te !o,e of te$no,og* in te $o"'an*9# $o"'etiti)e #t!ateg*5 in$,%&ing $oi$e# eteen eing a te$no,og* ,ea&e! o! fo,,oe!. Hoe)e!5 te!e i,, !e"ain "o!e #'e$ifi$ &e$i#ion# tat a!e 'a!t of R=D f%n$tiona, #t!ateg*5 #%$ a# te !e,ati)e e"'a#i# eteen '!o&%$t an& '!o$e## R=D5 o ne te$no,og* i,, e otaine& /inte!na, &e)e,o'"ent )#. e6te!na, t!o%g '%!$a#ing5 a$8%i#ition5 ,i$en#ing5 a,,ian$e#5 et$.5 an& &eg!ee of $ent!a,i+ation fo! R=D a$ti)itie#. H%"an !e#o%!$e# f%n$tiona, #t!ateg* in$,%&e# "an* to'i$#5 t*'i$a,,* !e$o""en&e& * te %"an !e#o%!$e# &e'a!t"ent5 %t "an* !e8%i!ing to' "anage"ent a''!o)a,. E6a"',e# a!e 2o $atego!ie# an& &e#$!i'tion# 'a* an& enefit# !e$!%iting5 #e,e$tion5 an& o!ientation $a!ee! &e)e,o'"ent an& t!aining e)a,%ation an& in$enti)e #*#te"# 'o,i$ie# an& &i#$i',ine an& "anage"ente6e$%ti)e #e,e$tion '!o$e##e#. CHOOSIN THE BEST STRATEY ALTERNATIES De$i#ion "a(ing i# a $o"',e6 #%2e$t5 o!t* of a $a'te! o! oo( of it# on. Ti# #e$tion $an on,* offe! a fe #%gge#tion#. A"ong te "an* #o%!$e# fo! a&&itiona, info!"ation5 I !e$o""en& Ha!!i#on /15 M$Ca,, = ?a',an /15 an& Wi,,ia"# /77. He!e a!e #o"e fa$to!# to $on#i&e! en $oo#ing a"ong a,te!nati)e #t!ategie#: It i# i"'o!tant to get a# $,ea! a# 'o##i,e ao%t o2e$ti)e# an& &e$i#ion $!ite!ia /at "a(e# a &e$i#ion a 4goo&4 one3 Te '!i"a!* an#e! to te '!e)io%# 8%e#tion5 an& te!efo!e a )ita, $!ite!ion5 i# tat te $o#en #t!ategie# "%#t e effe$ti)e in a&&!e##ing te 4$!iti$a, i##%e#4 te $o"'an* fa$e# at ti# ti"e Te* "%#t e $on#i#tent it te "i##ion an& ote! #t!ategie# of te o!gani+ation ESHWARI.S---LORAA BUSINESS ACADEMY Page <1
Te* nee& to e $on#i#tent it e6te!na, en)i!on"ent fa$to!#5 in$,%&ing !ea,i#ti$ a##e##"ent# of te $o"'etiti)e en)i!on"ent an& t!en&# Te* fit te $o"'an*9# '!o&%$t ,ife $*$,e 'o#ition an& "a!(et att!a$ti)ene##$o"'etiti)e #t!engt #it%ation Te* "%#t e $a'a,e of eing i"',e"ente& effe$ti)e,* an& effi$ient,*5 in$,%&ing eing !ea,i#ti$ it !e#'e$t to te $o"'an*9# !e#o%!$e# Te !i#(# "%#t e a$$e'ta,e an& in ,ine it te 'otentia, !ea!&# It i# i"'o!tant to "at$ #t!ateg* to te ote! a#'e$t# of te #it%ation5 in$,%&ing: /a #i+e5 #tage5 an& g!ot !ate of in&%#t!* / in&%#t!* $a!a$te!i#ti$#5 in$,%&ing f!ag"entation5 i"'o!tan$e of te$no,og*5 $o""o&it* '!o&%$t o!ientation5 inte!nationa, feat%!e# an& /$ $o"'an* 'o#ition /&o"inant ,ea&e!5 ,ea&e!5 agg!e##i)e $a,,enge!5 fo,,oe!5 ea(5 4#t%$( in /e.g.5 te "i&&,e4 Con#i&e! #ta(eo,&e! ana,*#i# an& ote! 'eo',e!e,ate& fa$to!# inte!na, an& e6te!na, '!e##%!e#5 !i#( '!o'en#it*5 an& nee&# an& &e#i!e# of i"'o!tant &e$i#ion-"a(e!# So"eti"e# it i# e,'f%, to &o #$ena!io $on#t!%$tion5 e.g.5 $a#e# it o'ti"i#ti$5 "o#t ,i(e,*5 an& 'e##i"i#ti$ a##%"'tion#. SOME TROUBLESOME STRATEIES TO AOID OR USE WITH CAUTION o,,o te Lea&e!: en te "a!(et a# no "o!e !oo" fo! $o'*$at '!o&%$t# an& ,oo(-a,i(e $o"'etito!#. So"eti"e# #%$ a #t!ateg* $an o!( fine5 %t not ito%t $a!ef%, $on#i&e!ation of te $o"'an*9# 'a!ti$%,a! #t!engt# an& ea(ne##e#. /e.g.5 %2it#% Lt&. a# &!i)en #in$e te 1# to $at$ %' to IBM in "ainf!a"e# an& $ontin%e& ti# 8%e#t e)en into te 1# afte! "ainf!a"e# e!e in #tee' &e$,ine o! te &e$i#ion * Stan&a!& Oi, of Oio to fo,,o E66on an& Moi, Oi, into $ong,o"e!ate &i)e!#ifi$ation Co%nt On Hitting Anote! Ho"e R%n: e.g.5 Po,a!oi& t!ie& to fo,,o it# ea!,* #%$$e## it in#tant 'otog!a'* * &e)e,o'ing 4Po,a)i#ion4 &%!ing te "i&-1G#. Unfo!t%nate,*5 ti# )e!* e6'en#i)e5 in#tant &e)e,o'ing5 J""5 ,a$( an& ite5 #i,ent "otion 'i$t%!e $a"e!a an& fi," a# &i#',a*e& at a #to$(o,&e!#9 "eeting ao%t te ti"e tat te fi!#t eta-fo!"at )i&eo !e$o!&e! a# !e,ea#e& * Son*. Po,a!oi& !e'o!te&,* !ote off at ,ea#t "i,,ion on ti# )ent%!e ito%t #e,,ing a #ing,e $a"e!a. T!* to Do E)e!*ting: e#ta,i#ing "an* ea( "a!(et 'o#ition# in#tea& of a fe #t!ong one# A!"# Ra$e: Atta$(ing te "a!(et ,ea&e!# ea&-on ito%t a)ing eite! a goo& $o"'etiti)e a&)antage o! a&e8%ate finan$ia, #t!engt "a(ing #%$ agg!e##i)e atte"'t# to ta(e "a!(et #a!e tat !i)a,# a!e '!o)o(e& into #t!ong !eta,iation an& a $o#t,* 4a!"# !a$e.4 S%$ att,e# #e,&o" ESHWARI.S---LORAA BUSINESS ACADEMY Page <7
'!o&%$e a #%#tantia, $ange in "a!(et #a!e# %#%a, o%t$o"e i# ige! $o#t# an& '!ofit,e## #a,e# g!ot P%t Mo!e Mone* On a Lo#ing Han&: one )e!#ion of ti# i# a,,o$ating R=D effo!t# to ea( '!o&%$t# in#tea& of #t!ong '!o&%$t# /e.g.5 Po,a)i#ion again5 Pan A"9# atte"'t to $ontin%e g,oa, !o%te# in 1JG O)e!o'ti"i#ti$ E6'an#ion: U#ing ig &et to finan$e in)e#t"ent# in ne fa$i,itie# an& e8%i'"ent5 ten getting t!a''e& it ig fi6e& $o#t# en &e"an& t%!n# &on5 e6$e## $a'a$it* a''ea!#5 an& $a# f,o# a!e tigt Un!ea,i#ti$ Stat%#-C,i"ing: oing afte! te ig en& of te "a!(et ito%t a)ing te !e'%tation to att!a$t %*e!# ,oo(ing fo! na"e-!an&5 '!e#tige goo&# /e.g.5 Sea!#9 atte"'t# to int!o&%$e &e#igne! o"en9# $,oting Se,,ing te Si++,e Wito%t te Stea(: S'en&ing "o!e "one* onan& "a!(eting an& #a,e# '!o"otion# to t!* '!o&%$t to get a!o%n& '!o,e"# '!o&%$t 8%a,it* 'e!fo!"an$e. De'en&ing on $o#"eti$ i"'!o)e"ent# to it #e!)e a# a #%#tit%te fo! !ea, inno)ation an& e6t!a $%#to"e! )a,%e. Ste'# in St!ateg* o!"%,ation P!o$e## St!ateg* fo!"%,ation !efe!# to te '!o$e## of $oo#ing te "o#t a''!o'!iate $o%!#e of a$tion fo! te !ea,i+ation of o!gani+ationa, goa,# an& o2e$ti)e# an& te!e* a$ie)ing te o!gani+ationa, )i#ion. Te '!o$e## of #t!ateg* fo!"%,ation a#i$a,,* in)o,)e# #i6 "ain #te'#. To%g te#e #te'# &o not fo,,o a !igi& $!ono,ogi$a, o!&e!5 oe)e! te* a!e )e!* !ationa, an& $an e ea#i,* fo,,oe& in ti# o!&e!. 1. Setting O!gani+ation#; o2e$ti)e# - Te (e* $o"'onent of an* #t!ateg* #tate"ent i# to #et te ,ong-te!" o2e$ti)e# of te o!gani+ation. It i# (non tat #t!ateg* i# gene!a,,* a "e&i%" fo! !ea,i+ation of o!gani+ationa, o2e$ti)e#. O2e$ti)e# #t!e## te #tate of eing te!e e!ea# St!ateg* #t!e##e# %'on te '!o$e## of !ea$ing te!e. St!ateg* in$,%&e# ot te fi6ation of o2e$ti)e# a# e,, te "e&i%" to e %#e& to !ea,i+e to#e o2e$ti)e#. T%#5 #t!ateg* i# a i&e! te!" i$ e,ie)e# in te "anne! of &e',o*"ent of !e#o%!$e# #o a# to a$ie)e te o2e$ti)e#. Wi,e fi6ing te o!gani+ationa, o2e$ti)e#5 it i# e##entia, tat te fa$to!# i$ inf,%en$e te #e,e$tion of o2e$ti)e# "%#t e ana,*+e& efo!e te #e,e$tion of o2e$ti)e#. On$e te o2e$ti)e# an& te fa$to!# inf,%en$ing #t!ategi$ &e$i#ion# a)e een &ete!"ine&5 it i# ea#* to ta(e #t!ategi$ &e$i#ion#. ESHWARI.S---LORAA BUSINESS ACADEMY Page <<
7. E)a,%ating te O!gani+ationa, En)i!on"ent - Te ne6t #te' i# to e)a,%ate te gene!a, e$ono"i$ an& in&%#t!ia, en)i!on"ent in i$ te o!gani+ation o'e!ate#. Ti# in$,%&e# a !e)ie of te o!gani+ation# $o"'etiti)e 'o#ition. It i# e##entia, to $on&%$t a 8%a,itati)e an& 8%antitati)e !e)ie of an o!gani+ation# e6i#ting '!o&%$t ,ine. Te '%!'o#e of #%$ a !e)ie i# to "a(e #%!e tat te fa$to!# i"'o!tant fo! $o"'etiti)e #%$$e## in te "a!(et $an e &i#$o)e!e& #o tat te "anage"ent $an i&entif* tei! on #t!engt# an& ea(ne##e# a# e,, a# tei! $o"'etito!#; #t!engt# an& ea(ne##e#. Afte! i&entif*ing it# #t!engt# an& ea(ne##e#5 an o!gani+ation "%#t (ee' a t!a$( of $o"'etito!#; "o)e# an& a$tion# #o a# to &i#$o)e! '!oa,e o''o!t%nitie# of t!eat# to it# "a!(et o! #%'',* #o%!$e#. <. @%antitati)e Ta!get# - In ti# #te'5 an o!gani+ation "%#t '!a$ti$a,,* fi6Setting te 8%antitati)e ta!get )a,%e# fo! #o"e of te o!gani+ationa, o2e$ti)e#. Te i&ea ein& ti# i# to $o"'a!e it ,ong te!" $%#to"e!#5 #o a# to e)a,%ate te $ont!i%tion tat "igt e "a&e * )a!io%# '!o&%$t +one# o! o'e!ating &e'a!t"ent#. >. Ai"ing in $onte6t it te &i)i#iona, ',an# - In ti# #te'5 te $ont!i%tion# "a&e * ea$ &e'a!t"ent o! &i)i#ion o! '!o&%$t $atego!* itin te o!gani+ation i# i&entifie& an& a$$o!&ing,* #t!ategi$ ',anning i# &one fo! ea$ #%-%nit. Ti# !e8%i!e# a $a!ef%, ana,*#i# of "a$!oe$ono"i$ t!en&#. . Pe!fo!"an$e Ana,*#i# - Pe!fo!"an$e ana,*#i# in$,%&e# &i#$o)e!ing an& ana,*+ing te ga' eteen te ',anne& o! &e#i!e& 'e!fo!"an$e. A $!iti$a, e)a,%ation of te o!gani+ation# 'a#t 'e!fo!"an$e5 '!e#ent $on&ition an& te &e#i!e& f%t%!e $on&ition# "%#t e &one * te o!gani+ation. Ti# $!iti$a, e)a,%ation i&entifie# te &eg!ee of ga' tat 'e!#i#t# eteen te a$t%a, !ea,it* an& te ,ong-te!" a#'i!ation# of te o!gani+ation. An atte"'t i# "a&e * te o!gani+ation to e#ti"ate it# '!oa,e f%t%!e $on&ition if te $%!!ent t!en&# 'e!#i#t. . Coi$e of St!ateg* - Ti# i# te %,ti"ate #te' in St!ateg* o!"%,ation. Te e#t $o%!#e of a$tion i# a$t%a,,* $o#en afte! $on#i&e!ing o!gani+ationa, goa,#5 o!gani+ationa, #t!engt#5 'otentia, an& ,i"itation# a# e,, a# te e6te!na, o''o!t%nitie#. tt':."anage"ent#t%&*g%i&e.$o"#t!ategi$-"anage"ent.t" ESHWARI.S---LORAA BUSINESS ACADEMY Page <>
1 #te'# in #t!ateg* fo!"%,ation: Te!e a!e #e)e!a, a*# a #t!ateg* $an e &e#igne& fo! a $o"'an*. Hoe)e! #o"e "eto&# a!e ette! tan te ote!#. He!e a!e 1 #te'# i$ g%i&e *o% in &e$i&ing te #t!ateg* of *o%! $o"'an*. Ste'# 1 to "ain,* in)o,)e inte!na, o! e6te!na, !e#ea!$ a# e,, a# )e!* ,ong te!" #t!ateg* "a(ing /St!ategie# "a&e in te fi!#t #te'# affe$t te o,e ,ife $*$,e of te $o"'an* 1 W!ite a i#ion State"ent Q A )i#ion #tate"ent /$!i#' an& to te 'oint i# a "%#t fo! &e)e,o'ing a #t!ateg*. E6',o!ing an& &e$i&ing on te )i#ion of te $o"'an* gi)e# *o% $,a!it* on te "ain o2e$ti)e# of te $o"'an*. 7 Mi##ion State"ent - De$i&e a Mi##ion #tate"ent fo! te $o"'an*. Ti# "i##ion #tate"ent o%,& a$t%a,,* &ete!"ine te "eto&o,og* of te $o"'an* inte !ea$ing it# )i#ion5 an& it#nee&# 'i,o#o'* it# goa,#. < Define $o"'an* '!ofi,e - it# Te '%!'o#e# $o"'an* '!ofi,e to e ein& $o"'!een#i)e i$ f%!te! $,ea!# te goa,# of te o!gani+ation. Wat o%,& e te #t!engt# of te $o"'an*5 $a'ai,itie#5 "anage"ent. In e##en$e "ention e)e!*ting *o% $an ao%t te $o"'an*. Ti# e,'# in t!an#'a!en$* i,e &e$i&ing te #t!ateg*. > St%&* te E6te!na, en)i!on"ent Q No #t!ateg* $an e $o"',ete ito%t ta(ing into $on#i&e!ation te effe$t tat e6te!na, en)i!on"ent a# on %#ine##e#. T%# an in &e't #t%&* on e6te!na, en)i!on"ent i# ne$e##a!* an& te #a"e #o%,& e "entione& in te #t!ateg* !e'o!t. Te t #te' in)o,)e# "at$ing a,, t!ee Q Mi##ion #tate"ent5 Co"'an* '!ofi,e an& te e6te!na, en)i!on"ent #%$ tat te* a!e in #*n$ to a$ie)e te )i#ion of te $o"'an*. !o" e!e on5 Ste' to 1 in)o,)e &e$i#ion "a(ing a#e& on te !e#ea!$ a# e,, a# te &e$i#ion# ta(en fo! te $o"'an* in te '!e)io%# #te'#. Te ,a#t #te'# a!e "o!e in$,ine& toa!&# i"',e"entation. De$i&ing te a$tion# fo! a$$o"',i#ing te "i##ion of te o!gani+ation G Se,e$ting ,ong te!" #t!ategie# i$ i,, e "o#t effe$ti)e J De$i&ing on #o!t te!" #t!ategie# a!i#ing f!o" te ,ong te!" one# #%$ tat te#e #o!t te!" #t!ategie# too a!e in #*n$ it te "i##ion an& )i#ion #tate"ent ESHWARI.S---LORAA BUSINESS ACADEMY Page <
De$i&ing te %&get an& !e#o%!$e a,,o$ation a$$o!&ing to te #o!t te!" #t!ateg* 1 I"',e"entation of te #t!ategie# a,ong it '!e &e$i&e& !e)ie #*#te" a,ong it "ea#%!e# to "aintain $ont!o, an& a fa,,a$( #o!t te!" ',an. STRATEIC ISION AND MISSION To%g #o%n&ing $,i$e&5 i#ion = Mi##ion #tate"ent $an &o a ,ot to a,ign"ent. It i# i"'o!tant tat te #a"e i# o!&e& an& a!ti$%,ate& in a a* te 'eo',e $an !e,ate to te" an& a,#o fin& it ,in(e& to tei! 2o. St!ategi$ i#ion A #t!ategi$ )i#ion i# a )ie of an o!gani+ation;# f%t%!e &i!e$tion an& %#ine## "a(e%'. i# a te g%i&ing $on$e't at te o!gani+ation i#e t!*ing to'!e#ent5 &o an& to e$o"e. It We!ea# fo$%# of tefo! $o"'an*;# "i##ion ten&# to on te te fo$%# of a #t!ategi$ )i#ion i# on a $o"'an*;# f%t%!e. If te #tate"ent of "i##ion #'ea(# a# "%$ to te f%t%!e 'at te o!gani+ation inten&# to fo,,o a# to te '!e#ent o!gani+ationa, '%!'o#e5 ten te "i##ion #tate"ent in$o!'o!ate# te #t!ategi$ )i#ion an& te!e;# no #e'a!ate nee& fo! a )i#ion. /To"'#on St!i$(,an& '.7> A )i#ion #tate"ent an#e!# te 8%e#tion# KWat i,, o%! %#ine## ,oo( ,i(e in to 1 *ea!# f!o" no3 A #t!ategi$ )i#ion i# a !oa&"a' of a $o"'an*;# f%t%!e te &i!e$tion it i# ea&e&5 te $%#to"e! fo$%# it #o%,& a)e5 te "a!(et 'o#ition it #o%,& t!* to o$$%'*5 te %#ine## a$ti)itie# to e '%!#%e&5 an& te $a'ai,itie# it ',an# to &e)e,o'. o!"ing a #t!ategi$ )i#ion of at te $o"'an*;# f%t%!e %#ine## "a(e%' i,, e an& e!e te o!gani+ation i# ea&e& i# nee&e& #o a# to '!o)i&e ,ong-te!" &i!e$tion5 &e,ineate at (in& of ente!'!i#e te $o"'an* i# t!*ing to e$o"e5 an& inf%#e te o!gani+ation it a #en#e of '%!'o#ef%, a$tion. St!ategi$ )i#ion $a!t# te $o%!#e fo! te o!gani+ation to '%!#%e an& $!eate# o!gani+ationa, '%!'o#e an& i&entit*. St!ategi$ )i#ion #'e,,# o%t a &i!e$tion an& &e#$!ie# te &e#tination. /To"a# St!i$(,an&5 '.<5 7G A )i#ion #tate"ent i# a 'oe!f%, 'i$t%!e of at te $o"'an*;# %#ine## $an an& #o%,& e a &e$a&e f!o" no. Wen a #t!ategi$ )i#ion $on)e*# te "a!(et 'o#ition it inten&# to #ta(e o%t an& at $o%!#e te $o"'an* i# going to fo,,o5 ten te )i#ion i# t!%,* $a'a,e in 1. g%i&ing "anage!ia, &e$i#ion "a(ing 7. #a'ing te $o"'an*;# #t!ateg* <. i"'a$ting o te $o"'an* i# !%n./To"a# St!i$(,an&5 '.7J A e,,-o!&e& #t!ategi$ )i#ion #tate"ent a# !ea, )a,%e: /To"a# St!i$(,an&55 '.< 1. It $!*#ta,,i+e# #enio! e6e$%ti)e;# on )ie# ao%t fi!" ,ong-te!" &i!e$tion an& f%t%!e. 7. It g%i&e# "anage!ia, &e$i#ion "a(ing. <. It $on)e*# an o!gani+ationa, '%!'o#e tat a!o%#e# e"',o*ee %*-in an& $o""it"ent. >. It '!o)i&e# a ea$on ,oe!-,e)e, "anage!# $an %#e to fo!" &e'a!t"enta, "i##ion#5 #et &e'a!t"enta, o2e$ti)e#5 an& $!aft #t!ategie#. . It e,'# an o!gani+ation '!e'a!e fo! te f%t%!e. De)e,o'ing a St!ategi$ i#ion State"ent ESHWARI.S---LORAA BUSINESS ACADEMY Page <
Te ent!e'!ene%!ia, $a,,enge in &e)e,o'ing a #t!ategi$ )i#ion i# to tin( $!eati)e,* ao%t o to '!e'a!e a $o"'an* fo! te f%t%!e. It !e8%i!e# !ationa, ana,*#i# of at te $o"'an* #o%,& e &oing to get !ea&* fo! te $ange# $o"ing in it# '!e#ent %#ine## an& to $a'ita,i+e on ne,* &e)e,o'ing "a!(et o''o!t%nitie#. Ca,,enge# !e,ate& to i#ion State"ent: P%tting-%' a )i#ion i# not a $a,,enge. Te '!o,e" i# to "a(e e"',o*ee# engage& it it. Man* a ti"e5 te!"# ,i(e )i#ion5 "i##ion an& #t!ateg* e$o"e "o!e a #%2e$t of #$o!n tan eing ,oo(e& %'-to. Ti# i# '!i"a!i,* e$a%#e ,ea&e!# "a* not e a,e to "a(e a $onne$t eteen te )i#ion"i##ion an& 'eo',e;# e)e!* &a* o!(. Too often5 e"',o*ee# #ee a ga' eteen te )i#ion5 "i##ion an& tei! '!io!itie#. E)en if i# i#ion a )a,i&ta$ti$a, !ea#on fo! ti# "i#-"at$5 it goa,# i# not=e6',aine&. Ho!i+on ofte!e i#ion: #o%,& e te o!i+on of -1 *ea!#. If it i# ,e## tan tat5 it e$o"e# ta$ti$a,. If it i# of a o!i+on of 7 *ea!# /#a*5 it e$o"e# &iffi$%,t fo! te #t!ateg* to !e,ate to te )i#ion. eat%!e# of a goo& )i#ion #tate"ent: * * * * * * * Ea#* to !ea& an& %n&e!#tan&. Co"'a$t an& C!i#' to ,ea)e #o"eting to 'eo',e;# i"agination. i)e# te &e#tination an& not te !oa&-"a'. I# "eaningf%, an& not too o'en en&e& an& fa!-fet$e&. E6$ite 'eo',e an& "a(e te" get goo#e-%"'#. P!o)i&e# a "oti)ating fo!$e5 e)en in a!& ti"e#. I# 'e!$ei)e& a# a$ie)a,e an& at te #a"e ti"e i# $a,,enging an& $o"'e,,ing5 #t!et$ing %# e*on& at i# $o"fo!ta,e. i#ion i# a &!ea"a#'i!ation5 fine-t%ne& to !ea,it*: Te Enti!e '!o$e## #ta!ting f!o" i#ion &on to te %#ine## o2e$ti)e#5 i# ig,* ite!ati)e. Te 8%e#tion i# f!o" e!e #o%,& e #ta!t. We #t!ong,* !e$o""en& tat )i#ion an& "i##ion #tate"ent #o%,& e "a&e fi!#t ito%t eing $o,o!e& * $on#t!aint#5 $a'ai,itie# an& en)i!on"ent. Ti# $an #ai& a(in to te )i#ion of a!"e& fo!$e#5 tat;# 9Safe an& Se$%!e $o%nt!* f!o" e6te!na, t!eat#9. Ti# )i#ion i# a non-negotia,e an& it &!i)e# te o!gani+ation to fin& a*# an& "ean# to a$ie)e tei! )i#ion5 * o)e!$o"ing $on#t!aint# on $a'ai,itie# an& !e#o%!$e#. i#ion #o%,& e a #ta(e in te g!o%n&5 a 'o#ition5 a &!ea"5 i$ #o%,& e '!%&ent5 %t #o%,& e nonnegotia,e a!!ing fe !a!e $i!$%"#tan$e#. i#ion State"ent# fo! Ne an& S"a,, i!"# i#ion #tate"ent# an& "i##ion #tate"ent# a!e )e!* &iffe!ent. A )i#ion #tate"ent fo! a ne o! ESHWARI.S---LORAA BUSINESS ACADEMY Page
#"a,, fi!" #'e,,# o%t goa,# at a ig ,e)e, an& #o%,& $oin$i&e it te fo%n&e!9# goa,# fo! te %#ine##. Si"',* '%t5 te )i#ion #o%,& #tate at te fo%n&e! %,ti"ate,* en)i#ion# te %#ine## to e5 in te!"# of g!ot5 )a,%e#5 e"',o*ee#5 $ont!i%tion# to #o$iet*5 an& te ,i(e te!efo!e5 #e,f-!ef,e$tion * te fo%n&e! i# a )ita, a$ti)it* if a "eaningf%, )i#ion i# to e &e)e,o'e&. A# a fo%n&e!5 on$e *o% a)e &efine& *o%! )i#ion5 *o% $an egin to &e)e,o' #t!ategie# fo! "o)ing te o!gani+ation toa!& tat )i#ion. Pa!t of ti# in$,%&e# te &e)e,o'"ent of a $o"'an* "i##ion. * * * * Rea,i#ti$: A )i#ion "%#t e a#e& in !ea,it* to e "eaningf%, fo! an o!gani+ation. o! e6a"',e5 if *o%9!e &e)e,o'ing a )i#ion fo! a $o"'%te! #ofta!e $o"'an* tat a# $a!)e& o%t a #"a,, ni$e in te "a!(et &e)e,o'ing in#t!%$tiona, #ofta!e an& a# a 1. 'e!$ent #a!e of te $o"'%te! #ofta!e "a!(et5 a )i#ion to o)e!ta(e Mi$!o#oft an& &o"inate te #ofta!e "a!(et i# not !ea,i#ti$ C!e&i,e: A )i#ion "%#t e e,ie)a,e to e !e,e)ant. To o" "%#t a )i#ion e $!e&i,e3 Mo#t i"'o!tant,*5 to te e"',o*ee# o! "e"e!# of te o!gani+ation. If te "e"e!# of te o!gani+ation &o not fin& te )i#ion $!e&i,e5 it i,, not e "eaningf%, o! #e!)e a %#ef%, '%!'o#e. One of te '%!'o#e# of a )i#ion i# to in#'i!e to#e in te o!gani+ation to a$ie)e a ,e)e, of e6$e,,en$e5 an& to '!o)i&e '%!'o#e an& &i!e$tion fo! te o!( of to#e e"',o*ee#. A )i#ion i$ i# not $!e&i,e i,, a$$o"',i# neite! of te#e en&#. Att!a$ti)e: If a )i#ion i# going to in#'i!e an& "oti)ate to#e in te o!gani+ation5 it "%#t e att!a$ti)e. Peo',e "%#t ant to e 'a!t of ti# f%t%!e tat9# en)i#ione& fo! te o!gani+ation. %t%!e: A )i#ion i# not in te '!e#ent5 it i# in te f%t%!e. In ti# !e#'e$t5 te i"age of te ,ea&e! ga+ing off into te &i#tan$e to fo!"%,ate a )i#ion "a* not e a a& one. A )i#ion i# not e!e *o% a!e no5 it9# e!e *o% ant to e in te f%t%!e. /If *o% !ea$ o! attain a )i#ion5 an& it9# no ,onge! in te f%t%!e5 %t in te '!e#ent5 i# it #ti,, a )i#ion3 Nan%# goe# on to #a* tat te !igt )i#ion fo! an o!gani+ation5 one tat i# a !ea,i#ti$5 $!e&i,e5 att!a$ti)e f%t%!e fo! tat o!gani+ation5 $an a$$o"',i# a n%"e! of ting# fo! te o!gani+ation: * * * It att!a$t# $o""it"ent an& ene!gi+e# 'eo',e. Ti# i# one of te '!i"a!* !ea#on# fo! a)ing a )i#ion fo! an o!gani+ation: it# "oti)ationa, effe$t. Wen 'eo',e $an #ee tat te o!gani+ation i# $o""itte& to a )i#ion-an& tat entai,# "o!e tan 2%#t a)ing a )i#ion #tate"ent-it gene!ate# ent%#ia#" ao%t te $o%!#e te o!gani+ation inten&# to fo,,o5 an& in$!ea#e# te $o""it"ent of 'eo',e to o!( toa!& a$ie)ing tat )i#ion. It $!eate# "eaning in o!(e!#9 ,i)e#. A )i#ion a,,o# 'eo',e to fee, ,i(e te* a!e 'a!t of a g!eate! o,e5 an& en$e '!o)i&e# "eaning fo! tei! o!(. Te !igt )i#ion i,, "ean #o"eting to e)e!*one in te o!gani+ation if te* $an #ee o at te* &o $ont!i%te# to tat )i#ion. Con#i&e! te &iffe!en$e eteen te ote, #e!)i$e o!(e! o $an on,* #a*5 4I "a(e e&# an& $,ean at!oo"#54 to te one o $an a,#o #a*5 4I9" 'a!t of a tea" $o""itte& to e$o"ing te o!,&i&e ,ea&e! in '!o)i&ing 8%a,it* #e!)i$e to o%! ote, g%e#t#.4 Te o!( i# te #a"e5 %t te $onte6t an& "eaning of te o!( i# &iffe!ent. It e#ta,i#e# a #tan&a!& of e6$e,,en$e. A )i#ion #e!)e# a )e!* i"'o!tant f%n$tion in Page
ESHWARI.S---LORAA BUSINESS ACADEMY
* e#ta,i#ing a #tan&a!& of e6$e,,en$e. In fa$t5 a goo& )i#ion i# a,, ao%t e6$e,,en$e. To" Pete!#5 te a%to! of In Sea!$ of E6$e,,en$e5 ta,(# ao%t going into an o!gani+ation e!e a n%"e! of '!o,e"# e6i#te&. Wen e atte"'te& to get te o!gani+ation9# ,ea&e!#i' to a&&!e## te '!o,e"#5 e got te &efen#i)e !e#'on#e5 4B%t e9!e no o!#e tan an*one e,#e4 Pete!# $ite# ti# #a!$a#ti$a,,* a# a g!eat )i#ion fo! an o!gani+ation: 4A$"e Wi&get#: We9!e No Wo!#e Tan An*one E,#e4 A )i#ion #o $a!a$te!i+e& * ,a$( of a #t!i)ing fo! e6$e,,en$e o%,& not "oti)ate o! e6$ite an*one ao%t tat o!gani+ation. Te #tan&a!& of e6$e,,en$e a,#o $an #e!)e a# a a "ea#%!e $ontin%ing an& #ti"%,ate 8%a,it* i"'!o)e"ent '!og!a"#5 a# e,, a# '!o)i&ing of goa, te o!t of te o!gani+ation. It !i&ge# te '!e#ent an& te f%t%!e. Te !igt )i#ion ta(e# te o!gani+ation o%t of te '!e#ent5 an& fo$%#e# it on te f%t%!e. It9# ea#* to get $a%gt %' in te $!i#e# of te &a*5 an& to ,o#e #igt of e!e *o% e!e ea&ing. A goo& )i#ion $an o!ient *o% on te f%t%!e5 an& '!o)i&e 'o#iti)e &i!e$tion. Te )i#ion a,one i#n9t eno%g to "o)e *o% f!o" te '!e#ent to te f%t%!e5 oe)e!. Tat9# e!e a #t!ategi$ ',an5 &i#$%##e& ,ate! in te $a'te!5 $o"e# in. A )i#ion i# te &e#i!e& f%t%!e #tate fo! te o!gani+ation te #t!ategi$ ',an i# o to get f!o" e!e *o% a!e no to e!e *o% ant to e in te f%t%!e. Mi##ion State"ent Wat i# a "i##ion: Mi##ion of an o!gani+ation i# te '%!'o#e fo! i$ te o!gani+ation i#. Mi##ion i# again a #ing,e #tate"ent5 an& $a!!ie# te #tate"ent in )e!. Mi##ion in one a* i# te !oa& to a$ie)e te )i#ion. o! e6a"',e5 fo! a ,%6%!* '!o&%$t# $o"'an*5 te )i#ion $o%,& e 9To e a"ong "o#t a&"i!e& ,%6%!* !an&# in te o!,&9 an& "i##ion $o%,& e 9To a&& #t*,e to te ,i)e#9 A goo& "i##ion #tate"ent i,, e : * * * C,ea! an& C!i#': Wi,e te!e a!e &iffe!ent )ie#5 We #t!ong,* !e$o""en& tat "i##ion #o%,& on,* '!o)i&e at5 an& not 9o an& en9. We o%,& '!efe! te "i##ion of 9Ma(ing Peo',e "eet tei! $a!ee!9 to 9Ma(ing 'eo',e "eet tei! $a!ee! t!o%g effe$ti)e $a!ee! $o%n#e,ing an& e&%$ation9. A "i##ion #tate"ent ito%t 9o = en9 e,e"ent ,ea)e# a $!eati)e #'a$e it te o!gani+ation to ena,e te" ta(e-%' i&e! #t!ategi$ $oi$e#. Ha)e to a)e a )e!* )i#i,e ,in(age to te %#ine## goa,# an& #t!ateg*: o! e6a"',e *o% $annot a)e a "i##ion /fo! a o"e f%!ni#ing $o"'an* of 9B!inging St*,e to Peo',e;# ,i)e#9 i,e *o%! #t!ateg* a#(# fo! "a## '!o&%$t an& #e,,ing. It# ette! tat eite! *o% #ta!t #e,,ing ig-en& '!o&%$t# to ig )a,%e $%#to"e!#5 OR $ange *o%! "i##ion #tate"ent to 9He,' 'eo',e %i,& o"e#9. So%,& not e #a"e a# te "i##ion of a $o"'eting o!gani+ation. It #o%,& to%$ %'on o it# '%!'o#e it %ni8%e. Mi##ion State"ent# fo! Ne an& S"a,, i!"# Te "i##ion #tate"ent #o%,& e a $on$i#e #tate"ent of %#ine## #t!ateg* an& &e)e,o'e& f!o" te $%#to"e!9# 'e!#'e$ti)e an& it #o%,& fit it te )i#ion fo! te %#ine##. Te ESHWARI.S---LORAA BUSINESS ACADEMY Page <
"i##ion #o%,& an#e! t!ee 8%e#tion#: 1. Wat &o e &o3 7. Ho &o e &o it3 <. o! o" &o e &o it3 Wat &o e &o3 Ti# 8%e#tion #o%,& not e an#e!e& in te!"# of at i# '*#i$a,,* &e,i)e!e& to $%#to"e!#5 %t * te !ea, an&o! '#*$o,ogi$a, nee&# tat a!e f%,fi,,e& en $%#to"e!# %* *o%! '!o&%$t# o! #e!)i$e#. C%#to"e!# "a(e '%!$a#e &e$i#ion# fo! "an* !ea#on#5 in$,%&ing e$ono"i$a,5 ,ogi#ti$a,5 an& e"otiona, fa$to!#. An e6$e,,ent i,,%#t!ation of ti# i# a %#ine## in te Tin Citie# tat i"'o!t# an&-"a&e 2ee,!* f!o" ea#t Af!i$a. Wen a#(e& at e! %#ine## &oe#5 te one! !e',ie&5 4We i"'o!t an& "a!(et ea#t Af!i$an 2ee,!*.4 B%t en a#(e& * $%#to"e!# %* e! 2ee,!*5 #e e6',aine& tat5 4Te*9!e %*ing a #to!* in e!e te 2ee,!* $a"e f!o".4 Ti# i# an i"'o!tant &i#tin$tion an& an#e!ing 8%e#tion f!o" te nee&-f%,fi,,e& 'e!#'e$ti)e i,, e,' *o% an#e! te ote! ti# to 8%e#tion# effe$ti)e,*. Ho &o e &o it3 Ti# 8%e#tion $a't%!e# te "o!e te$ni$a, e,e"ent# of te %#ine##. Yo%! an#e! #o%,& en$o"'a## te '*#i$a, '!o&%$t o! #e!)i$e an& o it i# #o,& an& &e,i)e!e& to $%#to"e!#5 an& it #o%,& fit it te nee& tat te $%#to"e! f%,fi,,# it it# '%!$a#e. In te e6a"',e ao)e5 te %#ine## one! a& o!igina,,* &efine& e! %#ine## a# #e,,ing ea#t Af!i$an 2ee,!* an& a# atte"'ting to #e,, it on #e,)e# of o%ti8%e !etai, #to!e# it ,itt,e #%$$e##. Afte! "o&if*ing te an#e! to te fi!#t 8%e#tion5 #e !ea,i+e& tat #e nee&e& to &e,i)e! te #to!* to e! $%#to"e!# a,ong it te '!o&%$t. Se egan o!gani+ing ine 'a!tie# tat in$,%&e& a #,i&e #o of ea#t Af!i$a5 #to!ie# of 'e!#ona, e6'e!ien$e# te!e5 an& 'i$t%!e# an& &e#$!i'tion# of te )i,,age!# o "a(e te 2ee,!*. Ti# "eto& of &e,i)e!* a# een )e!* #%$$e##f%, fo! e! %#ine##. o! o" &o e &o it3 Te an#e! to ti# 8%e#tion i# a,#o )ita,5 a# it i,, e,' *o% fo$%# *o%! "a!(eting effo!t#. To%g "an* #"a,, %#ine## one!# o%,& ,i(e to e,ie)e ote!i#e5 not e)e!*one i# a 'otentia, $%#to"e!5 a# $%#to"e!# i,, a,"o#t a,a*# a)e ot &e"og!a'i$ an& geog!a'i$ ,i"itation#. Wen #ta!ting o%t5 it i# gene!a,,* a goo& i&ea to &efine te &e"og!a'i$ $a!a$te!i#ti$# /age5 in$o"e5 et$. of $%#to"e!# o a!e ,i(e,* to %* an& ten &efine a geog!a'i$ a!ea in i$ *o%! %#ine## $an gain a '!e#en$e. A# *o% g!o5 *o% $an a&& ne $%#to"e! g!o%'# an& e6'an& *o%! geog!a'i$ fo$%#. Mi##ion fo,,o# te i#ion: Te Enti!e '!o$e## #ta!ting f!o" i#ion &on to te %#ine## o2e$ti)e#5 i# ig,* ite!ati)e. Te 8%e#tion i# f!o" e!e #o%,& e #ta!t. I #t!ong,* !e$o""en& tat "i##ion #o%,& fo,,o te ESHWARI.S---LORAA BUSINESS ACADEMY Page >
)i#ion. Ti# i# e$a%#e te '%!'o#e of te o!gani+ation $o%,& $ange to a$ie)e tei! )i#ion. o! e6a"',e to a$ie)e te )i#ion of an In#%!an$e $o"'an* 9To e te "o#t t!%#te& In#%!an$e Co"'an*95 te "i##ion $o%,& e fi!#t 9"a(ing 'eo',e finan$ia,,* #e$%!e9 a# tei! e"'a#i# i# on T!a&itiona, In#%!an$e '!o&%$t. At a ,ate! #tage te $o"'an* $an "a(e it# "i##ion a# 9Ma(ing "one* o!( fo! te 'eo',e9 en te* a,#o in$,%&e te non-t!a&itiona, %nit ,in(e& in)e#t"ent '!o&%$t#. STRATEIC OB0ECTIES: C,ea!,* #tate& #t!ategi$ o2e$ti)e#5 te ti!& #te' of #t!ateg* fo!"%,ation5 o%t,ine te 'o#ition in te "a!(et',a$e tat te fi!" #ee(#. Pe!fo!"an$e ta!get# #tate te "ea#%!a,e "i,e#tone# tat te o2e$ti)e# fi!" nee&# !e,ate to !ea$ otain to a$ie)e it# #t!ategi$ o2e$ti)e#. So"e #t!ategi$ to o! te 'o#itioning of goo&# an& #e!)i$e# in te $o"'etiti)e "a!(et',a$e i,e ote!# $on$e!n te #t!%$t%!e of te $o"'an* it#e,f an& o it ',an# to '!o&%$e goo&# o! "anage it# o'e!ation#. T*'i$a, #t!ategi$ o2e$ti)e# in)o,)e '!ofitai,it*5 "a!(et #a!e5 !et%!n on in)e#t"ent5 te$no,ogi$a, a$ie)e"ent5 $%#to"e! #e!)i$e ,e)e,5 !e)en%e #i+e5 an& &i)e!#ifi$ation. In o!&e! to "a(e #t!ategi$ ',anning o!(5 te goa,#5 "i##ion#5 o2e$ti)e#5 'e!fo!"an$e ta!get#5 o! ote! o'e# of to' "anage"ent "%#t #o"eo e "a&e !ea, * ote!# in "o!e &i#tant ,o$ation# &on te o!gani+ationa, $a!t. Me!e,* $o""%ni$ating to ea$ "e"e! of te %#ine## te )i#ion tat to' "anage"ent a# fo! te fi!" i# not #%ffi$ient. St!ategi$ o2e$ti)e# an& 'e!fo!"an$e ta!get# #o%,& 'enet!ate e)e!* $o!ne! of te o!gani+ationa, $a!t. Te!e #o%,& e a ie!a!$* of #t!ategi$ fo!"%,ation #ta!ting it te ige#t ,e)e,# of te fi!"5 f!o" i$ it i# $on#i#tent,* t!an#,ate& f!o" ,e)e, to ,e)e, #o tat ea$ &e'a!t"ent (no# at it# $ont!i%tion to te o)e!a,, "i##ion of te fi!" i# to e. Ti# '!o$e## #o%,& en& it ea$ in&i)i&%a, in te fi!" a)ing #t!ategi$ o2e$ti)e# an& 'e!fo!"an$e ta!get# tai,o!e& to tei! #'e$ifi$ !o,e in te fi!". tt':.!efe!en$efo!%#ine##.$o"en$*$,o'e&iaSt!-TeSt!ateg*-o!"%,ation.t", Setting o2e$ti)e# fo! te o!gani+ation i# one of te "o#t i"'o!tant an& $a,,enging ta#(. Te fai,%!e an& #%$$e## of te fi!" &e'en&# %'on te #etting of #t!ategi$ o2e$ti)e#. St!ategi$ o2e$ti)e# a!e fo!"%,ate& fo! a ,onge! 'e!io& an& a!e #et fo! t!ee to fi)e *ea!#. ESHWARI.S---LORAA BUSINESS ACADEMY Page >1
St!ategi$ o2e$ti)e# a!e &i)i&e& into ta!get# fo! %#ine## %nit#5 &e'a!t"ent# f%n$tiona, a!ea#5 tea"#5 an& in&i)i&%a,#. Te#e o2e$ti)e# a!e a ,en& of finan$ia, an& nonfinan$ia, "ea#%!e#. Ti# ena,e# te o!gani+ation to a,ign it#e,f to a$ie)e te #t!ategi$ o2e$ti)e#. O!gani+ation# fo,,o te fo,,oing 'oit# i,e #etting te #t!ategi$ o2e$ti)e#. * * * * * * * * * * To #ee te o!gani+ation;# $o"'eten$ie# an& $o"'etiti)e a&)antage# To #ee te $%!!ent an& '!o2e$te& inf,%en$e# on te in&%#t!* an& te $o"'etiti)e en)i!on"ent To #ee te $%!!ent an& f%t%!e $on#t!aint# on !e#o%!$e# an& o'e!ation# To #ee te $%!!ent 'o##ii,itie#5 '!oai,itie#5 an& $a'ai,itie# in te o!gani+ation. To ana,*+e te '!e)io%#,* '%!#%e& o''o!t%nitie# tat &i&n;t o!(. To #ee o o''o!t%nitie# i,, o!(3 To ana,*+e at in te o!gani+ation3 Tote $,a!if* at ting# #o%,& e $ange& o!ting# #e&3 a!e Te nee&e& "o#t i"'o!tant fa$to! at i# $%!!ent finan$ia, 'o#ition /&et5 e8%it*5 $a#5 et$.3 To ana,*+e te $%!!ent !e,ation#i'# it !e)en%e5 g!o## "a!gin an& '!ofit "a!gin5 et$. Te ao)e "entione& 'oint# e6',ain tat in o!&e! to $!eate a''!o'!iate #t!ategi$ o2e$ti)e#5 o!gani+ation# o!( to %n&e!#tan& tei! inte!na, $a'ai,itie# a# e,, a# te en)i!on"ent in i$ te* o'e!ate. %!te!5 te* a,#o #ee( to $,a!if* tei! '%!'o#e o! "i##ion. Te o!gani+ation fo$%#e# on te#e i##%e# a,,oing it to $!eate a fit eteen it# !e#o%!$e# an& te &e"an&# of te $o"'etiti)e #it%ation. Ro,e of Setting O2e$ti)e# in St!ategi$ P,anning: Te !o,e of o2e$ti)e #etting in #t!ategi$ ',anning i# )e!* $,ea!. Wito%t o2e$ti)e #t!ategi$ ',an# $annot o!(. O2e$ti)e #etting gi)e# te fi!" a g%i&e,ine an& &i!e$tion f!o" e!e to #ta!t an& e!e te o!gani+ation i# going. O2e$ti)e# '!o)i&e a ta!get to ai" an& to a$ie)e tat ai" a,, te effo!t# a!e fo$%#e& on it. Anote! !o,e te o2e$ti)e ',a* i# tat it "oti)ate# te "anage!# an& tea" "e"e!# fo! getting te !ea!& %'on a$ie)e"ent. Te o2e$ti)e# #etting #%''o!t# to e)a,%ate te #%$$e## of an* '!o2e$t in te #t!ategi$ ',anning.. Setting o2e$ti)e#: Int!o&%$tion O2e$ti)e# #et o%t at te %#ine## i# t!*ing to a$ie)e. O2e$ti)e# $an e #et at to ,e)e,#: /1 Co!'o!ate ,e)e, ESHWARI.S---LORAA BUSINESS ACADEMY Page >7
Te#e a!e o2e$ti)e# tat $on$e!n te %#ine## o! o!gani#ation a# a o,e E6a"',e# of $o!'o!ate o2e$ti)e# "igt in$,%&e: We ai" fo! a !et%!n on in)e#t"ent of at ,ea#t 1 We ai" to a$ie)e an o'e!ating '!ofit of o)e! 1 "i,,ion on #a,e# of at ,ea#t 1 "i,,ion We ai" to in$!ea#e ea!ning# 'e! #a!e * at ,ea#t 1 e)e!* *ea! fo! te fo!e#eea,e f%t%!e /7 %n$tiona, ,e)e, e.g. #'e$ifi$ o2e$ti)e# fo! "a!(eting a$ti)itie# E6a"',e# of f%n$tiona, "a!(eting o2e$ti)e#V "igt in$,%&e: We ai" to %i,& $%#to"e! &ataa#e of at ,ea#t 75 o%#eo,&# itin te ne6t 17 "ont# We ai" to a$ie)e a "a!(et #a!e of 1 We ai" to a$ie)e G $%#to"e! aa!ene## of o%! !an& in o%! ta!get "a!(et# Bot $o!'o!ate an& f%n$tiona, o2e$ti)e# nee& to $onfo!" to te $o""on,* %#e& SMART $!ite!ia. Te SMART $!ite!ia /an i"'o!tant $on$e't i$-*o% t!* #o%,& to !e"e"e! a'',*at in e6a"# a!e #%""a!i#e& e,o: S'e$ifi$ te#o%,& o2e$ti)e #tatean& e6a$t,* i# to e a$ie)e&. Mea#%!a,e - an o2e$ti)e #o%,& e $a'a,e of "ea#%!e"ent Q #o tat it i# 'o##i,e to &ete!"ine ete! /o! o fa! it a# een a$ie)e& A$ie)a,e - te o2e$ti)e #o%,& e !ea,i#ti$ gi)en te $i!$%"#tan$e# in i$ it i# #et an& te !e#o%!$e# a)ai,a,e to te %#ine##. Re,e)ant - o2e$ti)e# #o%,& e !e,e)ant to te 'eo',e !e#'on#i,e fo! a$ie)ing te" Ti"e Bo%n& - o2e$ti)e# #o%,& e #et it a ti"e-f!a"e in "in&. Te#e &ea&,ine# a,#o nee& to e !ea,i#ti$. inan$ia, O2e$ti)e#: Te %#ine## ',an finan$ia, o2e$ti)e# in)o,)e "ea#%!ing finan$ia, 'e!fo!"an$e to !ef,e$t te tota, o'e!ationa, 'e!fo!"an$e. Te ai" in "anaging ti# 'e!fo!"an$e #o%,& e to "a6i"i+e net '!ofit an& net $a# #%!',%#e# of te o'e!ation. Te to "ain "ea#%!e#5 te!efo!e5 a!e net '!ofit an& net $a# f,o. Ea$ in&i$ato! fo! an* gi)en 'e!io& i# $a,$%,ate& a# fo,,o#: Tota, in$o"e /!e)en%e ,e## &i!e$t $o#t# /o! C.O..S. e8%a,# g!o## '!ofit /$ont!i%tion "a!gin an& g!o## '!ofit ,e## o'e!ating $o#t# /$o#t of !%nning te %#ine## i# e8%a, to net '!ofit. Tota, !e$ei't# /inf,o# ,e## tota, 'a*"ent# /o%tf,o# i# e8%a, to net $a# f,o #%!',%#. ESHWARI.S---LORAA BUSINESS ACADEMY Page ><
Net '!ofit i# $a,$%,ate& a# te e6$e## of in$o"e /!e)en%e o)e! e6'en#e# of te o'e!ation fo! a gi)en 'e!io&. In$o"e /!e)en%e i# te ea!ning# of te %#ine## an& e6'en#e# a!e it9# !%nning $o#t#. Net $a# f,o #%!',%# i# $a,$%,ate& a# te e6$e## of !e$ei't# /inf,o# o)e! 'a*"ent# fo! a gi)en 'e!io&. Re$ei't# a!e te $a# inf,o# of te %#ine##5 'a*"ent# a!e it9# $a# o%tf,o# o! o%tgoing#. See a,#o 'e!fo!"an$e "et!i$# inan$ia, P,an O%t,ine 1 B!ea( e)en ana,*#i# One of te "ain finan$ia, o2e$ti)e# i# to 'e!fo!" a !ea( e)en ana,*#i#. Ti# #o%,& e &one efo!e '!e'a!ing te fina, finan$ia, ',an# fo! *o%! #o%,& te #a,e# !ea(-e)en 'oint5 tat te ,e)e, of #a,e#o'e!ation. ne$e##a!* Yo% to "eet te(no tota, %#ine## !%nning $o#t#. Yo% $ani#5 a,#o %#e !ea(e)en ana,*#i# to &ete!"ine te ,e)e, of #a,e# to a$ie)e a &e#i!e& '!ofit ta!get. See a,#o #a,e# !ea( e)en 'oint 7 Catego!i#e $o#t# a# fi6e& o! )a!ia,e i6e& $o#t# a!e $on#tant. Te* &o not $ange en #a,e# ,e)e,# $ange '!o)i&e& te %#ine## &oe# not $ange it# o'e!ating $a'a$it*. a!ia,e $o#t# $ange '!o'o!tiona,,* to $ange# in %#ine## a$ti)it*. Wen #a,e ,e)e,# $ange5 te#e $o#t# a,#o $ange /%' o! &on. E6a"',e# of )a!ia,e $o#t# a!e #to$( '%!$a#e#5 !a "ate!ia, '%!$a#e#5 an& &i!e$t $o#t# /2o "ate!ia, '%!$a#e#. < Ca,$%,ate te $ont!i%tion "a!gin Ti# i# a (e* a!ea of te finan$ia, o2e$ti)e#. Te #a,e# in$o"e of te %#ine## "%#t e eno%g to $o)e! it9# )a!ia,e $o#t# an& it9# fi6e& $o#t9# a# e,, a# te !e8%i!e& '!ofit. Te $ont!i%tion "a!gin i# te e6$e## of #a,e# in$o"e o)e! te )a!ia,e $o#t# of te %#ine## fo! te 'e!io& /#a,e# ,e## &i!e$t $o#t#. Te $ont!i%tion "a!gin "ea#%!e# o "%$ #a,e# $ont!i%te toa!&# "eeting fi6e& $o#t# an& te &e#i!e& net '!ofit of te %#ine##. Ti# i# te one of te (e* finan$ia, o2e$ti)e#5 a# ito%t #%ffi$ient $ont!i%tion "a!gin *o% $annot "eet *o%! o'e!ating $o#t# an& *o% i,, e in negati)e net '!ofit te!!ito!*. See a,#o 'e!fo!"an$e "et!i$# > Ca,$%,ate te !ea(-e)en 'oint Wit a (no,e&ge of te $ont!i%tion "a!gin / to #a,e#5 *o% $an fin& te %#ine##9# !ea(-e)en 'oint5 te ,e)e, at i$ in$o"e e8%a,# e6'en#e# /&i!e$t $o#t# an& o)e!ea&# o! e6'en#e#5 #o tat neite! a '!ofit o! a ,o## i# "a&e /in te net '!ofit ,ine of *o%! '!ofit an& ,o## !e'o!t. See a,#o #a,e# !ea( e)en 'oint. inan$ia, o!e$a#t# #a,e# Sa,e# fo!e$a#t# #o%,& e te fi!#t fo!e$a#t# "a&e en ',anning '!ofit an& o)e!a,, finan$ia, o2e$ti)e#. Te #a,e# fo!e$a#t i# of '!i"e i"'o!tan$e e$a%#e it inf,%en$e# "an* of te $o#t fo!e$a#t# fo! *o%! %#ine##. o!e$a#t '!ofit #tate"ent# P!e'a!e a fo!e$a#t '!ofit #tate"ent #oing te ann%a, net '!ofit ta!get fo! te %#ine## fo! ea$ *ea!. See a,#o 'e!fo!"an$e "et!i$# ESHWARI.S---LORAA BUSINESS ACADEMY Page >>
G o!e$a#t $a'ita, e6'en&it%!e !e8%i!e"ent# P!e'a!e an ann%a, $a'ita, e6'en&it%!e fo!e$a#t fo! ea$ *ea!. Ti# #o# &etai,# of *o%! '!o'o#e& $a'ita, e6'en&it%!e fo! te 'e!io& in te %#ine## ',an. J o!e$a#t $a# f,o Afte! *o% a)e '!e'a!e& te fo!e$a#t '!ofit an& $a'ita, e6'en&it%!e #tate"ent#5 *o% $an no '!e'a!e $a# f,o #tate"ent# fo! ea$ *ea! of te %#ine## ',an. Potentia, ,en&e!# i,, $!iti$a,,* ana,*#e *o%! $a# f,o fo!e$a#t# to &ete!"ine *o%! ai,it* to "eet ,oan !e'a*"ent#. A $a# f,o #tate"ent #o# te inten&e& $a# !e$ei't# an& 'a*"ent# of te %#ine## o)e! te 'e!io& of te %#ine## ',an5 i$ ten a,,o# te $a# f,o to e $a,$%,ate&. A fo!e$a#t $a# f,o #tate"ent #o# te $a# !e$ei't# /inf,o# an& 'a*"ent# /o%tf,o# of te o'e!ation5 i$ ena,e# f%t%!e $a# 'o#ition# to e '!e&i$te&. Ti# i# one,e)e, of te finan$ia, o2e$ti)e# *o%! 'e!io& %#ine##5 an& &i$tate# an* !e8%i!e& of(e* f%n&ing o)e! te $o"ing of t!a&ing /%&get *ea!. inan$ia, Ratio# Te $a,$%,ation of finan$ia, !atio# '!o)i&e# a %#ef%, #%""a!* of te a$$e'tai,it* of fo!e$a#t#. Te* $an e %#e& to i&entif* #t!engt# an& ea(ne##e# in ',anne& o'e!ating a$ti)itie#. Ratio# a!e $o"'a!e& it #tan&a!& en$"a!(# #%$ a# in&%#t!* a)e!age# fo! a$$e'tai,it*. Ratio# #o%,& a,#o e i"'!o)ing o)e! ti"e. Te i&entifi$ation of an* %na$$e'ta,e !atio# #o%,& $a%#e *o% to !e)ie an& a&2%#t !e,e)ant #e$tion# of te o'e!ationa, ',an to '!o&%$e #ati#fa$to!* fo!e$a#t# an& !e#%,t#. o! a $o"'!een#i)e %n&e!#tan&ing of finan$ia, !atio# #ee o%! eBoo( !e,ation#i'# tat #o te ea,t of *o%! %#ine##. 1 inan$ia, !e$o!&# Yo% i,, nee& to &e#ign a $o"'!een#i)e !e$o!& #*#te" tat !e$o!&# te finan$ia, t!an#a$tion# of te %#ine##. inan$ia, !e$o!&# a!e ne$e##a!* fo! te finan$ia, $ont!o, of te o'e!ation. Re$o!&# of finan$ia, t!an#a$tion# ena,e a$$%!ate !e'o!t# to e '!e'a!e& fo! "onito!ing te finan$ia, !e#%,t# of te o'e!ation. inan$ia, !e#%,t# a!e $o"'a!e& it $o!!e#'on&ing ta!get# to i&entif* an* %n#ati#fa$to!* 'e!fo!"an$e #o tat fo,,o %' a$tion $an e ta(en. 11 B%#ine## in#%!an$e P,an at t*'e# of in#%!an$e i,, e !e8%i!e& fo! te %#ine## no an& fo! te 'e!io& of te ',an5 te t*'e# of in#%!an$e "igt in$,%&e '%,i$ ,iai,it* /%#%a,,* te "ini"%" an& '!ofe##iona, in&e"nit*. Co"'!een#i)e in#%!an$e $o)e! #o%,& e a!!ange& an& "aintaine& fo! *o%! %#ine## o'e!ation to "ini"i#e e6'o#%!e to &ai,* !i#(# i$ $an $a%#e finan$ia, ,o##e#. 17 inan$ia, $ont!o,# Te fina, a!ea of finan$ia, o2e$ti)e# i# to e#ta,i# te finan$ia, $ont!o,# fo! *o%! %#ine##. Afte! *o% a)e &e#igne& *o%! finan$ia, !e$o!& (ee'ing #*#te"5 *o% #o%,& ten &e$i&e at finan$ia, $ont!o,# to a&o't fo! *o%! %#ine## o'e!ation. ESHWARI.S---LORAA BUSINESS ACADEMY Page >
inan$ia, $ont!o,# a!e te "eto&# o! te$ni8%e# *o% i,, %#e to "onito! an& e)a,%ate te finan$ia, !e#%,t# of *o%! o'e!ation. ?e* finan$ia, !e#%,t# a!e 9'!ofit95 9$a# f,o9 an& 9finan$ia, 'o#ition9. See a,#o 'e!fo!"an$e "et!i$# Un&e!#tan&ing te finan$ia, o2e$ti)e# fo! *o%! %#ine## o'e!ation i# e##entia, if *o%! %#ine## i# to e #%$$e##f%,. Man* %#ine## fai, e$a%#e te* &o not ta(e ti"e o%t to fi!#t e#ta,i# te#e5 an& ten to "onito! te". Te#e a!e *o%! 4#ta(e# in te g!o%n&4 i$ %,ti"ate,* #%''o!t te #t!%$t%!e of *o%! %#ine## Te Ba,an$e& S$o!e$a!& T!a&itiona, finan$ia, !e'o!ting #*#te"# '!o)i&e an in&i$ation of o a fi!" a# 'e!fo!"e& ino! tee6a"',e5 'a#t5 %t ,itt,e info!"ation ao%t it "igt 'e!fo!" in te f%t%!e. a offe! fi!" "igt !e&%$e it# ,e)e, of o $%#to"e! #e!)i$e in o!&e! to oo#t $%!!ent ea!ning#5 %t ten f%t%!e ea!ning# "igt e negati)e,* i"'a$te& &%e to !e&%$e& $%#to"e! #ati#fa$tion. To &ea, it ti# '!o,e"5 Roe!t ?a',an an& Da)i& No!ton &e)e,o'e& te Ba,an$e& S$o!e$a!&5 a 'e!fo!"an$e "ea#%!e"ent #*#te" tat $on#i&e!# not on,* finan$ia, "ea#%!e#5 %t a,#o $%#to"e!5 %#ine## '!o$e##5 an& ,ea!ning "ea#%!e#. Te Ba,an$e& S$o!e$a!& f!a"eo!( i# &e'i$te& in te fo,,oing &iag!a": Te a,an$e& #$o!e$a!& t!an#,ate# te o!gani+ation9# #t!ateg* into fo%! 'e!#'e$ti)e#5 it a a,an$e eteen te fo,,oing: * * * eteen inte!na, an& e6te!na, "ea#%!e# eteen o2e$ti)e "ea#%!e# an& #%2e$ti)e "ea#%!e# eteen 'e!fo!"an$e !e#%,t# an& te &!i)e!# of f%t%!e !e#%,t# Be*on& te inan$ia, Pe!#'e$ti)e In te in&%#t!ia, age5 "o#t of te a##et# of a fi!" e!e in '!o'e!t*5 ',ant5 an& e8%i'"ent5 an& te finan$ia, a$$o%nting #*#te" 'e!fo!"e& an a&e8%ate 2o of )a,%ing to#e a##et#. In te info!"ation age5 "%$ of te )a,%e of te fi!" i# e"e&&e& in inno)ati)e '!o$e##e#5 $%#to"e! !e,ation#i'#5 an& %"an !e#o%!$e#. Te finan$ia, a$$o%nting #*#te" i# not #o goo& at )a,%ing #%$ a##et#. ESHWARI.S---LORAA BUSINESS ACADEMY Page >
Diag!a" of te Ba,an$e& S$o!e$a!& inan$ia, C%#to"e! St!ateg* B%#ine## P!o$e##e# Lea!ning = !ot Te Ba,an$e& S$o!e$a!& goe# e*on& #tan&a!& finan$ia, "ea#%!e# to in$,%&e te fo,,oing a&&itiona, 'e!#'e$ti)e#: te $%#to"e! 'e!#'e$ti)e5 te inte!na, '!o$e## 'e!#'e$ti)e5 an& te ,ea!ning an& g!ot 'e!#'e$ti)e. * * * * inan$ia, 'e!#'e$ti)e - in$,%&e# "ea#%!e# #%$ a# o'e!ating in$o"e5 !et%!n on $a'ita, e"',o*e&5 an& e$ono"i$ )a,%e a&&e&. C%#to"e! 'e!#'e$ti)e - in$,%&e# "ea#%!e# #%$ a# $%#to"e! #ati#fa$tion5 $%#to"e! !etention5 an& "a!(et #a!e in ta!get #eg"ent#. B%#ine## '!o$e## 'e!#'e$ti)e - in$,%&e# "ea#%!e# #%$ a# $o#t5 t!o%g'%t5 an& 8%a,it*. Te#e a!e fo! %#ine## '!o$e##e# #%$ a# '!o$%!e"ent5 '!o&%$tion5 an& o!&e! f%,fi,,"ent. Lea!ning = g!ot 'e!#'e$ti)e - in$,%&e# "ea#%!e# #%$ a# e"',o*ee #ati#fa$tion5 e"',o*ee !etention5 #(i,, #et#5 et$. Te#e fo%! !ea,"# a!e not #i"',* a $o,,e$tion of in&e'en&ent 'e!#'e$ti)e#. Rate!5 te!e i# a ,ogi$a, $onne$tion eteen te" - ,ea!ning an& g!ot ,ea& to ette! %#ine## '!o$e##e#5 i$ in t%!n ,ea& to in$!ea#e& )a,%e to te $%#to"e!5 i$ fina,,* ,ea&# to i"'!o)e& finan$ia, 'e!fo!"an$e. ESHWARI.S---LORAA BUSINESS ACADEMY Page >G
O2e$ti)e#5 Mea#%!e#5 Ta!get#5 an& Initiati)e# Ea$ 'e!#'e$ti)e of te Ba,an$e& S$o!e$a!& in$,%&e# o2e$ti)e#5 "ea#%!e# of to#e o2e$ti)e#5 ta!get )a,%e# of to#e "ea#%!e#5 an& initiati)e#5 &efine& a# fo,,o#: * * * * O2e$ti)e# - "a2o! o2e$ti)e# to e a$ie)e&5 fo! e6a"',e5 '!ofita,e g!ot. Mea#%!e# - te o#e!)a,e 'a!a"ete!# tat i,, e %#e& to "ea#%!e '!og!e## toa!& !ea$ing o2e$ti)e. o! e6a"',e5 te o2e$ti)e of '!ofita,e g!ot fo! "igt "ea#%!e& te * g!ot in net "a!gin. Ta!get# - te #'e$ifi$ ta!get )a,%e# tee "ea#%!e#5 fo! e6a"',e5 7 g!ot in net "a!gin. Initiati)e# - a$tion '!og!a"# to e initiate& in o!&e! to "eet te o2e$ti)e. Te#e $an e o!gani+e& fo! ea$ 'e!#'e$ti)e in a ta,e a# #on e,o. O2e$ti)e# Mea#%!e# Ta!get# Initiati)e# inan$ia, C%#to"e! P!o$e## Lea!ning Ba,an$e& S$o!e$a!& a# a St!ategi$ Manage"ent S*#te": Te Ba,an$e& S$o!e$a!& o!igina,,* a# $on$ei)e& a# an i"'!o)e& 'e!fo!"an$e "ea#%!e"ent #*#te". Hoe)e!5 it #oon e$a"e e)i&ent tat it $o%,& e %#e& a# a "anage"ent #*#te" to i"',e"ent #t!ateg* at a,, ,e)e,# of te o!gani+ation * fa$i,itating te fo,,oing f%n$tion#: 1. C,a!if*ing #t!ateg* - te t!an#,ation of #t!ategi$ o2e$ti)e# into 8%antifia,e "ea#%!e# $,a!ifie# te "anage"ent tea"9# %n&e!#tan&ing of te #t!ateg* an& e,'# to &e)e,o' a $oe!ent $on#en#%#. 7. Co""%ni$ating #t!ategi$ o2e$ti)e# - te Ba,an$e& S$o!e$a!& $an #e!)e to t!an#,ate ig ,e)e, o2e$ti)e# into o'e!ationa, o2e$ti)e# an& $o""%ni$ate te #t!ateg* effe$ti)e,* t!o%go%t te o!gani+ation. <. P,anning5 #etting ta!get#5 an& a,igning #t!ategi$ initiati)e# - a"itio%# %t a$ie)a,e ta!get# a!e #et fo! ea$ 'e!#'e$ti)e an& initiati)e# a!e &e)e,o'e& to a,ign effo!t# to !ea$ te ta!get#. ESHWARI.S---LORAA BUSINESS ACADEMY Page >J
>. St!ategi$ fee&a$( an& ,ea!ning - e6e$%ti)e# !e$ei)e fee&a$( on ete! te #t!ateg* i"',e"entation i# '!o$ee&ing a$$o!&ing to ',an an& on ete! te #t!ateg* it#e,f i# #%$$e##f%, /4&o%,e-,oo' ,ea!ning4. Te#e f%n$tion# a)e "a&e te Ba,an$e& S$o!e$a!& an effe$ti)e "anage"ent #*#te" fo! te i"',e"entation of #t!ateg*. Te Ba,an$e& S$o!e$a!& a# een a'',ie& #%$$e##f%,,* to '!i)ate #e$to! $o"'anie#5 non-'!ofit o!gani+ation#5 an& go)e!n"ent agen$ie#. Te Ba,an$e& S$o!e$a!& a# int!o&%$e& a# one of te nee#t "anage"ent too,#. Te '%!'o#e a# to a,,o o!gani+ation# to e ette! a,e to %#e tei! intangi,e a##et#. Te a,an$e& #$o!e$a!& i# to e %#e& a# a #%'',e"ent to t!a&itiona, finan$ia, It "ea#%!e# 'e!fo!"an$e f!o" t!ee a&&itiona, 'e!#'e$ti)e# $%#to"e!#5"ea#%!e#. inte!na, %#ine## '!o$e##e#5 an& ,ea!ning an& g!ot. Te #$o!e$a!& $an e,' to'-,e)e, "anage"ent ,in( te ,ong-te!" #t!ateg* it te #o!t-te!" a$tion#. Manage!# %#ing a a,an$e& #$o!e$a!& &o not on,* a)e to !e,* on te #o!t-te!" finan$ia, !e#%,t# a# in&i$ato!# of te $o"'an*;# '!og!e##. It !ing# in ote! in&i$ato!# tat '!o)i&e info!"ation ao%t o te #o!t-te!" !e#%,t# a)e affe$te& te ,ong-te!" #t!ateg*. Te #$o!e$a!& a,,o# "anage!# to int!o&%$e fo%! ne '!o$e##e# 1. t!an#,ating te )i#ion5 7. $o""%ni$ating an& ,in(ing5 <. %#ine## ',anning5 an& >. fee&a$( an& ,ea!ning. T!an#,ating te )i#ion i# a "ean# of e6'!e##ing te "i##ion)i#ion #tate"ent# it an integ!ate& #et of o2e$ti)e# an& "ea#%!e#. Ti# fo!$e# te to' "anage"ent to &e)e,o' o'e!ationa, "ea#%!e#5 i$ !e8%i!e# te" to &i#$%##5 an& e)ent%a,,* ag!ee on5 a "ean# of a$ie)ing te goa,# of te $o"'an*. Co""%ni$ating an& ,in(ing i# a '!o$e## tat fa$i,itate# te $o""%ni$ation of #t!ategie# t!o%go%t te enti!e o!gani+ation. De'a!t"enta, an& in&i)i&%a, o2e$ti)e# "%#t e a,igne& it te #t!ateg* t!o%g e)a,%ation '!o$e&%!e# an& in$enti)e#. To a)e goa, $ong!%en$e eteen te in&i)i&%a, e"',o*ee# an& te $o"'an*5 #$o!e$a!& %#e!# engage in t!ee a$ti)itie#: $o""%ni$ating an& e&%$ating5 #etting goa,#5 an& ,in(ing !ea!&# to 'e!fo!"an$e "ea#%!e# i$ a!e in t%!n ,in(e& to te o)e!a,, #t!ateg*. Co""%ni$ating an& e&%$ating i# a$ie)e& * "aintaining 'o,i$ie# tat en#%!e a,, e"',o*ee# a!e aa!e of te #t!ategie# of te o!gani+ation. A,#o5 it i# i"'o!tant fo! te ,oe! ,e)e, e"',o*ee# to e a,e to $o""%ni$ate %'a!&# ao%t ete! o! not te #t!ategie# a!e !ea,i#ti$ f!o" te $o"'etiti)e o! o'e!ationa, 'e!#'e$ti)e. ESHWARI.S---LORAA BUSINESS ACADEMY Page >
Setting goa,# a,one i# not #%ffi$ient to $ange e"',o*ee;# "in&-#et. One te$ni8%e to en#%!e te o2e$ti)e# !e,ate& to te goa,# a!e a$ie)e& i# te %#e of a 'e!#ona, #$o!e$a!&. It i# #i"',* a $a!& tat a# info!"ation tat &e#$!ie# $o!'o!ate o2e$ti)e#5 "ea#%!e#5 an& ta!get#. E"',o*ee# o%,& $a!!* it it te". Ti# a,,o# e"',o*ee# to ette! t!an#,ate te#e o2e$ti)e# into "eaningf%, ta#(# tat i,, e,' !ea$ te#e goa,#. Lin(ing !ea!&# to 'e!fo!"an$e i# an i"'o!tant in$enti)e to e,' an o!gani+ation a$ie)e it# '%!'o#e. Wat te a,an$e& #$o!e$a!& a&&# to te t!a&itiona, "ean# of ,in(ing !ea!&# to finan$ia, 'e!fo!"an$e i# tat it ta(e# a "o!e o,i#ti$ ,oo( at te o!gani+ation. It en#%!e# tat te $o!!e$t $!ite!ia a!e %#e& a# a "ea#%!e of 'e!fo!"an$e efo!e !ea!&# a!e gi)en. Te i&ea i# tat5 if *o% a!e not %#ingti# te ea)io!. $o!!e$t in&i$ato!# to e)a,%ate 'e!fo!"an$e5 te!e%#e& i# a* ig !i#( in !ea!&ing B%#ine## ',anning i# te ti!& '!o$e## "anage!# it te a,an$e& #$o!e$a!&. B* %#ing te #$o!e$a!&5 %#ine##e# i,, integ!ate tei! #t!ategi$ ',anning an& %&geting '!o$e##e#. Ti# "a(e# #%!e tat te %&get# #%''o!t te #t!ategie# of te $o"'an*. Te %#e!# of te #$o!e$a!& 'i$( "ea#%!e# tat !e'!e#ent ea$ of te fo%! 'e!#'e$ti)e#5 an& ten #et ta!get# fo! ea$. Ten te* i,, &e$i&e i$ #'e$ifi$ a$tion# i,, e,' te" in !ea$ing to#e ta!get#. U#ing #o!t-te!" "i,e#tone# to e)a,%ate te '!og!e## toa!& te #t!ategi$ goa, i# at !e#%,t# f!o" %#ing te a,an$e& #$o!e$a!&. Te fo%!t5 an& fina,5 '!o$e## i# fee&a$( an& ,ea!ning. Wit te a,an$e& #$o!e$a!& in ',a$e "anage!# $an "onito! fee&a$( an& !e,ate ti# to te #t!ateg*. Te fi!#t t!ee '!o$e##e# a!e )e!* i"'o!tant5 %t te* &e"an& a $on#tant o2e$ti)e. An* &e)iation f!o" te ',an i# $on#i&e!e& a &efe$t. B* a&&ing te fee&a$( an& ,ea!ning '!o$e##5 te #$o!e$a!& e$o"e# a,an$e& * '!o)i&ing !ea, ti"e info!"ation to enan$e #t!ategi$ ,ea!ning. Te a,an$e& #$o!e$a!& #%'',ie# t!ee e##entia, ite"# to #t!ategi$ ,ea!ning. i!#t5 it a!ti$%,ate# te )i#ion. Te o,i#ti$ )i#ion i# $o""%ni$ate& to te enti!e o!gani+ation5 an& te in&i)i&%a, effo!t# a!e ,in(e& to %#ine## %nit o2e$ti)e#. Se$on&5 te #$o!e$a!& #%'',ie# a #t!ategi$ fee&a$( #*#te".Ti# #*#te" )ie# te #t!ategie# a# *'ote#e#5 an& #o%,& e a,e to te#t5 )a,i&ate5 an& "o&if* te#e *'ote#e#. Ti!&5 te a,an$e& #$o!e$a!& fa$i,itate# #t!ateg* !e)ie. In#tea& of %#ing 'e!io&i$ "eeting# to e)a,%ate 'a#t 'e!fo!"an$e# a# te t!a&itiona, finan$ia, !e)ie '!o$e## &oe#5 ESHWARI.S---LORAA BUSINESS ACADEMY Page
#$o!e$a!& %#e!# !e)ie te fee&a$( in a a* to gain a ette! %n&e!#tan&ing of if te #t!ateg* i# eing !ea$e&5 o i# it eing !ea$e&5 an& #o%,& te #t!ateg* e "o&ifie& a#e& on ne info!"ation. Ti# gi)e# te o!gani+ation a fo!a!& fo$%#. Te a,an$e& #$o!e$a!& fa$i,itate# an o!gani+ation9# ',an to a,ign "anage"ent '!o$e##e# an& fo$%#e# it te ,ong-te!" #t!ateg* of te $o"'an*. Wito%t te #$o!e$a!& it o%,& e nea!,* i"'o##i,e to "aintain a $on#i#ten$* of )i#ion an& a$tion i,e atte"'ting to int!o&%$e ne #t!ategie# an& '!o$e##e#. KTe a,an$e& #$o!e$a!& '!o)i&e# a f!a"eo!( fo! "anaging te i"',e"entation of a #t!ateg*5 i,e a,#o a,,oing te #t!ateg* to e)o,)e in !e#'on#e to $ange# in te $o"'an*;# $o"'etiti)e5 "a!(et5 an& te$no,ogi$a, en)i!on"ent#. Te St!ategi$ P,anning P!o$e## In te 1G9#5 "an* ,a!ge fi!"# a&o'te& a fo!"a,i+e& to'-&on #t!ategi$ ',anning "o&e,. Un&e! ti# "o&e,5 #t!ategi$ ',anning e$a"e a &e,ie!ate '!o$e## in i$ to' e6e$%ti)e# 'e!io&i$a,,* o%,& fo!"%,ate te fi!"9# #t!ateg*5 ten $o""%ni$ate it &on te o!gani+ation fo! i"',e"entation. Te fo,,oing i# a f,o$a!t "o&e, of ti# '!o$e##: Ti# '!o$e## i# "o#t a'',i$a,e to #t!ategi$ "anage"ent at te %#ine## %nit ,e)e, of te o!gani+ation. o! ,a!ge $o!'o!ation#5 #t!ateg* at te $o!'o!ate ,e)e, i# "o!e $on$e!ne& it "anaging a 'o!tfo,io of %#ine##e#. o! e6a"',e5 $o!'o!ate ,e)e, #t!ateg* in)o,)e# &e$i#ion# ao%t i$ %#ine## %nit# to g!o5 !e#o%!$e a,,o$ation a"ong te %#ine## %nit#5 ta(ing a&)antage of #*ne!gie# a"ong te %#ine## %nit#5 an& "e!ge!# an& a$8%i#ition#. In te '!o$e## o%t,ine& e!e5 4$o"'an*4 o! 4fi!"4 i,, e %#e& to &enote a #ing,e-%#ine## fi!" o! a #ing,e %#ine## %nit of a &i)e!#ifie& fi!". Mi##ion A $o"'an*9# "i##ion i# it# !ea#on fo! eing. Te "i##ion often i# e6'!e##e& in te fo!" of a "i##ion #tate"ent5 i$ $on)e*# a #en#e of '%!'o#e to e"',o*ee# an& '!o2e$t# a $o"'an* i"age to $%#to"e!#. In te #t!ateg* fo!"%,ation '!o$e##5 te "i##ion #tate"ent #et# te "oo& of e!e te $o"'an* #o%,& go. O2e$ti)e# O2e$ti)e# a!e $on$!ete goa,# tat te o!gani+ation #ee(# to !ea$5 fo! e6a"',e5 an ea!ning# g!ot ta!get. Te o2e$ti)e# #o%,& e $a,,enging %t a$ie)a,e. Te* a,#o #o%,& e "ea#%!a,e #o tat te $o"'an* $an "onito! it# '!og!e## an& "a(e $o!!e$tion# a# nee&e&. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
Te St!ategi$ P,anning P!o$e## Mi##ion X O2e$ti)e# X Sit%ation Ana,*#i# X St!ateg* o!"%,ation X I"',e"entation X Cont!o, Sit%ation Ana,*#i# On$e te fi!" a# #'e$ifie& it# o2e$ti)e#5 it egin# it it# $%!!ent #it%ation to &e)i#e a #t!ategi$ ',an to !ea$ to#e o2e$ti)e#. Cange# in te e6te!na, en)i!on"ent often '!e#ent ne o''o!t%nitie# an& ne a*# to !ea$ te o2e$ti)e#. An en)i!on"enta, #$an i# 'e!fo!"e& to i&entif* te a)ai,a,e o''o!t%nitie#. Te fi!" a,#o "%#t (no it# on $a'ai,itie# an& ,i"itation# in o!&e! to Te #e,e$t te o''o!t%nitie# tat it in)o,)e# $an '%!#%e a ige! '!oai,it* of #%$$e##. #it%ation ana,*#i# te!efo!e an it ana,*#i# of ot te e6te!na, an& inte!na, en)i!on"ent. ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
Te e6te!na, en)i!on"ent a# to a#'e$t#: te "a$!o-en)i!on"ent tat affe$t# a,, fi!"# an& a "i$!o-en)i!on"ent tat affe$t# on,* te fi!"# in a 'a!ti$%,a! in&%#t!*. Te "a$!o-en)i!on"enta, ana,*#i# in$,%&e# 'o,iti$a,5 e$ono"i$5 #o$ia,5 an& te$no,ogi$a, fa$to!# an& #o"eti"e# i# !efe!!e& to a# a PEST ana,*#i#. An i"'o!tant a#'e$t of te "i$!o-en)i!on"enta, ana,*#i# i# te in&%#t!* in i$ te fi!" o'e!ate# o! i# $on#i&e!ing o'e!ating. Mi$ae, Po!te! &e)i#e& a fi)e fo!$e# f!a"eo!( tat i# %#ef%, fo! in&%#t!* ana,*#i#. Po!te!9# fo!$e# in$,%&e a!!ie!# to ent!*5 $%#to"e!#5 #%'',ie!#5 #%#tit%te '!o&%$t#5 an& !i)a,!* a"ong $o"'eting fi!"#. Te inte!na, ana,*#i# $on#i&e!# te #it%ation itin te fi!" it#e,f5 #%$ a#: * * * * * * * * * * * * * Co"'an* $%,t%!e Co"'an* i"age O!gani+ationa, #t!%$t%!e ?e* #taff A$$e## to nat%!a, !e#o%!$e# Po#ition on te e6'e!ien$e $%!)e O'e!ationa, effi$ien$* O'e!ationa, $a'a$it* B!an& aa!ene## Ma!(et #a!e inan$ia, !e#o%!$e# E6$,%#i)e $ont!a$t# Patent# an& t!a&e #e$!et# A #it%ation ana,*#i# $an gene!ate a ,a!ge a"o%nt of info!"ation5 "%$ of i$ i# not 'a!ti$%,a!,* !e,e)ant to #t!ateg* fo!"%,ation. To "a(e te info!"ation "o!e "anagea,e5 it #o"eti"e# i# %#ef%, to $atego!i+e te inte!na, fa$to!# of te fi!" a# #t!engt# an& ea(ne##e#5 an& te e6te!na, en)i!on"enta, fa$to!# a# o''o!t%nitie# an& t!eat#. S%$ an ana,*#i# often i# !efe!!e& to a# a SWOT ana,*#i#. St!ateg* o!"%,ation On$e a $,ea! 'i$t%!e of te fi!" an& it# en)i!on"ent i# in an&5 #'e$ifi$ #t!ategi$ a,te!nati)e# $an e &e)e,o'e&. Wi,e &iffe!ent fi!"# a)e &iffe!ent a,te!nati)e# &e'en&ing on tei! #it%ation5 te!e a,#o e6i#t gene!i$ #t!ategie# tat $an e a'',ie& a$!o## a i&e !ange of fi!"#. Mi$ae, Po!te! i&entifie& $o#t ,ea&e!#i'5 &iffe!entiation5 an& fo$%# a# t!ee gene!i$ #t!ategie# tat "a* e $on#i&e!e& en &efining #t!ategi$ a,te!nati)e#. Po!te! a&)i#e& again#t i"',e"enting a $o"ination of te#e #t!ategie# fo! a gi)en '!o&%$t !ate!5 e a!g%e& tat on,* one of te gene!i$ #t!ateg* a,te!nati)e# #o%,& e '%!#%e&. I"',e"entation Te #t!ateg* ,i(e,* i,, e e6'!e##e& in ig-,e)e, $on$e't%a, te!"# an& '!io!itie#. o! effe$ti)e i"',e"entation5 it nee&# to e t!an#,ate& into "o!e &etai,e& 'o,i$ie# tat $an e %n&e!#too& at te ESHWARI.S---LORAA BUSINESS ACADEMY Page <
f%n$tiona, ,e)e, of te o!gani+ation. Te e6'!e##ion of te #t!ateg* in te!"# of f%n$tiona, 'o,i$ie# a,#o #e!)e# to ig,igt an* '!a$ti$a, i##%e# tat "igt not a)e een )i#i,e at a ige! ,e)e,. Te #t!ateg* #o%,& e t!an#,ate& into #'e$ifi$ 'o,i$ie# fo! f%n$tiona, a!ea# #%$ a#: * * * * * * Ma!(eting Re#ea!$ an& &e)e,o'"ent P!o$%!e"ent P!o&%$tion H%"an !e#o%!$e# Info!"ation #*#te"# In a&&ition to &e)e,o'ing f%n$tiona, 'o,i$ie#5 te i"',e"entation 'a#e in)o,)e# i&entif*ing te$ange#. !e8%i!e&Cont!o, !e#o%!$e# an& '%tting into ',a$e te of ne$e##a!* o!gani+ationa, On$e i"',e"ente&5 te !e#%,t# te #t!ateg* nee& to e "ea#%!e& an& e)a,%ate&5 it $ange# "a&e a# !e8%i!e& to (ee' te ',an on t!a$(. Cont!o, #*#te"# #o%,& e &e)e,o'e& an& i"',e"ente& to fa$i,itate ti# "onito!ing. Stan&a!&# of 'e!fo!"an$e a!e #et5 te a$t%a, 'e!fo!"an$e "ea#%!e&5 an& a''!o'!iate a$tion ta(en to en#%!e #%$$e##. D*na"i$ an& Contin%o%# P!o$e## Te #t!ategi$ "anage"ent '!o$e## i# &*na"i$ an& $ontin%o%#. A $ange in one $o"'onent $an ne$e##itate a $ange in te enti!e #t!ateg*. A# #%$5 te '!o$e## "%#t e !e'eate& f!e8%ent,* in o!&e! to a&a't te #t!ateg* to en)i!on"enta, $ange#. T!o%go%t te '!o$e## te fi!" "a* nee& to $*$,e a$( to a '!e)io%# #tage an& "a(e a&2%#t"ent#. D!aa$(# of ti# P!o$e## Te #t!ategi$ ',anning '!o$e## o%t,ine& ao)e i# on,* one a''!oa$ to #t!ategi$ "anage"ent. It i# e#t #%ite& fo! #ta,e en)i!on"ent#. A &!aa$( of ti# to'-&on a''!oa$ i# tat it "a* not e !e#'on#i)e eno%g fo! !a'i&,* $anging $o"'etiti)e en)i!on"ent#. In ti"e# of $ange5 #o"e of te "o!e #%$$e##f%, #t!ategie# e"e!ge info!"a,,* f!o" ,oe! ,e)e,# of te o!gani+ation5 e!e "anage!# a!e $,o#e! to $%#to"e!# on a &a*-to-&a* a#i#. Anote! &!aa$( i# tat ti# #t!ategi$ ',anning "o&e, a##%"e# fai!,* a$$%!ate fo!e$a#ting an& &oe# not ta(e into a$$o%nt %ne6'e$te& e)ent#. In an %n$e!tain o!,&5 ,ong-te!" fo!e$a#t# $annot e !e,ie& %'on it a ig ,e)e, of $onfi&en$e. In ti# !e#'e$t5 "an* fi!"# a)e t%!ne& to #$ena!io ',anning a# a too, fo! &ea,ing it "%,ti',e $ontingen$ie#. ESHWARI.S---LORAA BUSINESS ACADEMY Page >
Te ie!a!$* of St!ategi$ intent: St!ategi$ Intent Define& St!ategi$ intent i# a ig-,e)e, #tate"ent of te "ean# * i$ *o%! o!gani+ation i,, a$ie)e it# )i#ion. It i# a #tate"ent of &e#ign fo! $!eating a &e#i!a,e f%t%!e /#tate& in '!e#ent te!"#. Si"',* '%t5 a #t!ategi$ intent i# *o%! $o"'an*9# )i#ion of at it ant# to a$ie)e in te ,ong te!". In $o"',e6it* #$ien$e9# te!"#5 #t!ategi$ intent i# &e$o"'o#ition of e6',o!ation !%,e# into te ne6t ,e)e, of &etai,5 te ,in(age# to te e6',o!ation !%,e# an& te t!an#ition !%,e# tat &efine o it i,, "ig!ate f!o" it# $%!!ent &e#ign an& e$o#*#te" to a f%t%!e %#ine## &e#ign an& e$o#*#te".1 P%!'o#e of St!ategi$ Intent Te ,ogi$5 %ni8%ene## an& &i#$o)e!* tat "a(e *o%! #t!ategi$ intent $o"e to ,ife a!e )ita,,* fo! e"',o*ee#. a)ee6e!$i#e5 to %n&e!#tan&5 an& ,i)e a$$o!&ing toi"'o!tant it. St!ateg* #o%,& e aTe* #t!et$ not a e,ie)e fit e6e!$i#e. E6'!e##ion of #t!ategi$ intent i# to e,' in&i)i&%a,# an& o!gani+ation# #a!e te $o""on intention to #%!)i)e an& $ontin%e o! e6ten& te"#e,)e# t!o%g ti"e an& #'a$e. St!ategie# a!e in)o,)e& in te fo!"%,ation5 i"',e"entation an& e)a,%ation of #t!ateg*. Te ie!a!$* of #t!ategi$ intent ,a*# te fo%n&ation fo! #t!ategi$ "anage"ent '!o$e##. Te '!o$e## of e#ta,i#ing te ie!a!$* of #t!ategi$ intent i# )e!* $o"',e6. In ti# ie!a!$*5 te )i#ion5 "i##ion5 %#ine## &efinition an& o2e$ti)e# a!e e#ta,i#e&. o!"%,ation of #t!ategie# i# 'o##i,e on,* en #t!ategi$ intent i# $,ea!,* #et %'. Ti# #te' i# "o#t,* 'i,o#o'i$a, in nat%!e. It i,, a)e ,ong te!" i"'a$t on te o!gani+ation. i#ion i# at te to' in te ie!a!$* of #t!ategi$ intent. It i# at te fi!" o%,& %,ti"ate,* ,i(e to e$o"e. Mi##ion i# te Ke##entia, '%!'o#e of te o!gani+ation5 $on$e!ning 'a!ti$%,a!,* * it i# in e6i#ten$e5 te nat%!e of te %#ine## it i# in5 an& te $%#to"e!# it #ee(# to #e!)e an& #ati#f*.4 Te "i##ion #tate"ent# #tage te !o,e tat o!gani+ation ',a*# in #o$iet*. B%#ine## &efinition e6',ain# te %#ine## of an o!gani+ation in te!"# of $%#to"e! nee $%#to"e! g!o%'# an& a,te!nati)e te$no,ogie#. O2e$ti)e# !efe! to te %,ti"ate en& !e#%,t# i$ a!e to e a$$o"',i#e& * te o)e!a,, ',an o)e! a #'e$ifie& 'e!io& of ti"e. Te )i#ion5 "i##ion an& %#ine## &efinition &ete!"ine te %#ine## 'i,o#o'* to e a&o'te& in te ,ong !%n. Te goa,# an& o2e$ti)e# a!e #et to a$ie)e te" ESHWARI.S---LORAA BUSINESS ACADEMY Page
Unit-7 Ana,*+ing a $o"'an*;# e6te!na, en)i!on"ent: A %#ine## &oe# not f%n$tion in a )a$%%". It a# to a$t an& !ea$t to at a''en# o%t#i&e te fa$to!* an& offi$e a,,#. Te#e fa$to!# tat a''en o%t#i&e te %#ine## a!e (non a# e6te!na, fa$to!# o! inf,%en$e#. Te#e i,, affe$t te "ain inte!na, f%n$tion# of te %#ine## an& 'o##i,* te o2e$ti)e# of te %#ine## an& it# #t!ategie#. Main a$to!# Te "ain fa$to! tat affe$t# "o#t %#ine## i# te &eg!ee of $o"'etition o fie!$e,* ote! %#ine##e# $o"'ete it te '!o&%$t# tat anote! %#ine## "a(e#. Te ote! fa$to!# tat $an affe$t te %#ine## a!e: * * * * * * So$ia, o $on#%"e!#5 o%#eo,&# an& $o""%nitie# ea)e an& tei! e,ief#. o! in#tan$e5 $ange# in attit%&e toa!&# ea,t5 o! a g!eate! n%"e! of 'en#ione!# in a 'o'%,ation. Lega, te a* in i$ ,egi#,ation in #o$iet* affe$t# te %#ine##. E.g. $ange# in e"',o*"ent ,a# on o!(ing o%!#. E$ono"i$ o te e$ono"* affe$t# a %#ine## in te!"# of ta6ation5 go)e!n"ent #'en&ing5 gene!a, &e"an&5 inte!e#t !ate#5 e6$ange !ate# an& E%!o'ean an& g,oa, e$ono"i$ fa$to!#. Po,iti$a, o $ange# in go)e!n"ent 'o,i$* "igt affe$t te %#ine## e.g. a &e$i#ion to #%#i&i#e %i,&ing ne o%#e# in an a!ea $o%,& e goo& fo! a ,o$a, !i$( o!(#. Te$no,ogi$a, o te !a'i& 'a$e of $ange in '!o&%$tion '!o$e##e# an& '!o&%$t inno)ation affe$t a %#ine##. Eti$a, at i# !ega!&e& a# "o!a,,* !igt o! !ong fo! a %#ine## to &o. o! in#tan$e #o%,& it t!a&e it $o%nt!ie# i$ a)e a 'oo! !e$o!& on %"an !igt#. Canging E6te!na, En)i!on"ent Ma!(et# a!e $anging a,, te ti"e. It &oe# &e'en& on te t*'e of '!o&%$t te %#ine## '!o&%$e#5 oe)e! a %#ine## nee&# to !ea$t o! ,o#e $%#to"e!#. So"e of te "ain !ea#on# * "a!(et# $ange !a'i&,*: * * * * * C%#to"e!# &e)e,o' ne nee&# an& ant#. Ne $o"'etito!# ente! a "a!(et. Ne te$no,ogie# "ean tat ne '!o&%$t# $an e "a&e. A o!,& o! $o%nt!*i&e e)ent a''en# e.g. %,f Wa! o! foot an& "o%t &i#ea#e. o)e!n"ent int!o&%$e# ne ,egi#,ation e.g. in$!ea#e# "ini"%" age. ESHWARI.S---LORAA BUSINESS ACADEMY Page
B%#ine## an& Co"'etition To%g a %#ine## &oe# not ant $o"'etition f!o" ote! %#ine##e#5 ine)ita,* "o#t i,, fa$e a &eg!ee of $o"'etition. Te a"o%nt an& t*'e of $o"'etition &e'en&# on te "a!(et te %#ine## o'e!ate# in: * * * Man* #"a,, !i)a, %#ine##e# e.g. a #o''ing "a,, o! $it* $ent!e a!$a&e $,o#e !i)a,!*. A fe ,a!ge !i)a, fi!"# e.g. a#ing 'o&e! o! Co(e an& Pe'#i. A !a'i&,* $anging "a!(et e.g. e!e te te$no,og* i# eing &e)e,o'e& )e!* 8%i$(,* te "oi,e 'one "a!(et. A %#ine## !ea$t to a*#: an in$!ea#e in $o"'etition /e.g. a ,a%n$ of !i)a, '!o&%$t in$o%,& te fo,,oing * * * * C%t '!i$e# /%t $an !e&%$e '!ofit# I"'!o)e 8%a,it* /%t in$!ea#e# $o#t# S'en& "o!e on '!o"otion /e.g. &o "o!e a&)e!ti#ing5 in$!ea#e !an& ,o*a,t* %t $o#t# "one* C%t $o#t#5 e.g. %#e $ea'e! "ate!ia,#5 "a(e #o"e o!(e!# !e&%n&ant So$ia, En)i!on"ent an& Re#'on#ii,it* So$ia, $ange i# en te 'eo',e in te $o""%nit* a&2%#t tei! attit%&e# to a* te* ,i)e. B%#ine##e# i,, nee& to a&2%#t tei! '!o&%$t# to "eet te#e $ange#5 e.g. ta(ing #%ga! o%t of $i,&!en;# &!in(#5 e$a%#e 'a!ent# fee, tei! $i,&!en a!e a)ing too "%$ #%ga! in tei! &iet#. Te %#ine## a,#o nee&# to e aa!e of tei! #o$ia, !e#'on#ii,itie#. Te#e a!e te a* te* a$t toa!&# te &iffe!ent 'a!t# of #o$iet* tat te* $o"e into $onta$t it. Legi#,ation $o)e!# a n%"e! of te a!ea# of !e#'on#ii,it* tat a %#ine## a# it it# $%#to"e!#5 e"',o*ee# an& ote! %#ine##e#. It i# a,#o i"'o!tant to $on#i&e! te effe$t# a %#ine## $an a)e on te ,o$a, $o""%nit*. Te#e a!e (non a# te #o$ia, enefit# an& #o$ia, $o#t#. A #o$ia, enefit i# e!e a %#ine## a$tion ,ea&# to enefit# ao)e an& e*on& te &i!e$t enefit# to te %#ine## an&o! $%#to"e!. o! e6a"',e5 te %i,&ing of an att!a$ti)e ne fa$to!* '!o)i&e# e"',o*"ent o''o!t%nitie# to te ,o$a, $o""%nit*. A #o$ia, $o#t i# e!e te a$tion a# te !e)e!#e effe$t te!e a!e $o#t# i"'o#e& on te !e#t of #o$iet*5 fo! in#tan$e 'o,,%tion. Te#e e6t!a enefit# an& $o#t# a!e &i#ting%i#e& f!o" te '!i)ate enefit# an& $o#t# &i!e$t,* att!i%ta,e to te %#ine##. Te#e e6t!a $o#t an& enefit# a!e (non a# e6te!na,itie# e6te!na, $o#t# an& enefit#. ESHWARI.S---LORAA BUSINESS ACADEMY Page G
o)e!n"ent# en$o%!age #o$ia, enefit# t!o%g te %#e of #%#i&ie# an& g!ant# /e.g. !egiona, a##i#tan$e fo! %n&e)e,o'e& a!ea#. Te* a,#o &i#$o%!age #o$ia, $o#t# it fine#5 ta6e# an& ,egi#,ation. P!e##%!e g!o%'# i,, a,#o &i#$o%!age #o$ia, $o#t#. Ana,*+e te $o"'an*;# e6te!na, en)i!on"ent an& i&entif* o''o!t%nitie# an& t!eat# it fa$e#. Li#t te o''o!t%nitie# an& t!eat# te $o"'an* fa$e# in to $o,%"n# 2%#t a# *o% ,i#te& #t!engt# an& ea(ne##e# in to $o,%"n#. On$e e;)e #t%&ie& te in&%#t!* ,ife-$*$,e "o&e, an& te Po!te! -fo!$e# "o&e, in Ca'te! <5 t!* %#ing te" to ana,*+e te #it%ation *o%! $o"'an* fa$e#. If *o% tin( of a&&itiona, #t!engt# an& ea(ne##e# a# *o% a!e ,i#ting o''o!t%nitie# an& t!eat#5 a&& te" to te ,i#t# *o% $!eate& in Ste' 7. He!e i# a ,i#t of o''o!t%nitie# an& t!eat# &e)e,o'e& te S%n Mi$!o#*#te"# $a#e. tat ti# ,i#t5 a#e& on te e!e $a#e '%,i#e& f!o" in 715 #o# "o!e t!eat# tanNote o''o!t%nitie#. Te t!eat# #on ',a*e& a #ignifi$ant !o,e in te #e!io%# '!o,e"# tat S%n e6'e!ien$e& in 71 an& 77. O''o!t%nitie# Sa,e# of neto!(ing e8%i'"ent fo! e5 ote! ,a!ge-#$a,e a'',i$ation# a!e g!oing Digita, $ontent# $!eation %#ine## i# g!oing T!eat# Man* $o"'etito!# $an "a(e Uni6 #e!)e!# Mi$!o#oft Win&o# NT $an in teo!* &o e)e!*ting So,a!i# &oe# an& offe! "%$ i&e! $o"'atii,it* Lin%6 offe!# #t!ong $o"'etition fo! So,a!i# an& i# "o!e o'en In&%#t!* ana,*#i#: Definition: A "a!(et a##e##"ent too, &e#igne& to '!o)i&e a %#ine## it an i&ea of te $o"',e6it* of a 'a!ti$%,a! in&%#t!*. In&%#t!* ana,*#i# in)o,)e# !e)ieing te e$ono"i$5 'o,iti$a, an& "a!(et fa$to!# tat inf,%en$e te a* te in&%#t!* &e)e,o'#. Ma2o! fa$to!# $an in$,%&e te 'oe! ie,&e& * #%'',ie!# an& %*e!#5 te $on&ition of $o"'etito!#5 an& te ,i(e,ioo& of ne "a!(et ent!ant#. ESHWARI.S---LORAA BUSINESS ACADEMY Page J
In&%#t!* Ana,*#i# Te $o%!#e i# a#e& on te ai,it* of #t%&ent# to &efine tei! %#ine##5 $on&%$t an effe$ti)e in&%#t!* ana,*#i#5 an& i&entif* te 4(e* #%$$e## fa$to!*4 fo! fi!"# $o"'eting in te in&%#t!*. S%$ in&%#t!* ana,*#i# i# a#e& on: THE BUSINESS. Te o%n&a!* fo! in&%#t!* ana,*#i# i# A. DEINE te "a!(et# an& '!o&%$t# tat &e#$!ie te &o"ain of te in&%#t!*. On$e *o% %n&e!#tan& te %#ine## #eg"ent tat i# to e ana,*+e&5 i&entif* te $a'ai,itie# !e8%i!e& to 'a!ti$i'ate in tat in&%#t!*5 an& to#e $o"'etito!# tat a!e a,e to effe$ti)e,* ta!get te #a"e %#ine## #eg"ent#. Te#e fo%! e,e"ent# #et te 'a!a"ete!# fo! %n&e!#tan&ing an& ana,*+ing te in&%#t!*. A# in&%#t!ie# ,i(e '!inte!#5 $o'ie!#5 #$anne!#5 an& fa$#i"i,e "a$ine# $on)e!ge5 %#ine## &efinition# e$o"e "o!e &iffi$%,t. In in&%#t!ie# ,i(e $o"'%te!#5 $on#%"e!# a!e e$o"ing "o!e &e"an&ing fo!'!o&%$t-"a!(et $%#to"i+e& '!o&%$t# an& #e!)i$e#. B. DESCRIBE THE INDUSTRY STRUCTURE. o! ea$ #eg"ent5 an in&%#t!* ana,*#i# i,, &e#$!ie te 4fi)e-fo!$e#4 of $o"'etition. 1. A '!i"a!* fo!$e $o"e# $%#to"e! #eg"ent# tat "a(e %' te "a!(et#. Te #i+e an& i"'o!tan$e of $%#to"e!# '!o)i&e te 'oe! to negotiate '!i$e# an& &ea,# tat !e&%$e te '!ofitai,it* of te in&%#t!*. Te #i+e an& g!ot of #eg"ent# &ete!"ine tei! 'otentia, inf,%en$e on '!o&%$t &e)e,o'"ent an& ,e)e, of $o"'etition. 7. A #e$on& fo!$e $o"e# f!o" te $o"'etito!# an& tei! #t!ategie# fo! gaining "a!(et #a!e. Ea$ $o"'etito! offe!# a #et of '!o&%$t# an& #e!)i$e# tat atte"'t# to '!o)i&e ige! )a,%e to te '!o&%$t-"a!(et #eg"ent# te* a&&!e##. St!ategie# $an e to '!o)i&e #o"e $o"ination of ige! 'e!fo!"an$e5 "o!e fa#ion an& feat%!e#5 ige! 8%a,it*5 o! ,oe! '!i$e. In$!ea#e& !i)a,!* often ,ea&# to '!i$e o! #e!)i$e $o"'etition tat $an !e&%$e te '!ofitai,it* of te %#ine##. <. A ti!& fo!$e $o"e# f!o" te in&%#t!* #%'',ie!#. In&%#t!* #%'',ie!# often $ont!o, $!iti$a, in'%t# tat $an affe$t a fi!"# ai,it* to $o"'ete. A$$e## to $!iti$a, e8%i'"ent5 "ate!ia,#5 o! $o"'onent# $an &ete!"ine at fi!"# i,, ,ea& te in&%#t!*. o! ti# !ea#on5 in$!ea#e& o%t#o%!$ing often ,ea&# to ,oe! ent!* a!!ie!# fo! ne $o"'etition. >. Te fo%!t fo!$e !e'!e#ent# te a!!ie!# to $ange in in&%#t!* #t!%$t%!e5 eite! f!o" ne $o"'etito!# ente!ing te in&%#t!* o! $%!!ent $o"'etito!# e6i#ting te in&%#t!*. Ba!!ie!# to ent!* often in$,%&e ea)* in)e#t"ent in $a'ita,5 e8%i'"ent5 an& "a!(et &e)e,o'"ent. Ba!!ie!# to e6it often in$,%&e o%t#tan&ing a!!ant* o! #e!)i$e $ont!a$t# tat "%#t e ono!e&5 an& a,te!nati)e %#e o! 'otentia, #a,e of e8%i'"ent an& fa$i,itie#. On$e #'e$ia,i+e& fa$i,itie# a!e e#ta,i#e&5 te* a!e #e,&o" #%t &on5 %t a!e often #o,& to anote! in&%#t!* 'a!ti$i'ant. . Te fift fo!$e !e'!e#ent# te 'otentia, fo! $ange in '!o&%$t"a!(et #t!%$t%!e of te in&%#t!* t!o%g te #%#tit%tion of '!o&%$t# o! #e!)i$e# it a,te!nati)e a''!oa$e# to #ati#f*ing te $%#to"e!9# nee&#. Ti# !e8%i!e# te i&entifi$ation of 'otentia, #%#tit%te# an& te $a!a$te!i#ti$# tat o%,& $a%#e !a'i& #%#tit%tion. P!i$e often e$o"e# a &!i)e! fo! #%#tit%te#5 #%$ a# ',a#ti$# fo! "eta,# in $a!# an& ',%"ing #%'',ie#. To&a*5 te Inte!net i# e$o"ing a #%#tit%te fo! "ai, #e!)i$e an&5 e)ent%a,,*5 te,e'one #e!)i$e. ESHWARI.S---LORAA BUSINESS ACADEMY Page
C. IDENTIY ?EY SUCCESS ACTORS. Te '!i"a!* '%!'o#e of in&%#t!* ana,*#i# i# to i&entif* te !e8%i!e"ent# an& t!en&# tat &ete!"ine te (e* #%$$e## fa$to!# fo! te %#ine##. Te#e fa$to!# en$o"'a## /1 $%#to"e! !e8%i!e"ent#5 /7 $o"'etiti)e fa$to!# tat "%#t e "et5 /< !eg%,ation#in&%#t!* #tan&a!&# in te %#ine##5 /> te !e#o%!$e !e8%i!e"ent# to i"',e"ent $o"'etiti)e #t!ateg*5 an& ote! / te$ni$a, !e8%i!e"ent# to %i,& a $o"'etiti)e 'o#ition. 1. C%#to"e!# a!e ,oo(ing fo! '!o&%$t# tat '!o)i&e #o"e ,e)e, of )a,%e fo! te '!i$e te* 'a*. Ea$ %*e! #eg"ent a# &iffe!ent !e8%i!e"ent# tat affe$t it# (e* #%$$e## fa$to!#. Re8%i!e"ent# $an in$,%&e ig 'e!fo!"an$e5 &%!ai,it*5 #'e$ia, feat%!e# o! fa#ion5 ea#e of %#e5 o! !a'i& a)ai,ai,it*. 7. Co"'eting fi!"# often %#e #i"i,a! '!o&%$t"a!(et #t!ategie#. i# often '!i$e5 8%a,it*5 &e,i)e!*. De'en&ing on tei! Co"'etition #t!ategi$ fo$%#5 ea$a#e& fi!" on "%#t &e)e,o' a #et an& of #(i,,# /#t!ategi$ ea'on# tat a,,o it to 'e!fo!" ette! tan tei! $o"'etito!# on ea$ $o"'etiti)e &i"en#ion. <. In&%#t!* !eg%,ation# o! #tan&a!&# a!e often "ini"%" !e8%i!e"ent# fo! 'a!ti$i'ation in a $o"'etiti)e a!ena. o)e!"ent !eg%,ation# often affe$t #afet* i##%e# fo! te en)i!on"ent o! en& %#e!#. In&%#t!* #tan&a!&# often &ete!"ine te$ni$a, $o"'atii,it*5 '!o$e## 'e!fo!"an$e5 an& inte!fa$e i##%e# fo! neto!( o! #*#te" '!o&%$t#. In&%#t!* #tan&a!&# $an e #et * a #'e$ia, o&*5 ,i(e te In&%#t!* Stan&a!&# O!gani+ation /ISO5 o! e$o"e a& o$ #tan&a!&# #et * ,ea&ing $o"'etitio!#5 ,i(e Inte, an& Mi$!o#oft. >. Re#o%!$e !e8%i!e"ent# a!e e $o"ing in$!ea#ing,* $!iti$a, a# "a!(et# e$o"e g,oa, an& e$ono"ie# of #$a,e e$o"e $!iti$a, fo! !e#ea!$ an& &e)e,o'"ent5 "an%fa$t%!ing5 an& "a!(eting. In)e#t"ent# no e6$e&e 1 i,,ion fo! fa$i,itie# in #e"i$on&%$to!#5 'a'e! "a(ing5 an& #tee, '!o&%$tion. In ig te$no,og* a!ea#5 ,i(e info!"ation te$no,og*5 #o!tage# of 8%a,ifie& 'e!#onne, a!e fo!$ing fi!"# to o%t#o%!$e "%$ of tei! $a'ai,itie#. . Te$ni$a, !e8%i!e"ent# a!e a,#o (e* to to&a*9# $o"'etiti)e en)i!on"ent. Wito%t a$$e## to5 o! inte!na, te$no,og*5 fi!"# a!e not a,e to 'a!ti$i'ate in "an* in&%#t!ie#. Ti# i# e#'e$ia,,* i"'o!tant fo! #%'',ie!#5 #%$ a# $o"'onent #%'',ie!# fo! e,e$t!oni$# o! a%to"oi,e#. A# fi!"# !e&%$e tei! n%"e! of #%'',ie!#5 #%'',ie!# "%#t in$!ea#ing,* a&& !e#ea!$ an& &e)e,o'"ent $a'ai,itie# to #ta* in te ga"e. B%#ine## St!ategie# Ana,*#i# Co"'etiti)e '!o&%$t-"a!(et #t!ategie# a!e $!iti$a, to %#ine## #%$$e##. B%#ine## #t!ateg* ana,*#i# !e8%i!e# te fo,,oing: A. IDENTIY STRATEIC OALS. A fi!"9# #t!ategi$ goa,# &!i)e %#ine## #t!ateg* an& a&&!e## te (e* #%$$e## fa$to!# of te in&%#t!*. St!ategi$ goa,# often in$,%&e te )i#ion o! "i##ion #tate"ent fo! te %#ine##. Te* #o%,& a,#o #et te &i!e$tion an& #tan&a!& fo! finan$ia, an& "a!(et !e#%,t# again#t i$ a$t%a, 'e!fo!"an$e $an e "ea#%!e&. Te to "o#t $o""on #tategi$ goa,# a!e: 1. Co"'etiti)e an& "a!(et goa,# tat &efine "a!(et #a!e o! "a!(et g!ot an& 'enet!ation fo! te fi!"9# '!o&%$t# o! #e!)i$e#. 7. inan$ia, 'e!fo!"an$e in te!"# of (e* !atio#5 ,i(e !et%!n on in)e#t"ent an& #a,e#5 an& g!ot in !e)en%e# an&o! '!ofitai,it*. ESHWARI.S---LORAA BUSINESS ACADEMY Page
B. DEINE BUSINESS STRATEY. Te &efinition of %#ine## #t!ateg* in$,%&e# #i6 a!ea# of ana,*#i#. Te '!o&%$t-"a!(et fo$%# i# te fi!#t #te'. Te %n&e!,*ing $a'ai,itie# in i"',e"enting a '!o&%$t-"a!(et #t!ateg* in$,%&e te te$no,ogie#5 '!o$e##e# an& "a!(et a$$e## tat a fi!" a#. Te#e a&&!e## te %#ine## an& it# (e* #%$$e## fa$to!#. B%#ine### #t!ateg* in$,%&e# $%#to"e! ta!geting5 '!o&%$t ,ine# an& 'o#ition#5 te$ni$a, $a'ai,itie#5 #t!ategi$ '!o$e##e#5 an& "a!(et a$$e##. 1. De#$!ie te $%#to"e! ta!geting #t!ateg* an& it# !e8%i!e"ent#. Wito%t ta!geting a #'e$ifi$ $%#to"e! #eg"ent5 it i# i"'o##i,e to &e)e,o' effe$ti)e '!o&%$t# o! #e!)i$e# tat "eet #'e$ifi$ $%#to"e! nee&# an& !e8%i!e"ent#. Ea$ #eg"ent5 * &efinition5 a# a &iffe!ent #et of !e8%i!e"ent#. Wi,e &iffe!en$e# "a* e "ino! at ti"e5 te* affe$t te &e$i#ion of'!o&%$t te $%#to"e! to '%!$a#e te '!o&%$t #e!)i$e. 7. De#$!ie te '!o&%$t ,ine an& 'o#itioning #t!ategie# fo! teo! "a!(et #eg"ent. Te %#ine## %nit "%#t &e$i&e at it i,, offe! an& o to#e offe!ing# i,, e 'o#itione& itin te $o"'etiti)e en)i!on"ent. A fi!" $an a)e one '!o&%$t o! a '!o&%$t ,ine tat $o)e!# a !ange of '!i$e# it a )a!iet* of feat%!e#. Te '!i$e-8%a,it*'e!fo!"an$e 'o#ition i# a !e,ati)e &ete!"ination $o"'a!e& it $o"'etito!#9 '!i$e#5 8%a,it* ,e)e,# an& feat%!e# en $o"'a!ing *o%! '!o&%$t# it a,te!nati)e '!o&%$t# in te "a!(et',a$e. <. I&entif* te te$no,ogie# !e8%i!e& to i"',e"ent te '!o&%$t-"a!(et #t!ateg*. Te$no,ogie# '!o)i&e te a#i$ $a'ai,itie# nee&e& to &e)e,o' '!o&%$t# o! #e!)i$e#5 a# e,, a# te a##o$iate& '!o$e##e# %#e& in &e)e,o'ing o! &e,i)e!ing te" to te "a!(et',a$e. Te$no,og* &ete!"ine# te !ange of '!o&%$t# an& #'ee& it i$ te* $an e &e)e,o'e& an& &e,i)e!e& to te "a!(et',a$e. >. I&entif* te #t!ategi$ '!o$e##/e# !e8%i!e& to i"',e"ent te '!o&%$t-"a!(et #t!ateg*. Te $o!e $a'ai,itie# of a fi!" a!e e"e&&e& in te %#ine## '!o$e##e# an& f%n$tion#. St!ategi$ '!o$e##e# $an eite! i"'!o)e te '!o&%$t o! "a!(eting $a'ai,itie# of a fi!". Te#e '!o$e##e# an& f%n$tion# a!e te a#i# of a fi!"# $o"'etiti)e #t!engt# an& ea(ne##e#5 an& "a(e %' te $o!e $o"'eten$ie# of te fi!". Te#e #(i,,# an& $a'ai,ite# a!e &e#$!ie& in #e$tion C e,o. . I&entif* te "a!(et a$$e## #t!ateg*. Te fina, e,e"ent of #t!ateg* !e8%i!e# tat a fi!" a)e a$$e## to it# "a!(et o! $%#to"e!#. To&a*5 te Inte!net i# $on#i&e!e& te ne $anne, fo! a$$e##ing "a!(et#. In te 1#5 1-J n%"e!# e!e te ne "eto& of a$$e##. At te #a"e ti"e5 &i#$o%nt #%'e!#to!e# g!e tei! "a!(et #a!e in !etai, a,(-in #a,e# "a!(et#. C. IDENTIY INTERNAL CAPABILITIES AND S?ILLS. Te ai,it* of a fi!" to i"',e"ent it# #t!ateg* i# &e'en&ent %'on ot te f%n$tion# an& %#ine## '!o$e##e# tat #%''o!t# it# #t!ateg*. De'en&ing on te nat%!e of te o!gani+ation5 it# f%n$tion# an& %#ine## '!o$e## $a'ai,itie# an& #(i,,# a!e $ent!a, to #t!ateg* i"',e"entation. Te#e $a'ai,itie# $an e $,a##ifie& into '!o&%$t o! #e!)i$e $!eation f%n$tion# an& '!o$e##e#5 an& '!o&%$t o! #e!)i$e &e,i)e!* an& #ati#fa$tion f%n$tion# an& '!o$e##e#. P!o&%$t-!e,ate& f%n$tion# an& '!o$e##e# a!e &e'en&ent "an%fa$t%!ing'%!$a#ing $a'ai,itie#. %'on a fi!"9# R=D an& ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
1. Te R=D f%n$tion gene!ate# '!o'!ieta!* te$no,ogie# tat $an e a'',ie& to te &e)e,o'"ent an& '!o&%$tion of ne '!o&%$t#. In te e,e$t!oni$# in&%#t!*5 a$$e## to a#i$ $o"'onent#5 ,i(e a!& &i#( &!i)e# an& f,o''* &i#( &!i)e# an& ig '!e$i#ion '!o&%$tion e8%i'"ent a!e f%n&a"enta, to "a(ing #"a,,e!5 ,igte!5 ige! 8%a,it* '!o&%$t#. Ea$ gene!ation of #"a,,e! '!o&%$t#5 ,i(e 'a," $o!&e!#5 #ti"%,ate# "a!(et g!ot fo! te $o"'an* tat i# fi!#t to te "a!(et. Ea$ gene!ation of #"a,,e! '!o&%$t# a,#o !e&%$e 'a$(aging an& #i''ing $o#t#5 !e&%$e 'oe! $on#%"'tion5 e6ten& atte!* ,ife5 an& a!e "o!e $on)enient to $a!!*. 7. Te ti"e-to-"a!(et '!o$e## i# !e8%i!e& to integ!ate ne te$no,og* into a fi!"9# '!o&%$t# an& #e!)i$e#. To&a*5 $o"'etiti)e a&)antage i# often !e,ate& to te #'ee& it i$ a fi!" $an int!o&%$e te ne6t gene!ation of '!o&%$t te$no,ogie# into te '!o&%$tion "a!(et t!o%g ne '!o&%$t an& '!o$e## &e)e,o'"ent#. On$e te i# &e)e,o'e&5 $a'a$it* often e$o"e# te ,i"iting fa$to! of "a!(et g!ot. <. Te "an%fa$t%!ing f%n$tion t!an#fo!"# a #et of '%!$a#e& $o"'onent# an& #ofta!e into a fi!"9# '!o&%$t#. Ha)ing a$$e'ta,e '!o&%$t# a)ai,a,e in a ti"e,* "anne! fo! $%#to"e!# i# $ent!a, to "a(ing #a,e#. Te ai,it* to '!o)i&e te ige#t 8%a,it* '!o&%$t# in te "o#t effi$ient a,,o# $o"'anie# to gain "a!(et #a!e * offe!ing $o"'etiti)e '!i$e# an& !ea&* a)ai,ai,it*. E6'e!ien$e $%!)e effe$t# f!o" ig )o,%"e# $an ,ea& to ,oe! $o#t#. >. Te integ!ate&-#%'',*-$ain '!o$e## $oo!&inate# '%!$a#ing of $o"'onent# fo! a##e",*5 '!o&%$t o%t#o%!$ing5 ote!i#e "a(ing #%!e '!o&%$t# a!e a)ai,a,e to "eet $%#to"e! o!&e! !e8%i!e"ent#. O%t#o%!$ing an& a,,ian$e# in$!ea#e a fi!"9# ai,it* to offe! a i&e! !ange of '!o&%$t# o! to int!o&%$e ne '!o&%$t# "o!e !a'i&,*. In$!ea#e& f,e6ii,it* '!o)i&e# $o"'etiti)e a&)antage in !e#'on&ing to !a'i& "a!(et $ange#. Ma!(et-!e,ate& f%n$tion# an& '!o$e##e# a!e &i!e$te& at #e!)ing te $%#to"e! in te "o#t effe$ti)e "anne! 'o##i,e. Di#t!i%tion an& "a!(eting a$ti)itie#5 in$,%&ing #a,e# an& #e!)i$e5 a!e $ent!a, to f%,fi,,ing $%#to"e! &e"an&# an& en#%!ing $%#to"e! #ati#fa$tion. 1. Te &i#t!i%tion f%n$tion i# e##entia, fo! a fi!" in gaining "a!(et a$$e##. Te $o"'an* tat &o"inate# te #a,e# $anne,# fo! a gi)en "a!(et often $ont!o,# te "a!(et. Ma!(et #a!e i# !e,ate& to '!o&%$t a)ai,ai,it*5 i.e. te n%"e! an& t*'e of ,o$ation# tat "a(e te '!o&%$t# an& #e!)i$e# a)ai,a,e to *o%! $%#to"e! ta!get. Te Inte!net i# '!o)i&ing te ne6t gene!ation of &i#t!i%tion an& "a!(eting #*#te". 7. Te "a!(et-to-$o,,e$tion '!o$e## i# %#e& to otain $%#to"e!# an& &e,i)e! '!o&%$t#. Te Inte!net i# $anging te !o,e of #a,e# f!o" fa$e-to-fa$e $o""%ni$ation to 'one o! $o"'%te! $o""%ni$ation#. It i# e6'e$te& tat "an* inte!"e&ia!* !o,e# /#%$ a# &i#t!i%to!# an& agent# i,, $ange to tat of info"e&ia!*. A# '!o&%$t 8%a,it* an& &%!ai,it* i"'!o)e5 #e!)i$e e$o"e# ,e## i"'o!tant5 an& ne $anne,# $an e &e)e,o'e&. <. Te "a!(eting f%n$tion '!o)i&e# te $%#to"e! it info!"ation an& e&%$ation ao%t a fi!"9# '!o&%$t# an& #e!)i$e#. P!o&%$t info!"ation an& e&%$ation i# often nee&e& to ,et $%#to"e!# (no ao%t '!o&%$t $a'ai,itie#. A&)e!ti#ing i# te 'a!t of "a!(eting tat e,'# '%,, te $%#to"e! into te "a!(et-to-$o,,etion '!o$e## * $!eating !e$ognition an& i"age fo! te !an&9# '!o&%$t# an& #e!)i$e#. It e,'# '%,, te $%#to"e! into te #to!e an& $!eate !an& i"age. Co$a Co,a5 it te ,a!ge#t a&)e!ti#ing %&get5 #'en&# ,e## "one* ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
'e! ott,e of #oft &!in( #a,e# tan an* ote! $o"'etito!. Tat gi)e# te" $o"'etiti)e a&)antage. >. Te $%#to"e!-#e!)i$e an& #ati#fa$tion '!o$e## i# $!iti$a, to #%#tain a $o"'an*9# !an& ,o*a,t*. It i# "%$ ,e## e6'en#i)e to (ee' an e6i#ting $%#to"e! tan to a$8%i!e a ne $%#to"e!. On$e a $%#to"e! !e,ation#i' i# e#ta,i#e&5 it i# i"'o!tant tat a''!o'!iate $%#to"e! #e!)i$e a$ti)itie# a!e e#ta,i#e& to "aintain te !e,ation#i'5 an& #o,)e '!o,e"# tat "igt %!t te !e,ation#i'. Wen afte! #a,e# #e!)i$e i# !e8%i!e&5 $%#to"e!# nee& a $o"'an* $onta$t. 1-J n%"e!# an& te Inte!net a!e !a'i&,* '!o)i&ing &i!e$t '%!$a#e o''o!t%nitie# an& te$ni$a, #%''o!t $a'ai,itie#. De,, Co"'%te!#5 fo! e6a"',e5 g%a!antee# >J o%! !e'ai!# of tei! '!o&%$t# /often ne6t &a* #e!)i$e. e!o6 '!o)i&e# G&a*5 7>-o%! !e'ai! ,a!geTe #*#te" $%#to"e!#. D. STRATEIC PERORMANCE. Pe!fo!"an$e i# an#e!)i$e o%t$o"eto oftei! #t!ateg*. #%$$e## it i$ a fi!"9# %#ine## #t!ateg* effe$ti)e,* a&&!e##e# it# in&%#t!*9# (e* #%$$e## fa$to!# i,, &ete!"ine it# #t!ategi$ 'e!fo!"an$e. St!ategi$ 'e!fo!"an$e i# "ea#%!e& in te!"# of ot finan$ia, an& "a!(et #%$$e##. 1. inan$ia, 'e!fo!"an$e i# e##entia, fo! $ontin%e& %#ine## o'e!ation#. inan$ia, $a'ai,itie# a!e $!iti$a, in #%''o!ting f%n$tiona, #t!ategie# an& "a(ing !e8%i!e& inf!a#t!%$t%!e in)e#t"ent#. o! e6a"',e5 a $o"'an* it a&e8%ate f%n&ing $an e6'an& o! in)e#t5 o! $an '!o)i&e $%#to"e! finan$ing. 7. Ma!(et #a!e &e"on#t!ate# a fi!"9# ai,it* to $!eate an& o,& $%#to"e!#5 i$ &ete!"ine# te ,ong te!" #%$$e## of a fi!". Te f!e#ne## of '!o&%$t ,ine# an& "a!(et 'o#itioning affe$t a fi!"9# ai,it* to att!a$t $%#to"e!# aea& of tei! $o"'etition. Po!te! # &o"inant e$ono"i$ feat%!e#: * HOME In&%#t!*Z# Do"inant E$ono"i$ eat%!e# I&entifi$ation of in&%#t!*;# &o"inant e$ono"i$ feat%!e# i# )e!* i"'o!tant fo! ana,*+ing a $o"'an*;# in&%#t!*;# an& $o"'etiti)e en)i!on"ent. It a,#o '!o)i&e# an o)e!)ie of te o)e! a,, ,an&#$a'e of in&%#t!*. So a#i$a,,* it e,'# te o!gani+ation to (no te &iffe!ent (in& of #t!ategi$ "o)e# tat in&%#t!* "e"e!# a!e ,i(e,* to e"',o*. So"e of te i"'o!tant in&%#t!*;# &o"inant e$ono"i$ feat%!e# a!e gi)en e,o. Ma!(et #i+e an& g!ot !ate Ma!(et #i+e !efe!# to te tota, n%"e! of fi!"# o'e!ating in te in&%#t!*. It i# a,#o i"'o!tant to (no ete! te in&%#t!* i# g!oing5 #tati$ o! &e$,ining. It &e'en&# %'on te 'o#ition of in&%#t!* in te %#ine## ,ife $*$,e i.e. ea!,*&e)e,o'"ent5 !a'i& g!ot5 ea!,* "at%!it*5 "at%!it*5 #tagnation5 &e$,ine. ESHWARI.S---LORAA BUSINESS ACADEMY Page <
N%"e! of !i)a,# O!gani+ation# #o%,& a,#o (no ete! te in&%#t!* $ontain# too "an* #"a,, !i)a,# o! i# it &o"inate& * a fe ,a!ge fi!"#. Si"i,a!,* te* #o%,& a,#o (no ao%t te )a!io%# &e)e,o'"ent in te in&%#t!* #%$ a# "e!ge!# an&a$8%i#ition# et$. S$o'e of $o"'etiti)e !i)a,!* S$o'e of $o"'etiti)e !i)a,!* i# an i"'o!tant fa$to! fo! te o!gani+ation# to (no ao%t te ,e)e, of $o"'etition. In&%#t!* "e"e!# "%#t (no ao%t te nat%!e of f%t%!e $o"'etition. o! e6a"',e if a $o"'an* !ea,i+e# tat it# f%t%!e #%$$e## &e'en&# %'on &i)e!#ifi$ation5 '!o&%$t &e)e,o'"ent an& "a!(et e6'an#ion5 ten it "%#t #ta!t ',anning f!o" te )e!* fi!#t &a*. B%*e! nee&# an& !e8%i!e"ent# In&%#t!* "e"e!# "%#t ta(e into $on#i&e!ation te nee& an& ta#te of fina, %*e!# a# e,, a# te "i&&,e"en. So5 a#i$a,,* o!gani+ation# a)e to &o a ,ot of 'e!io&i$ !e#ea!$ o!&e! tote (no te te "a2o! #ift# in %*e!# nee&# an& !e8%i!e"ent#. Te* #o%,&in a,#o (no ao%t )a!io%# fa$to!# fa$to!# affe$ting $on#%"e! ea)io!. Deg!ee of '!o&%$t &iffe!entiation P!o&%$t &iffe!entiation i# anote! i"'o!tant fa$to! fo! ana,*+ing te o)e!a,, in&%#t!* #it%ation. If a,, te '!o&%$t# of in&%#t!* a!e not f%,,* &iffe!entiate& ten it i,, in$!ea#e $o"'etition a"ong te "e"e!# of in&%#t!*. In #%$ $a#e '!i$e# of te '!o&%$t# i,, e ,o an& te ne ent!ant# i,, fin& it &iffi$%,t to $o"'ete it te e6i#ting fi!"#. P!o&%$t inno)ation P!o&%$t inno)ation $an e %#e& a# a "ea#%!e to (no te &o"inant in&%#t!* feat%!e#. If te in&%#t!* i# $a!a$te!i+e& * !a'i& '!o&%$t inno)ation an& #o!t '!o&%$t ,ife $*$,e ten te !e#ea!$ an& &e)e,o'"ent i# )e!* i"'o!tant fo! te #%$$e## of an o!gani+ation. In #%$ $a#e#5 "e"e!# of te in&%#t!* "%#t $o"e %' it ne '!o&%$t# to $o"'ete effe$ti)e,*. Pa$e of te$no,ogi$a, $ange If te in&%#t!* i# $a!a$te!i+e& * !a'i& 'a$e of te$no,ogi$a, $ange ten te a!t of te #tate te$no,og* i# i"'e!ati)e fo! te #%$$e## of o!gani+ation#. o! e6a"',e In&%#t!* of "oi,e 'one# !e8%i!e# !a'i& $ange# in te te$no,og* in o!&e! to "eet te $anging $on#%"e! &e"an&#. ESHWARI.S---LORAA BUSINESS ACADEMY Page >
e!ti$a, integ!ation It i# i"'o!tant to (no ete! te $o"'etito!# in te in&%#t!* a!e 'a!tia,,* o! f%,,* integ!ate&. Si"i,a!,* te $o"'etiti)e a&)antage# an& &i#a&)antage# of f%,,*5 'a!tia,,* an& non integ!ate& fi!"# #o%,& e ta(en into $on#i&e!ation. e!ti$a, integ!ation $an $a%#e 'otentia, $o#t of '!o&%$tion &iffe!en$e#. E$ono"ie# of #$a,e O!gani+ation# "%#t a,#o (no ao%t te &iffe!ent e$ono"ie# of #$a,e in '%!$a#ing5 "an%fa$t%!ing5 an& ote! a$ti)itie#. Te* #o%,& ana,*+e ete! te $o"'anie# it ig #$a,e o'e!ation# a# an* $o#t a&)antage o! not. An* !e&%$tion in te $o#t of '!o&%$tion ,ea&# to ige! $o"'etiti)ene## i$ %,ti"ate,* !e#%,t# ige! '!ofit#. tt':"a-,e$t%!e#.$o"tagin&%#t!*#-&o"inant-e$ono"i$-feat%!e# Co"'etiti)e En)i!on"ent Ana,*#i# Co"'etiti)e En)i!on"ent Ana,*#i# e6',ain# te #t!%$t%!e5 'a!ti$i'ant# an& fo!$e# tat affe$t te $o"'etiti)e inten#it* an& '!ofitai,it* of an in&%#t!* o! "a!(et. It i# a %#ef%, too, to $o"',e"ent a SWOT ana,*#i# an& to a##e## te att!a$ti)ene## of a 'otentia, %#ine## &i)e!#ifi$ation. i)e o!$e# Mo&e, Te e#t-(non "o&e, fo! ana,*#ing a $o"'etiti)e en)i!on"ent i# Mi$ae, Po!te!9# i)e o!$e# "o&e,. Po!te! $,a##ifie# te fi)e fo!$e# o! 4!%,e# of $o"'etition4 a#: 1. T!eat of ne ent!ant# 7. Ba!gaining 'oe! of #%'',ie!# <. Ba!gaining 'oe! of %*e!# >. T!eat of #%#tit%te '!o&%$t# o! #e!)i$e# . Ri)a,!* a"ong e6i#ting $o"'etito!#. Te ana,*#t a# to "ea#%!e te in&i)i&%a, an& o)e!a,, #t!engt of te fi)e fo!$e# ten an#e! te 8%e#tion#: o att!a$ti)e i# te in&%#t!*"a!(et3 Ho $an e $o"'ete3 ESHWARI.S---LORAA BUSINESS ACADEMY Page
A Co"'etiti)e En)i!on"ent Ana,*#i# $an e )e!* %#ef%, '!o)i&e& a$$%!ate info!"ation i# %#e& an& te ana,*#i# i# o2e$ti)e. A to!o%g ana,*#i# "a* !e8%i!e "o!e !e#ea!$ ana,*#t !e#o%!$e tan te Co"'etiti)e Inte,,igen$e tea" $an #'a!e. We Can Ana,*#e Yo%! Co"'etiti)e En)i!on"ent Inte,,igent#ia i# e6'e!t in Co"'etiti)e En)i!on"ent Ana,*#i#. We o!( $,o#e,* it $,ient#9 $o"'etiti)e #t!ateg* tea"#5 to eite! !ef!e# e6i#ting ana,*#e# a# $o"'etiti)e fo!$e# $ange o! to $!eate te ana,*#i# to egin te '!o$e##. Te Benefit# of O%t#o%!$ing O%t#o%!$ing a $o"'etiti)e en)i!on"ent ana,*#i# i# $o#t-effe$ti)e. Yo% !e$ei)e a e,, !e#ea!$e& 'ie$e of ana,*#i# an& $an5 if *o% i#5 &e',o* te ana,*#i# on ote! '!io!itie# in te %#ine##. Ana,*#i# of $o"'etition Te ti!& e,e"ent of St!ategi$ ana,*#i# i# to ,oo( at te $o"'etiti)e en)i!on"ent at *o%! $o"'etito!# a!e &oing5 e!e te ne6t te$no,ogi$a, &e)e,o'"ent# a!e $o"ing f!o" an& te gene!a, &i!e$tion# te "a!(et i# "o)ing. Co"'etiti)e an& en)i!on"enta, ana,*#i# A $o"'etiti)e an& en)i!on"enta, ana,*#i# of *o%! "a!(et# #o%,& in$,%&e a,, te (e* inf,%en$ing fa$to!# tat affe$t te a* in i$ *o% $an $o"'ete. A $o"'etiti)e !e)ie i# i"'o!tant fo! to !ea#on. i!#t,*5 e)en if *o% (no at te $%#to"e!# ant an& a)e te !e#o%!$e# to "eet te $%#to"e!#9 &e"an it "a* e tat te $o"'etiti)e en)i!on"ent "ean# tat it i# not o!t '%!#%ing 'a!ti$%,a! 'a!t# of te "a!(et fo! a o,e !ange of #t!ategi$ !ea#on#5 #%$ a# te t!eat a '!i$e a!5 $anne, $onf,i$t5 o! ,ega, o! eti$a, $on#i&e!ation#. Se$on&,*5 *o% nee& to (no if *o%! $o"'etito!# a!e &oing ting# ette! tan *o% a!e5 o! "o!e &ange!o%#,*5 ete! te* a!e ,oo(ing to $ange te a#i# of $o"'etition in te "a!(et5 fo! in#tan$e * "o)ing to a &i!e$t #a,e# "o&e,5 o! * int!o&%$ing #o"e !e)o,%tiona!* ne '!o&%$t o! te$no,og*. Te "ain t*'e# of $o"'etiti)e ana,*#i# f!o" a #t!ategi$ 'oint of )ie a!e: * * 4Te i)e o!$e#4 Ben$"a!(ing an& $o"'etiti)e e)a,%ation ESHWARI.S---LORAA BUSINESS ACADEMY Page
Ma!(et Inte,,igen$e i# te '!i"a!* "e$ani#" fo! gate!ing info!"ation ao%t $o"'etito!# /a,to%g #o"e "a* $o"e f!o" ta,(ing to $%#to"e!# in *o%! on "a!(et #%!)e*#. Notanant i# o%! on-,ine "a!(et (no,e&ge #*#te" fo! $o,,e$ting5 #a!ing an& "anaging $%#to"e! an& $o"'etito! (no,e&ge '!o)i&e& * egen CIS. i)e fo!$e# Te fi)e fo!$e# $o"e f!o" Po!te!9# fa"o%# f!a"eo!( an& a!e: * Poe! of B%*e!# * Poe! of S%'',ie!# * T!eat of #%#tit%te# * Ba!!ie!# to ent!* * Co"'etito!# Te i&ea i# tat $ange in *o%! "a!(et i# ,i(e,* to $o"e a# te a#i# of one of te#e fi)e a!ea#. o! in#tan$e5 %*e!# "a* &i#to!t te "a!(et * fo!$ing '!i$e# &on5 o! * &e$i&ing to ta(e %i,& '!o&%$t# in-o%#e. In $on#i&e!ing o te#e 4fo!$e#4 a$t on *o%! "a!(et#5 *o% get a 'i$t%!e of i##%e# #%$ a# $anne, $onf,i$t5 t!eat# f!o" )e!ti$a, integ!ation5 teta(e i"'a$t of !eg%,ato!* ne te$no,og*. Yo% $an a,#o a )ie a# to o $ange *o% a!eo! o!te $ana&)ent affe$tof te $o"'etiti)e #it%ation fo! *o%! on enefit5 !ate! tan #tati$a,,* a$$e'ting te #tat%# 8%o. Con#e8%ent,* it e$o"e# 'o##i,e to ',a* a!o%n& it &iffe!ent f%t%!e $o"'etiti)e #$ena!io# an& to %#e te#e to te#t &iffe!ent '!o'o#ition# to t!* an& g%e## o te "a!(et i,, $ange. Yo%! #t!ateg* $an ten in$,%&e $ontingen$ie# an& !e#'on#e# to $ange# tat "igt affe$t *o%5 o! $ange# tat *o% "igt "a(e to te "a!(et. Ben$"a!(ing Ben$"a!(ing i# %#e& to a#$e!tain o e,, *o% a!e &oing again#t te $o"'etition. A!e te!e a!ea# tat *o% $an ,ea!n f!o" te $o"'etition3 A!e te!e i&ea# in "a!(et# o%t#i&e *o%! on tat o%,& e o!t !inging into *o%! "a!(et to gi)e *o% a $o"'etiti)e a&)antage3 Yo%! $o"'etito!# $an a,#o e a #o%!$e fo! info!"ation ao%t te gene!a, "a!(et. Tei! a&)e!ti#ing an& "a!(eting i# te,,ing *o% #o"eting ao%t te "e##age# an& a''!oa$e# tat te* tin( a!e a'',i$a,e to *o%! "a!(et. If te* a)e &one tei! !e#ea!$5 *o% $an ,ea!n f!o" tei! a''!oa$e#. One $o""on i##%e tat $o"e# f!o" ,oo(ing at te $o"'etition i# at &o *o% &o ao%t it3 Te o'tion# a!e: ESHWARI.S---LORAA BUSINESS ACADEMY Page G
* Igno!e * igt * A&o't In '!a$ti$e5 if te!e i# "e!it in #o"eting ne an& *o% igno!e it5 it i# ,i(e,* to ite *o% ,ate!. If *o% figt again#t it5 *o% a&& to *o%! $o#t# 'otentia,,* 2%#t to #a)e "a!(et #a!e5 !ate! tan to in "a!(et #a!e. Con#e8%ent,* often a&o'tion of te $o"'etition9# goo& i&ea# i# te e#t a* fo!a!& /a,to%g 'e!a'# afte! a ,itt,e figting to te#t ete! te i&ea# a!e #o%n&. Mi$!o#oft9# E"!a$e an& E6ten& an& Inte,9# 4On,* te Pa!anoi& S%!)i)e4 a!e goo& e6a"',e# of $o"'anie# tat %#e te $o"'etition to (ee' tei! '!o&%$t# at te $%tting e&ge. Often te!e $an inte!na, $%,t%!a, i##%e# tat "ean ti# $an e &iffi$%,t to a$$e't. B%t ,ea!ning f!o" te $o"'etition5 &oe#n9t "ean fo,,oing te $o"'etition. Ti# a''!oa$5 (non a# an 4in)e#t in *o%! t!eat#4#t!ateg*5 $an e an e6t!e"e,* effe$ti)e a* of (ee'ing %' it an& aea& of te "a!(et. tt':.&one*.$o"St!ategie#$o"'eten$e#.t" Po!te!9# o!$e# Ana,*#i#: Te "o&e, o!iginate& f!o" Mi$ae, E. Po!te!9# 1J oo( 4Co"'etiti)e St!ateg*: Te$ni8%e# fo! Ana,*+ing In&%#t!ie# an& Co"'etito!#.4 Sin$e ten5 it a# e$o"e a f!e8%ent,* %#e& too, fo! ana,*+ing a $o"'an*9# in&%#t!* #t!%$t%!e an& it# $o!'o!ate #t!ateg*. In i# oo(5 Po!te! i&entifie& fi)e $o"'etiti)e fo!$e# tat #a'e e)e!* #ing,e in&%#t!* an& "a!(et. Te#e fo!$e# e,' %# to ana,*+e e)e!*ting f!o" te inten#it* of $o"'etition to te '!ofitai,it* an& att!a$ti)ene## of an in&%#t!*. ig%!e 1 #o# te !e,ation#i' eteen te &iffe!ent $o"'etiti)e fo!$e#. ESHWARI.S---LORAA BUSINESS ACADEMY Page J
1. T!eat in&%#t!*5 t!eat of * * * * *
of Ne Ent!ant# - Te ea#ie! it i# fo! ne $o"'anie# to ente! te te "o!e $%tt!oat $o"'etition te!e i,, e. a$to!# tat $an ,i"it te ne ent!ant# a!e (non a# a!!ie!# to ent!*. So"e e6a"',e# in$,%&e: *
E6i#ting ,o*a,t* to "a2o! !an&# In$enti)e# fo! %#ing a 'a!ti$%,a! %*e! /#%$ a# f!e8%ent #o''e! '!og!a"# Hig fi6e& $o#t# S$a!$it* of !e#o%!$e# Hig $o#t# of #it$ing $o"'anie# o)e!n"ent !e#t!i$tion# o! ,egi#,ation Poe! of S%'',ie!# - Ti# i# o "%$ '!e##%!e #%'',ie!# $an ',a$e on a %#ine##. If one #%'',ie! a ,a!ge eno%g 'oe!. i"'a$t He!e to affe$t $o"'an*9# an& )o,%"e#5 ten ita# o,&# #%#tantia, a!e aafe !ea#on#"a!gin# tat #%'',ie!# "igt a)e 'oe!: * * * * * Te!e a!e )e!* fe #%'',ie!# of a 'a!ti$%,a! '!o&%$t Te!e a!e no #%#tit%te# Sit$ing to anote! /$o"'etiti)e '!o&%$t i# )e!* $o#t,* Te '!o&%$t i# e6t!e"e,* i"'o!tant to %*e!# - $an9t &o ito%t it Te #%'',*ing in&%#t!* a# a ige! '!ofitai,it* tan te %*ing in&%#t!* Poe! of B%*e!# - Ti# i# o "%$ '!e##%!e $%#to"e!# $an ',a$e on a %#ine##. If one $%#to"e! a# a ,a!ge eno%g i"'a$t to affe$t a $o"'an*9# "a!gin# an& )o,%"e#5 ten te $%#to"e! o,& #%#tantia, 'oe!. He!e a!e a fe !ea#on# tat $%#to"e!# "igt a)e 'oe!: * * * * * S"a,, n%"e! of %*e!# P%!$a#e# ,a!ge )o,%"e# Sit$ing to anote! /$o"'etiti)e '!o&%$t i# #i"',e Te '!o&%$t i# not e6t!e"e,* i"'o!tant to %*e!# te* $an &o ito%t te '!o&%$t fo! a 'e!io& of ti"e C%#to"e!# a!e '!i$e #en#iti)e SUPPLIER POWER S%'',ie! $on$ent!ation I"'o!tan$e of )o,%"e to #%'',ie! Diffe!entiation of in'%t# I"'a$t of in'%t# on $o#t o! &iffe!entiation Sit$ing $o#t# of fi!"# in te in&%#t!* ESHWARI.S---LORAA BUSINESS ACADEMY Page
P!e#en$e of #%#tit%te in'%t# T!eat of fo!a!& integ!ation Co#t !e,ati)e to tota, '%!$a#e# in in&%#t!* THREAT O NEW ENTRANTS Ba!!ie!# to Ent!* A#o,%te $o#t a&)antage# P!o'!ieta!* ,ea!ning $%!)e A$$e## to in'%t# o)e!n"ent 'o,i$* E$ono"ie# of #$a,e Ca'ita, !e8%i!e"ent# B!an& i&entit* Sit$ing $o#t# A$$e## to &i#t!i%tion E6'e$te& !eta,iation P!o'!ieta!* '!o&%$t# BUYER POWER Ba!gaining ,e)e!age B%*e! )o,%"e B%*e! info!"ation B!an& i&entit* P!i$e #en#iti)it* T!eat of a$(a!& integ!ation P!o&%$t &iffe!entiation B%*e! $on$ent!ation )#. in&%#t!* S%#tit%te# a)ai,a,e B%*e!#9 in$enti)e# DEREE O RIALRY -E6it a!!ie!# -In&%#t!* $on$ent!ation -i6e& $o#t#a,%e a&&e& -In&%#t!* g!ot -Inte!"ittent o)e!$a'a$it* -P!o&%$t &iffe!en$e# -Sit$ing $o#t# -B!an& i&entit* -Di)e!#it* of !i)a,# -Co!'o!ate THREAT O SUBSTITUTES $o#t# -B%*e! in$,ination to #%#tit%te #ta(e# -P!i$e-'e!fo!"an$e t!a&e-off -Sit$ing of #%#tit%te# ESHWARI.S---LORAA BUSINESS ACADEMY Page G
A)ai,ai,it* of S%#tit%te# - Wat i# te ,i(e,ioo& tat #o"eone i,, #it$ to a $o"'etiti)e '!o&%$t o! #e!)i$e3 If te $o#t of #it$ing i# ,o5 ten ti# 'o#e# a #e!io%# t!eat. He!e a!e a fe fa$to!# tat $an affe$t te t!eat of #%#tit%te#: * * Te "ain i##%e i# te #i"i,a!it* of #%#tit%te#. o! e6a"',e5 if te '!i$e of $offee !i#e# #%#tantia,,*5 a $offee &!in(e! "a* #it$ o)e! to a e)e!age ,i(e tea. If #%#tit%te# a!e #i"i,a!5 it $an e )iee& in te #a"e ,igt a# a ne ent!ant. Co"'etiti)e Ri)a,!* - Ti# &e#$!ie# te inten#it* of $o"'etition eteen e6i#ting fi!"# in an in&%#t!*. Hig,* $o"'etiti)e in&%#t!ie# gene!a,,* ea!n ,o !et%!n# e$a%#e te $o#t of $o"'etition i# ig. A ig,* $o"'etiti)e "a!(et "igt !e#%,t f!o": * * * Man* ',a*e!# of ao%t te #a"e #i+e te!e i# no &o"inant fi!" Litt,e &iffe!entiation eteen $o"'etito!# '!o&%$t# an& #e!)i$e# A "at%!e in&%#t!* it )e!* ,itt,e g!ot $o"'anie# $an on,* g!o * #tea,ing $%#to"e!# aa* f!o" $o"'etito!# In&%#t!* D!i)ing o!$e#: O!gani+ation# of a,, t*'e# a!e $ontin%a,,* #t!i)ing to enan$e tei! %#ine## info!"ation #*#te"#. o%! "a2o! &!i)ing fo!$e# affe$t te #t!ategie# tat CIO;# an& ote! IT ,ea&e!# '%!#%e !e,ati)e to tei! ,ega$* #*#te"#. Te#e &!i)e!# in$,%&e: * * * C%#to"e! nee&# Te $a'ai,it* an& 8%a,it* of #%$ #*#te"# to f%,fi,, te nee&# of $%#to"e!# often &iffe!entiate an o!gani+ation f!o" it# $o"'etito!#. Reg%,ato!* $ange# an& e"e!ging #tan&a!&# Con$%!!ent,*5 o!gani+ation# a!e $ontin%a,,* %n&e! '!e##%!e to !e#'on& to $ange# in ,a#5 !eg%,ation# an& 'o,i$ie# tat go)e!n tei! o'e!ation#. Si"i,a!,*5 e"e!ging in&%#t!* #tan&a!&# "a* !e8%i!e $ange# in #*#te" f%n$tiona,it*. E)o,)ing te$no,ogie# Ne f%n$tiona,it* in ne )e!#ion# of '!o&%$t# o! enti!e,* ne '!o&%$t# '!o)i&e o''o!t%nitie# to enan$e #*#te"#. So"eti"e#5 a# te$no,og* e)o,)e#5 )en&o!# &i#$ontin%e #%''o!t fo! a $o"'onent of a #*#te"5 i$ in #o"e $a#e# '%t# "i##ion$!iti$a, ,ega$* #*#te"# at !i#(. B%&get an& ti"e $on#t!aint# Lea&e!# !e#'on#i,e fo! ,ega$* #*#te"# "%#t en&ea)o! to a,an$e a,, &!i)ing fo!$e# it te $o#t of #*#te"# &e)e,o'"ent an& o'e!ation#. In fa$t5 o!gani+ation# t*'i$a,,* fa$e te nee& to '!o)i&e "o!e an& ette! f%n$tiona,it* in #o!te! ti"e f!a"e# an& !e&%$e& %&get#. * * * * ESHWARI.S---LORAA BUSINESS ACADEMY Page G1
(e* #%$$e## fa$to!# an& i"',e"entation: no ana,*+ing $o"'an*9# !e#o%!$e $o"'etiti)e 'o#ition: ana,*#i# of $o"'an*;# '!e#ent #t!ategie#: 1. 7. <. >. . Ho e,, i# te $o"'an*;# '!e#ent #t!ateg* o!(ing3 Wat a!e te $o"'an*;# #t!engt#5 ea(ne##e#5 o''o!t%nitie#5 an& t!eat#3 A!e te $o"'an*;# '!i$e# an& $o#t# $o"'etiti)e3 Ho #t!ong i# te $o"'an*;# $o"'etiti)e 'o#ition3 Wat #t!ategi$ i##%e# &oe# te $o"'an* fa$e3 St!ateg* an& Co"'etiti)e A&)antage Te i)e ene!i$ Co"'etiti)e St!engt# Wen one #t!i'# aa* te &etai,# to get at te !ea, #%#tan$e te igge#t an& "o#t i"'o!tant &iffe!en$e# a"ong $o"'etiti)e #t!ategie# oi, &on to /1 ete! a $o"'an* # "a!(et ta!get i# !oa& o! na!!o an& /7 ete! it i# '%!#%ing a $o"'etiti)e a&)antage ,in(e& to ,o $o#t# o! '!o&%$t &iffe!entiation. i)e &i#tin$t a''!oa$e# #tan& o%t: 1. A ,o-$o#t ,ea&e!#i' #t!ateg* A''ea,ing to a !oa& #'e$t!%" of $%#to"e!# a#e& on eing te o)e!a,, ,o $o#t '!o)i&e! of a '!o&%$t o! #e!)i$e. 7. A !oa& &iffe!entiation #t!ateg* See(ing to &iffe!entiate te $o"'an* # '!o&%$t offe!ing f!o" !i)a,# in a*# tat i,, a''ea, to a !oa& #'e$t!%" of %*e!#. <. A e#t-$o#t '!o)i&e! #t!ateg* i)ing $%#to"e!# "o!e )a,%e fo! te "one* * $o"ining an e"'a#i# on ,o $o#t it an e"'a#i# on %'#$a,e &iffe!entiation te ta!get i# to a)e te e#t /,oe#t $o#t# an& '!i$e# !e,ati)e to '!o&%$e!# of '!o&%$t# it $o"'a!a,e 8%a,it* an& feat%!e#. >. A fo$%#e& o! "a!(et ni$e #t!ateg* a#e& on ,oe! $o#t Con$ent!ating on a na!!o %*e! #eg"ent an& o%t$o"'eting !i)a,# * #e!)ing ni$e "e"e!# at a ,oe! $o#t tan !i)a,#. . A fo$%#e& o! "a!(et ni$e #t!ateg* a#e& on &iffe!entiation Con$ent!ating on a na!!o %*e! #eg"ent an& o%t$o"'eting !i)a,# * offe!ing ni$e "e"e!# a $%#to"i+e& '!o&%$t o! #e!)i$e tat "eet# tei! ta#te# an& !e8%i!e"ent# ette! tan !i)a,# offe!ing. ESHWARI.S---LORAA BUSINESS ACADEMY Page G7
T * ' e o f C o " ' e titi) e A & ) a n ta g e B e in g P % !# % e & S e $ tio n o f Lo e! C o#t B % * e !# D iffe !e n tia tio n A B !o a & M a !( e t T a !g e t C !o # # A N a !!o SWOT Ana,*#i# SWOT a too, an& fo! e,'# a%&iting an o!gani+ation it en)i!on"ent. i# te fi!#tana,*#i# #tage ofi# ',anning "a!(ete!# to fo$%# an& on (e* i##%e#. SWOT It #tan&# fo! #t!engt#5 ea(ne##e#5 o''o!t%nitie#5 an& t!eat#. St!engt# an& ea(ne##e# a!e inte!na, fa$to!#. O''o!t%nitie# an& t!eat# a!e e6te!na, fa$to!#. Seg" ent O ) e !a ,, L o -C o # t B !o a & L e a & e !# i' D iffe !e n tia tio n S t!a te g * S t!a te g * B e # t-C o # t P !o ) i& e ! S t!a te g * o$%#e& o$%#e& Lo D iffe !e n tia tio n C o # t S t!a te g * S t!a te g * B %*e! SWOT Ana,*#i# A #$an of te inte!na, an& e6te!na, en)i!on"ent i# an i"'o!tant 'a!t of te #t!ategi$ ',anning '!o$e##. En)i!on"enta, fa$to!# inte!na, to te fi!" %#%a,,* $an e $,a##ifie& a# #t!engt# /S o! ea(ne##e# /W5 an& to#e e6te!na, to te fi!" $an e $,a##ifie& a# o''o!t%nitie# /O o! t!eat# /T. S%$ an ana,*#i# of te #t!ategi$ en)i!on"ent i# !efe!!e& to a# a SWOT ana,*#i#. Te SWOT ana,*#i# '!o)i&e# info!"ation tat i# e,'f%, in "at$ing te fi!"9# !e#o%!$e# an& $a'ai,itie# to te $o"'etiti)e en)i!on"ent in i$ it o'e!ate#. A# #%$5 it i# in#t!%"enta, in #t!ateg* fo!"%,ation an& #e,e$tion. Te fo,,oing &iag!a" #o# o a SWOT ana,*#i# fit# into an en)i!on"enta, #$an: SWOT Ana,*#i# !a"eo!( En)i!on"enta, S$an [ Inte!na, Ana,*#i# E6te!na, Ana,*#i# [ [ St!engt# Wea(ne##e# O''o!t%nitie# T!eat# X SWOT Mat!i6 ESHWARI.S---LORAA BUSINESS ACADEMY Page G<
St!engt# A fi!"9# #t!engt# a!e it# !e#o%!$e# an& $a'ai,itie# tat $an e %#e& a# a a#i# fo! &e)e,o'ing a $o"'etiti)e a&)antage. E6a"',e# of #%$ #t!engt# in$,%&e: * * * * * * 'atent# #t!ong !an& na"e# goo& !e'%tation a"ong $%#to"e!# $o#t a&)antage# f!o" '!o'!ieta!* (no-o e6$,%#i)e a$$e## to ig g!a&e nat%!a, !e#o%!$e# fa)o!a,e a$$e## to &i#t!i%tion neto!(# Wea(ne##e# Te a#en$e of $e!tain #t!engt# "a* e )iee& a# a ea(ne##. o! e6a"',e5 ea$ of te fo,,oing "a* e $on#i&e!e& ea(ne##e#: * * * * * * ,a$( of 'atent '!ote$tion a ea( !an& na"e 'oo! !e'%tation a"ong $%#to"e!# ig $o#t #t!%$t%!e ,a$( of a$$e## to te e#t nat%!a, !e#o%!$e# ,a$( of a$$e## to (e* &i#t!i%tion $anne,# In #o"e $a#e#5 a ea(ne## "a* e te f,i' #i&e of a #t!engt. Ta(e te $a#e in i$ a fi!" a# a ,a!ge a"o%nt of "an%fa$t%!ing $a'a$it*. Wi,e ti# $a'a$it* "a* e $on#i&e!e& a #t!engt tat $o"'etito!# &o not #a!e5 it a,#o "a* e a $on#i&e!e& a ea(ne## if te ,a!ge in)e#t"ent in "an%fa$t%!ing $a'a$it* '!e)ent# te fi!" f!o" !ea$ting 8%i$(,* to $ange# in te #t!ategi$ en)i!on"ent. O''o!t%nitie# Te e6te!na, en)i!on"enta, ana,*#i# "a* !e)ea, $e!tain ne o''o!t%nitie# fo! '!ofit an& g!ot. So"e e6a"',e# of #%$ o''o!t%nitie# in$,%&e: * * * * an %nf%,fi,,e& $%#to"e! nee& a!!i)a, of ne te$no,ogie# ,oo#ening of !eg%,ation# !e"o)a, of inte!nationa, t!a&e a!!ie!# T!eat# Cange# in te e6te!na, en)i!on"enta, a,#o "a* '!e#ent t!eat# to te fi!". So"e e6a"',e# of #%$ t!eat# in$,%&e: ESHWARI.S---LORAA BUSINESS ACADEMY Page G>
* * * * #ift# in $on#%"e! ta#te# aa* f!o" te fi!"9# '!o&%$t# e"e!gen$e of #%#tit%te '!o&%$t# ne !eg%,ation# in$!ea#e& t!a&e a!!ie!# Te SWOT Mat!i6 A fi!" #o%,& not ne$e##a!i,* '%!#%e te "o!e ,%$!ati)e o''o!t%nitie#. Rate!5 it "a* a)e a ette! $an$e at &e)e,o'ing a $o"'etiti)e a&)antage * i&entif*ing a fit eteen te fi!"9# #t!engt# an& %'$o"ing o''o!t%nitie#. In #o"e $a#e#5 te fi!" $an o)e!$o"e a ea(ne## in o!&e! to '!e'a!e it#e,f to '%!#%e a $o"'e,,ing o''o!t%nit*. To &e)e,o' #t!ategie# tat ta(e into a$$o%nt te SWOT '!ofi,e5 a "at!i6 ofi# te#e fa$to!# e$on#t!%$te&. SWOT "at!i6 /a,#o (non a# a TOWS Mat!i6 #on e,o:$an SWOT TOWS Mat!i6 Te St!engt# Wea(ne##e# O''o!t%nitie# S-O #t!ategie# W-O #t!ategie# T!eat# S-T #t!ategie# W-T #t!ategie# * * * * S-O #t!ategie# '%!#%e o''o!t%nitie# tat a!e a goo& fit to te $o"'an*9# #t!engt#. W-O #t!ategie# o)e!$o"e ea(ne##e# to '%!#%e o''o!t%nitie#. S-T #t!ategie# i&entif* a*# tat te fi!" $an %#e it# #t!engt# to !e&%$e it# )%,ne!ai,it* to e6te!na, t!eat#. W-T #t!ategie# e#ta,i# a &efen#i)e ',an to '!e)ent te fi!"9# ea(ne##e# f!o" "a(ing it ig,* #%#$e'ti,e to e6te!na, t!eat#. )a,%e $ain ana,*#i# Int!o&%$tion a,%e Cain Ana,*#i# &e#$!ie# te a$ti)itie# tat ta(e ',a$e in a %#ine## an& !e,ate# te" to an ana,*#i# of te $o"'etiti)e #t!engt of te %#ine##. Inf,%entia, o!( * Mi$ae, Po!te! #%gge#te& tat te a$ti)itie# of a %#ine## $o%,& e g!o%'e& %n&e! to ea&ing#: /1 P!i"a!* A$ti)itie# - to#e tat a!e &i!e$t,* $on$e!ne& it $!eating an& &e,i)e!ing a '!o&%$t /e.g. $o"'onent a##e",* an& ESHWARI.S---LORAA BUSINESS ACADEMY Page G
/7 S%''o!t A$ti)itie#5 i$ i,#t te* a!e not &i!e$t,* in)o,)e& in '!o&%$tion5 "a* in$!ea#e effe$ti)ene## o! effi$ien$* /e.g. %"an !e#o%!$e "anage"ent. It i# !a!e fo! a %#ine## to %n&e!ta(e a,, '!i"a!* an& #%''o!t a$ti)itie#. a,%e Cain Ana,*#i# i# one a* of i&entif*ing i$ a$ti)itie# a!e e#t %n&e!ta(en * a %#ine## an& i$ a!e e#t '!o)i&e& * ote!# /4o%t #o%!$e&4. Lin(ing a,%e Cain Ana,*#i# to Co"'etiti)e A&)antage Wat a$ti)itie# a %#ine## %n&e!ta(e# i# &i!e$t,* ,in(e& to a$ie)ing $o"'etiti)e a&)antage. o! e6a"',e5 a %#ine## i$ i#e# to o%t'e!fo!" it# $o"'etito!# t!o%g &iffe!entiating it#e,f t!o%g ige! 8%a,it* i,, a)e to 'e!fo!" it# )a,%e $ain a$ti)itie# ette! tan te o''o#ition. B* $ont!a#t5 a #t!ateg* a#e& on #ee(ing $o#t ,ea&e!#i' i,, !e8%i!e a !e&%$tion in te $o#t# it te )a,%e $ain a$ti)itie#5 o! a $ain !e&%$tion in te tota, a"o%nt of a##o$iate& !e#o%!$e# %#e&. P!i"a!* A$ti)itie# P!i"a!* )a,%e a$ti)itie# in$,%&e: P!i"a!* A$ti)it* Ino%n& ,ogi#ti$# O'e!ation# De#$!i'tion A,, to#e a$ti)itie# $on$e!ne& it !e$ei)ing an& #to!ing e6te!na,,* #o%!$e& "ate!ia,# Te "an%fa$t%!e of '!o&%$t# an& #e!)i$e# - te a* in i$ !e#o%!$e in'%t# /e.g. "ate!ia,# a!e $on)e!te& to o%t'%t# /e.g. '!o&%$t# O%to%n& A,, to#e a$ti)itie# a##o$iate& it getting fini#e& goo&# an& #e!)i$e# to ,ogi#ti$# %*e!# Ma!(eting an& E##entia,,* an info!"ation a$ti)it* - info!"ing %*e!# an& $on#%"e!# ao%t #a,e# '!o&%$t# an& #e!)i$e# /enefit#5 %#e5 '!i$e et$. Se!)i$e A,, to#e a$ti)itie# a##o$iate& it "aintaining '!o&%$t 'e!fo!"an$e afte! te '!o&%$t a# een #o,& S%''o!t A$ti)itie# S%''o!t a$ti)itie# in$,%&e: Se$on&a!* A$ti)it* P!o$%!e"ent H%"an Re#o%!$e Manage"ent Te$no,og* De)e,o'"ent De#$!i'tion Ti# $on$e!n# o !e#o%!$e# a!e a$8%i!e& fo! a %#ine## /e.g. #o%!$ing an& negotiating it "ate!ia,# #%'',ie!# To#e a$ti)itie# $on$e!ne& it !e$!%iting5 &e)e,o'ing5 "oti)ating an& !ea!&ing te o!(fo!$e of a %#ine## A$ti)itie# $on$e!ne& it "anaging info!"ation '!o$e##ing an& te &e)e,o'"ent an& '!ote$tion of 4(no,e&ge4 in a %#ine## ESHWARI.S---LORAA BUSINESS ACADEMY Page G
Inf!a#t!%$t%!e Con$e!ne& it a i&e !ange of #%''o!t #*#te"# an& f%n$tion# #%$ a# finan$e5 ',anning5 8%a,it* $ont!o, an& gene!a, #enio! "anage"ent Ste'# in a,%e Cain Ana,*#i# a,%e $ain ana,*#i# $an e !o(en &on into a t!ee #e8%entia, #te'#: /1 B!ea( &on a "a!(eto!gani#ation into it# (e* a$ti)itie# %n&e! ea$ of te "a2o! ea&ing# in te "o&e, /7 A##e## te 'otentia, fo! a&&ing )a,%e )ia $o#t a&)antage o! &iffe!entiation5 o! i&entif* $%!!ent a$ti)itie# e!e a %#ine## a''ea!# to e at a $o"'etiti)e &i#a&)antage /< Dete!"ine #t!ategie# %i,t a!o%n& fo$%#ing on a$ti)itie# e!e $o"'etiti)e a&)antage $an e #%#taine& Te a,%e Cain ana,*#i#: To ette! %n&e!#tan& te a$ti)itie# t!o%g i$ a fi!" &e)e,o'# a $o"'etiti)e a&)antage an& $!eate# #a!eo,&e! )a,%e5 it i# %#ef%, to #e'a!ate te %#ine## #*#te" into a #e!ie# of )a,%e-gene!ating a$ti)itie# !efe!!e& to a# te )a,%e $ain. In i# 1J oo( Co"'etiti)e A&)antage5 Mi$ae, Po!te! int!o&%$e& a gene!i$ )a,%e $ain "o&e, tat $o"'!i#e# a #e8%en$e of a$ti)itie# fo%n& to e $o""on to a i&e !ange of fi!"#. Po!te! i&entifie& '!i"a!* an& #%''o!t a$ti)itie# a# #on in te fo,,oing &iag!a": Te goa, of te#e a$ti)itie# i# to offe! te $%#to"e! a ,e)e, of )a,%e tat e6$ee&# te $o#t of te a$ti)itie#5 te!e* !e#%,ting in a '!ofit "a!gin. Te '!i"a!* )a,%e $ain a$ti)itie# a!e: * * * * * Ino%n& Logi#ti$#: te !e$ei)ing an& a!eo%#ing of !a "ate!ia,#5 an& tei! &i#t!i%tion to "an%fa$t%!ing a# te* a!e !e8%i!e&. O'e!ation#: te '!o$e##e# of t!an#fo!"ing in'%t# into fini#e& '!o&%$t# an& #e!)i$e#. O%to%n& Logi#ti$#: te a!eo%#ing an& &i#t!i%tion of fini#e& goo&#. Ma!(eting = Sa,e#: te i&entifi$ation of $%#to"e! nee&# an& te gene!ation of #a,e#. Se!)i$e: te #%''o!t of $%#to"e!# afte! te '!o&%$t# an& #e!)i$e# a!e #o,& to te". Po!te!9# ene!i$ a,%e Cain ESHWARI.S---LORAA BUSINESS ACADEMY Page GG
Ino%n& Logi#ti$# \ O'e!ation# \ O%to%n& Logi#ti$# \ Ma!(eting = Sa,e# \ Se!)i$e \ M A R I N i!" Inf!a#t!%$t%!e HR Manage"ent Te$no,og* De)e,o'"ent P!o$%!e"ent Te#e '!i"a!* a$ti)itie# a!e #%''o!te& *: * * * * Te inf!a#t!%$t%!e of te fi!": o!gani+ationa, #t!%$t%!e5 $ont!o, #*#te"#5 $o"'an* $%,t%!e5 et$. H%"an !e#o%!$e "anage"ent: e"',o*ee !e$!%iting5 i!ing5 t!aining5 &e)e,o'"ent5 an& $o"'en#ation. Te$no,og* &e)e,o'"ent: te$no,ogie# to #%''o!t )a,%e-$!eating a$ti)itie#. P!o$%!e"ent: '%!$a#ing in'%t# #%$ a# "ate!ia,#5 #%'',ie#5 an& e8%i'"ent. Te fi!"9# "a!gin o! '!ofit ten &e'en&# on it# effe$ti)ene## in 'e!fo!"ing te#e a$ti)itie# effi$ient,*5 #o tat te a"o%nt tat te $%#to"e! i# i,,ing to 'a* fo! te '!o&%$t# e6$ee&# te $o#t of te a$ti)itie# in te )a,%e $ain. It i# in te#e a$ti)itie# tat a fi!" a# te o''o!t%nit* to gene!ate #%'e!io! )a,%e. A $o"'etiti)e a&)antage "a* e a$ie)e& * !e$onfig%!ing te )a,%e $ain to '!o)i&e ,oe! $o#t o! ette! &iffe!entiation. Te )a,%e $ain "o&e, i# a %#ef%, ana,*#i# too, fo! &efining a fi!"9# $o!e $o"'eten$ie# an& te a$ti)itie# in i$ it $an '%!#%e a $o"'etiti)e a&)antage a# fo,,o#: * * Co#t a&)antage: * ette! %n&e!#tan&ing $o#t# an& #8%ee+ing te" o%t of te )a,%ea&&ing a$ti)itie#. Diffe!entiation: * fo$%#ing on to#e a$ti)itie# a##o$iate& it $o!e $o"'eten$ie# an& $a'ai,itie# in o!&e! to 'e!fo!" te" ette! tan &o $o"'etito!#. Co#t A&)antage an& te a,%e Cain A fi!" "a* $!eate a $o#t a&)antage eite! * !e&%$ing te $o#t of in&i)i&%a, )a,%e ESHWARI.S---LORAA BUSINESS ACADEMY Page GJ
$ain a$ti)itie# o! * !e$onfig%!ing te )a,%e $ain. On$e te )a,%e $ain i# &efine&5 a $o#t ana,*#i# $an e 'e!fo!"e& * a##igning $o#t# to te )a,%e $ain a$ti)itie#. Te $o#t# otaine& f!o" te a$$o%nting !e'o!t "a* nee& to e "o&ifie& in o!&e! to a,,o$ate te" '!o'e!,* to te )a,%e $!eating a$ti)itie#. Po!te! i&entifie& 1 $o#t &!i)e!# !e,ate& to )a,%e $ain a$ti)itie#: * * * * * * * * * * E$ono"ie# of #$a,e Lea!ning Ca'a$it* %ti,i+ation Lin(age# a"ong a$ti)itie# Inte!!e,ation#i'# a"ong %#ine## %nit# Deg!ee of )e!ti$a, integ!ation Ti"ing of "a!(et ent!* i!"9# 'o,i$* of $o#t o! &iffe!entiation eog!a'i$ ,o$ation In#tit%tiona, fa$to!# /!eg%,ation5 %nion a$ti)it*5 ta6e#5 et$. A fi!" &e)e,o'# a $o#t a&)antage * $ont!o,,ing te#e &!i)e!# ette! tan &o te $o"'etito!#. A $o#t a&)antage a,#o $an e '%!#%e& * !e$onfig%!ing te )a,%e $ain. Re$onfig%!ation "ean# #t!%$t%!a, $ange# #%$ a ne '!o&%$tion '!o$e##5 ne &i#t!i%tion $anne,#5 o! a &iffe!ent #a,e# a''!oa$. o! e6a"',e5 e&E6 #t!%$t%!a,,* !e&efine& e6'!e## f!eigt #e!)i$e * a$8%i!ing it# on ',ane# an& i"',e"enting a % an& #'o(e #*#te". Diffe!entiation an& te a,%e Cain A &iffe!entiation a&)antage $an a!i#e f!o" an* 'a!t of te )a,%e $ain. o! e6a"',e5 '!o$%!e"ent of in'%t# tat a!e %ni8%e an& not i&e,* a)ai,a,e to $o"'etito!# $an $!eate &iffe!entiation5 a# $an &i#t!i%tion $anne,# tat offe! ig #e!)i$e ,e)e,#. Diffe!entiation #te"# f!o" %ni8%ene##. A &iffe!entiation a&)antage "a* e a$ie)e& eite! * $anging in&i)i&%a, )a,%e $ain a$ti)itie# to in$!ea#e %ni8%ene## in te fina, '!o&%$t o! * !e$onfig%!ing te )a,%e $ain. Po!te! i&entifie& #e)e!a, &!i)e!# of %ni8%ene##: * * * * * Po,i$ie# an& &e$i#ion# Lin(age# a"ong a$ti)itie# Ti"ing Lo$ation Inte!!e,ation#i'# Page G ESHWARI.S---LORAA BUSINESS ACADEMY
* * * * Lea!ning Integ!ation S$a,e /e.g. ette! #e!)i$e a# a !e#%,t of ,a!ge #$a,e In#tit%tiona, fa$to!# Man* of te#e a,#o #e!)e a# $o#t &!i)e!#. Diffe!entiation often !e#%,t# in g!eate! $o#t#5 !e#%,ting in t!a&eoff# eteen $o#t an& &iffe!entiation. Te!e a!e #e)e!a, a*# in i$ a fi!" $an !e$onfig%!e it# )a,%e $ain in o!&e! to $!eate %ni8%ene##. It $an fo!a!& integ!ate in o!&e! to 'e!fo!" f%n$tion# tat on$e e!e 'e!fo!"e& * it# $%#to"e!#. It $an a$(a!& integ!ate in o!&e! to a)e "o!e $ont!o, o)e! it# in'%t#. ItU,ti"ate,*5 "a* i"',e"ent '!o$e## te$no,ogie# o! %ti,i+e neto &i#t!i%tion $anne,#. tene fi!" "a* nee& to e $!eati)e in o!&e! &e)e,o' a no)e, )a,%e $ain $onfig%!ation tat in$!ea#e# '!o&%$t &iffe!entiation. Te$no,og* an& te a,%e Cain Be$a%#e te$no,og* i# e"',o*e& to #o"e &eg!ee in e)e!* )a,%e $!eating a$ti)it*5 $ange# in te$no,og* $an i"'a$t $o"'etiti)e a&)antage * in$!e"enta,,* $anging te a$ti)itie# te"#e,)e# o! * "a(ing 'o##i,e ne $onfig%!ation# of te )a,%e $ain. a!io%# te$no,ogie# a!e %#e& in ot '!i"a!* )a,%e a$ti)itie# an& #%''o!t a$ti)itie#: * Ino%n& Logi#ti$# Te$no,ogie# o T!an#'o!tation o Mate!ia, an&,ing o Mate!ia, #to!age o Co""%ni$ation# o Te#ting o Info!"ation #*#te"# O'e!ation# Te$no,ogie# o P!o$e## o Mate!ia,# o Ma$ine too,# o Mate!ia, an&,ing o Pa$(aging o Maintenan$e o Te#ting o B%i,&ing &e#ign = o'e!ation o Info!"ation #*#te"# O%to%n& Logi#ti$# Te$no,ogie# o T!an#'o!tation o Mate!ia, an&,ing Page J * * ESHWARI.S---LORAA BUSINESS ACADEMY
o o o * Pa$(aging Co""%ni$ation# Info!"ation #*#te"# Ma!(eting = Sa,e# Te$no,ogie# o Me&ia o A%&io)i&eo o Co""%ni$ation# o Info!"ation #*#te"# Se!)i$e Te$no,ogie# o Te#ting o Co""%ni$ation# o Info!"ation #*#te"# * Note tat "an* of te#e te$no,ogie# a!e %#e& a$!o## te )a,%e $ain. o! e6a"',e5 info!"ation #*#te"# a!e #een in e)e!* a$ti)it*. Si"i,a! a!e %#e& in #%''o!t a$ti)itie#. In a&&ition5 te$no,ogie# !e,ate& tote$no,ogie# t!aining5 $o"'%te!ai&e& &e#ign5 an& #ofta!e &e)e,o'"ent f!e8%ent,* a!e e"',o*e& in #%''o!t a$ti)itie#. To te e6tent tat te#e te$no,ogie# affe$t $o#t &!i)e!# o! %ni8%ene##5 te* $an ,ea& to a $o"'etiti)e a&)antage. Lin(age# Beteen a,%e Cain A$ti)itie# a,%e $ain a$ti)itie# a!e not i#o,ate& f!o" one anote!. Rate!5 one )a,%e $ain a$ti)it* often affe$t# te $o#t o! 'e!fo!"an$e of ote! one#. Lin(age# "a* e6i#t eteen '!i"a!* a$ti)itie# an& a,#o eteen '!i"a!* an& #%''o!t a$ti)itie#. Con#i&e! te $a#e in i$ te &e#ign of a '!o&%$t i# $ange& in o!&e! to !e&%$e "an%fa$t%!ing $o#t#. S%''o#e tat ina&)e!tant,* te ne '!o&%$t &e#ign !e#%,t# in in$!ea#e& #e!)i$e $o#t# te $o#t !e&%$tion $o%,& e ,e## tan anti$i'ate& an& e)en o!#e5 te!e $o%,& e a net $o#t in$!ea#e. So"eti"e# oe)e!5 te fi!" "a* e a,e to !e&%$e $o#t in one a$ti)it* an& $on#e8%ent,* en2o* a $o#t !e&%$tion in anote!5 #%$ a# en a &e#ign $ange #i"%,taneo%#,* !e&%$e# "an%fa$t%!ing $o#t# an& i"'!o)e# !e,iai,it* #o tat te #e!)i$e $o#t# a,#o a!e !e&%$e&. T!o%g #%$ i"'!o)e"ent# te fi!" a# te 'otentia, to &e)e,o' a $o"'etiti)e a&)antage. Ana,*+ing B%#ine## Unit Inte!!e,ation#i'# Inte!!e,ation#i'# a"ong %#ine## %nit# fo!" te a#i# fo! a o!i+onta, #t!ateg*. S%$ %#ine## %nit inte!!e,ation#i'# $an e i&entifie& * a )a,%e $ain ana,*#i#. Tangi,e inte!!e,ation#i'# offe! &i!e$t o''o!t%nitie# to $!eate a #*ne!g* a"ong ESHWARI.S---LORAA BUSINESS ACADEMY Page J1
%#ine## %nit#. o! e6a"',e5 if "%,ti',e %#ine## %nit# !e8%i!e a 'a!ti$%,a! !a "ate!ia,5 te '!o$%!e"ent of tat "ate!ia, $an e #a!e& a"ong te %#ine## %nit#. Ti# #a!ing of te '!o$%!e"ent a$ti)it* $an !e#%,t in $o#t !e&%$tion. S%$ inte!!e,ation#i'# "a* e6i#t #i"%,taneo%#,* in "%,ti',e )a,%e $ain a$ti)itie#. Unfo!t%nate,*5 atte"'t# to a$ie)e #*ne!g* f!o" te inte!!e,ation#i'# a"ong &iffe!ent %#ine## %nit# often fa,, #o!t of e6'e$tation# &%e to %nanti$i'ate& &!aa$(#. Te $o#t of $oo!&ination5 te $o#t of !e&%$e& f,e6ii,it*5 an& o!gani+ationa, '!a$ti$a,itie# #o%,& e ana,*+e& en &e)i#ing a #t!ateg* to !ea' te enefit# of te #*ne!gie#. O%t#o%!$ing a,%e Cain A$ti)itie# A fi!" "a* #'e$ia,i+e in one o! "o!e )a,%e $ain a$ti)itie# an& o%t#o%!$e te !e#t. Te e6tent to i$ fi!" 'e!fo!"# %'#t!ea" an& &on#t!ea" a$ti)itie# i# &e#$!ie& * it#te &eg!ee ofa)e!ti$a, integ!ation. A to!o%g )a,%e $ain ana,*#i# $an i,,%"inate %#ine## #*#te" to fa$i,itate o%t#o%!$ing &e$i#ion#. To &e$i&e i$ a$ti)itie# to o%t#o%!$e5 "anage!# "%#t %n&e!#tan& te fi!"9# #t!engt# an& ea(ne##e# in ea$ a$ti)it*5 ot in te!"# of $o#t an& ai,it* to &iffe!entiate. Manage!# "a* $on#i&e! te fo,,oing en #e,e$ting a$ti)itie# to o%t#o%!$e: * * * * Wete! te a$ti)it* $an e 'e!fo!"e& $ea'e! o! ette! * #%'',ie!#. Wete! te a$ti)it* i# one of te fi!"9# $o!e $o"'eten$ie# f!o" i$ #te"# a $o#t a&)antage o! '!o&%$t &iffe!entiation. Te !i#( of 'e!fo!"ing te a$ti)it* in-o%#e. If te a$ti)it* !e,ie# on fa#t$anging te$no,og* o! te '!o&%$t i# #o,& in a !a'i&,*$anging "a!(et5 it "a* e a&)antageo%# to o%t#o%!$e te a$ti)it* in o!&e! to "aintain f,e6ii,it* an& a)oi& te !i#( of in)e#ting in #'e$ia,i+e& a##et#. Wete! te o%t#o%!$ing of an a$ti)it* $an !e#%,t in %#ine## '!o$e## i"'!o)e"ent# #%$ a# !e&%$e& ,ea& ti"e5 ige! f,e6ii,it*5 !e&%$e& in)ento!*5 et$. Te a,%e Cain S*#te" A fi!"9# )a,%e $ain i# 'a!t of a ,a!ge! #*#te" tat in$,%&e# te )a,%e $ain# of %'#t!ea" #%'',ie!# an& &on#t!ea" $anne,# an& $%#to"e!#. Po!te! $a,,# ti# #e!ie# of )a,%e $ain# te )a,%e #*#te"5 #on $on$e't%a,,* e,o: Te a,%e S*#te" ... \ a,%e Cain \ a,%e Cain \ a,%e Cain \ a,%e Cain S%'',ie! i!" Canne, B%*e! Lin(age# e6i#t not on,* in a fi!"9# )a,%e $ain5 %t a,#o eteen )a,%e $ain#. ESHWARI.S---LORAA BUSINESS ACADEMY Page J7
Wi,e a fi!" e6iiting a ig &eg!ee of )e!ti$a, integ!ation i# 'oi#e& to ette! $oo!&inate %'#t!ea" an& &on#t!ea" a$ti)itie#5 a fi!" a)ing a ,e##e! &eg!ee of )e!ti$a, integ!ation nonete,e## $an fo!ge ag!ee"ent# it #%'',ie!# an& $anne, 'a!tne!# to a$ie)e ette! $oo!&ination. o! e6a"',e5 an a%to "an%fa$t%!e! "a* a)e it# #%'',ie!# #et %' fa$i,itie# in $,o#e '!o6i"it* in o!&e! to "ini"i+e t!an#'o!t $o#t# an& !e&%$e 'a!t# in)ento!ie#. C,ea!,*5 a fi!"9# #%$$e## in &e)e,o'ing an& #%#taining a $o"'etiti)e a&)antage &e'en&# not on,* on it# on )a,%e $ain5 %t on it# ai,it* to "anage te )a,%e #*#te" of i$ it i# a 'a!t. Ben$"a!(ing: Definition Ben$"a!(ing i# te '!o$e## of i&entif*ing 4e#t '!a$ti$e4 !e,ation to ot '!o&%$t# /in$,%&ing an& te '!o$e##e# * i$ to#e '!o&%$t#in a!e $!eate& an& &e,i)e!e&. Te #ea!$ fo! 4e#t '!a$ti$e4 $an ta(e! ',a$e ot in#i&e a 'a!ti$%,a! in&%#t!*5 an& a,#o in ote! in&%#t!ie# /fo! e6a"',e - a!e te!e ,e##on# to e ,ea!ne& f!o" ote! in&%#t!ie#3. Te o2e$ti)e of en$"a!(ing i# to %n&e!#tan& an& e)a,%ate te $%!!ent 'o#ition of a %#ine## o! o!gani#ation in !e,ation to 4e#t '!a$ti$e4 an& to i&entif* a!ea# an& "ean# of 'e!fo!"an$e i"'!o)e"ent. Te Ben$"a!(ing P!o$e## Ben$"a!(ing in)o,)e# ,oo(ing o%ta!& /o%t#i&e a 'a!ti$%,a! %#ine##5 o!gani#ation5 in&%#t!*5 !egion o! $o%nt!* to e6a"ine o ote!# a$ie)e tei! 'e!fo!"an$e ,e)e,# an& to %n&e!#tan& te '!o$e##e# te* %#e. In ti# a* en$"a!(ing e,'# e6',ain te '!o$e##e# ein& e6$e,,ent 'e!fo!"an$e. Wen te ,e##on# ,ea!nt f!o" a en$"a!(ing e6e!$i#e a!e a'',ie& a''!o'!iate,*5 te* fa$i,itate i"'!o)e& 'e!fo!"an$e in $!iti$a, f%n$tion# itin an o!gani#ation o! in (e* a!ea# of te %#ine## en)i!on"ent. A'',i$ation of en$"a!(ing in)o,)e# fo%! (e* #te'#: /1 Un&e!#tan& in &etai, e6i#ting %#ine## '!o$e##e# /7 Ana,*#e te %#ine## '!o$e##e# of ote!# /< Co"'a!e on %#ine## 'e!fo!"an$e it tat of ote!# ana,*#e& /> I"',e"ent te #te'# ne$e##a!* to $,o#e te 'e!fo!"an$e ga' Ben$"a!(ing #o%,& not e $on#i&e!e& a one-off e6e!$i#e. To e effe$ti)e5 it "%#t e$o"e an ongoing5 integ!a, 'a!t of an ongoing i"'!o)e"ent '!o$e## it te goa, of (ee'ing a!ea#t of e)e!-i"'!o)ing e#t '!a$ti$e. ESHWARI.S---LORAA BUSINESS ACADEMY Page J<
T*'e# of Ben$"a!(ing Te!e a!e a n%"e! of &iffe!ent t*'e# of en$"a!(ing5 a# #%""a!i#e& e,o: T*'e St!ategi$ Ben$"a!(ing De#$!i'tion We!e %#ine##e# nee& to i"'!o)e o)e!a,, 'e!fo!"an$e * e6a"ining te ,ong-te!" #t!ategie# an& gene!a, a''!oa$e# tat a)e ena,e& ig-'e!fo!"e!# to #%$$ee&. It in)o,)e# $on#i&e!ing ig ,e)e, a#'e$t# #%$ a# $o!e $o"'eten$ie#5 &e)e,o'ing ne '!o&%$t# an& #e!)i$e# an& i"'!o)ing $a'ai,itie# fo! &ea,ing it $ange# in te e6te!na, en)i!on"ent. Cange# !e#%,ting f!o" ti# t*'e of en$"a!(ing "a* e &iffi$%,t to i"',e"ent an& ta(e a ,ong ti"e to "ate!ia,i#e B%#ine##e# $on#i&e! tei! 'o#ition in !e,ation to 'e!fo!"an$e $a!a$te!i#ti$# of (e* '!o&%$t# an& #e!)i$e#. Ben$"a!(ing 'a!tne!# a!e &!an f!o" te #a"e #e$to!. Ti# t*'e of ana,*#i# i# often %n&e!ta(en t!o%g t!a&e a##o$iation# o! ti!& 'a!tie# to '!ote$t fo! te o,,oing P%!'o#e# - Re-a,igning %#ine##$onfi&entia,it*. #t!ategie# tat Mo#t a)e A''!o'!iate e$o"e ina''!o'!iate Pe!fo!"an$e o! Co"'etiti)e Ben$"a!(ing ] A##e##ing !e,ati)e ,e)e, of 'e!fo!"an$e in (e* a!ea # o! a$ti)itie# in $o"'a!i#o n it ote!# in te #a"e #e$to! an& fin&ing a*# of $,o#ing ga'# in 'e!fo!"an$e A$ie)ing i"'!o)e"ent# in (e* '!o$e##e# to otain 8%i$( enefit# P!o$e## Ben$"a!(ing %n$tiona, Ben$"a!(ing Inte!na,Ben$ "a!(ing o$%#e# on i"'!o)ing #'e$ifi$ $!iti$a, '!o$e##e# an& o'e!ation#. Ben$"a!(ing 'a!tne!# a!e #o%gt f!o" e#t '!a$ti$e o!gani#ation# tat 'e!fo!" #i"i,a! o!( o! &e,i)e! #i"i,a! #e!)i$e#. P!o$e## en$"a!(ing in)a!ia,* in)o,)e# '!o&%$ing '!o$e## "a'# to fa$i,itate $o"'a!i#on an& ana,*#i#. Ti# t*'e of en$"a!(ing often !e#%,t# in #o!t te!" enefit#. B%#ine##e# ,oo( to en$"a!( it 'a!tne!# &!an f!o" &iffe!ent %#ine## #e$to!# o! a!ea# of a$ti)it* to fin& a*# of i"'!o)ing #i"i,a! f%n$tion# o! o!( '!o$e##e#. Ti# #o!t of en$"a!(ing $an ,ea& to inno)ation an& &!a"ati$ i"'!o)e"ent#. in)o,)e# en$"a!(ing %#ine##e# o! o'e!ation# f!o" itin te #a"e o!gani#ation /e.g. %#ine## %nit# in &iffe!ent $o%nt!ie#. Te "ain a&)antage# of inte!na, en$"a!(ing a!e tat a$$e## to #en#iti)e &ata an& info!"ation i# - I"'!o)ing a$ti)itie# o! #e!)i$e# fo! i$ $o%nte!'a!t# &o not e6i#t. - Se)e!a, %#ine## %nit# itin te #a"e o!gani#ation e6e"',if* goo& '!a$ti$e an& "anage"ent ant to Page J> ESHWARI.S---LORAA BUSINESS ACADEMY
E6te!na, Ben$"a!(ing Inte!nationa, Ben$"a!(ing ea#ie! #tan&a!&i#e& &ata i# often !ea&i,* a)ai,a,e an&5 %#%a,,* ,e## ti"e an& !e#o%!$e# a!e nee&e&. Te!e "a* e fee! a!!ie!# to i"',e"entation a# '!a$ti$e# "a* e !e,ati)e,* ea#* to t!an#fe! a$!o## te #a"e o!gani#ation. Hoe)e!5 !ea, inno)ation "a* e ,a$(ing an& e#t in $,a## 'e!fo!"an$e i# "o!e ,i(e,* to e fo%n& t!o%g e6te!na, en$"a!(ing. in)o,)e# ana,*#ing o%t#i&e o!gani#ation# tat a!e (non to e e#t in $,a##. E6te!na, en$"a!(ing '!o)i&e# o''o!t%nitie# of ,ea!ning f!o" to#e o a!e at!e#o%!$e te 4,ea&ing e&ge4. Ti# t*'e of en$"a!(ing $an ta(e %' #ignifi$ant ti"e an& to en#%!e te $o"'a!ai,it* of &ata an& info!"ation5 te $!e&ii,it* of te fin&ing# an& te &e)e,o'"ent of #o%n& !e$o""en&ation#. Be#t '!a$titione!# a!e i&entifie& an& ana,*#e& e,#ee!e in te o!,&5 'e!a'# e$a%#e te!e a!e too fe en$"a!(ing 'a!tne!# itin te #a"e $o%nt!* to '!o&%$e )a,i& !e#%,t#. ,oa,i#ation an& a&)an$e# in info!"ation te$no,og* a!e in$!ea#ing o''o!t%nitie# fo! inte!nationa, '!o2e$t#. Hoe)e!5 te#e $an ta(e "o!e ti"e an& !e#o%!$e# to #et %' an& i"',e"ent an& te !e#%,t# "a* nee& $a!ef%, ana,*#i# &%e to nationa, &iffe!en$e# #'!ea& ti# e6'e!ti#e 8%i$(,*5 t!o%go%t te o!gani#ation - We!e e6a"',e# of goo& '!a$ti$e# $an e fo%n& in ote! o!gani#ation# an& te!e i# a ,a$( of goo& '!a$ti$e# itin inte!na, %#ine## %nit# - We!e te ai" i# to a$ie)e o!,& $,a## #tat%# o! #i"',* e$a%#e te!e a!e in#%ffi$ient4nationa,4 %#ine##e# again#t i$ to en$"a!(. Te en$"a!(ing '!o$e## $on#i#t# of fi)e 'a#e#: 1. P,anning. Te e##entia, #te'# a!e to#e of an* ',an &e)e,o'"ent: at5 o an& o. * Wat i# to e en$"a!(e&3 E)e!* f%n$tion of an o!gani+ation a# o! &e,i)e!# a K'!o&%$t o! o%t'%t. Ben$"a!(ing i# a''!o'!iate fo! an* o%t'%t of a '!o$e## o! f%n$tion5 ete! it;# a '*#i$a, goo&5 an o!&e!5 a #i'"ent5 an in)oi$e5 a #e!)i$e o! a !e'o!t. To o" o! at i,, e $o"'a!e3 B%#ine##-to-%#ine##5 &i!e$t $o"'etito!# a!e $e!tain,* '!i"e $an&i&ate# to en$"a!(. B%t te* a!e not te on,* ta!get#. Ben$"a!(ing "%#t e $on&%$te& again#t te e#t $o"'anie# an& %#ine## f%n$tion# !ega!&,e## of e!e te* e6i#t. * * * Ho i,, te &ata e $o,,e$te&3 Te!e;# no one a* to $on&%$t en$"a!(ing in)e#tigation#. Te!e;# an infinite )a!iet* of a*# to otain !e8%i!e& &ata an& "o#t of Page J ESHWARI.S---LORAA BUSINESS ACADEMY
te &ata *o%;,, nee& a!e !ea&i,* an& '%,i$,* a)ai,a,e. Re$ogni+e tat en$"a!(ing i# a '!o$e## not on,* of &e!i)ing 8%antifia,e goa,# an& ta!get#5 %t "o!e i"'o!tant,*5 it;# te '!o$e## of in)e#tigating an& &o$%"enting te e#t in&%#t!* '!a$ti$e#5 i$ $an e,' *o% a$ie)e goa,# an& ta!get#. 7. Ana,*#i#. Te ana,*#i# 'a#e "%#t in)o,)e a $a!ef%, %n&e!#tan&ing of *o%! $%!!ent '!o$e## an& '!a$ti$e#5 a# e,, a# to#e of te o!gani+ation# eing en$"a!(e&. Wat i# &e#i!e& i# an %n&e!#tan&ing of inte!na, 'e!fo!"an$e on i$ to a##e## #t!engt# an& ea(ne##e#. A#(: * * * * * I# ti# ote! o!gani+ation ette! W* a!e te* ette!3 B*tei! o "%$3 Wat e#t '!a$ti$e# a!e eing %#e&tan no e o! a!e3 $an e anti$i'ate&3 Ho $an '!a$ti$e# e in$o!'o!ate& o! a&a'te& fo! %#e in o%! o!gani+ation3 An#e!# to te#e 8%e#tion# i,, &efine te &i"en#ion# of an* 'e!fo!"an$e ga': negati)e5 'o#iti)e o! 'a!it*. Te ga' '!o)i&e# an o2e$ti)e a#i# on i$ to a$tQto $,o#e te ga' o! $a'ita,i+e on an* a&)antage *o%! o!gani+ation a#. <. Integ!ation. Integ!ation i# te '!o$e## of %#ing en$"a!( fin&ing# to #et o'e!ationa, ta!get# fo! $ange. It in)o,)e# $a!ef%, ',anning to in$o!'o!ate ne '!a$ti$e# in te o'e!ation an& to en#%!e en$"a!( fin&ing# a!e in$o!'o!ate& in a,, fo!"a, ',anning '!o$e##e#. Ste'# in$,%&e: * * * ain o'e!ationa, an& "anage"ent a$$e'tan$e of en$"a!( fin&ing#. C,ea!,* an& $on)in$ing,* &e"on#t!ate fin&ing# a# $o!!e$t an& a#e& on #%#tanti)e &ata. De)e,o' a$tion ',an#. Co""%ni$ate fin&ing# to a,, o!gani+ationa, ,e)e,# to otain #%''o!t5 $o""it"ent an& one!#i'. >. A$tion. Con)e!t en$"a!( fin&ing#5 an& o'e!ationa, '!in$i',e# a#e& on te"5 to #'e$ifi$ a$tion# to e ta(en. P%t in ',a$e a 'e!io&i$ "ea#%!e"ent an& a##e##"ent of a$ie)e"ent. U#e te $!eati)e ta,ent# of te 'eo',e o a$t%a,,* 'e!fo!" o!( ta#(# to &ete!"ine o te fin&ing# $an e in$o!'o!ate& into te o!( '!o$e##e#. An* ',an fo! $ange a,#o #o%,& $ontain "i,e#tone# fo! %'&ating te en$"a!( fin&ing#5 an& an ongoing !e'o!ting "e$ani#". P!og!e## toa!& en$"a!( fin&ing# "%#t e !e'o!te& to a,, e"',o*ee#. . Mat%!it*. Mat%!it* i,, e !ea$e& en e#t in&%#t!* '!a$ti$e# a!e in$o!'o!ate& in a,, %#ine## '!o$e##e#5 t%# en#%!ing #%'e!io!it*. Te#t# fo! #%'e!io!it*: ESHWARI.S---LORAA BUSINESS ACADEMY Page J
* * If te no-$ange& '!o$e## e!e to e "a&e a)ai,a,e to ote!#5 o%,& a (no,e&gea,e %#ine##'e!#on '!efe! it3 Do ote! o!gani+ation# en$"a!( *o%! inte!na, o'e!ation#3 Mat%!it* a,#o i# a$ie)e& en en$"a!(ing e$o"e# an ongoing5 e##entia, an& #e,finitiate& fa$et of te "anage"ent '!o$e##. Ben$"a!(ing e$o"e# in#tit%tiona,i+e& an& i# &one at a,, a''!o'!iate ,e)e,# of te o!gani+ation5 not * #'e$ia,i#t#. ig%!e 1 Ben$"a!(ing '!o$e## #te'# ESHWARI.S---LORAA BUSINESS ACADEMY Page JG
Unit:< ene!i$ Co"'etiti)e St!ategie# M.E. Po!te!5 Co"'etiti)e A&)antage5 Ne Yo!(5 1J. Ti# &iag!a" a# een !e$!eate& * LMC. LMC e6',ain# ene!i$ Co"'etiti)e St!ategie# Te gene!i$ $o"'etiti)e #t!ategie# fo!" a %#ine## too, i$ e,'# #t!ategi#t# %n&e!#tan& o te 'o#ition of a $o"'an* itin it# in&%#t!* $an e &i!e$t,* !e,ate& to te #t!ateg* it e"',o*#. Te #t!ateg* e"',o*e& $an ten e ana,*#e& to %n&e!#tan& e!e a $o"'an*9# $o"'etiti)e a&)antage ,ie#5 it a )ie to "aintaining it. Po!te! /1J i&entifie& te to "ain t*'e# of $o"'etiti)e a&)antage a# $o#t a&)antage an& &iffe!entiation. In &e)e,o'ing an& "aintaining tei! $o"'etiti)e a&)antage5 $o"'anie# a)e te o'tion to a&o't one of te t!ee gene!i$ #t!ategie#: $o#t ,ea&e!#i'5 &iffe!entiation o! fo$%#. Te o!i+onta, a6i# a$!o## te to' of te g!a' #o# te t*'e of $o"'etiti)e a&)antage te $o"'an* a#5 i,#t te )e!ti$a, a6i# !e,ate# to te #$o'e of te $o"'etition5 eite! !oa& an& $o"'an*-i&e o! na!!o an& ,i"ite& to a "a!(et #eg"ent. ESHWARI.S---LORAA BUSINESS ACADEMY Page JJ
Co#t Lea&e!#i' Ti# i# a #t!ateg* e!e a $o"'an* ai"# to o%t-'!i$e it# $o"'etito!# * !e&%$ing o)e!ea&# o! te fi6e& $o#t# a##o$iate& it "an%fa$t%!e an& &i#t!i%tion. It !e8%i!e# a fo$%# on te effi$ien$* of '!o&%$tion ,ine# an& e$ono"ie# of #$a,e. Ti# #t!ateg* i# e"',o*e& e!e $%#to"e!# a)e te ai,it* to $ange #%'',ie! ea#i,* an& te '!o&%$t# o! #e!)i$e# a!e #tan&a!&i#e& an& e,, %n&e!#too& * te $on#%"e!. A goo& e6a"',e of $o#t ,ea&e!#i' #t!ateg* i# e"',o*e& * #%'e!"a!(et $ain# on e)e!*&a* ne$e##it* goo&#. B* %#ing ti# #t!ateg*5 "a!(eting te '!o&%$t e$o"e# ,e## i"'o!tant. Benefit# in$,%&e !ai#ing a!!ie!# fo! $o"'etito!# to ente! te "a!(et an& ea#ing te effe$t of fi6e&-$o#t !i#e# a$!o## te in&%#t!*. Diffe!entiation Ti# #t!ateg* i# e"',o*e& e!e a %ni8%e att!i%te of a '!o&%$t o! #e!)i$e i# ig,igte& te $o"'etition. It a,,o# a ige! !e,ati)e '!i$e to to e #i"i,a! $a!ge& a,te!nati)e# o! a g!eate! '!e#ente& ai,it* to* $o""an& $%#to"e! ,o*a,t*. Diffe!entiation #t!ateg* i# %#e& e!e te $o"'an* #ee# it# (e* '!o&%$t $o"'eten$ie# a# a "o!e '!ofita,e a&)antage tan #i"',e $o#t ,ea&e!#i'. E6a"',e# in$,%&e Co$a-Co,a5 i$ &iffe!entiate# * %i,&ing a #o,i& !an&5 o! Son*5 i$ &iffe!entiate# on 8%a,it* o! !e,iai,it* of '!o&%$t#. C%#to"e!# !ea$t to ti# #t!ateg* * 'a*ing "o!e fo! a 'e!$ei)e& g!eate! !e,iai,it* o! 8%a,it* o! * !et%!ning to a t!%#te& !an&. It !e,ie# ea)i,* on "a!(eting o! a&)e!ti#ing to "aintain te !an& i&entit* an& !ai#e# te a!!ie! to $o"'etito!# ente!ing te "a!(et. o$%# Ti# #t!ateg* i# ai"e& at a #'e$ifi$ ta!get $on#%"e! g!o%'5 fo! e6a"',e $%,t%!a,5 e$ono"i$5 'o,iti$a,5 geog!a'i$a, o! age-!e,ate& g!o%'#. Te #t!ateg* e"',o*# eite! $o#t fo$%# /
&iffe!entiation5 an& fo$%#. Te fo$%# #t!ateg* a# to )a!iant#5 $o#t fo$%# an& &iffe!entiation fo$%#. 1. Co#t Lea&e!#i' In $o#t ,ea&e!#i'5 a fi!" #et# o%t to e$o"e te ,o $o#t '!o&%$e! in it# in&%#t!*. Te #o%!$e# of $o#t a&)antage a!e )a!ie& an& &e'en& on te #t!%$t%!e of te in&%#t!*. Te* "a* in$,%&e te '%!#%it of e$ono"ie# of #$a,e5 '!o'!ieta!* te$no,og*5 '!efe!entia, a$$e## to !a "ate!ia,# an& ote! fa$to!#. A ,o $o#t '!o&%$e! "%#t fin& an& e6',oit a,, #o%!$e# of $o#t a&)antage. if a fi!" $an a$ie)e an& #%#tain o)e!a,, $o#t ,ea&e!#i'5 ten it i,, e an ao)e a)e!age 'e!fo!"e! in it# in&%#t!*5 '!o)i&e& it $an $o""an& '!i$e# at o! nea! te in&%#t!* a)e!age. 7. Diffe!entiation In a &iffe!entiation #t!ateg* a fi!" #ee(# to %ni8%e in it# in&%#t!* a,ong #o"e &i"en#ion# tat a!e i&e,* )a,%e& * %*e!#. Ite #e,e$t# one o! "o!e att!i%te# tat "an* %*e!# in an in&%#t!* 'e!$ei)e a# i"'o!tant5 an& %ni8%e,* 'o#ition# it#e,f to "eet to#e nee&#. It i# !ea!&e& fo! it# %ni8%ene## it a '!e"i%" '!i$e. <. o$%# Te gene!i$ #t!ateg* of fo$%# !e#t# on te $oi$e of a na!!o $o"'etiti)e #$o'e itin an in&%#t!*. Te fo$%#e! #e,e$t# a #eg"ent o! g!o%' of #eg"ent# in te in&%#t!* an& tai,o!# it# #t!ateg* to #e!)ing te" to te e6$,%#ion of ote!#. Te fo$%# #t!ateg* a# to )a!iant#. /a In $o#t fo$%# a fi!" #ee(# a $o#t a&)antage in it# ta!get #eg"ent5 i,e in / &iffe!entiation fo$%# a fi!" #ee(# &iffe!entiation in it# ta!get #eg"ent. Bot )a!iant# of te fo$%# #t!ateg* !e#t on ESHWARI.S---LORAA BUSINESS ACADEMY Page
&iffe!en$e# eteen a fo$%#e!9# ta!get #eg"ent an& ote! #eg"ent# in te in&%#t!*. Te ta!get #eg"ent# "%#t eite! a)e %*e!# it %n%#%a, nee&# o! e,#e te '!o&%$tion an& &e,i)e!* #*#te" tat e#t #e!)e# te ta!get #eg"ent "%#t &iffe! f!o" tat of ote! in&%#t!* #eg"ent#. Co#t fo$%# e6',oit# &iffe!en$e# in $o#t ea)io! in #o"e #eg"ent#5 i,e &iffe!entiation fo$%# e6',oit# te #'e$ia, nee&# of %*e!# in $e!tain #eg"ent#. OR Po!te!9# ene!i$ St!ategie# If te '!i"a!* &ete!"inant of aan fi!"9# '!ofitai,it* te att!a$ti)ene## of te in&%#t!* in i$ it o'e!ate#5 i"'o!tant #e$on&a!*i# &ete!"inant i# it# 'o#ition itin tat in&%#t!*. E)en to%g an in&%#t!* "a* a)e e,o-a)e!age '!ofitai,it*5 a fi!" tat i# o'ti"a,,* 'o#itione& $an gene!ate #%'e!io! !et%!n#. A fi!" 'o#ition# it#e,f * ,e)e!aging it# #t!engt#. Mi$ae, Po!te! a# a!g%e& tat a fi!"9# #t!engt# %,ti"ate,* fa,, into one of to ea&ing#: $o#t a&)antage an& &iffe!entiation. B* a'',*ing te#e #t!engt# in eite! a !oa& o! na!!o #$o'e5 t!ee gene!i$ #t!ategie# !e#%,t: $o#t ,ea&e!#i'5 &iffe!entiation5 an& fo$%#. Te#e #t!ategie# a!e a'',ie& at te %#ine## %nit ,e)e,. Te* a!e $a,,e& gene!i$ #t!ategie# e$a%#e te* a!e not fi!" o! in&%#t!* &e'en&ent. Te fo,,oing ta,e i,,%#t!ate# Po!te!9# gene!i$ #t!ategie#: Ta!get S$o'e A&)antage Lo Co#t Co#t Lea&e!#i' St!ateg* P!o&%$t Uni8%ene## Diffe!entiation St!ateg* B!oa& /In&%#t!* Wi&e Na!!o /Ma!(et Seg"ent o$%# St!ateg* /,o $o#t o$%# St!ateg* /&iffe!entiation Co#t Lea&e!#i' St!ateg* Ti# gene!i$ #t!ateg* $a,,# fo! eing te ,o $o#t '!o&%$e! in an in&%#t!* fo! a gi)en ,e)e, of 8%a,it*. Te fi!" #e,,# it# '!o&%$t# eite! at a)e!age in&%#t!* '!i$e# to ea!n a '!ofit ige! tan ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
tat of !i)a,#5 o! e,o te a)e!age in&%#t!* '!i$e# to gain "a!(et #a!e. In te e)ent of a '!i$e a!5 te fi!" $an "aintain #o"e '!ofitai,it* i,e te $o"'etition #%ffe!# ,o##e#. E)en ito%t a '!i$e a!5 a# te in&%#t!* "at%!e# an& '!i$e# &e$,ine5 te fi!"# tat $an '!o&%$e "o!e $ea',* i,, !e"ain '!ofita,e fo! a ,onge! 'e!io& of ti"e. Te $o#t ,ea&e!#i' #t!ateg* %#%a,,* ta!get# a !oa& "a!(et. So"e of te a*# tat fi!"# a$8%i!e $o#t a&)antage# a!e * i"'!o)ing '!o$e## effi$ien$ie#5 gaining %ni8%e a$$e## to a ,a!ge #o%!$e of ,oe! $o#t "ate!ia,#5 "a(ing o'ti"a, o%t#o%!$ing an& )e!ti$a, integ!ation &e$i#ion#5 o! a)oi&ing #o"e $o#t# a,togete!. If $o"'eting fi!"# a!e %na,e to ,oe! tei! $o#t# * a #i"i,a! a"o%nt5 te fi!" "a* e a,e to #%#tain a $o"'etiti)e a&)antage a#e& on $o#t ,ea&e!#i'. inte!na, #t!engt#: i!"# tat #%$$ee& in $o#t ,ea&e!#i' often a)e te fo,,oing * * * * A$$e## to te $a'ita, !e8%i!e& to "a(e a #ignifi$ant in)e#t"ent in '!o&%$tion a##et# ti# in)e#t"ent !e'!e#ent# a a!!ie! to ent!* tat "an* fi!"# "a* not o)e!$o"e. S(i,, in &e#igning '!o&%$t# fo! effi$ient "an%fa$t%!ing5 fo! e6a"',e5 a)ing a #"a,, $o"'onent $o%nt to #o!ten te a##e",* '!o$e##. Hig ,e)e, of e6'e!ti#e in "an%fa$t%!ing '!o$e## enginee!ing. Effi$ient &i#t!i%tion $anne,#. Ea$ gene!i$ #t!ateg* a# it# !i#(#5 in$,%&ing te ,o-$o#t #t!ateg*. o! e6a"',e5 ote! fi!"# "a* e a,e to ,oe! tei! $o#t# a# e,,. A# te$no,og* i"'!o)e#5 te $o"'etition "a* e a,e to ,ea'f!og te '!o&%$tion $a'ai,itie#5 t%# e,i"inating te $o"'etiti)e a&)antage. A&&itiona,,*5 #e)e!a, fi!"# fo,,oing a fo$%# #t!ateg* an& ta!geting )a!io%# na!!o "a!(et# "a* e a,e to a$ie)e an e)en ,oe! $o#t itin tei! #eg"ent# an& a# a g!o%' gain #ignifi$ant "a!(et #a!e. Diffe!entiation St!ateg* A &iffe!entiation #t!ateg* $a,,# fo! te &e)e,o'"ent of a '!o&%$t o! #e!)i$e tat offe!# %ni8%e att!i%te# tat a!e )a,%e& * $%#to"e!# an& tat $%#to"e!# 'e!$ei)e to e ette! tan o! &iffe!ent f!o" te '!o&%$t# of te $o"'etition. Te )a,%e a&&e& * te %ni8%ene## of te '!o&%$t "a* a,,o te fi!" to $a!ge a '!e"i%" '!i$e fo! it. Te fi!" o'e# tat te ige! '!i$e i,, "o!e tan $o)e! te e6t!a $o#t# in$%!!e& in offe!ing te %ni8%e '!o&%$t. Be$a%#e of te '!o&%$t9# %ni8%e att!i%te#5 if #%'',ie!# in$!ea#e tei! '!i$e# te fi!" "a* e a,e to 'a## a,ong te $o#t# to it# $%#to"e!# o $annot fin& #%#tit%te '!o&%$t# ea#i,*. i!"# tat #%$$ee& in a &iffe!entiation #t!ateg* often a)e te fo,,oing inte!na, #t!engt#: * * A$$e## to ,ea&ing #$ientifi$ !e#ea!$. Hig,* #(i,,e& an& $!eati)e '!o&%$t &e)e,o'"ent tea". Page 7 ESHWARI.S---LORAA BUSINESS ACADEMY
* * St!ong #a,e# tea" it te ai,it* to #%$$e##f%,,* $o""%ni$ate te 'e!$ei)e& #t!engt# of te '!o&%$t. Co!'o!ate !e'%tation fo! 8%a,it* an& inno)ation. Te !i#(# a##o$iate& it a &iffe!entiation #t!ateg* in$,%&e i"itation * $o"'etito!# an& $ange# in $%#to"e! ta#te#. A&&itiona,,*5 )a!io%# fi!"# '%!#%ing fo$%# #t!ategie# "a* e a,e to a$ie)e e)en g!eate! &iffe!entiation in tei! "a!(et #eg"ent#. o$%# St!ateg* Te fo$%# #t!ateg* $on$ent!ate# on a na!!o #eg"ent an& itin tat #eg"ent atte"'t# to a$ie)e eite! a $o#t a&)antage o! &iffe!entiation. Te '!e"i#e tat te nee&# of #t!ateg* te g!o%' $an e ette! #e!)i$e& * fo$%#ing enti!e,* on it. Ai# fi!" %#ing a fo$%# often en2o*# a ig &eg!ee of $%#to"e! ,o*a,t*5 an& ti# ent!en$e& ,o*a,t* &i#$o%!age# ote! fi!"# f!o" $o"'eting &i!e$t,*. Be$a%#e of tei! na!!o "a!(et fo$%#5 fi!"# '%!#%ing a fo$%# #t!ateg* a)e ,oe! )o,%"e# an& te!efo!e ,e## a!gaining 'oe! it tei! #%'',ie!#. Hoe)e!5 fi!"# '%!#%ing a &iffe!entiationfo$%#e& #t!ateg* "a* e a,e to 'a## ige! $o#t# on to $%#to"e!# #in$e $,o#e #%#tit%te '!o&%$t# &o not e6i#t. i!"# tat #%$$ee& in a fo$%# #t!ateg* a!e a,e to tai,o! a !oa& !ange of '!o&%$t &e)e,o'"ent #t!engt# to a !e,ati)e,* na!!o "a!(et #eg"ent tat te* (no )e!* e,,. So"e !i#(# of fo$%# #t!ategie# in$,%&e i"itation an& $ange# in te ta!get #eg"ent#. %!te!"o!e5 it "a* e fai!,* ea#* fo! a !oa&-"a!(et $o#t ,ea&e! to a&a't it# '!o&%$t in o!&e! to $o"'ete &i!e$t,*. ina,,*5 ote! fo$%#e!# "a* e a,e to $a!)e o%t #%-#eg"ent# tat te* $an #e!)e e)en ette!. A Co"ination of ene!i$ St!ategie# - St%$( in te Mi&&,e3 Te#e gene!i$ #t!ategie# a!e not ne$e##a!i,* $o"'ati,e it one anote!. If a fi!" atte"'t# to a$ie)e an a&)antage on a,, f!ont#5 in ti# atte"'t it "a* a$ie)e no a&)antage at a,,. o! e6a"',e5 if a fi!" &iffe!entiate# it#e,f * #%'',*ing )e!* ig 8%a,it* '!o&%$t#5 it !i#(# %n&e!"ining tat 8%a,it* if it #ee(# to e$o"e a $o#t ,ea&e!. E)en if te 8%a,it* &i& not #%ffe!5 te fi!" o%,& !i#( '!o2e$ting a $onf%#ing i"age. o! ti# !ea#on5 Mi$ae, Po!te! a!g%e& tat to e #%$$e##f%, o)e! te ,ong-te!"5 a fi!" "%#t #e,e$t on,* one of te#e t!ee gene!i$ #t!ategie#. Ote!i#e5 it "o!e tan one #ing,e gene!i$ #t!ateg* te fi!" i,, e 4#t%$( in te "i&&,e4 an& i,, not a$ie)e a $o"'etiti)e a&)antage. Po!te! a!g%e& tat fi!"# tat a!e a,e to #%$$ee& at "%,ti',e #t!ategie# often &o #o * $!eating #e'a!ate %#ine## %nit# fo! ea$ #t!ateg*. B* #e'a!ating te #t!ategie# into &iffe!ent %nit# a)ing ESHWARI.S---LORAA BUSINESS ACADEMY Page <
&iffe!ent 'o,i$ie# an& e)en &iffe!ent $%,t%!e#5 a $o!'o!ation i# ,e## ,i(e,* to e$o"e 4#t%$( in te "i&&,e.4 Hoe)e!5 te!e e6i#t# a )ie'oint tat a #ing,e gene!i$ #t!ateg* i# not a,a*# e#t e$a%#e itin te #a"e '!o&%$t $%#to"e!# often #ee( "%,ti-&i"en#iona, #ati#fa$tion# #%$ a# a $o"ination of 8%a,it*5 #t*,e5 $on)enien$e5 an& '!i$e. Te!e a)e een $a#e# in i$ ig 8%a,it* '!o&%$e!# faitf%,,* fo,,oe& a #ing,e #t!ateg* an& ten #%ffe!e& g!eat,* en anote! fi!" ente!e& te "a!(et it a ,oe!-8%a,it* '!o&%$t tat ette! "et te o)e!a,, nee&# of te $%#to"e!#. ene!i$ St!ategie# an& In&%#t!* o!$e# Te#e gene!i$ #t!ategie# ea$ a)e att!i%te# tat $an #e!)e to &efen& again#t $o"'etiti)e fo!$e#. Te fo,,oing ta,e $o"'a!e# #o"e $a!a$te!i#ti$# of te gene!i$ #t!ategie# in te $onte6t of te Po!te!9# fi)e fo!$e#. ene!i$ St!ategie# an& In&%#t!* o!$e# In&%#t!* o!$e Ent!* Ba!!ie!# ene!i$ St!ategie# Co#t Lea&e!#i' Ai,it* to $%t '!i$e in !eta,iation &ete!# 'otentia, ent!ant#. Ai,it* to offe! ,oe! '!i$e to 'oe!f%, %*e!#. Diffe!entiation o$%# C%#to"e! ,o*a,t* $an o$%#ing &e)e,o'# $o!e $o"'eten$ie# &i#$o%!age 'otentia, ent!ant#. tat $an a$t a# an ent!* a!!ie!. La!ge %*e!# a)e ,e## 'oe! La!ge %*e!# a)e ,e## 'oe! to to negotiate e$a%#e of fe negotiate e$a%#e of fe a,te!nati)e#. $,o#e a,te!nati)e#. S%'',ie!# a)e 'oe! e$a%#e of ,o )o,%"e#5 %t a &iffe!entiationfo$%#e& fi!" i# ette! a,e to 'a## on #%'',ie! '!i$e in$!ea#e#. B%*e! Poe! S%'',ie! Poe! Bette! in#%,ate& f!o" 'oe!f%, #%'',ie!#. Bette! a,e to 'a## on #%'',ie! '!i$e in$!ea#e# to $%#to"e!#. Can %#e ,o '!i$e to C%#to"e!9# e$o"e atta$e& S'e$ia,i+e& '!o&%$t# = $o!e T!eat of &efen& again#t to &iffe!entiating att!i%te#5 $o"'eten$* '!ote$t again#t S%#tit%te# #%#tit%te#. !e&%$ing t!eat of #%#tit%te#. #%#tit%te#. Ri)a,!* Bette! a,e to $o"'ete on '!i$e. B!an& ,o*a,t* to (ee' $%#to"e!# f!o" !i)a,#. Ri)a,# $annot "eet &iffe!entiationfo$%#e& $%#to"e! nee&#. ESHWARI.S---LORAA BUSINESS ACADEMY Page >
St!ategi$ a,,ian$e#: Definition Ag!ee"ent fo! $oo'e!ation a"ong to o! "o!e in&e'en&ent fi!"# to o!( togete! toa!&# $o""on o2e$ti)e#. Un,i(e in a 2oint )ent%!e5 fi!"# in a #t!ategi$ a,,ian$e &o not fo!" a ne entit* to f%!te! tei! ai"# %t $o,,ao!ate i,e !e"aining a'a!t an& &i#tin$t T*'e# of St!ategi$ A,,ian$e# Co,,ao!ati)e ag!ee"ent# eteen %#ine##e# $an ta(e a n%"e! of fo!"# an& a!e e$o"ing in$!ea#ing,* $o""on a# %#ine##e# ai" to get te %''e! an& o)e! tei! $o"'etito!#. Tei# "ain of #t!ategi$ a!e ,i#te& 0oint ent%!e# A 2oint )ent%!e an t*'e# ag!ee"ent * to o!a,,ian$e# "o!e 'a!tie# to fo!"e,o: a #ing,e entit* to %n&e!ta(e a $e!tain '!o2e$t. Ea$ of te %#ine##e# a# an e8%it* #ta(e in te in&i)i&%a, %#ine## an& #a!e !e)en%e#5 e6'en#e# an& '!ofit#. 40oint ent%!e# a!e ag!ee"ent# eteen 'a!tie# o! fi!"# fo! a 'a!ti$%,a! '%!'o#e o! )ent%!e. Tei! fo!"ation "a* e )e!* info!"a,5 #%$ a# a an&#a(e an& an ag!ee"ent fo! to fi!"# to #a!e a oot at a t!a&e #o. Ote! a!!ange"ent# $an e e6t!e"e,* $o"',e65 #%$ a# te $on#o!ti%" of "a2o! U.S. e,e$t!oni$# fi!"# to &e)e,o' ne "i$!o$i'#54 #a*# Ca!,e# P. Li$(#on in A Lega, %i&e fo! S"a,, B%#ine##. 0oint )ent%!e# eteen #"a,, fi!"# a!e )e!* !a!e5 '!i"a!i,* e$a%#e of te !e8%i!e& $o""it"ent an& $o#t# in)o,)e&. O%t#o%!$ing Te 1J# a# te &e$a&e e!e o%t#o%!$ing !ea,,* !o#e to '!o"inen$e5 an& ti# t!en& $ontin%e& t!o%go%t te 1# to to&a*5 a,to%g to a #,igt,* ,e##e! e6tent. Te ea!,* fo!e$a#t#5 #%$ a# te one f!o" A"e!i$an 0o%!na,i#t La!!* E,&e!5 a)e een #on to not a,a*# e t!%e: ESHWARI.S---LORAA BUSINESS ACADEMY Page
KO%t#o%!$ing an& g,oa,i+ation of "an%fa$t%!ing a,,o# $o"'anie# to !e&%$e $o#t#5 enefit# $on#%"e!# it ,oe! $o#t goo&# an& #e!)i$e#5 $a%#e# e$ono"i$ e6'an#ion tat !e&%$e# %ne"',o*"ent5 an& in$!ea#e# '!o&%$ti)it* an& 2o $!eation. Affi,iate Ma!(eting Affi,iate "a!(eting a# e6',o&e& o)e! !e$ent *ea!#5 it te "o#t #%$$e##f%, on,ine !etai,e!# %#ing it to g!eat effe$t. Te nat%!e of te inte!net "ean# tat !efe!!a,# $an e a$$%!ate,* t!a$(e& !igt t!o%g te o!&e! '!o$e##. A"a+on a# te 'ionee! of affi,iate "a!(eting5 an& no a# ten# of to%#an&# of e#ite# '!o"oting it# '!o&%$t# on a 'e!fo!"an$e-a#e& a#i#. Te$no,og* Li$en#ing Ti# i# a $ont!a$t%a, a!!ange"ent e!e* t!a&e "a!(#5 inte,,e$t%a, '!o'e!t* an& t!a&e #e$!et# a!e ,i$en#e& to an e6te!na, fi!". It;# %#e& "ain,* a# a ,o $o#t a* to ente! "a!(et#. Te "ain of ,i$en#ing i# 'o##ii,it* te ,o## ofof $ont!o, o)e! te fo!eign te$no,og* a# #oon a# it&on#i&e ente!# ote! an&# te e6',oitation a!i#e#. P!o&%$t Li$en#ing Ti# i# #i"i,a! to te$no,og* ,i$en#ing e6$e't tat te ,i$en#e '!o)i&e& i# on,* to "an%fa$t%!e an& #e,, a $e!tain '!o&%$t. U#%a,,* ea$ ,i$en#ee i,, e gi)en an e6$,%#i)e geog!a'i$ a!ea to i$ te* $an #e,, to. It;# a ,oe!-!i#( a* of e6'an&ing te !ea$ of *o%! '!o&%$t $o"'a!e& to %i,&ing *o%! "an%fa$t%!ing a#e an& &i#t!i%tion !ea$. !an$i#ing !an$i#ing i# an e6$e,,ent a* of 8%i$(,* !o,,ing o%t a #%$$e##f%, $on$e't nationi&e. !an$i#ee# 'a* a #et-%' fee an& ag!ee to ongoing 'a*"ent# #o te '!o$e## i# finan$ia,,* !i#(-f!ee fo! te $o"'an*. Hoe)e!5 &on#i&e# &o e6i#t5 'a!ti$%,a!,* it te ,o## of $ont!o, o)e! o f!an$i#ee# !%n tei! f!an$i#e. R=D St!ategi$ a,,ian$e# a#e& a!o%n& R=D ten& to fa,, into te 2oint )ent%!e $atego!*5 e!e to o! "o!e %#ine##e# &e$i&e to e"a!( on a !e#ea!$ )ent%!e t!o%g fo!"ing a ne entit*. ESHWARI.S---LORAA BUSINESS ACADEMY Page
Di#t!i%to!# If *o% a)e a '!o&%$t one of te e#t a*# to "a!(et it i# to !e$!%it &i#t!i%to!#5 e!e ea$ one a# it# on geog!a'i$a, a!ea o! t*'e of '!o&%$t. Ti# en#%!e# tat ea$ &i#t!i%to!;# #%$$e## $an e ea#i,* "ea#%!e& again#t ote! &i#t!i%to!#. Di#t!i%tion Re,ation#i'# Ti# i# 'e!a'# te "o#t $o""on fo!" of a,,ian$e. St!ategi$ a,,ian$e# a!e %#%a,,* fo!"e& e$a%#e te %#ine##e# in)o,)e& ant "o!e $%#to"e!#. Te !e#%,t i# tat $!o##-'!o"otion ag!ee"ent# a!e e#ta,i#e&. Con#i&e! te $a#e of a an(. Te* #en& o%t an( #tate"ent# e)e!* "ont. A o"e in#%!an$e $o"'an* "a* a''!oa$ te an( an& offe! to "a(e an e6$,%#i)e a)ai,a,e to tei! $%#to"e!# if te* $an in$,%&e it a,ong it te ne6t an( #tate"ent tat i# #ent o%t. It;# a in-in ag!ee"ent te an( gain# t!o%g offe!ing a g!eat &ea, to tei! an& $%#to"e!#5 tegain in#%!an$e $o"'an* enefit# t!o%g in$!ea#e& $%#to"e! n%"e!#5 $%#to"e!# t!o%g !e$ei)ing an e6$,%#i)e offe!. St!ategi$ A,,ian$e# - an Un&e!%#e& Ma!(eting Ta$ti$: St!ategi$ a,,ian$e# a!e fo!"a, 'a!tne!#i'# eteen %#ine##e# i$ e,' te %#ine##e# a$ie)e a #et of goa,#. Te!e a!e "an* t*'e# of #t!ategi$ a,,ian$e#5 in$,%&ing 2oint )ent%!e#5 affi,iate# an& &i#t!i%tion ag!ee"ent#. Te* a!e 'a!ti$%,a!,* $o""on in in&%#t!ie# tat a!e e6'e!ien$ing !a'i& $ange5 te inte!net eing one e6a"',e5 an& a!e often te 8%i$(e#t a* of !a'i&,* e6'an&ing a %#ine##. o!t%ne Maga+ine $a,,e& te 1# Kte &e$a&e of te #t!ategi$ a,,ian$e an& it a# e$o"e one of te (e* too,# in !a'i&,* e6'an&ing an& inning "a!(et #a!e. Benefit# of St!ategi$ A,,ian$e# Man* #ta!t%'# &e$i&e tat te e#t a* to !a'i&,* e6'an& tei! %#ine## i# to ente! into #t!ategi$ a,,ian$e# it e#ta,i#e& $o"'anie# i$ #e!)e a &iffe!ent %t #i"i,a! "a!(et. Te "an* enefit# of #t!ategi$ a,,ian$e# a!e ,i#te& e,o: F F A$$e## to &i#t!i%tion $anne,# A$$e## to te$no,og*5 e6'e!ti#e o! inte,,e$t%a, '!o'e!t* Page G ESHWARI.S---LORAA BUSINESS ACADEMY
F F F F F A# a "ean# to !ai#e $a'ita, Ne '!o&%$t# fo! *o%! $%#to"e!# Loe! R=D $o#t# E$ono"ie# of #$a,e Rai#e !an& aa!ene## o! a ne %#ine## ,oo(ing to &e)e,o' !an& aa!ene## te!e a!e fe "o!e $o#teffe$ti)e a*# of !ai#ing i&e#'!ea& aa!ene## tan 'a!tne!ing it an e#ta,i#e& %#ine## itin te #a"e in&%#t!*. Te!e;# a,#o no !ea#on to #to' te!e *o% $an $ontin%e to 'a!tne! it ote! non$o"'eting fi!"# an& enefit f!o" "%,ti',e &i#t!i%tion $anne,#. Wen a''!oa$ing a $o"'an* to '!o'o#e a #t!ategi$ a,,ian$e!e"e"e! tat *o% "%#t a)e #o"eting to offe! te" in e6$ange. Di#a&)antage# of St!ategi$ A,,ian$e# Te '!o,e" it #t!ategi$ a,,ian$e# i# tat te!e a!e a n%"e! of '!o,e"# i$ "%#t e o)e!$o"e fo! te" to e a #%$$e##5 in$,%&ing: F F F F In$oe!ent goa,#5 it one %#ine## not enefiting g!eat,* f!o" te ag!ee"ent In#%ffi$ient t!%#t5 it ea$ 'a!tne! $o"'an* t!*ing to get te ette! &ea, Conf,i$t# o)e! o te 'a!tne!#i' o!(# Potentia, to !e&%$e f%t%!e o''o!t%nitie# t!o%g eing %na,e to ente! into ag!ee"ent# it *o%! 'a!tne!;# $o"'etito!# La$( of $o""it"ent to te 'a!tne!#i' Ri#( of #a!ing too "%$ (no,e&ge an& te 'a!tne! $o"'an* e$o"ing a $o"'etito! F F Te "ain '!o,e" it #t!ategi$ a,,ian$e# i# eing a,e to &e)e,o' a 'a!tne!#i' i$ i# enefi$ia, to ot 'a!tie#. Often a 'a!tne!#i' i# enefi$ia, to te #"a,,e! %#ine##5 'e!a'# &%e to te i&e-#$a,e &i#t!i%tion $anne,# tat a!e gaine&5 %t te enefit# fo! te e#ta,i#e& %#ine## a!en;t 8%ite #o $,ea!. E)en en ti# '!o,e" a# een o)e!$o"e te '!o,e" of t!%#t a!i#e#. Wito%t a &eg!ee of t!%#t 'a!tne!#i'# e$o"e e#et it a&"ini#t!ati)e '!o,e"# an& #%#'i$ion#. ESHWARI.S---LORAA BUSINESS ACADEMY Page J
Te e#t a* to o)e!$o"e ti# i# to e t!an#'a!ent an& !ea##e## te a,,ian$e at !eg%,a! inte!)a,# to en#%!e tat ot 'a!tie# a!e gaining f!o" te ag!ee"ent. If te* a!en;t ten 'e!a'# te te!"# of te ag!ee"ent nee& to e $ange&. ina,,*5 e $a!ef%, tat a 'a!tne!#i' &oe#n;t en& %' eing "o!e of a in&!an$e tan a enefit. Pa!tne!ing it a $o"'an* itin a $e!tain fie,& i,, "a(e it a!&e!5 if not i"'o##i,e5 to 'a!tne! o! in $ont!a$t# f!o" ote! $o"'eting $o"'anie# itin te #a"e in&%#t!*. So"eti"e# te !i#( $an e e)en $,o#e! to o"e5 e!e te 'a!tne!ing $o"'an* gain# #%ffi$ient (no,e&ge fo! te" to e$o"e a $o"'etito! !ate! tan a 'a!tne!. Stage# of #t!ategi$ A,,ian$e o!"ation A t*'i$a, a,,ian$e fo!"ation '!o$e## in)o,)e# te#e #te'#: F St!ateg* De)e,o'"ent: St!ateg* &e)e,o'"ent in)o,)e# #t%&*ing te a,,ian$e;# fea#ii,it*5 o2e$ti)e# an& !ationa,e5 fo$%#ing on te "a2o! i##%e# an& $a,,enge# an& &e)e,o'"ent of !e#o%!$e #t!ategie# fo! '!o&%$tion5 te$no,og*5 an& 'eo',e. It !e8%i!e# a,igning a,,ian$e o2e$ti)e# it te o)e!a,, $o!'o!ate #t!ateg*. F Pa!tne! A##e##"ent: Pa!tne! a##e##"ent in)o,)e# ana,*+ing a 'otentia, 'a!tne!;# #t!engt# an& ea(ne##e#5 $!eating #t!ategie# fo! a$$o""o&ating a,, 'a!tne!#; "anage"ent #t*,e#5 '!e'a!ing a''!o'!iate 'a!tne! #e,e$tion $!ite!ia5 %n&e!#tan&ing a 'a!tne!;# "oti)e# fo! 2oining te a,,ian$e an& a&&!e##ing !e#o%!$e $a'ai,it* ga'# tat "a* e6i#t fo! a 'a!tne!. F Cont!a$t Negotiation: Cont!a$t negotiation# in)o,)e# &ete!"ining ete! a,, 'a!tie# a)e !ea,i#ti$ o2e$ti)e#5 fo!"ing ig $a,i!e negotiating tea"#5 &efining ea$ 'a!tne!;# $ont!i%tion# an& !ea!&# a# e,, a# '!ote$t an* '!o'!ieta!* info!"ation5 a&&!e##ing te!"ination $,a%#e#5 'ena,tie# fo! 'oo! 'e!fo!"an$e5 an& ig,igting te &eg!ee to i$ a!it!ation '!o$e&%!e# a!e $,ea!,* #tate& an& %n&e!#too&. F A,,ian$e O'e!ation: A,,ian$e o'e!ation# in)o,)e# a&&!e##ing #enio! "anage"ent;# $o""it"ent5 fin&ing te $a,i!e of !e#o%!$e# &e)ote& to te a,,ian$e5 ,in(ing of %&get# an& !e#o%!$e# it #t!ategi$ '!io!itie#5 "ea#%!ing an& !ea!&ing a,,ian$e 'e!fo!"an$e5 an& a##e##ing te 'e!fo!"an$e an& !e#%,t# of te a,,ian$e. F A,,ian$e Te!"ination: A,,ian$e te!"ination in)o,)e# in&ing &on te a,,ian$e5 fo! in#tan$e en it# o2e$ti)e# a)e een "et o! $annot e "et5 o! en a 'a!tne! a&2%#t# '!io!itie# o! !e-a,,o$ate# !e#o%!$e# e,#ee!e. ESHWARI.S---LORAA BUSINESS ACADEMY Page
Te a&)antage# of #t!ategi$ a,,ian$e in$,%&e: 1. A,,oing ea$ 'a!tne! to $on$ent!ate on a$ti)itie# tat e#t "at$ tei! $a'ai,itie#. 7. Lea!ning f!o" 'a!tne!# = &e)e,o'ing $o"'eten$e# tat "a* e "o!e i&e,* e6',oite& e,#ee!e. <. A&e8%ate #%itai,it* of te !e#o%!$e# = $o"'eten$ie# of an o!gani+ation fo! it to #%!)i)e. Co,,ao!ati)e 'a!tne!#i'#: Te Co,,ao!ati)e A''!oa$ Ti# a''!oa$ e6ten&# #t!ategi$ &e$i#ion-"a(ing to te o!gani+ation9# to' "anage"ent tea" in an#e! to te 8%e#tion 4Ho $an I get "* to' "anage"ent tea" to e,' &e)e,o' an& $o""it to a goo& #et of go,a# an& #t!ategie#34 Te #t!ategi$ ,ea&e! an& i# #enio! "anage! /&i)i#iona, %#ine## %nitit a gene!a, "anage!# o! #enio! f%n$tiona, "anage!# "eet fo!ea ,engt* &i#$%##ion )ie to fo!"%,ating '!o'o#e& #t!ategi$ $ange#. In ti# a''!oa$5 te ,ea&e! e"',o*# g!o%' &*na"i$# an& 4!ain#to!"ing4 te$ni8%e# to get "anage!# it &iffe!ing 'oint# of )ie to $ont!i%te to te #t!ategi$ ',anning '!o$e##. Te Co,,ao!ati)e A''!oa$ o)e!$o"e# to (e* ,i"itation# ine!ent in te '!e)io%# to. B* $a't%!ing info!"ation $ont!i%te& * "anage!# $,o#e! to o'e!ation#5 an& * offe!ing a fo!%" fo! te e6'!e##ion of "anage!# $,o#e! to o'e!ation#5 an& * offe!ing a fo!%" fo! te e6'!e##ion of "an* )ie'oint#5 it $an in$!ea#e te 8%a,it* an& ti"e,ine## of te info!"ation in$o!'o!ate& in te #t!ateg*. An& to te &eg!ee tan 'a!ti$i'ation enan$e# $o""it"ent to te #t!ateg*5 it i"'!o)e# te $an$e# of effi$ient i"',e"entation. Hoe)e!5 te Co,,ao!ati)e A''!oa$ "a* gain "o!e $o""it"ent tat te fo!egoing a''!oa$e#5 it "a* a,#o !e#%,t in a 'oo!e! #t!ateg*. Te negotiate& a#'e$t of te '!o$e## !ing# it #e)e!a, !i#(# -tat te #t!ateg* i,, e "o!e $on#e!)ati)e an& ,e## )i#iona!* tan one &e)e,o'e& * a #ing,e 'e!#on o! #taff tea". An& te negotiation '!o$e## $an ta(e #o "%$ ti"e tat an o!gani+ation "i##e# o''o!t%nitie# an& fai,# to !ea$t eno%g to $anging en)i!on"ent#. A "o!e f%n&a"enta, $!iti$i#" of te Co,,ao!ati)e A''!oa$ i# tat it i# not !ea,,* $o,,e$ti)e &e$i#ion# "a(ing f!o" an o!gani+ationa, )ie'oint e$a%#e %''e!-,e)e, "anage!# often !etain $ent!a,i+e& $ont!o,. In effe$t5 ti# a''!oa$ '!e#e!)e# te a!tifi$ia, &i#tin$tion eteen tin(e!# an& &oe!# an& fai,# to &!a on te f%,, %"an 'otentia, t!o%go%t te o!gani+ation. Co,,ao!ati)e St!ategie#: Te !o%te to "a6i"i#ing f%t%!e o'e!ationa, #a)ing#: T!a&itiona, a''!oa$e# to 'a!tne!ing an& o%t#o%!$ing a)e i"'!o)e& 'e!fo!"an$e5 to%g e6a"',e# ten& to e fo%n& in "at%!e $ont!a$t# i$ a!e no ,a!ge,* e6a%#te&. Te $%!!ent ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
nee& i# to go e*on& ti# t!a&itiona, a''!oa$ an& fo$%# on o)e!a,, 'e!fo!"an$e i"'!o)e"ent5 o'ti"i#ing te $o#t an& !e)en%e 'o#ition. T!a&itiona, 'a!tne!ing $ont!a$t# ten& to feat%!e a #ing,e #%'',ie! &e,i)e!ing %n&,e& #e!)i$e# an& ,ong te!" )a,%e t!o%g )a!io%# fo!"# of in$enti)e#. A $o,,ao!ati)e #t!ateg* i# a #te' $ange f!o" te t!a&itiona, $,ient #%'',ie! !e,ation#i'5 &e)e,o'ing a 2oint a''!oa$ f!o" a,, te #%'',ie!# o a$t togete! to &e,i)e! g!eate! )a,%e a# a #ing,e entit*. Te#e a!e not $o"',e6 $o,,ao!ation#5 oe)e!5 if te!e i# not a #t!ong $%,t%!a, an& '!ofe##iona, $ont!a$t ,ea&ing to "%t%a, e$ono"i$ gain5 te* $an fai,. Te $o!e to #%$$e##f%, $o,,ao!ation i# not fo%n& in t!a&itiona, #e!)i$e# /a,to%g '!o)i&ing te#e at te )e!* e#t ,e)e, i# i"'o!tant5 it i# te "anne! in i$ te#e a!e $o"ine& to &e,i)e! a "o!e )a,%a,e o%t$o"e. C!eating #o,%tion# A #e!)i$e# $o,,ao!ati)e 'a!tne!#i' i# $o""on,* &efine& a# a ,in( eteen $o"'anie# to 2oint,* '%!#%e a $o""on goa,. Te#e 'a!tne!#i'# a!e )e!* &iffe!ent f!o" t!a&itiona, !e,ation#i'# eteen $o"'anie# an& it i# te#e &iffe!en$e# tat nee& to e "anage& to a$ie)e e6$e'tiona, 'e!fo!"an$e. B* #%$$e##f%,,* ,in(ing it anote! fi!"5 one o! ot 'a!tie# "a* en2o* te enefit# ote!i#e %na)ai,a,e to te". Te $o,,ao!ati)e 'a!tne!#i' i# $a!a$te!i#e& * te fo,,oing fo%! att!i%te#: Sa!e& !i#( an& !ea!&: Te !e#'on#ii,it* fo! "anaging te $o,,ao!ation i# #a!e& * te o!gani#ation# in te 'a!tne!#i'. Ti# i# in $ont!a#t to a t!a&itiona, a!!ange"ent e!e ,ea&e!#i' i# )e#te& in one o!gani#ation &e#ignate& a# te '!i"e #%'',ie!. Co,,ao!ati)e enefit# $o"e f!o" ,e)e!aging g!eate! e$ono"ie# in #%'',* $ain "anage"ent an& a #a!e& #e!)i$e te$no,og* ',atfo!" i$ !ea$e# e*on& te #$a,e of a #ing,e o!gani#ation. One of te enefit# of ti# a''!oa$ i# te e"e!gen$e of inno)ati)e #o,%tion# tat &e,i)e! ige! )a,%e. T*'i$a,,*5 t!a&itiona, o%t#o%!$ing o%,& &e,i)e! 1-7 !e&%$tion in '!o'e!t* $o#t#. Hoe)e!5 f%!te! !e&%$tion# $an e &e!i)e& f!o" #$o'e o! #e!)i$e integ!ation fa$i,itate& * te $o,,ao!ation. Te a#i# of !ea!& i# fo! te $o,,e$ti)e g!o%'5 i$ $an e &i!e$t,* !e,ate& to te )a,%e &e,i)e!e& an& a# te 'otentia, to &e,i)e! a f%!te! -1 !e&%$tion in '!o'e!t* a##et#. A$$e##ing i&e! $a'ai,itie# In t!a&itiona, 'a!tne!ing "o&e,# te!e o%,& not no!"a,,* e in$enti)e# to en$o%!age f%!te! inno)ation o%t#i&e te #$o'e of te $ont!a$t. B* a,,oing "e"e!# of te $o,,ao!ation to "aintain tei! in&i)i&%a, i&entitie#5 i&e! $a'ai,itie# a!e #ti,, &e)e,o'e& o%t#i&e te $ont!a$t an& !e,ate& inte,,e$t%a, '!o'e!t* of ea$ o!gani#ation $an #ti,, e ,e)e!age&. Te $o""e!$ia, "o&e, i# f%n&a"enta,,* a#e& on #a!e& !ea!&# an& te!efo!e a,, inte,,e$t%a, in'%t tat &e,i)e!# #a)ing# $an e &i#t!i%te& eteen a,, 'a!tie#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 11
T!an#fe! of #(i,,# D%!ing te '!o$e## of $o,,ao!ation te 'a!tne!# '!o)i&e in'%t# /f%n&ing5 #(i,,# an& 'e!#onne, on an ongoing a#i#. Te!e i# a $ontin%a, #%'',* of !e#o%!$e# an& $o""%ni$ation f!o" 'a!ent o!gani#ation#5 i$ &!i)e# ongoing enefit#. Ti# ,ea&# to %'-#(i,,ing te tea" in o!&e! to "eet te nee&# of te $,ient o!gani#ation5 $ont!i%ting "o!e i&e,* to te $o,,ao!ation o%t#i&e te $on#t!aint# of a t!a&itiona, $ont!a$t. Ti# !e#%,t# in g!eate! geog!a'i$ #'!ea& an& ne a!ea# of o'e!ation5 te!e* #%#taining enefit# o)e! a g!eate! a!ea of te %#ine##. Signifi$ant a&)antage# en &ea,ing it $o"',e6 '!o,e"# Te $o,,ao!ation "o&e, e6',i$it,* $on#i&e!# ot te ta#( an& o!gani#ationa, $o"',e6it* of te $a,,enge5 ,ea&ing to in#igt# into 'e!fo!"an$e i##%e# an& o''o!t%nitie# tat $an e $ont!i%tion# a$ie)e&. Ti#of i#te a$ie)e& t!o%g integ!ation5 ,in(ing te $o"',e"enta!* 'a!tne!# in a )e!ti$a, )a,%e $ain. Te $o"ine& effo!t# of a,, 'a!tne!# "%#t a&& %' to a )a,%e $ain i$ i,, '!o&%$e a "o!e $o"'etiti)e en& !e#%,t. De,i)e!ing )a,%e To "a(e $o,,ao!ati)e 'a!tne!#i'# #%$$e##f%, te!e nee&# to e a &eg!ee of t!%#t eteen 'a!tne!#. Wito%t ti#5 fo$%# i,, not e on te 2oint &e$i#ion# an& $on#%,tation# !e8%i!e& to &!i)e te )a,%e. Te (e* att!i%te i# an a,ign"ent of ea)io%!# an& $ont!a$t%a, ag!ee"ent# fo$%#e& on "%t%a, e$ono"i$ gain#. Te#e a!e ea#ie! to a$ie)e itin one o!gani#ation !ate! tan "%,ti',e o!gani#ation#. A$ie)ing ti# i# )a,%a,e not on,* in &!i)ing te t!an#fo!"ationa, agen&a itin te o!gani#ation# Co!'o!ate Rea, E#tate f%n$tion5 %t in &e,i)e!ing a g!eate! o)e!a,, !et%!n fo! te $,ient an& #%'',ie!#. B* #a!ing a $o""on )i#ion an& goa, a!o%n& $,ea! !ea! te o%t$o"e i,, e6$ee& t!a&itiona, a!!ange"ent# an& i,, enan$e %#ine## 'e!fo!"an$e. ?e* enefit# Ri#( !e&%$tion- te $o,,ao!ation i# &i!e$t,* ,in(e& to "%t%a, e$ono"i$ gain5 &!i)ing a V!igt fi!#t ti"e; a''!oa$ it $,ea! a$$o%ntai,itie#. P!o&%$t 'o!tfo,io &i)e!#ifi$ation- t!o%g $o,,ao!ation te $,ient a# a$$e## to a "%$ !oa&e! !ange of '!o&%$t# an& #e!)i$e#5 $o"ine& to &e,i)e! "a6i"%" )a,%e. Ti# $an a,#o $o"ine to offe! in#igt into 'e!fo!"an$e $a,,enge# an& o''o!t%nitie#. Re&%$tion of fi6e& $o#t#- te nat%!e of te $o,,ao!ation often in)o,)ing te $,ient o!gani#ation te"#e,)e# nat%!a,,* ,ea&# to effi$ien$ie#. O'ti"i#ation of 'e!#onne, an& '!o$e## a!e a $on#e8%en$e. ESHWARI.S---LORAA BUSINESS ACADEMY Page 17
Loe! tota, $a'ita, in)e#t"ent- a $o,,ao!ati)e "o&e, a,,o# "o!e !ea,i#ti$ #o,)ing of $o"',e6 '!o,e"#5 !e&%$ing te a"o%nt of &i!e$t in)e#t"ent te $,ient nee&# to "a(e in !e#o,)ing te#e #it%ation#. a#te! 'a*a$(- te "%t%a, e$ono"i$ gain i,, &!i)e fa#te! o%t$o"e# a# te !ea!&# a!e &i!e$t,* ,in(e& to te 'a!tne!#. Ti# !e8%i!e# a,ign"ent it te $,ient o!gani#ation. Te$no,og* #*ne!g*- a ,ot of Co!'o!ate Rea, E#tate $o#t# a!e ,in(e& to an effe$ti)e ente!'!i#e ,e)e, '!o'e!t* 'e!fo!"an$e #*#te". T!o%g $o,,ao!ation te 'a!tne!# $an "a(e effe$ti)e in)e#t"ent &e$i#ion# an& $o"ine te$no,og* to &!i)e )a,%e. Me!ge!# an& a$8%i#ition: I"',e"enting St!ategie# t!o%g Me!ge!#5 A$8%i#ition#: Me!ge!# an& a$8%i#ition# a!e to f!e8%ent,* %#e& "eto&# fo! i"',e"enting &i)e!#ifi$ation# #t!ategie#. A "e!ge! ta(e# ',a$e en to $o"'anie# $o"ine tei! o'e!ation#5 $!eating in effe$t5 a ti!& $o"'an*. An a$8%i#ition i# a #it%ation in i$ one $o"'an* %*#5 an& $ont!o,# anote! $o"'an*. * * Ho!i+onta, "e!ge!# o! a$8%i#ition# a!e te $o"ining of to o! "o!e o!gani+ation# tat a!e &i!e$t $o"'etito!#. Con$ent!i$ "e!ge# o! a$8%i#ition# a!e te $o"ining of to o! "o!e o!gani+ation# tat a)e #i"i,a! '!o&%$t# o! #e!)i$e# in te!"# of te$no,og*5 '!o&%$t ,ine5 &i#t!i%tion $anne,#5 o! $%#to"e! a#e. e!ti$a, "e!ge# o! a$8%i#ition# a!e te $o"ining of to o! "o!e o!gani+ation# to e6ten& an o!gani+ation into eite! #%'',*ing '!o&%$t# o! #e!)i$e# !e8%i!e& in '!o&%$ing it# '!e#ent '!o&%$t# o! #e!)i$e# o! into &i#t!i%ting o! #e,,ing it# on '!o&%$t an& #e!)i$e#. Cong,o"e!ate "e!ge!# o! a$8%i#ition# in)o,)e te $o"ining of to o! "o!e o!gani+ation# tat a!e '!o&%$ing '!o&%$t# o! #e!)i$e# tat a!e #ignifi$ant,* &iffe!ent f!o" ea$ ote!. * * O!gani+ation# #ee( "e!ge!# an& a$8%i#ition# fo! "an* !ea#on#. Te '!i"a!* !ea#on fo! ,a!ge "e!ge!# an& a$8%i#ition# i# te 'otentia, enefit tat $an a$$!%e to te #to$(o,&e!# of ot $o"'anie#. S*ne!g* i# often $ite& a# a !ationa,e fo! "e!ge!#. S*ne!g* o$$%!# a# te !e#%,t of a "e!ge!5 en to o'e!ating %nit# $an e !%n "o!e effi$ient,* /i.e.: it ,oe! $o#t# an& o! "o!e effe$ti)e,* /i.e.: it a''!o'!iate a,,o$ation of #$a!$e !e#o%!$e# gi)en en)i!on"enta, $on#t!ain# togete! tan a'a!t. Ote! !ea#on fo! "e!ging it o! a$8%i!ing anote! $o"'an* in$,%&e i"'!o)ing o! "aintaining $o"'etiti)e 'o#ition in a 'a!ti$%,a! %#ine## in o!&e! to ente! ne "a!(et# o! a$8%i!e ne '!o&%$t# !a'i&,*5 to i"'!o)e finan$ia, 'o#ition5 o! to a)oi& a ta(eo)e!. Me!ge!# an& a$8%i#ition# $an e $a!!ie& o%t in eite! a f!ien&,* o! a o#ti,e en)i!on"ent. !ien&,* "e!ge!# an& a$8%i#ition# a!e a$$o"',i#e& en te #to$(o,&e!# an& "anage"ent of ot o!gani+ation# ag!ee tat te $o"ination i,, enefit# ot fi!"# an& te o!( togete! to en#%!e it# #%$$e##. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
Ho#ti,e /o!5 a# te* a!e f!e8%ent,* $a,,e&5 ta(eo)e! "e!ge!# an& a$8%i#ition# !e#%,t en te o!gani+ation# to e a$8%i!e& /a,#o #o"eti"e# $a,,e& te ta!get $o"'an* !e#i#t te atte"'t. Se)e!a, "eto&# a!e a)ai,a,e fo! $a!!*ing o%t "e!ge!# an& a$8%i#ition#: * * * * One i#5 te ten&e! offe!5 i# e,, a '!e#$!ie& a"o%nt of te #to$( of $o"'an* i# to '%!$a#e #to$( of te a$8%i!ing $o"'an* $an a,#o '%!$a#e
'%,i$i+e& i& "a&e * a $o!'o!ation to a,, o! anote! o!gani+ation#. Anote! o'tion fo! one ta!get o!gani+ation in te o'en "a!(et. Te te a##et# of te ta!get $o"'an*. ina,,*5 te
to fi!"# "a* ag!ee to an e6$ange of #to$(. Be$a%#e #o "an* te!"# a!e %#e& in &e#$!ie& a$ti)itie# in)o,)e& in "e!ge!# an& a$8%i#ition#5 te!e i# #%""a!* of te &efinition# of "an* of te#e te!"#. Se)e!a, fa$to!# nee& to e a)oi&e& to en#%!e a #%$$e##f%, "e!ge! o! a$8%i#ition. Te#e fa$to!# in$,%&e: 1. 7. <. >. . . G. Pa*ing to "%$ St!a*ing too fa! a fie,& Ma!!*ing &i#'a!ate $o!'o!ate $%,t%!e# Co%nting on (e* "anage!# #ta*ing A##%"ing tat a oo" "a!(et i,, not $!a# Lea'ing efo!e ,oo(ing Sa,,oing too ,a!ge $o"'an* N%"e!o%# o!gani+ation# a)e een a,e to integ!ate #%ffi$ient,* #o tat te "e!ge! o! a$8%i#ition e$o"e# a #%$$e##f%, #t!ateg* of &i)e!#ifi$ation Me!ge!# = A$8%i#ition P,anning: Co"'anie# e"',o* "e!ge!# an& a$8%i#ition# #t!ategie# /M=A in o!&e! to g!o tei! %#ine## an& o,#te! tei! $o"'etiti)e a&)antage#. o! e6a"',e5 one $o"'an* "igt e g!eat at '!o&%$t &e)e,o'"ent5 e!ea# anote! a# "a!(eting $anne,# %i,t into i$ te '!o&%$t# $o%,& e #o,&. To e #%$$e##f%,5 a $o"'an*9# M=A #t!ateg* "%#t e $a!ef%,,* ',anne&. Te #t!ategi$ o2e$ti)e# #et &%!ing te ',anning '!o$e## &ete!"ine te t*'e of $o"'anie# tat i,, e a$8%i!e&. 1. O2e$ti)e# Te $o"'an* "a* ant to e6'an& geog!a'i$a,,* * a$8%i!ing a $o"'an* it a #t!ong '!e#en$e in anote! "a!(et. Co#t #a)ing# a,#o $an e a$ie)e& en #taff f%n$tion# #%$ a# a$$o%nting o! %"an !e#o%!$e# a!e #a!e&. In#tea& of a)ing to &e'a!t"ent# 'e!fo!"ing a ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
f%n$tion5 te* $an e $on#o,i&ate& into one5 an& te tota, n%"e! of #taff "e"e!# $an e !e&%$e&. A $o"'an* "a* ,a$( a (e* $a'ai,it*5 #%$ a# te$ni$a, inno)ation5 tat it nee&# to $o"'ete. A$8%i!ing a $o"'an* #t!ong in ti# !ega!& fi,,# te ga'. A$8%i#ition C!ite!ia: Setting o2e$ti)e# !e#%,t# in te $!eation of a #et of a$8%i#ition $!ite!ia. Te#e a!e te e,e"ent# tat &e#$!ie te i&ea, a$8%i#ition fo! te $o"'an*. Te* in$,%&e te #i+e of $o"'an* tat i,, e a$8%i!e& -- in te!"# of !e)en%e an& '!eta6 in$o"e -- e!e it i# ,o$ate&5 an& te in&%#t!* o! "a!(et ni$e# te $o"'an* #e!)e#. Dea, So%!$e#: I"',e"enting an M=A '!og!a" !e8%i!e# at i# te!"e& 4&ea, f,o4 -- eing '!e#ente& it a #tea&* #t!ea" of ig-8%a,it* a$8%i#ition $an&i&ate#. E6e$%ti)e# it !e#'on#ii,it* fo! "a(ing a$8%i#ition# %#%a,,* it '!ofe##iona,# #%$ a# atto!ne*#5 a$$o%nt# an& in)e#t"ent an(e!# neto!( tat o!( it ote! %#ine##e#. Te $o"'an* "a(e# it (non it i# #ee(ing to "a(e a$8%i#ition# an& te#e '!ofe##iona,# !efe! $o"'anie# tat a!e a goo& fit fo! te a$8%i#ition $!ite!ia te $o"'an* a# #e,e$te&. A$8%i#ition Tea" B%i,t: Se,e$ting $o"'anie# to a$8%i!e an& $o"',eting te negotiation# %' to $,o#ing of a t!an#a$tion !e8%i!e a #'e$ifi$ #et of #(i,,# an& e6'e!ien$e. Te#e in$,%&e an %n&e!#tan&ing of te ,ega, a#'e$t# of "a(ing an a$8%i#ition5 #%$ a# te &o$%"entation !e8%i!e& an& $o"',ian$e it a'',i$a,e #e$%!itie# ,a#. ?no,e&ge of %#ine## )a,%ation te$ni8%e# i# a,#o i"'o!tant to en#%!e te &ea, te!"# a!e fai! to ot 'a!tie# an& te $o"'an* &oe# not o)e!'a* fo! te a$8%i#ition. St!ategi$ ',anning #(i,, a,#o i# nee&e& -- te ai,it* to #ee o te to $o"'anie# $o%,& fit togete! #t!ategi$a,,* going fo!a!& an& ta(e a&)antage of ea$ ote!9# #t!engt#. If te "anage"ent tea" &oe# not a)e a,, of te#e #(i,,#5 o%t#i&e $on#%,tant# $an e i!e& to a##i#t o! "anage"ent 'e!#onne, i,, e a&&e& to te tea". %n&ing So%!$e# in P,a$e: A $o"'an* #ee(ing to "a(e an a$8%i#ition "a* not a)e a,, te $a# !e8%i!e& to $o"',ete te t!an#a$tion. In tat $a#e5 f%n&ing #o%!$e# "%#t e ,ine& %'. Te#e $o%,& e e8%it* 'a!tne!# o! ,en&e!# tat #'e$ia,i+e in a$8%i#ition finan$ing. Te $o"'an* #o%,& a)e te finan$ing #o%!$e# a)ai,a,e '!io! to eginning negotiation# it te $o"'an* to e a$8%i!e&. Po#t-A$8%i#ition P,an: Te &e$i#ion ete! to go aea& it an a$8%i#ition &e'en&# on o fa)o!a,e a '!i$e $an e negotiate& %t a,#o on te enefit# te $o"'an* i,, !e$ei)e afte! te t!an#a$tion i# $,o#e&. Te#e enefit# a!e 8%antifie& t!o%g $!eating a 'o#ta$8%i#ition %#ine## ',an tat '!o2e$t# te !e)en%e# an& '!ofit fo! te $o"ine& entitie#5 an& '!e#ent# #t!ategie# fo! %i,&ing te $o"ine& $o"'an*9# !e)en%e# an& "a!(et #t!engt. Te 'o#t-a$8%i#ition ',an i# '!e#ente& to te e8%it* 'a!tne!# o! ,en&e!# tat i,, e a#(e& to '!o)i&e finan$ing. Diffe!en$e eteen Me!ge!# an& A$8%i#ition# To%g te to o!&# "e!ge!# an& a$8%i#ition# a!e often #'o(en in te #a"e !eat an& a!e a,#o %#e& in #%$ a a* a# if te* a!e #*non*"o%#5 oe)e!5 te!e a!e $e!tain &iffe!en$e# eteen "e!ge!# an& a$8%i#ition#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
Me!ge! Te $a#e en to $o"'anie# /often of #a"e #i+e &e$i&e to "o)e fo!a!& a# a #ing,e ne $o"'an* in#tea& of o'e!ating %#ine## #e'a!ate,*. Te #to$(# of ot te $o"'anie# a!e #%!!en&e!e&5 i,e ne #to$(# a!e i##%e& af!e#. o! e6a"',e5 ,a6o We,,$o"e an& S"it?,ine Bee$a" $ea#e& to e6i#t an& "e!ge& to e$o"e a ne $o"'an*5 (non a# ,a6o S"it?,ine. A$8%i#ition Te $a#e en one $o"'an* ta(e# o)e! anote! an& e#ta,i#e# it#e,f a# te ne one! of te %#ine##. Te %*e! $o"'an* K#a,,o# te %#ine## of te ta!get $o"'an*5 i$ $ea#e# to e6i#t. D!. Re&&*9# La# a$8%i!e& Beta'a!" t!o%g an ag!ee"ent a"o%nting G "i,,ion. A %*o%t ag!ee"ent $an a,#o e (non a# a "e!ge! en ot one!# "%t%a,,* &e$i&e to $o"ine tei! %#ine## in te e#t inte!e#t of tei! fi!"#. B%t en te ag!ee"ent i# o#ti,e5 o! en te ta!get fi!" i# %ni,,ing to e o%gt5 it i# $on#i&e!e& a# an a$8%i#ition. Me!ge!# = A$8%i#ition Ri#(# An a$8%i#ition o$$%!# en one $o"'an* %*# anote!. Wen to $o"'anie# ag!ee to $o"ine into one $o"'an*5 te* "e!ge. Rea#on# fo! te#e $o!'o!ate a$tion# in$,%&e a #t!ategi$ ',an to e,i"inate $o"'etition * a$8%i!ing it5 a &e#i!e to e6'an& into anote! geog!a'i$a, a!ea o! '!o&%$t ,ine o! a nee& to #e,, o! "e!ge te $o"'an* e$a%#e of one! !eti!e"ent o! $o!'o!ate finan$ia, &iffi$%,tie#. Bot $o"'anie# fa$e #%#tantia, !i#(#. It i# not %n%#%a, fo! one $o"'an* #ee(ing to a$8%i!e anote! to en& %' eing a$8%i!e& it#e,f5 an& a$8%i#ition ',an# #o"eti"e# e$o"e "e!ge!#. 1. Re$(,e## Ent%#ia#": Me!ge!# an& a$8%i#ition#5 a,#o (non a# M=A5 egin in #t!ategi$ ',anning #e##ion#5 en $o"'an* "anage"ent &e$i&e# to a$8%i!e anote! $o"'an*5 to e a$8%i!e& o! to "e!ge. Te ne6t #te' i# i!ing an in)e#t"ent an(e! o! atto!ne* #'e$ia,i+ing in M=A o!(. Te enti!e '!o$e## i# ,ong5 ti"e-$on#%"ing an& #t!e##f%,. Mo#t M=A #'e$ia,i#t# #a* te "o#t &ange!o%# 'a!t i# '!o2e$t fatig%e5 i$ $a%#e# $o"'an* "anage"ent to &e$i&e on a $an&i&ate 2%#t to get te ta#( o)e! it. Re$(,e## ent%#ia#" o!n of '!o2e$t fatig%e i# one of te "ain !ea#on# fo! fai,%!e# of "e!ge!# o! a$8%i#ition#. Ret%!n on In)e#t"ent: Te !ong a$8%i#ition $an #e)e!e,* a!" a $o"'an*9# '!ofitai,it*. Wen AT=T a$8%i!e& NCR5 afte! fi)e *ea!# of #tea&i,* a$$%"%,ating ,o##e# tota,ing 7 i,,ion5 AT=T fina,,* a&"itte& te fai,%!e an& #o,& it# #ta(e in NCR. Ti"e Wa!ne!9# '%!$a#e of AOL a,#o en&e& in *ea!# of ,o##e# an& an e)ent%a, #'in-off of AOL. M%$ &eate in te M=A in&%#t!* $ente!# a!o%n& ete! to 'e!fo!" e6a%#ti)e &%e &i,igen$e an& negotiation# o! to 2%#t 2%"' in an& %* o! "e!ge it te fi!#t $o"'an* tat ,oo(# goo&5 o!!*ing ao%t te $on#e8%en$e# ,ate!. De,oitte = To%$e LLP $o%n#e,# a !oa&-a#e& a''!oa$ ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
in)o,)ing e6a"ination of a,, 'a!t# of a $an&i&ate $o"'an*5 it ',anne& !i#( "anage"ent at "%,ti',e ,e)e,#. Co!'o!ate Integ!ation: Te #e$on& "ain !i#( in M=A '!o2e$t# i# 'oo! integ!ation of te $o"'anie#. An e6a"',e of ti# i# en a $o"'an* a$8%i!e# anote! fo! a #'e$ifi$ te$no,og* it &e)e,o'e& an& ten in te $onf%#ion of integ!ating te to $o"'anie# "i#ta(en,* $,o#e# te &e'a!t"ent tat $!eate& te ta!gete& te$no,og* a##et. Ote! e6a"',e# of 'oo! integ!ation a!e $o"'an* $%,t%!e $,a#e#5 a# in te Dai",e! Ben+-C!*#,e! "e!ge! e!e e!"an effi$ien$* "et ea&-on it A"e!i$an %nion o!( !%,e#. A ti!& e6a"',e of $o""on integ!ation fai,%!e i# te ,o## of i"'o!tant $%#to"e!# o ,i(e& &oing %#ine## it te o,& $o"'an*5 not te ne one. Te #o,%tion i# &etai,e& ',anning an& te#ting of &e$i#ion#5 it a $ent!a,i+e& integ!ation "anage"ent tea" te tat "onito!# e)e!* e,e"ent of te '!o2e$t. Lega, S%!'!i#e#: No "atte! o $a!ef%, &%e &i,igen$e effo!t5 nea!,* e)e!* "e!ge! an& a$8%i#ition e6'e!ien$e# ,ega, #%!'!i#e#. Te#e a!e often in te fo!" of ,a#%it# tat te ',aintiff# #%&&en,* &e$i&e to fi,e e$a%#e te $o"ination of $o"'anie# a# '!e#ente& g!eate! a##et# to atta$. Yo% $an e6'e$t e)e!*ting f!o" e6'i!ing 'atent#5 $an$e,e& ,i$en#e#5 %n!e'o!te& f!a%&5 inf!inge"ent on anote! $o"'an*9# 'atent an& #a!eo,&e! $,a## a$tion #%it#. Ri#( "anage"ent5 in ti# $a#e5 in)o,)e# te e#t &ea, $ont!a$t# tat $an e $!eate&5 i$ i# * goo& M=A atto!ne*# a!e #o ne$e##a!* an& e6'en#i)e. o Me!ge! an& A$8%i#ition St!ategie# Me!ge! an& a$8%i#ition a!e te $o!'o!ate #t!ategie# tat &ea, it %*ing5 #e,,ing o! $o"ining &iffe!ent $o"'anie# it a goa, to a$ie)e !a'i& g!ot. Hoe)e!5 te &e$i#ion# on "e!ge!# an& a$8%i#ition# a!e ta(en afte! $on#i&e!ing a fe fa$t# ,i(e te $%!!ent %#ine## #tat%# of te $o"'anie#5 te '!e#ent "a!(et #$ena!io5 an& te t!eat# an& o''o!t%nitie# et$. In fa$t5 te #%$$e## of "e!ge!# an& a$8%i#ition# ,a!ge,* &e'en& %'on te "e!ge! an& a$8%i#ition #t!ategie# a&o'te& * te o!gani+ation#. Me!ge! an& a$8%i#ition #t!ategie# a!e te !oa&"a' fo! te $o!'o!ate &e)e,o'"ent effo!t# of an o!gani+ation. Te #t!ategie# on "e!ge! an& a$8%i#ition a!e &e)i#e& to t!an#fo!" te #t!ategi$ %#ine## ',an of te o!gani+ation to a ,i#t of ta!get a$8%i#ition '!o#'e$t#. Te "e!ge! an& a$8%i#ition #t!ategie# offe! a f!a"eo!(5 i$ e)a,%ate# a$8%i#ition $an&i&ate# an& e,'# te o!gani+ation to i&entif* te #%ita,e one#. Man* ig $o"'anie# $ontin%o%#,* ,oo( o%t fo! 'otentia, $o"'anie#5 '!efe!a,* #"a,,e! one#5 fo! "e!ge!# an& a$8%i#ition#. So"e $o"'anie# "a* a)e tei! $o!e $e,,#5 i$ $on$ent!ate on "e!ge!# an& a$8%i#ition#. Me!ge! an& a$8%i#ition #t!ategie# a!e &e)i#e& in a$$o!&an$e it te 'o,i$* of te o!gani+ation. So"e "a* '!efe! to &i)e!#if* o! to e6'an& in a #'e$ifi$ fie,& of %#ine##5 i,e #o"e ote!# "a* i# to #t!engten tei! !e#ea!$ fa$i,itie# et$. Me!ge! an& A$8%i#ition St!ateg* P!o$e## ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
Te "e!ge! an& a$8%i#ition #t!ategie# "a* &iffe! f!o" $o"'an* to $o"'an* an& a,#o &e'en& a ,ot on te 'o,i$* of te !e#'e$ti)e o!gani+ation. Hoe)e!5 "e!ge! an& a$8%i#ition #t!ategie# a)e got #o"e &i#tin$t '!o$e##5 a#e& on i$5 te #t!ategie# a!e &e)i#e&. Dete!"ine B%#ine## P,an D!i)e!#: Me!ge! an& a$8%i#ition #t!ategie# a!e &e&%$e& f!o" te #t!ategi$ %#ine## ',an of te o!gani+ation. So5 in "e!ge! an& a$8%i#ition #t!ategie#5 *o% fi!#t,* nee& to fin& o%t te a* to a$$e,e!ate *o%! #t!ategi$ %#ine## ',an t!o%g te M=A. Yo% nee& to t!an#fo!" te #t!ategi$ %#ine## ',an of *o%! o!gani+ation into a #et of $a,(ing &!i)e!#5 o%t i$ *o%! "e!ge! an& a$8%i#ition #t!ategie# o%,& a&&!e##. Wi,e #t!ategie#5 *o% nee& to $on#i&e! te 'oint# ,i(e te "a!(et# of *o%! inten&e& %#ine##5 te "a!(et #a!e tat *o% a!e e*eing fo! in ea$ "a!(et5 te '!o&%$t# an& te$no,ogie# tat *o% o%,& !e8%i!e5 te geog!a'i$ ,o$ation# e!e *o% o%,& o'e!ate *o%! %#ine## in5 te #(i,,# an& !e#o%!$e# tat *o% o%,& !e8%i!e5 te finan$ia, ta!get#5 an& te !i#( a"o%nt et$. Dete!"ine A$8%i#ition inan$ing Con#t!aint#: No5 *o% nee& to fin& o%t if te!e a!e an* finan$ia, $on#t!aint# fo! #%''o!ting te a$8%i#ition. %n&# fo! a$8%i#ition# "a* $o"e t!o%g )a!io%# a*# ,i(e $a#5 &et5 '%,i$ an& '!i)ate e8%itie#5 PIPE#5 "ino!it* in)e#t"ent#5 ea!n o%t# et$. Yo% nee& to $on#i&e! a fe fa$t# ,i(e te a)ai,ai,it* of %nta''e& $!e&it fa$i,itie#5 #%!',%# $a#5 o! %nta''e& e8%it*5 te a"o%nt of ne e8%it* an& ne &et tat *o%! o!gani+ation $an !ai#e et$. Yo% a,#o nee& to $a,$%,ate te a"o%nt of !et%!n# tat *o% "%#t a$ie)e. De)e,o' A$8%i#ition Can&i&ate Li#t: No *o% a)e to i&entif* te #'e$ifi$ $o"'anie# /'!i)ate an& '%,i$ tat *o% a!e e*eing fo! a$8%i#ition. Yo% $an i&entif* to#e * "a!(et !e#ea!$5 '%,i$ #to$( !e#ea!$5 !efe!!a,# f!o" oa!& "e"e!#5 in)e#t"ent an(e!#5 in)e#to!# an& atto!ne*#5 an& e)en !e$o""en&ation# f!o" *o%! e"',o*ee#. Yo% a,#o nee& to &e)e,o' #%""a!* '!ofi,e fo! e)e!* $o"'an*. B%i,& P!e,i"ina!* a,%ation Mo&e,#: Ti# #tage i# to $a,$%,ate te initia, e#ti"ate& a$8%i#ition $o#t5 te e#ti"ate& !et%!n# et$. Man* o!gani+ation# a)e tei! on fo!"at# fo! '!e#enting '!e,i"ina!* )a,%ation. RateRan( A$8%i#ition Can&i&ate#: Rate o! !an( te a$8%i#ition $an&i&ate# a$$o!&ing to tei! i"'a$t on %#ine## an& fea#ii,it* of $,o#ing te &ea,. Ti# '!o$e## i,, e,' *o% in %n&e!#tan&ing te !e,ati)e i"'a$t# of te a$8%i#ition#. Re)ie an& A''!o)e te St!ateg*: Ti# i# te ti"e to !e)ie an& a''!o)e *o%! "e!ge! an& a$8%i#ition #t!ategie#. Yo% nee& to fin& o%t ete! a,, te $!iti$a, #ta(eo,&e!# ,i(e oa!& "e"e!#5 in)e#to!# et$. ag!ee it it o! not. If e)e!*one gi)e# tei! no&# on te #t!ategie#5 *o% $an go aea& it te "e!ge! o! a$8%i#ition. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
Me!ge! an& A$8%i#ition P!o$e## Me!ge!# an& a$8%i#ition# a!e 'a!t# of $o!'o!ate #t!ategie# tat &ea, it %*ing #e,,ing o! $o"ining of %#ine## entitie#5 i$ in t%!n5 e,' a $o"'an* to g!o 8%i$(,*. Hoe)e!5 "e!ge! an& a$8%i#ition '!o$e## i# 8%ite a $o"',e6 '!o$e## tat $on#i#t# of a fe #te'#. Befo!e going fo! an* "e!ge! an& a$8%i#ition5 ot te $o"'anie# nee& to $on#i&e! a fe 'oint# an& a,#o nee& to go t!o%g #o"e &i#tin$t #te'#. Te "e!ge! an& a$8%i#ition '!o$e## i# a,#o a ig 'oint of $on$e!n fo! te $o"'anie# in)o,)e& in te &ea,5 a# te '!o$e## $o%,& e f%,, of !i#( an& %n$e!taint*. Hoe)e!5 '!io! effe$ti)e ',anning an& !e#ea!$ $o%,& "a(e te '!o$e## ea#* an& #i"',e. Ste'# of Me!ge!# an& A$8%i#ition P!o$e## Te '!o$e## of "e!ge! an& a$8%i#ition a# te #te'#: Ma!(ettat a,%ation Befo!e fo! an* "e!ge! an& a$8%i#ition5 it fo,,oing i# of %t"o#t i"'o!tant *o% "%#t (no*o% tego '!e#ent "a!(et )a,%e of te o!gani+ation a# e,, a# it# e#ti"ate& f%t%!e finan$ia, 'e!fo!"an$e. Te info!"ation ao%t o!gani+ation5 it# i#to!*5 '!o&%$t##e!)i$e#5 fa$i,itie# an& one!#i'# a!e !e)iee&. Sa,e# o!gani+ation an& "a!(eting a''!oa$e# a!e a,#o ta(en into $on#i&e!ation. E6it P,anning: Te &e$i#ion to #e,, %#ine## ,a!ge,* &e'en&# %'on te f%t%!e ',an of te o!gani+ation at &oe# it ta!get to a$ie)e an& o i# it going to an&,e te ea,t et$. a!io%# i##%e# ,i(e e#tate ',anning5 $ontin%ing %#ine## in)o,)e"ent5 &et !e#o,%tion et$. a# e,, a# ta6 i##%e# an& %#ine## i##%e# a!e $on#i&e!e& efo!e "a(ing e6it ',anning. Te #t!%$t%!e of te &ea, ,a!ge,* &e'en&# %'on te a)ai,a,e o'tion#. Te fo!" of $o"'en#ation /#%$ a# $a#5 #e$%!e& note#5 #to$(5 $on)e!ti,e on !o*a,tie#5 f%t%!e ea!ning# #a!e5 $on#%,ting ag!ee"ent#5 o! %* a$( o''o!t%nitie# et$. a,#o ',a*# a "a2o! !o,e e!e in &ete!"ining te e6it ',anning. St!%$t%!e& Ma!(eting P!o$e## Ti# i# "e!ge! an& a$8%i#ition '!o$e## in)o,)e# "a!(eting of te %#ine## entit*. Wi,e &oing te "a!(eting5 #e,,ing '!i$e i# ne)e! &i)%,ge& to te 'otentia, %*e!#. Se!io%# %*e!# a!e a,#o i&entifie& an& ten en$o%!age& &%!ing te '!o$e##. o,,oing a!e te feat%!e# of ti# 'a#e. * * * * Se,,e! ag!ee# on te &i##e"inate& "ate!ia,# in a&)an$e. B%*e! a,#o nee&# to #ign a NonDi#$,o#%!e ag!ee"ent. Se,,e! a,#o '!e#ent# Me"o!an&%" an& P!ofi,e#5 i$ fa$t%a,,* #o$a#e# te %#ine##. Dataa#e of '!o#'e$ti)e %*e!# a!e #ea!$e&. A##e##"ent an& #$!eening of %*e!# a!e &one. Page 1 ESHWARI.S---LORAA BUSINESS ACADEMY
* * S'e$ia, fo$%#e# a!e gi)en on e 'e!#ona, nee&# of te #e,,e! &%!ing #t!%$t%!ing of &ea,#. ina, ,ette! of intent i# &e)e,o'e& afte! a 'a#e of negotiation. Lette! of Intent Bot5 %*e! an& #e,,e! ta(e te ,ette! of intent to tei! !e#'e$ti)e atto!ne*# to fin& o%t ete! te!e i# an* #$o'e of f%!te! negotiation ,eft o! not. I##%e# ,i(e '!i$e an& te!"#5 &e$i&ing on &%e &i,igen$e 'e!io&5 &ea, #t!%$t%!e5 '%!$a#e '!i$e a&2%#t"ent#5 ea!n o%t '!o)i#ion# ,iai,it* o,igation#5 ISRA an& ERISA i##%e#5 Non-#o,i$itation ag!ee"ent5 B!ea(%' fee# an& no #o' '!o)i#ion#5 '!e $,o#ing ta6 ,iai,itie#5 '!o&%$t ,iai,it* i##%e#5 'o#t $,o#ing in#%!an$e 'o,i$ie#5 !e'!e#entation# an& a!!antie#5 an& in&e"nifi$ation i##%e# et$. a!e negotiate& in te Lette! of Intent. Afte! !e)ieing5 a Definiti)e P%!$a#e Ag!ee"ent i# '!e'a!e&. B%*e! D%e Di,igen$e Ti# i# te 'a#e in te "e!ge! an& a$8%i#ition '!o$e## e!e #e,,e! "a(e# it# %#ine## '!o$e## o'en fo! te %*e!5 #o tat it $an "a(e an in-&e't in)e#tigation on te %#ine## a# e,, a# it# atto!ne*#5 an(e!#5 a$$o%ntant#5 ta& a&)i#o!# et$. Definiti)e P%!$a#e Ag!ee"ent: ina,,* Definiti)e P%!$a#e Ag!ee"ent a!e "a&e5 i$ #tate# te t!an#a$tion &etai,# in$,%&ing !eg%,ato!* a''!o)a,#5 finan$ing #o%!$e# an& ote! $on&ition# of #a,e. O%t#o%!$ing - A St!ategi$ De$i#ion3 Doe# #t!ategi$ o%t#o%!$ing a$t%a,,* enefit an o!gani+ation3 O! i,, it a$(fi!e in te ,ong !%n3 He!e9# o o%t#o%!$ing a# i"'a$te& o!gani+ation# in In&ia5 an& o it $an enefit *o%. * So%ti"an Da# %'ta Wat &o $o"'anie# ,i(e He!o Hon&a Moto!#5 Ba!ti Te,e-ent%!e# Li"ite&5 te Nationa, Sto$( E6$ange /NSE5 HDC Ban(5 Son* Ente!tain"ent Te,e)i#ion5 H*att Se!)i$e# In&ia P)t. Lt&5 an& HPCL a)e in $o""on3 Te $o""on t!ea& !%nning t!o%g te#e ,a!ge o!gani+ation# i# tat a,, of te" a)e $o#en o%t#o%!$ing a# a #t!ategi$ %#ine## &e$i#ion to ga!ne! tangi,e an& intangi,e enefit# in te nea! an& ,ong !%n. In&ee&5 it9# &iffi$%,t to fin& a #%$$e##f%, an& g!oing o!gani+ation in In&ia5 i!!e#'e$ti)e of #i+e5 tat &oe# not o%t#o%!$e a $e!tain a"o%nt of it# IT inf!a#t!%$t%!e #e!)i$e# o! "anage"ent. o$%# on te $o!e: ESHWARI.S---LORAA BUSINESS ACADEMY Page 11
i)en te '!e##%!e# of a $o"'etiti)e "a!(et5 o!gani+ation# ten& to fo$%# on tei! $o!e a$ti)itie# Q a$ti)itie# tat ,in(-%' &i!e$t,* it te !e)en%e# an& en$e te '!ofitai,it*. In #%$ a #$ena!io5 $o"'anie# ten& to o%t#o%!$e tei! non-$o!e ta#(# to fo$%# on %#ine## &e$i#ion-"a(ing. An& IT inf!a#t!%$t%!e ea#i,* ,en&# it#e,f to o%t#o%!$ing. He!o Hon&a Moto!# i# a goo& e6a"',e of an o!gani+ation tat %#e# #t!ategi$ o%t#o%!$ing to fo$%# on $o!e $o"'eten$*. KWe ante& to o%t#o%!$e a,, !o%tine /IT "aintenan$e ta#(# #o tat e $o%,& $on$ent!ate on te "ain %#ine## i##%e#. Wit te ea&a$e of &ea,ing it !o%tine $o"',aint# ta(en aa*5 o%! #taff fo$%#e# on %#e! !e8%i!e"ent# an& i# a,e to &e,i)e! #e!)i$e# to %#e!# on ti"e5 e6',ain# SR Ba,a#%!a"anian5 i$e P!e#i&ent - Info!"ation S*#te"#5 He!o Hon&a Moto!# Li"ite&. Co"'etiti)e %#ine## #t!ateg*: O%t#o%!$ing i# e#t a&o'te& afte! a $a!ef%, ,oo( at %#ine## nee&# an& a)ai,a,e o'tion#. It i# e##entia, tat te o%t#o%!$ing !e,ation#i' '!o)i&e# #t!ategi$ %#ine## enefit# in te f%t%!e. KO%t#o%!$ing '!o)i&e# a $o"'etiti)e #t!ateg* enefit in a n%"e! of a*# to an o!gani+ation. It a,,o# ea#e of "anage"ent5 !e&%$tion in $o#t5 ,e##e! "an'oe!5 an& f!ee# %' inte!na, !e#o%!$e#5 #a*# Pan(a2. KO%t#o%!$ing $an5 an& f!e8%ent,* &oe#5 '!o)i&e ot ,ong- an& #o!t-te!" enefit# to $o"'anie# tat o%t#o%!$e5 '!o)i&e& te* a)e a #t!ategi$ o2e$ti)e fo! o%t#o%!$ing. Me&i%" an& ,ong-te!" gain# a!e e#t !ea,i#e& * #e,e$ting a )en&o! o !ing# )a,%e to *o%! $o!e %#ine##5 !ate! tan one o $an '!o)i&e *o% it te ,oe#t '!i$e#5 e6',ain# Sa!a& Sangi5 Managing Di!e$to! = CEO5 Net"agi$ So,%tion P)t. Lt&. B%#ine##-!e,ate&: It9# i"'o!tant to %n&e!#tan& tat o%t#o%!$ing i# a %#ine##-!e,ate& &e$i#ion an& not #i"',* an IT nee&. Te %,ti"ate goa, of o%t#o%!$ing i# to !ing enefit# to te %#ine## an& #%#e8%ent,* te $%#to"e!. He!o Hon&a9# Ba,a#%!a"anian #a*#5 KWe e,ie)e an o%t#o%!$ing #e!)i$e '!o)i&e! $o%,& ette! an&,e o%! &a*-to-&a* "anage"ent nee&# tan o%! on tea". We9)e not a&&e& n%"e!# to o%! #taffing in #'ite of in$!ea#e& %#ine## a$ti)it*. Sin$e te o%t#o%!$ing agen$* "anage# te &ata $ent!e !o%n& te $,o$(5 o%! #taff a# een !e,ie)e& f!o" o!(ing in #ift#. Ko! $%#to"e!#5 it !ing# inno)ati)e an& #t!ea",ine& '!o&%$t# an& #e!)i$e# ,i(e i,,ing5 CRM an& &ata a!eo%#ing. o! e"',o*ee#5 it !ing# enan$e& 'e!fo!"an$e-$!iti$a, a'',i$ation# ,i(e int!anet5 e-"ai, an& on,ine $o,,ao!ation. An& at an o)e!a,, ,e)e,5 te #t!ategi$ a,,ian$e '!o)i&e# ESHWARI.S---LORAA BUSINESS ACADEMY Page 111
'!e&i$ta,e IT #'en an& a&&itiona, !e)en%e #t!ea"# to f%!te! enan$e #a!eo,&e! )a,%e5 e a&&#. Te $anging ,an&#$a'e: In te 'a#t5 In&ian $o"'anie# e!e not )e!* (een to o%t#o%!$e tei! IT nee '!i"a!i,* e$a%#e tei! ente!'!i#e IT en)i!on"ent# e!e !e,ati)e,* ,e## $o"',e65 ea#ie! to "anage5 an& ine6'en#i)e to "aintain. Be#i&e#5 fe o%t#o%!$ing #e!)i$e '!o)i&e!# offe!e& a n%"e! of o%t#o%!$ing o'tion# %n&e! one !oof. B%t no5 IT en)i!on"ent# in $o"'anie# a)e e$o"e "o!e $o"',e6. Te!e a# een g!ot in te!"# of )o,%"e of %#ine##5 !ange of #e!)i$e#5 n%"e! of e"',o*ee#5 n%"e! of $o"'etito!#5 ,o$ation#5 an& ente!'!i#e a'',i$ation#. Ti# To $a,,# fo! "o!e attention to nationi&e IT a# a #e!)i$e to '!o)i&e #t!ategi$ %#ine## enefit#. e,' o!gani+ation# get o'ti"%" )a,%e o%t IT an& %#e it a# a #t!ategi$ too, to f%!te! te $a%#e of %#ine##5 "an* CIO# tin( it o!t tei! i,e to o%t#o%!$e IT inf!a#t!%$t%!e "anage"ent. Inno)ati)e o'tion#: In&ian ente!'!i#e# to&a* a)e a )a!iet* of o%t#o%!$ing o'tion# f!o" i$ te* $an $oo#e te !igt fit. O%t#o%!$ing #o,%tion '!o)i&e!# offe! #e!)i$e# tat in$,%&e &e#(to' $,ient "anage"ent5 #e!)e! "anage"ent5 $a,e "anage"ent5 fi!ea,, "anage"ent5 'at$ "anage"ent5 #ofta!e ,i$en#e "anage"ent5 IT a%&it#5 a$(one an& $onne$ti)it*5 e#ite o#ting5 an& IT inf!a#t!%$t%!e "anage"ent. T%# te a)ai,a,e #e!)i$e# a!e inno)ati)e5 #ignifi$ant,* "o!e $%#to"i#e&5 an& ette! a,igne& it in&i)i&%a, $%#to"e! !e8%i!e"ent#. An ente!'!i#e $an 'i$(-an&-$o#e #'e$ifi$ #e!)i$e# an& %i,& a !e,ia,e "o&e of #e!)i$e &e,i)e!*. A $o"'an* $an o%t#o%!$e a#i$ &e#(to' "anage"ent nee o! te "anage"ent of te enti!e nationi&e IT inf!a#t!%$t%!e if nee&e&. To int!o&%$e "o!e f,e6ii,it*5 "an* #e!)i$e '!o)i&e!# offe! $,ient# i!e-'%!$a#e #$e"e#5 inf!a#t!%$t%!e on-&e"an&5 an& 'a*-a#-*o%-%#e o'tion#. Befo!e *o% o%t#o%!$e: A,, ting# #ai&5 o%t#o%!$ing i# a #t!ategi$ %#ine## &e$i#ion tat #o%,& e "a&e on,* if a $o"'an* #ee# t!%e %#ine## enefit# a$$!%ing f!o" it. Ba&,*-',anne& o%t#o%!$ing $o%,& !e#%,t in e!o#ion of #e!)i$e )a,%e an& $o#t e#$a,ation5 %t a e,,-',anne& o%t#o%!$ing &e$i#ion $an e,' *o% #,ee' ette! at nigt5 (noing tat te !e#'on#ii,it* of &e,i)e!a,e# i# in #afe an&#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 117
Mi$e,e Ca"ino# of a!tne! ig,igt# a fe #te'# tat $an ,ea& *o% to ta(e a '!o'e! &e$i#ion in ti# $onte6t. * * * * * * Wat t*'e of a #e!)i$e i# it3 I&entif* $a!a$te!i#ti$# of #e!)i$e an& te !e#'e$ti)e t*'e. Wat 'e!#'e$ti)e i# &!i)ing te effo!t3 I&entif* &e$i#ion !igt# /#e!)i$e one! an& in'%t !igt# /ote! #ta(eo,&e!#. Ho a!e ote! 'e!#'e$ti)e# affe$te&3 I&entif* $onf,i$t# an& o!( te" o%t. Ce$( 9(i,,e!9 fa$to!. I"'!o)e #o,%tion. Ce$( $o"',ian$e it '!in$i',e# an& fit it a!$ite$t%!e. Wo #o%,& $a!!* it o%t3 E)a,%ate &iffe!ent #taffing 'o##ii,itie#. Se,e$t e#t f!o" $o"ination. Wo #o%,& 'a!ti$i'ate te &e$i#ion3 S%"it #e!)i$e '!o'o#a, to #'e$ifi$ &e$i#ion '!o$e##. o,,o itin %'. Te To' 1 Ting# Yo% Nee& to ?no Ao%t O%t#o%!$ing St!ategie# 1. One a&)antage i# tat * o%t#o%!$ing5 $o"'anie# a!e a,e to fo$%# "o!e on tei! $o!e a$ti)itie#. Wen $o"'anie# g!o an& e6'an&5 te* egin to %#e "o!e !e#o%!$e# #%$ a# %"an an& finan$ia,. Ti# "a* ta(e aa* f!o" at te $o"'an* a# %i,t a!o%n&. O%t#o%!$ing te#e !e#o%!$e# i,, a,,o fo! !efo$%#ing on to#e $o!e #t!ategie#. 7. O%t#o%!$ing a,,o# fo! $o#t an& effi$ien$* #a)ing#. Se)e!a, of te 2o# in a $o!'o!ation $an e te&io%# an& $o#t,*. B* o%t#o%!$ing te#e 2o#5 #%$ a# $%#to"e! #e!)i$e5 ,ao! fo%n& e,#ee!e $an e $ea'e! an& te $o"'an* $an fo$%# on te a!ea# tat nee& te "o#t attention in o!&e! to ea!n '!ofit#. <. Re&%$ing o)e!ea& $o#t# i# anote! a&)antage of o%t#o%!$ing. Ti# !e,ate# again to te $%#to"e! #e!)i$e i"'a$t on a $o"'an*. Te#e 'o#ition#5 a# e,, a# eing $o#t,*5 a,#o !e8%i!e a ,a!ge a"o%nt of offi$e #'a$e &e'en&ing on te #i+e of te %#ine##. So"eti"e# te e"',o*e!# a)ing to "a(e te#e $a,,# to $%#to"e!# a!e !e#'on#i,e fo! ote! a!ea# an& $an ,o#e fo$%# on tei! "ain o2e$ti)e#. O%t#o%!$ing again $%t# $o#t# * eing a,e to fin& $ea'e! ,ao! o)e!#ea# a# e,, a# "ini"i+ing te !e8%i!e& offi$e #'a$e. >. Co"'anie# tat a)e e6i#te& fo! a i,e "a* ten& to ,o#e o'e!ationa, $ont!o,. o! e6a"',e5 a &e'a!t"ent "a* #%$$%" to 'oo! "anage"ent o)e! ti"e &%e to ,a$( of 8%a,ifie& !e#o%!$e# to fi,, te 'o#ition#. B* o%t#o%!$ing5 a $o"'an* $an ,oo( o%t#i&e of te U.S. fo! a "anage! tat a# #'e$ifi$ (no,e&ge an& e#t fit# te 'o#ition te* a!e ,oo(ing to fi,,. . Anote! a&)antage of o%t#o%!$ing i# tat it $an e,' &e)e,o' a "o!e #(i,,e& inte!na, #taff. A $o"'an* "a* a)e #taff tat ,a$(# te (no,e&ge nee&e& to $o"',ete a $e!tain ta#(. B* o%t#o%!$ing5 te $o"'an* $an !ing in te #(i,,e& 'eo',e tat $an o!( a,ong#i&e an& t!ain te e6i#ting #taff. On$e te t!aining i# &one5 te e"',o*e!# ESHWARI.S---LORAA BUSINESS ACADEMY Page 11<
a)e gaine& te (no,e&ge on te #%2e$t an& in te f%t%!e i,, e ette! '!e'a!e& fo! it. . A &i#a&)antage to o%t#o%!$ing i# tat te!e $an e a ,o## of "anage!ia, $ont!o,. Wen a $o"'an* o%t#o%!$e# an a!ea of tei! %#ine##5 "anage"ent no ,onge! a# &i!e$t $ont!o, o)e! o tat a!ea i# o'e!ating. Te $ont!o, e,ong# to tat i$ a# o%t#o%!$e& to5 te!efo!e ,ea&ing to te 'o##ii,it* of &e$!ea#e& #tan&a!&# o! #tan&a!&# tat fit anote! $o"'an*5 %t not *o%!#. G. Te!e i# a,#o te 'o##ii,it* of i&&en $o#t#. Afte! #igning a $ont!a$t it an o%t#o%!$ing $o"'an*5 te* "a* ta$( on a&&itiona, fee# tat e!e not #tate& in te initia, $ont!a$t. o! e6a"',e5 te* "a* a&& in ,ega, fee# fo! fi,ing te $ont!a$t. Te* &o ti# e$a%#e ti# i# o te* ea!n tei! '!ofit# an& te* a)e '!oa,* &one it efo!e5 te!e* $o"'an* at a %' f!ont fo! f%t%!e negotiation#. J.'%tting Wen a *o%! $o"'an* $oo#e# to&i#a&)antage o%t#o%!$e5 te!e i# a,#o te t!eat to #e$%!it* an& $onfi&entia,it*. Te!e a!e a ,ot of $o"'anie# tat e6i#t i,,ing to ta(e on te !o,e of te o%t#o%!$e&. Hoe)e!5 * $oo#ing te !ong one5 a $o"'an* ea!# te !i#( of ,o#ing it# t!a&e #e$!et# to te ige#t i&&e!. To '!e)ent an* in$i&en$e of ti# nat%!e5 te $o"'an* #o%,& "a(e #%!e te o%t#o%!$ing $o"'an* i# !e,ia,e an& tat te $ont!a$t in$,%&e# a 'ena,t* $,a%#e fo! an* !ong &oing. . Anote! &i#a&)antage of o%t#o%!$ing $o%,& e tat te!e i# a '!o,e" in te 8%a,it* of o!( &one. Cont!a$t# a!e #et a# fi6e& '!i$e# en a $o"'an* o%t#o%!$e# an& te o%t#o%!$ing $o"'an* i# in te %#ine## of "a(ing '!ofit. Te on,* a* fo! te" to "a6i"i+e tei! '!ofit# i# to !e&%$e tei! e6'en#e#. Ti# $o%,& "ean tat te* &on;t #'en& a# "%$ ti"e in in#'e$tion o! te* #i"',* $oo#e to %#e $ea' 'a!t# e!e goo& 'a!t# a!e ne$e##a!*. 1. A# *o% o%,& i"agine f!o" #eeing 2%#t te fe &i#a&)antage# ao)e5 en a $o"'an* $oo#e# to o%t#o%!$e5 te* ea! te !i#( of a)ing a& '%,i$it* o! i,,-i,, atta$e& to tei! na"e. So "an* e"',o*ee# a)e ,o#t tei! 2o# o)e! te 'a#t fe *ea!# tat te te!" Ko%t#o%!$ing i# gene!a,,* not a goo& ting fo! a $o"'an* to e a##o$iate& it. Not on,* &oe# it ,oe! te "o!a,e of te $o""%nit*5 %t 0oint )ent%!e: T!ee a#i$ #t!ategie# a)e een '!o'o#e& fo! %#e in 2oint )ent%!e#: te #'i&e!,# e5 go togete!-#',it an& #%$$e##i)e integ!ation. Te #'i&e!,# e #t!ateg* i# e"',o*e& in an in&%#t!* it fe ,a!ge o!gani+ation# an& #e)e!a, #"a,,e! one#. One #t!ateg* fo! #"a,,e! o!gani+ation# o%,& e to ente! a 2oint )ent%!e it one ,a!ge o!gani+ation an& ten5 in o!&e! to a)oi& eing a#o!e&5 ente! a ne 2oint )ent%!e a# 8%i$(,* a# 'o##i,e it one o! "o!e of te !e"aining o!gani+ation#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 11>
o togete!-#',it i# a #t!ateg* in i$ to o! "o!e o!gani+ation# $oo'e!ate fo! an e6ten&e& ti"e an& ten #e'a!ate. It i# 'a!ti$%,a!,* a''!o'!iate '!o2e$t# tat a)e a& &efinite ,ife #'an5 #%$ a# $on#t!%$tion '!o2e$t#. S%$$e##i)e integ!ation #ta!t# it a ea( 2oint )ent%!e !e,ation#i' eteen o!gani+ation#5 e$o"e# #t!onge!5 an& %,ti"ate,* "a* !e#%,t in a "e!ge! - eite! f!ien&,* o! o#ti,e. T!ee "a2o! $on#i&e!ation# #ee" to e 'a!ti$%,a!,* i"'o!tant in fo!"ing a 2oint )ent%!e: * * * Te fi!#t i# $oo#ing 'a!tne!. A #e$on& $on#i&e!ation i# te 8%e#tion of $ont!o, o)e! te 2oint )ent%!e. fina, $on#i&e!ation in)o,)e# te "anage"ent of te 2oint )ent%!e. INTERNATIONAL BUSINESS LEEL STRATEIES: Benefit# of Inte!nationa, St!ategie#: In$!ea#e& "a!(et #i+e. !eate! !et%!n# on "a2o! $a'ita, in)e#t"ent# o! ne '!o&%$t# o! '!o$e##e#. !eate! e$ono"ie# of #$a,e5 #$o'e o! ,ea!ning. A $o"'etiti)e a&)antage t!o%g ,o$ation. Inte!nationa, St!ategie#: Inte!nationa, B%#ine## Le)e, St!ategie# Inte!nationa, Co!'o!ate Le)e, St!ategie# M%,ti-&o"e#ti$ St!ateg* Page 11 ESHWARI.S---LORAA BUSINESS ACADEMY
,oa, St!ateg* T!an#nationa, St!ateg* Dete!"inant# of Nationa, A&)antage:
a$to!# of P!o&%$tion In'%t# Lao%!5 ,an&5 nat%!a, !e#o%!$e#5 $a'ita, = inf!a#t!%$t%!e De"an& Con&ition# Te nat%!e an& #i+e of e %*e!# nee&# in te o"e of goo&# = #e!)i$e# Re,ate&te = S%''o!ting In&%#t!ie# in i$"a!(et te ta!get $o%nt!* i# $on#i&e!e& ,ea&e! eg.In&%#t!ie# Ita,* - #oe# it a #%''o!ting ,eate! in&%#t!*5 0a'an - $a"e!a# = 'oto$o'ie!#5 Den"a!( - &ia!* = an in&%#t!* fo$%#e& on foo& en+*"e#.
i!" St!ateg*5 St!%$t%!e = Ri)a,!* "a(e %' e!"an* fo$%#e& on "eto&i$a, '!o&%$t = '!o$e## i"'!o)e"ent#5 Ita,*;# nationa, '!i&e of &e#igne!# e,'e& #'an fa#ion a''a!e,5 f%!nit%!e = #'o!t# $a! in&%#t!ie#. Page 11 ESHWARI.S---LORAA BUSINESS ACADEMY
Inte!nationa, Co!'o!ate-Le)e, St!ateg*: M%,ti-&o"e#ti$ St!ateg* St!ategi$ = o'e!ating &e$i#ion# a!e &e$ent!a,i+e& to te #t!ategi$ %#ine## %nit in ea$ $o%nt!* to tai,o! '!o&%$t# to te ,o$a, "a!(et. ,oa, St!ateg* A##%"e# "o!e #tan&a!&i+ation of '!o&%$t# a$!o## $o%nt!* "a!(et# T!an#nationa, St!ateg* Te fi!" #ee(# to a$ie)e ot g,oa, effi$ien$* an& ,o$a, !e#'on#i)ene##
Coi$e of Inte!nationa, Ent!* Mo&e: E6'o!ting: Co""on inte!nationa, "a!(et#/: F F F Fa* F Fto Noente! nee& ne to e#ta,i# o'e!ation# in ote! nation#. E#ta,i# &i#t!i%tion $anne,# t!o%g $ont!a$t%a, !e,ation#i'#. Ma* a)e ig t!an#'o!tation $o#t#. Ma* en$o%nte! ig i"'o!t ta!iff#. Ma* a)e ,e## $ont!o, on "a!(eting an& &i#t!i%tion. Diffi$%,t to $%#to"i+e '!o&%$t. Li$en#ing: i!" a%to!i+e# anote! fi!" to "an%fa$t%!e = #e,, it# '!o&%$t# Li$en#ing fi!" i# 'ai& a !o*a,t* on ea$ %nit '!o&%$e& an& #o,&. Li$en#ee ta(e# !i#(# in "an%fa$t%!ing in)e#t"ent#. Lea#t !i#(* a* to ente! a fo!eign "a!(et. Li$en#ing fi!" ,o#e# $ont!o, o)e! '!o&%$t 8%a,it* = &i#t!i%tion. Re,ati)e,* ,o '!ofit 'otentia,. St!ategi$ A,,ian$e#: Ena,e fi!"# to #a!e# !i#(# an& !e#o%!$e# to e6'an& into inte!nationa, )ent%!e#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 11G
Mo#t 2oint )ent%!e# /0# in)o,)e a fo!eign $o!'. it a ne '!o&%$t o! te$no,og* = a o#t $o"'an* it a$$e## to &i#t!i%tion o! (no,e&ge of ,o$a, $%#to"#5 no!"# o! 'o,iti$#. Ma* e6'e!ien$e &iffi$%,tie# in "e!ging &i#'a!ate $%,t%!e#. Ma* not %n&e!#tan& te #t!ategi$ intent of 'a!tne!# o! e6'e!ien$e &i)e!gent goa,#. A$8%i#ition#: Ena,e fi!"# to "a(e "o#t !a'i& inte!nationa, e6'an#ion. Can e )e!* $o#t,*. Lega, an& !eg%,ato!* !e8%i!e"ent# "a* '!e#ent a!!ie!# to fo!eign one!#i'. U#%a,,* !e8%i!e $o"',e6 an& $o#t,* negotiation#. Potentia,,* &i#'a!ate $o!'o!ate $%,t%!e. Ma2o! Ri#(# of Inte!nationa, Di)e!#ifi$ation: Po,iti$a, Ri#(: Nationa, go)e!n"ent in#tai,it* "a* $!eate 'otentia, '!o,e"# fo! inte!nationa,,* &i)e!#ifie& fi!"#. Potentia, $ange# in attit%&e# o! !eg%,ation# !ega!&ing fo!eign one!#i'. Lega, a%to!it* otaine& f!o" '!e)io%# a&"ini#t!ation "a* e$o"e in)a,i&. Potentia, fo! nationa,i+ation of fi!"#; a##et#.
E$ono"i$ Ri#(: E$on. !i#(# a!e inte!&e'en&ent it 'o,iti$a, !i#(#. Diffe!en$e# an& f,%$t%ation# in inte!nationa, $%!!en$ie# "a* affe$t )a,%e of a##et# = ,iai,itie#. Ti# affe$t# '!i$e# = t%# ai,it* to $o"'ete. Diffe!en$e# in inf,ation !ate# "a* affe$t inte!-nationa,,* &i)e!#ifie& fi!"#; ai,it* to $o"'ete. Enfo!$ing inte,,e$t%a, '!o'e!t* !igt# on CD#5 #ofta!e5 et$. Inte!nationa, Co!'o!ate = B%#ine## Le)e, St!ategie#: I"'o!tE6'o!t ESHWARI.S---LORAA BUSINESS ACADEMY Page 11J
A a#i$ inte!nationa, %#ine## #t!ateg* i# te i"'o!t an& e6'o!t of goo&# o! !e#o%!$e#. Co"'anie# often a$8%i!e e$ono"i$ !e#o%!$e# f!o" inte!nationa, $o%nt!ie# to ta(e a&)antage of fa)o!a,e $%!!en$* e6$ange !ate# an& $ea'e! %#ine## in'%t $o#t#. Co"'anie# "a* a,#o %#e !itten $ont!a$t# to #e$%!e e$ono"i$ !e#o%!$e# at fi6e& '!i$e# fo! f%t%!e %#e. E6'o!ting goo&# a,,o# $o"'anie# to #i' e$ono"i$ !e#o%!$e# o! fini#e& '!o&%$t# to inte!nationa, "a!(et# fo! %#ine## an& $on#%"e! %#e. E6'o!ting goo&# to inte!nationa, "a!(et# often !e8%i!e# $o"'anie# to a)e effi$ient o'e!ation# fo! #i''ing goo&# to ote! $o%nt!ie# it #'e$ifi$ inte!nationa, g%i&e,ine#. O%t#o%!$ing An in$!ea#ing,* 'o'%,a! inte!nationa, %#ine## #t!ateg* i# te o%t#o%!$ing of #'e$ifi$ %#ine## f%n$tion# o! #e!)i$e#. Info!"ation te$no,og* a,,o# $o"'anie# to o%t#o%!$e $a,, $ente!#5 te$ni$a, #%''o!t an& ote! a&"ini#t!ati)e #e!)i$e# to inte!nationa, $o%nt!ie#. O%t#o%!$ing none##entia, %#ine## #e!)i$e# a,,o# $o"'anie# to #a)e "one* on 'a*!o,, $o#t# an& enefit# fo! e"',o*ee#. Setting %' inte!nationa, %#ine## ,o$ation# "a* a,#o e $ea'e!5 &e'en&ing on te 'o,iti$a, an& %#ine## en)i!on"ent of inte!nationa, $o%nt!ie#. O%t#o%!$ing %#ine## f%n$tion# a,,o# $o"'anie# to gain te f%,, a&)antage of $ea'e! %#ine## $o#t# ito%t %#%a,,* "a(ing &i!e$t in)e#t"ent# in te fo!eign e$ono"i$ "a!(et. Co"'anie# "a* $!eate %#ine## 'a!tne!#i'# it o%t#o%!$ing f%n$tion# to en#%!e '!o&%$t# o! #e!)i$e# "eet te $o"'an*9# #tan&a!&#. 0oint ent%!e# 0oint )ent%!e# a!e %#ine## !e,ation#i'# in i$ to $o"'anie# $o,,ao!ate to $o"',ete %#ine## #e!)i$e# o! '!o&%$e $on#%"e! goo&#. 0oint )ent%!e# "a* e %#e& in inte!nationa, %#ine## #t!ategie# to a,,o an a,!ea&* e#ta,i#e& inte!nationa, $o"'an* '!o&%$e #'e$ifi$ goo&# o! #e!)i$e# !e,ating to anote! $o"'an*. Ti# a,,o# &o"e#ti$ %#ine##e# te o''o!t%nit* to &e)e,o' a '!e#en$e in inte!nationa, e$ono"i$ "a!(et# * ,i$en#ing an inte!nationa, $o"'an* to '!o&%$e goo&# o! #e!)i$e# fo! te inte!nationa, "a!(et. Di!e$t In)e#t"ent Te "o#t inten#i)e inte!nationa, %#ine## #t!ateg* $o"'anie# often "a(e i# a &i!e$t in)e#t"ent into an inte!nationa, "a!(et. Ti# #t!ateg* %#%a,,* !e8%i!e# $o"'anie# to '%!$a#e fa$i,itie# an& e8%i'"ent fo! '!o&%$ing goo&# o! #e!)i$e# in ea$ inte!nationa, "a!(et in i$ te* o'e!ate. Co"'anie# "%#t a,#o i!e e"',o*ee# an& fo,,o %#ine## g%i&e,ine# fo! ea$ inte!nationa, $o%nt!*. Wi,e ti# #t!ateg* i# often te "o#t ig !i#( an& e6'en#i)e inte!nationa, %#ine## #t!ateg*5 it "a* offe! $o"'anie# te e#t o'tion fo! $!eating a $o"'etiti)e a&)antage an& #at%!ate te inte!nationa, %#ine## "a!(et. ESHWARI.S---LORAA BUSINESS ACADEMY Page 11
UNIT:> o!"%,ating Long Te!" O2e$ti)e# an& !an& St!ategie# Long Te!" O2e$ti)e# Te!e a!e #e)en a!ea# in i$ ,ong te!" o2e$ti)e# a)e to e e#ta,i#e& 1. P!ofitai,it* Te ai,it* of an* fi!" to o'e!ate in te ,ong te!" &e'en&# on attaining an a$$e'ta,e ,e)e, of '!ofit#. St!ategi$a,,* "anage& fi!"# a)e a ,ong te!" o2e$ti)e5 %#%a,,* e6'!e##e& in ea!ning# 'e! #a!e o! !et%!n on e8%it*. 7. P!o&%$ti)it* Co""on,* %#e& '!o&%$ti)it* o2e$ti)e# a!e te n%"e! of ite"# '!o&%$e& o! te n%"e! of #e!)i$e# !en&e!e& 'e! %nit of in'%t. Te* a!e a,#o5 #o"eti"e#5 te!"# of &e#i!e& $o#t &e$!ea#e. <. Co"'etiti)e 'o#ition Ti# i# in &efine& te!"# ofin !e,ati)e &o"inan$e in te "a!(et',a$e. Co"'anie# often %#e tota, #a,e# o! "a!(et #a!e a# a "ea#%!e of $o"'etiti)e 'o#ition. >. E"',o*ee De)e,o'"ent E"',o*ee &e)e,o'"ent in te!"# of t!aining i$ in$!ea#e# '!o&%$ti)it* an& &e$!ea#e# e"',o*ee t%!no)e!. . E"',o*ee !e,ation# P!oa$ti)e #te'# in anti$i'ating te e"',o*ee nee&# an& e6'e$tation# a!e $a!a$te!i#ti$# of goo& #t!ategi$ "anage"ent. Ti# %i,&# e"',o*ee ,o*a,t* ,ea&ing to in$!ea#e in '!o&%$ti)it*. S%$ '!og!a"# in$,%&e #afet* t!aining5 e"',o*ee #to$( o'tion an& o!(e! !e'!e#entation on "anage"ent $o""ittee#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 17
. Te$no,ogi$a, ,ea&e!#i' i!"# a)e to a&o't &iffe!ent #t!ategie# &e'en&ing on it# intention of eing a ,ea&e! o! a fo,,oe! of te$no,og* ,ea&e!#i'. e.g.5 Co"'anie# ,i(e Inte, an& Mi$!o#oft a)e an a&)antage of eing (non a# te$no,ogi$a, ,ea&e!# in tei! &o"ain#. e-$o""e!$e te$no,og* i,, ,ea& to e"e!gen$e of ne ,ea&e!# o a!e ette! 'o#itione& to ta(e a&)antage of inte!net te$no,og* to i"'!o)e '!o&%$ti)it* an& inno)ation. G. P%,i$ !e#'on#ii,it* Co!'o!ate# en#%!e tat tei! !e#'on#ii,it* go e*on& '!o)i&ing goo& '!o&%$t# an& #e!)i$e# to in$,%&e $o!'o!ate #o$ia, !e#'on#ii,it*. Te* &onate to e&%$ationa, '!o2e$t#5 non'!ofit o!gani+ation#5 $a!itie# an& ote! #o$ia,,* !e,e)ant a$ti)itie#. e.g. Min&T!ee i# in)o,)e& it S'a#ti$# So$iet* of ?a!nata(a5 Tata Stee, in $!e&ite& it &e)e,o'"ent of 0a"#e&'%! @%a,itie# of ,ong-te!" o2e$ti)e# 1. A$$e'ta,e Te ,ong te!" o2e$ti)e# #o%,& e $on#i#tent it te '!efe!en$e# of te e"',o*ee#. Te* "a* igno!e o! e)en o#t!%$t an o2e$ti)e tat offen& te" o! tat te* e,ie)e to e ina''!o'!iate an& %nfai!. Te ,ong te!" o2e$ti)e# #o%,& a,#o e &e#igne& to e a$$e'ta,e to g!o%'# e6te!na, to te fi!". e.g. &e)e,o'"ent of *!i& $a!# 7. ,e6i,e O2e$ti)e# #o%,& e a&a'ta,e to %nfo!e#een o! e6t!ao!&ina!* $ange# in te fi!"9# $o"'etiti)e o! en)i!on"enta, fo!e$a#t#. S%$ f,e6ii,it* i# at te e6'en#e of #'e$ifi$it*. One a* of '!o)i&ing f,e6ii,it* i,e "ini"i+ing it# negati)e effe$t# i# to a,,o fo! a&2%#t"ent# in te ,e)e,5 !ate! tan in te nat%!e5 of o2e$ti)e#. e.g. te!e "a* e #o"e f,e6ii,it* in te g!ot !ate in te!"# of !e)en%e# in ti"e# of !e$e##ion <. Mea#%!a,e ESHWARI.S---LORAA BUSINESS ACADEMY Page 171
Te o2e$ti)e# "%#t $,ea!,* #tate at i,, e a$ie)e& an& * en it i,, e a$ie)e&. e.g. A&oe ant# to in$!ea#e it# !e)en%e# f!o" In&ia to of tei! tota, !e)en%e in te ne6t fi)e *ea!# >. Moti)ating Te o2e$ti)e# a)e to e #et to a "oti)ating ,e)e, i$ i# ig eno%g to $a,,enge5 %t not #o ig eno%g a# to f!%#t!ate5 an& a,#o it #o%,& not e #o ,o a# to e ea#i,* attaine&. Sin$e &iffe!ent g!o%' of 'eo',e a)e &iffe!ent ,e)e,# of "oti)ation5 &iffe!ent ,ong te!" o2e$ti)e# e#%ite& #et toto "oti)ate teai"# g!o%'#. . S%ita,e Long te!" o2e$ti)e#o%,& "%#t e te !oa& of te fi!"5 i$ a!e e6'!e##e& in it# "i##ion #tate"ent. Ea$ of te o2e$ti)e# #o%,& e,' te fi!" to "o)e $,o#e! to a$ie)ing it# "i##ion. e.g. $o"'anie# it "i##ion of g,oa, !e'%tation $annot &o an*ting i$ i# %neti$a, . Un&e!#tan&a,e A,, te 'eo',e in)o,)e& in te e6e$%tion of te o2e$ti)e# "%#t e a,e to $,ea!,* %n&e!#tan& te o2e$ti)e#. Te* #o%,& a,#o %n&e!#tan& te "a2o! $!ite!ia * i$ tei! 'e!fo!"an$e o%,& e e)a,%ate&. Te o2e$ti)e# "%#t e $,ea!5 "eaningf%, an& %na"ig%o%#. G. A$ie)a,e O2e$ti)e# "%#t e 'o##i,e to a$ie)e. Te o2e$ti)e# a)e e #et to e a$ie)a,e %n&e! no!"a, $on&ition#5 en e6t!e"e $ange# in te e6te!na, an& inte!na, en)i!on"ent# a!e not e6'e$te&. !an& St!ategie# !an& #t!ategie# '!o)i&e a#i$ &i!e$tion fo! #t!ategi$ a$tion#. Te* a!e te a#i# fo! $oo!&inate& an& #%#taine& effo!t# &i!e$te& toa!&# a$ie)ing ,ongte!" %#ine## o2e$ti)e#. Page 177 ESHWARI.S---LORAA BUSINESS ACADEMY
Te* in&i$ate a ti"e 'e!io& o)e! i$ ,ong-te!" o2e$ti)e# a!e to e a$ie)e&. i!"# in)o,)e& it "%,ti',e in&%#t!ie#5 %#ine##e#5 '!o&%$t ,ine# o! $%#to"e! g!o%'# %#%a,,* $o"ine #e)e!a, g!an& #t!ategie#. Te fifteen g!an& '!in$i',e# a!e: 1. Con$ent!ate& g!ot e.g. e-a* in on,ine a%$tion 7. Ma!(et &e)e,o'"ent e.g. 0=0 $ate!ing to te a&%,t#5 %#ing #a$et# fo! "a!(et 'enet!ation <. P!o&%$t &e)e,o'"ent e.g. 'e!#ona, $a!e '!o&%$t# f!o" HUL5 nee! )e!#ion of oo(#5 >. Inno)ation . Ho!i+onta, integ!ation . e!ti$a, integ!ation G. Con$ent!i$ &i)e!#ifi$ation Cong,o"e!ate &i)e!#ifi$ation . T%!na!o%n& 1. Di)e#tit%!e e.g. Sa,e of TOMCO J. * Tata5 #e,,ing of $e"ent &i)i#ion * L=T 11. Li8%i&ation 17. Ban(!%'t$* 1<. 0oint )ent%!e# 1>. St!ategi$ a,,ian$e# 1. Con#o!tia e.g. Mit#%i#i5 L Inno)ation Inno)ation i# nee&e& #in$e ot $on#%"e! an& in&%#t!ia, "a!(et# e6'e$t 'e!io&i$ $ange# an& i"'!o)e"ent# in te '!o&%$t# offe!e&. i!"# #ee(ing to "a(ing inno)ation a# tei! g!an& #t!ateg* #ee( to !ea' te initia,,* ig '!ofit# a##o$iate& it $%#to"e! a$$e'tan$e of a ne o! g!eat,* i"'!o)e& '!o&%$t. A# te '!o&%$t# ente!# te "at%!it* #tage te#e $o"'anie# #ta!t ,oo(ing fo! a ne inno)ation. Te %n&e!,ining !ationa,e i# to $!eate a ne '!o&%$t ,ife $*$,e an& te!e* "a(e #i"i,a! e6i#ting '!o&%$t# o#o,ete. Ti# #t!ateg* i# &iffe!ent f!o" te '!o&%$t &e)e,o'"ent #t!ateg* in i$ te '!o&%$t ,ife $*$,e of an e6i#ting '!o&%$t i# e6ten&e&. e.g. Po,a!oi& i$ ea)i,* '!o"ote# ea$ of it# ne $a"e!a# %nti, $o"'etito!# a!e a,e to "at$ it# te$no,ogi$a, inno)ation * ti# ti"e Po,a!oi& no!"a,,* i# '!e'a!e& to int!o&%$e a &!a"ati$a,,* ne o! i"'!o)e& '!o&%$t. Inte,5
It i# a #t!ateg* in i$ a fi!"# ,ong te!" #t!ateg* i# a#e& on g!ot t!o%g a$8%i#ition of one o! "o!e #i"i,a! fi!"# o'e!ating at te #a"e #tage of te '!o&%$tion-"a!(eting $ain. E.g. A$8%i#ition of A!$!o, * Mitta Stee,# S%$ a$8%i#ition# e,i"inate $o"'etito!# an& '!o)i&e te a$8%i!ing fi!" it a$$e## to ne "a!(et#. Te a$8%i!ing fi!" i"'!o)ing i# a,e toe$ono"i$# g!eat,* e6'an& it# an& o'e!ation#5 te!e* a$ie)ing g!eate! "a!(et #a!e5 of #$a,e5 in$!ea#ing te effi$ien$* of $a'ita, %#e. e.g. a$8%i#ition of A!$e!o, * Mitta, #tee,#5 a$8%i#ition of oi$eSt!ea" Wi!e,e## * De%t#$e Te,e(o" Te !i#( a##o$iate& it o!i+onta, integ!ation i# te in$!ea#e& $o""it"ent to one t*'e of %#ine##. e!ti$a, integ!ation It i# a '!o$e## in i$ a fi!"9# g!an& #t!ateg* i# to a$8%i!e fi!"# tat #%'',* it it in'%t# /#%$ a# !a "ate!ia,# o! a!e $%#to"e!# fo! it# o%t'%t# /#%$ a# a!eo%#e# fo! fini#e& '!o&%$t#. Te a$8%i!ing of #%'',ie!# i# $a,,e& a$(a!& integ!ation. Te "ain !ea#on fo! a$(a!& integ!ation i# te &e#i!e to in$!ea#e te &e'en&ai,it* of te #%'',* o! 8%a,it* of te !a "ate!ia,# %#e& in te '!o&%$tion in'%t#. Ti# nee& i# 'a!ti$%,a!,* g!eat en te n%"e! of #%'',ie!# a!e ,e## an& te n%"e! of $o"'etito!# i# ,a!ge. In te#e $on&ition# a )e!ti$a,,* integ!ate& fi!" $an ette! $ont!o, it# $o#t# an&5 te!e*5 i"'!o)e te '!ofit "a!gin. e.g. a$8%i!ing of te6ti,e '!o&%$e! * a #i!t "an%fa$t%!e! Te a$8%i!ing of $%#to"e!# i# $a,,e& fo!a!& integ!ation. e.g. a$8%i!ing of $,oting #to!e * a #i!t "an%fa$t%!e! o!a!& integ!ation i# '!efe!!e& if g!eat a&)antage# a$$!%e to #ta,e '!o&%$tion. It a,#o e,'# in g!eate! '!e&i$tai,it* of &e"an& fo! it# o%t'%t#. e!ti$a, integ!ation a# a !i#( i$ !e#%,t# f!o" te fi!"9# e6'an#ion into a!ea# !e8%i!ing #t!ategi$ "anage! to !oa&en te a#e of tei! $o"'eten$e# an& to a##%"e a&&itiona, !e#'on#ii,itie#.
Con$ent!i$ &i)e!#ifi$ation It in)o,)e# te a$8%i#ition of %#ine##e# tat a!e !e,ate& to te a$8%i!ing fi!" in te!"# of te$no,og*5 "a!(et#5 o! '!o&%$t#. Te #e,e$te& ne %#ine## "%#t 'o##e## a )e!* ig &eg!ee of $o"'atii,it* it te fi!"9# e6i#ting %#ine##. ESHWARI.S---LORAA BUSINESS ACADEMY Page 17>
Te i&ea, $on$ent!i$ &i)e!#ifi$ation o$$%!# en te $o"ine& $o"'an* '!ofit# in$!ea#e te #t!engt# an& o''o!t%nitie# an& &e$!ea#e# te ea(ne##e# an& e6'o#%!e to !i#(. T%#5 te a$8%i!ing fi!" #ea!$e# fo! ne %#ine##e# o#e '!o&%$t#5 "a!(et#5 &i#t!i%tion $anne,#5 te$no,ogie# an& !e#o%!$e !e8%i!e"ent# a!e #i"i,a! to %t not i&enti$a, it it# on5 o#e a$8%i#ition !e#%,t# in #*ne!gie# %t not $o"',ete inte!&e'en&en$e. e.g. a$8%i!ing of S'i$e Te,e$o" * I&ea Cong,o"e!ate Di)e!#ifi$ation It e$a%#e i# a g!an& #t!ateg* in i$ )e!* ,a!ge fi!" ',an# to a$8%i!e a)ai,a,e. a %#ine## it !e'!e#ent# te "o#ta '!o"i#ing in)e#t"ent o''o!t%nit*
Te '!in$i'a, $on$e!n5 an& often te #o,e $on$e!n5 of te a$8%i!ing fi!" i# te '!ofit 'atte!n of te )ent%!e. It gi)e# ,itt,e $on$e!n to $!eating '!o&%$t-"a!(et #*ne!g* it e6i#ting %#ine##. Te* "a* #ee( a a,an$e in tei! 'o!tfo,io eteen $%!!ent %#ine##e# it $*$,i$a, #a,e# an& a$8%i!e& %#ine##e# it $o%nte!$*$,i$a, #a,e#5 eteen ig-$a#,o-o''o!t%nit* an& ,o-$a#ig-o''o!t%nit* %#ine##e# o! eteen &et-f!ee an& ig ,e)e!age& %#ine##e#. e.g. a$8%i#ition of A&,a# * Ani, Di!%ai A"ani !o%' T%!na!o%n& So"eti"e# te '!ofit of a $o"'an* &e$,ine &%e to )a!io%# !ea#on# ,i(e e$ono"i$ !e$e##ion5 '!o&%$tion ineffi$ien$ie# an& inno)ati)e !ea(t!o%g * $o"'etito!#. In "an* $a#e# te "anage"ent e,ie)e# tat #%$ a fi!" $an #%!)i)e an& e)ent%a,,* !e$o)e! if a $on$e!te& effo!t i# "a&e o)e! a 'e!io& of a fe *ea!# to fo!tif* it# &i#tin$ti)e $o"'eten$e#. Ti# i# (non a# t%!na!o%n& #t!ateg*.
T%!na!o%n& t*'i$a,,* i# eg%n it one o! ot of te fo,,oing fo!"# of !et!en$"ent eing e"',o*e& eite! #ing,* o! in $o"ination. 1. Co#t !e&%$tion It i# &one * &e$!ea#ing te o!(fo!$e t!o%g e"',o*ee att!ition5 ,ea#ing !ate! tan '%!$a#ing e8%i'"ent5 e6ten&ing te ,ife of "a$ine!*5 e,i"inating '!o"otiona, a$ti)itie#5 ,a*ing off e"',o*ee#5 &!o''ing ite"# f!o" a '!o&%$tion ,ine an& &i#$ontin%ing ,o-"a!gin $%#to"e!#. 7. A##et !e&%$tion ESHWARI.S---LORAA BUSINESS ACADEMY Page 17
Ti# in$,%&e# #a,e of ,an&5 %i,&ing# an& e8%i'"ent not e##entia, to te a#i$ a$ti)it* of te fi!". Re#ea!$ a# #oe& tat t%!na!o%n& a,"o#t a,a*# a# a##o$iate& it $ange# in to' "anage"ent. Ne "anage!# a!e e,ie)e& to int!o&%$e ne 'e!#'e$ti)e#5 !ai#e e"',o*ee "o!a,e an& fa$i,itate &!a#ti$ a$tion# ,i(e &ee' %&geta!* $%t# in e#ta,i#e& '!og!a"#. T%!na!o%n& #it%ation Te "o&e, egin# it te &e'i$tion of e6te!na, an& inte!na, fa$to!# a# $a%#e# of a fi!"9# 'e!fo!"an$e &ont%!n. Wen te#e fa$to!# $ontin%e to &et!i"enta,,* i"'a$t te fi!"5 it# finan$ia, ea,t i# t!eatene&. Un$e$(e& &e$,ine ',a$e# te fi!" in a t%!na!o%n& #it%ation. A t%!na!o%n& #it%ation !e'!e#ent# a#o,%te an& !e,ati)e to te in&%#t!* &e$,ining 'e!fo!"an$e of a #%ffi$ient "agnit%&e to a!!ant e6',i$it t%!na!o%n& a$tion#. T%!na!o%n& #it%ation# "a* e a !e#%,t of *ea!# of g!a&%a, #,o&on o! "ont# of #a!' &e$,ine. o! a &e$,ining fi!"5 #tai,i+ing o'e!ation# an& !e#to!ing '!ofitai,it* a,"o#t a,a*# entai, #t!i$t $o#t !e&%$tion fo,,oe& * #!in(ing a$( to to#e #eg"ent# of te %#ine## tat a)e een te e#t '!o#'e$t# of att!a$ti)e '!ofit "a!gin#. Sit%ation #e)e!it* ESHWARI.S---LORAA BUSINESS ACADEMY Page 17
Te %!gen$* of te !e#%,ting t!eat to $o"'an* #%!)i)a, 'o#e& * te t%!na!o%n& #it%ation i# (non a# #it%ation #e)e!it*. Se)e!it* i# te go)e!ning fa$to! in e#ti"ating te #'ee& it i$ te !et!en$"ent !e#'on#e i,, e fo!"%,ate& an& a$ti)ate&. Wen #e)e!it* i# ,o #tai,it* $an e a$ie)e& t!o%g $o#t !e&%$tion a,one. Wen #e)e!it* i# ig $o#t !e&%$tion "%#t e #%'',e"ente& it "o!e &!a#ti$ a##et !e&%$tion "ea#%!e#. A##et# ta!gete& fo! &i)e#tit%!e a!e to#e &ete!"ine& to e %n&e!'!o&%$ti)e. Mo!e '!o&%$ti)e !e#o%!$e# a!e '!ote$te& an& i,, e$o"e te $o!e %#ine## in te f%t%!e ',an of te $o"'an*. E.g . #t!ateg* a&o'te& * Citian( T%!na!o%n& !e#'on#e T%!na!o%n& !e#'on#e a"ong #%$$e##f%, fi!"# t*'i$a,,* in$,%&e to #t!ategi$ a$ti)itie#: Ret!en$"ent 'a#e Re$o)e!* 'a#e Ret!en$"ent 'a#e It $on#i#t# of $o#t-$%tting an& a##et-!e&%$ing a$ti)itie#. Te '!i"a!* o2e$ti)e of ti# '!o$e## i# to #tai,i+e te fi!"9# finan$ia, $on&ition. i!"# in &ange! of an(!%'t$* o! fai,%!e atte"'t to a,t &e$,ine t!o%g $o#t an& a##et !e&%$tion#. It i# )e!* i"'o!tant to $ont!o, te !et!en$"ent '!o$e## in a effe$ti)e an& effi$ient "anne! fo! an* t%!na!o%n& to e #%$$e##f%,. Afte! te #tai,it* a# een attaine& t!o%g !et!en$"ent5 te ne6t #te' of !e$o)e!* 'a#e egin#. Re$o)e!* 'a#e Te '!i"a!* $a%#e# of te t%!na!o%n& #it%ation i,, e a##o$iate& it te !e$o)e!* 'a#e. o! fi!"# tat &e$,ine& a# a !e#%,t of e6te!na, '!o,e"#5 t%!na!o%n& "o#t often a# een a$ie)e& t!o%g $!eati)e ne ent!e'!ene%!ia, #t!ategie#. o! fi!"# tat &e$,ine& a# a !e#%,t of inte!na, '!o,e"5 t%!na!o%n& a# een "o#t,* a$ie)e& t!o%g effi$ien$* #t!ategie#. Re$o)e!* i# a$ie)e& en e$ono"i$ "ea#%!e# in&i$ate tat te fi!" a# !egaine& it# '!e&ont%!n ,e)e,# of 'e!fo!"an$e. Tai,o!ing #t!ateg* to fit #'e$ifi$ in&%#t!* an& $o"'an* #it%ation# ESHWARI.S---LORAA BUSINESS ACADEMY Page 17G
St!ategie# a#e& on in&%#t!* #it%ation St!ategie# fo! e"e!ging in&%#t!ie# St!ategie# fo! $o"'eting in t%!%,ent5 ig-)e,o$it* "a!(et# St!ategie# fo! $o"'eting in "at%!ing in&%#t!ie# St!ategie# fo! fi!"# in #tagnant o! &e$,ining in&%#t!ie# St!ategie# fo! $o"'eting in f!ag"ente& in&%#t!ie# St!ategie# a#e& on $o"'an* #it%ation St!ategie# fo! #%#taining !a'i& $o"'an* g!ot St!ateg* fo! in&%#t!* ,ea&e!# St!ategie# fo! !%nne!-%' fi!"# St!ategie# fo! ea( an& $!i#i#-!i&&en %#ine##e# St!ategie# fo! e"e!ging in&%#t!ie# An e"e!ging in&%#t!* i# one i$ i# in it# fo!"ati)e #tage. Te to $!iti$a, #t!ategi$ i##%e# $onf!onting fi!"# in an e"e!ging in&%#t!* a!e: 1. Ho to finan$e initia, o'e!ation# %nti, #a,e# an& !e)en%e# ta(e off 7. Wat "a!(et #eg"ent# an& $o"'etiti)e a&)antage# to go afte! in t!*ing to #e$%!e a f!ont!%nne! 'o#ition. Ca,,enge# en $o"'eting in e"e!ging in&%#t!ie# 1. Be$a%#e te "a!(et i# ne an& %n'!o)en5 te!e i# #'e$%,ation ao%t o it i,, f%n$tion5 o fa#t it i,, g!o an& o ig it i,, get. It i# &iffi$%,t to "a(e #a,e# an& '!ofit '!o2e$tion#. Te!e i,, e g%e## o!( ao%t o !a'i&,* $%#to"e!# o%,& e att!a$te& an& o "%$ te* o%,& e i,,ing to 'a*. 7. M%$ of te te$no,ogi$a, (no-o fo! te '!o&%$t# of e"e!ging in&%#t!ie# i# '!o'!ieta!* an& $,o#e,* g%a!&e&. Patent# an& %ni8%e te$ni$a, e6'e!ti#e a!e (e* fa$to!# in #e$%!ing $o"'etiti)e a&)antage. <. Often5 te!e i# no $on#en#%# !ega!&ing i$ of te #e)e!a, $o"'eting te$no,ogie# i,, in o! i$ '!o&%$t att!i%te# i,, '!o)e &e$i#i)e in inning %*e! fa)o!. SM an& CDMA te$no,ogie# an& te* inne!. >. . Ent!* a!!ie!# ten& $o"'anie#. ESHWARI.S---LORAA BUSINESS ACADEMY
e.g. Te "oi,e #e!)i$e '!o)i&e!# a!e %#ing ot a!e not #%!e i$ te$no,og* i,, e te to e ,o5 e)en fo! ent!e'!ene%!ia, #ta!t-%' Page 17J
La!ge $o"'anie# it a"',e !e#o%!$e# i,, ente! te "a!(et if te* fin& te '!o"i#e fo! e6',o#i)e g!ot o! if it# e"e!gen$e tei! e6i#ting %#ine##. e.g. ent!* of ,a!ge n%"e! of ',a*e!# to te "oi,e #e!)i$e# "a!(et . St!ong ,ea!ning an& e6'e!ien$e $%!)e effe$t# "a* e '!e#ent5 a,,oing #ignifi$ant '!i$e !e&%$tion# a# )o,%"e %i,&# an& $o#t# fa,,. . Te "a!(eting ta#( i# to in&%$e initia, '%!$a#e# an& to o)e!$o"e $%#to"e! $on$e!n# ao%t '!o&%$t feat%!e#5 'e!fo!"an$e !e,iai,it* an& $onf,i$ting $,ai"# of !i)a, fi!"#. G. Potentia, %*e!# e6'e$t fi!#t-gene!ation '!o&%$t# to e !a'i&,* i"'!o)e&5 #o i,, te* &e,a* '%!$a#e ti,, #e$on& o! ti!& gene!ation '!o&%$t# a!e !e,ea#e&. J. It ta(e ti"e fo! $o"'anie# to #e$%!e a"',e !a "ate!ia,# an& $o"'onent#. Ti,, #%'',ie!# gea! %' to "eet te in&%#t!*9# nee&#. . A ,ot of "e!ge!# an& a$8%i#ition# a''en a# "an* #"a,, $o"'anie# not a,e to f%n& R=D i,, e i,,ing to e a$8%i!e&. St!ategi$ a)en%e# fo! $o"'eting in an e"e!ging "a!(et 1. T!* an& in ea!,* !a$e fo! in&%#t!* ,ea&e!#i' it !i#(-ta(ing ent!e'!ene%!#i' an& a o,& $!eati)e #t!ateg*. B!oa& o! fo$%#e& &iffe!entiation #t!ategie# it e"'a#i# on te$no,og* o! '!o&%$t #%'e!io!it* offe!# te e#t $an$e fo! ea!,* $o"'etiti)e a&)antage. 7. P%# to 'e!fe$t te te$no,og*5 i"'!o)e '!o&%$t 8%a,it* an& &e)e,o' a&&itiona, att!a$ti)e 'e!fo!"an$e feat%!e#. <. A# te$no,ogi$a, %n$e!taint* $,ea!# an& a &o"inant te$no,og* e"e!ge#5 a&o't it 8%i$(,*. >. o!" #t!ategi$ a,,ian$e# it (e* #%'',ie!# to gain a$$e## to #'e$ia,i+e& #(i,,#5 te$no,ogi$a, $a'ai,itie# an& $!iti$a, "ate!ia,# o! $o"'onent#. . A$8%i!e of fo!" a,,ian$e# it $o"'anie# tat a)e !e,ate& o! $o"',e"enta!* te$no,ogi$a, e6'e!ti#e a# a "ean# of e,'ing o%t$o"'ete !i)a,# on te a#i# of te$no,ogi$a, #%'e!io!it*. . T!* to $a't%!e an* fi!#t-"o)e! a&)antage a##o$iate& it ea!,* $o""it"ent# to '!o"i#ing te$no,ogie#. G. P%!#%e ne $%#to"e! g!o%'#5 ne %#e! a'',i$ation# an& ent!* into ne geog!a'i$a, a!ea#. J. Ma(e it ea#* an& $ea' fo! fi!#t-ti"e %*e!# to t!* te in&%#t!*9# fi!#t gene!ation '!o&%$t. Ten5 a# te '!o&%$t e$o"e# fa"i,ia! to a ,a!ge #e$tion of te "a!(et5 #ift a&)e!ti#e"ent e"'a#i# to in$!ea#ing f!e8%en$* of %#e an& %i,&ing !an& ,o*a,t*. . U#e '!i$e $%t# to att!a$t te ne6t ,a*e! of '!i$e-#en#iti)e %*e!# into te "a!(et. St!ategie# fo! $o"'eting in t%!%,ent5 ig-)e,o$it* "a!(et# ESHWARI.S---LORAA BUSINESS ACADEMY Page 17
Te $a!a$te!i#ti$# of te t%!%,ent5 ig-)e,o$it* "a!(et# i# te o$$%!!en$e of a,, te fo,,oing ting# at on$e: !a'i& te$no,ogi$a, $ange #o!t '!o&%$t ,ife $*$,e# ent!* of ne !i)a,# into te "a!(et',a$e f!e8%ent ,a%n$e# of ne $o"'etiti)e "o)e# * !i)a,# fa#t e)o,)ing $%#to"e! !e8%i!e"ent# e.g. "oi,e #e!)i$e#5 $e,, 'one#5 St!ategie# fo! $o'ing it !a'i& $ange# Te $ent!a, #t!ateg*-"a(ing $a,,enge in a t%!%,ent "a!(et en)i!on"ent i# "anaging $ange. A $o"'an* $an a##%"e of te t!ee #t!ategi$ 'o#t%!e# in &ea,ing it'o#t%!e#5 ig-)e,o$it* $ange. I&ea,,*an* a $o"'an*9# a''!oa$ #o%,& in$o!'o!ate a,, t!ee in &iffe!ent '!o'o!tion#. Te e#t-'e!fo!"ing $o"'anie# in ig-)e,o$it* "a!(et# $on#i#tent,* #ee( to ,ea& $ange it '!oa$ti)e #t!ategie#5 at te #a"e ti"e anti$i'ating an& '!e'a!ing fo! te f%t%!e an& !ea$ting 8%i$(,* to %n'!e&i$ta,e an& %n$ont!o,,a,e ne &e)e,o'"ent#. 1. It $an !ea$t to $ange Te $o"'an* $an !e#'on& to a !i)a,9# ne '!o&%$t it a ette! '!o&%$t. It $an $o%nte! %ne6'e$te& #ift in %*e! ta#te# an& %*e! &e"an& * !e&e#igning o! !e'a$(ing it# '!o&%$t. Di#a&)antage# Rea$ting i# a &efen#i)e #t!ateg*. It i# %n,i(e,* to $!eate f!e# o''o!t%nit*. 7. It $an anti$i'ate $ange5 "a(e ',an# fo! &ea,ing it te e6'e$te& $ange an& fo,,o it# ',an# a# $ange# o$$%! /fine-t%ning te" a# "a* e nee&e& It entai,# ,oo(ing aea& to ana,*+e at i# ,i(e,* to o$$%! an& ten '!e'a!ing an& 'o#itioning fo! tat f%t%!e. It entai,# #t%&*ing %*e! ea)io!5 %*e! nee an& %*e! e6'e$tation# to get in#igt into o te "a!(et i,, e)o,)e5 ten '!e'a!ing fo! te ne$e##a!* '!o&%$tion an& &i#t!i%tion $a'ai,itie# aea& of ti"e. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
A&)antage# It $an o'en ne o''o!t%nitie# an& t%# i# a ette! a* to "anage $ange tan 2%#t '%!e !ea$tion. Di#a&)antage# Anti$i'ating $ange i# f%n&a"enta,,* a &efen#i)e #t!ateg*. <. It $an ,ea& $ange It entai,# initiating te "a!(et an& $o"'etiti)e fo!$e# tat ote!# "%#t !e#'on& to. It "ean# eing te fi!#t to "a!(et it an i"'o!tant ne '!o&%$t o! #e!)i$e. It "ean# eing te$no,ogi$a, ,ea&e!. It "ean# a)ing '!o&%$t# o#e feat%!e# an& att!i%te# #a'e $%#to"e! '!efe!en$e# an& e6'e$tation# It "ean# '!oa$ti)e,* #ee(ing to #a'e te !%,e# of te ga"e. A&)antage It i# a offen#i)e #t!ateg* ai"e& at '%tting a $o"'an* in te &!i)e!9# #eat. St!ategi$ "o)e# fo! fa#t-$anging "a!(et# Te #t!ategi$ "o)e# &e'en&# on te $o"'an*9# ai,it* to I"'!o)i#e E6'e!i"ent A&a't Rein)ent !egene!ate It a# to $on#tant,* !e#a'e it# #t!ateg* an& it# a#i# fo! $o"'etiti)e a&)antage. C%tting-e&ge (no-o an& fi!#t-to-"a!(et $a'ai,itie# a!e )e!* )a,%a,e $o"'etiti)e a##et#. A $o"'an* a# to a)e 8%i$( !ea$tion ti"e an& #o%,& a)e f,e6i,e an& a&a'ta,e !e#o%!$e#. O!gani+ationa, agi,it* o%,& e a $o"'etiti)e a##et. Wen a $o"'an*9# #t!ateg* a!e not &oing e,,5 it a# to 8%i$(,* !eg!o%' '!oing5 e6'e!i"enting5 i"'!o)i#ing an& t!*ing again an& again5 %nti, it fin&# #o"eting tat i# a$$e'ta,e * $%#to"e!#.
Te fo,,oing fi)e #t!ategi$ "o)e# '!o)i&e te e#t 'a*off eteen a,te!ing offen#i)e an& &efen#i)e #t!ategie# an& fa#t-o#o,e#$ing #t!ateg*. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<1
1. In)e#t agg!e##i)e,* in R=D to #ta* on te ,ea&ing e&ge of te$no,ogi$a, (no-o If te$no,og* i# te '!i"a!* &!i)e! of $ange5 it i# i"'o!tant to t!an#,ate te$no,ogi$a, a&)an$e# into inno)ati)e ne '!o&%$t# an& !e"aining $,o#e to ate)e! a&)an$e"ent# an& feat%!e# a!e 'ionee!e& * !i)a,#. It i# &e#i!a,e to fo$%# te R=D effo!t on a fe $!iti$a, a!ea# to: - a)oi& #t!et$ing te $o"'an*9# !e#o%!$e# too tin - &ee'en te fi!"9# e6'e!ti#e - "a#te! te te$no,og* - f%,,* $a't%!e ,ea!ning $%!)e effe$t# - e$o"e a &o"inant ',a*e! in a 'a!ti$%,a! te$no,og* a!ea o! '!o&%$t $atego!*. De)e,o' 8%i$(-!e#'on#e $a'ai,it* Sin$e it i,, not e 'o##i,e toto anti$i'ate a,, te $ange# tat $an a''en5 a)ingan $a'ai,it* !ea$t 8%i$(,* e$o"e# )e!* $!%$ia,. Ti# "ean#: - o!gani+ationa, #ifting !e#o%!$e# inte!na,,* - a&a'ting e6i#ting $o"'eten$ie# an& $a'ai,itie# $!eating ne $o"'eten$ie# an& $a'ai,itie# - not fa,,ing fa! ein& !i)a,#
7. <. Re,* on #t!ategi$ 'a!tne!#i'# it o%t#i&e #%'',ie!# an& it $o"'anie# "a(ing tie-in '!o&%$t# A# &i#$%##e& ea!,ie! #'e$ia,i+ation an& fo$%# a!e &e#i!a,e5 e)en to%g te$no,og* in ig-)e,o$it* "a!(et $!eate# ne 'at# an& '!o&%$t $atego!ie# $ontin%o%#,*. It e,'# to Pa!tne! it #%'',ie!# "a(ing #tate-of-te-a!t 'a!t# an& $o"'onent# an& $o,,ao!ating $,o#e,* it &e)e,o'e!# of !e,ate& te$no,ogie# an& "a(e!# of tie-in '!o&%$t#. e.g. PC "an%fa$t%!e!# !e,* ea)i,* on #%'',ie!# of $o"'onent# an& #ofta!e fo! inno)ati)e a&)an$e#. S%'',ie!# #ta* on te $%tting e&ge of tei! #'e$ia,i+ation an& $an a$ie)e e$ono"i$# of #$a,e. Te "anage!ia, $a,,enge i# to #t!i(e a goo& a,an$e eteen %i,&ing a !i$ inte!na, !e#o%!$e a#e tat (ee'# te fi!" f!o" eing at te "e!$* of te #%'',ie!# an& a,,ie# an& at te #a"e ti"e "aintain o!gani+ationa, agi,it* * !e,*ing on !e#o%!$e# an& e6'e!ti#e of o%t#i&e!#.
>. Initiate f!e# a$tion# e)e!* fe "ont#5 not 2%#t en a $o"'etiti)e !e#'on#e i# nee&e& ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<7
A $o"'an* $an e '!oa$ti)e * "a(ing '!oa$ti)e ti"e-'a$e& "o)e# - int!o&%$ing a ne o! i"'!o)e& '!o&%$t e)e!* fe "ont# !ate! tan en te "a!(et &e$,ine# o! en !i)a,# int!o&%$e ne "o&e,#. It $an ente! a ne "a!(et e)e!* fe "ont# !ate! ait fo! o''o!t%nit* to '!e#ent it#e,f. It $an !ef!e# e6i#ting !an&# often !ate! ait fo! it# 'o'%,a!it* to ane. Te (e* to #%$$e##f%,,* %#ing ti"e 'a$ing #t!ateg* i# te !igt inte!)a,. e.g.
. Wat a!e te $ange# e $an #ee in an in&%#t!* a# it ente!# te "at%!e #tage3 1. S,oing g!ot in %*e! &e"an& gene!ate# "o!e $o"'etition fo! "a!(et #a!e i!"# ,oo(ing fo! ige! g!ot i,, t!* to ta(e $%#to"e!# aa* f!o" $o"'etito!#. P!i$e $%tting5 in$!ea#e& a&)e!ti#ing an& ote! agg!e##i)e ta$ti$# a!e #een a# "a!(et# "at%!e. 7. B%*e!# e$o"e "o!e #o'i#ti$ate&5 often &!i)ing a a!&e! a!gain on !e'eat '%!$a#e# Sin$e %*e!# a)e a,!ea&* e6'e!ien$e& te '!o&%$t an& a!e fa"i,ia! it $o"'eting !an te* e)a,%ate &iffe!ent !an&# an& $an negotiate fo! a ette! &ea, it #e,,e! ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<<
<. Co"'etition often '!o&%$e# a g!eate! e"'a#i# on $o#t an& #e!)i$e A# #e,,e!# a&& a,, feat%!e# in a '!o&%$t5 te #e,,e!# fo$%# #ift# to $o"ination of '!i$e an& #e!)i$e. >. i!"# a!e not !ea&* to a&& ne fa$i,itie# . P!o&%$t inno)ation an& ne en&-%#e a'',i$ation# a!e a!&e! to $o"e * . Inte!nationa, $o"'etition in$!ea#e# i!"# #ta!t ,oo(ing fo! fo!eign "a!(et# fo! g!ot. E.g. o&afone P!o&%$tion a$ti)it* i,, e #ifte& to $o%nt!ie# e!e '!o&%$t# $an e '!o&%$e& at e#t $o#t. E.g. A%to"oi,e $o"'anie# #ta!ting o'e!ation# in In&ia P!o&%$t #tan&a!&i+ation an& &iff%#ion of te$ni$a, (no-o ,oe!# a!!ie! an& en$o%!age# fo!eign $o"'anie# to ente! te "a!(et. Te fo$%# fo! "o#t g,oa, ',a*e!# i,, e to $a't%!e te ,a!ge geog!a'i$ "a!(et#. E.g. P= ente!ing In&ia G. In&%#t!* '!ofitai,it* fa,,# te"'o!a!i,* o! 'e!"anent,* J. Stiffening $o"'etition in&%$e# a n%"e! of "e!ge!# an& a$8%i#ition# a"ong $o"'etito!#5 ea(e! fi!"# a!e &!i)en o%t an& $on#o,i&ation i# #een. E.g. o&afone a$8%i!e& H%t$ Wat #t!ategi$ "o)e# $an e a&o'te& fo! "at%!ing in&%#t!ie#3 1. P!%ning "a!gina, '!o&%$t# an& "o&e,# e.g. HUL !e&%$ing it# n%"e! of !an&# A i&e )a!iet* of '!o&%$t# i# #%ita,e fo! g!ot #tage5 en $on#%"e! ta#te# a!e #ti,, e)o,)ing. E.g. $e,,'one an&#et "a!(et A )a!iet* of '!o&%$t# in a "at%!e in&%#t!* "ean# a&&itiona, $o#t# in te!"# of "aintaining "o!e in)ento!*5 not a,e to !ea$ e$ono"i$# of #$a,e5 an& &i#t!i%tion $o#t#. P!%ning "a!gina, '!o&%$t# e,'# te fi!"# to $%t $o#t5 $on$ent!ate on a fe ite"# it ige#t "a!gin# an& e!e fi!"# a)e $o"'etiti)e a&)antage. e.g. HUL '!%ning it# "an* !an&# to $on$ent!ate on on,* a fe 'oe! !an&# 7. Mo!e e"'a#i# on )a,%e $ain inno)ation e.g. Ma!%ti S%+%(i a#(ing it# )en&o!# to in)e#t in R=D5 en&o!# in)o,)e& in Nano5 #etting %' $o"'an* one& !etai, #o'# * $o"'anie# ,i(e Re,ian$e /i"a, a,%e $ain inno)ation $an ,ea& to: ,oe! $o#t# ette! '!o&%$t an& #e!)i$e 8%a,it* g!eate! ai,it* to '!o&%$e $%#to"i+e& '!o&%$t# #o!te! &e#ign-to-"a!(et ti"e ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<>
Inno)ation in '!o&%$tion te$no,og* * %#ing ette! te$no,og*5 ,ao! effi$ien$*5 f,e6i,e "an%fa$t%!ing5 !e&e#ign of a##e",* ,ine# $an ,ea& to #a)ing an& $%#to"i+ation. E.g. %#ing !oot# in a%to"oi,e "an%fa$t%!ing Bette! $o,,ao!ation it #%'',ie!# an& &i#t!i%to!# $an in$!ea#e 8%a,it* of #e!)i$e. <. T!i""ing $o#t# e.g. !e&%$tion in e"',o*ee# t!o%g a%to"ation >. In$!ea#ing #a,e# to '!e#ent $%#to"e!# e.g. C!e&it $a!& $o"'anie# offe!ing "%,ti',e $a!&# to #a"e $%#to"e!# Ti# i# a "o!e ea#ie! o'tion a# $o"'a!e& to $on)e!ting $%#to"e!# ,o*a, to !i)a, $o"'anie#. Ti# "a* in$,%&e fin&ing ne a'',i$ation# fo! te '!o&%$t# an& #a,e# '!o"otion#. E.g. 0on#on "a(ing #oa'# fo! "ote!# a,#o . A$8%i!ing !i)a, fi!"# at a!gain '!i$e# e.g. A$8%i#ition of Mo&e!n B!ea&# * HUL5 a$8%i#ition of ?i##an 2a"# * HUL5 a$8%i#ition of Me!!i,, L*n$ * Ban( A"e!i$a Ri)a, fi!"# i$ e,'# a!e not &oing e,, $an e ta!get# fo! a$8%i#ition at of a!gain '!i$e#. A$8%i#ition# in: in$!ea#ing te $%#to"e! a#e * a&&ing a$8%i!e& $%#to"e!# !ea$ing e$ono"i$# of #$a,e5 if 'o##i,e %#ing ne te$no,ogie# f!o" a$8%i!e& fi!"# Te a$8%i#ition "%#t e &one $a!ef%,,* to en#%!e te o)e!a,, $o"'etiti)e #t!engt of te fi!" in$!ea#e#. . E6'an&ing inte!nationa,,* e.g. o&afone a$8%i#ition of H%t$ i!"# #o%,& ,oo( fo! "a!(et# i$ a)e att!a$ti)e g!ot 'otentia, an& $o"'etiti)e '!e##%!e# a!e ,e##. It i# "o!e #%ita,e en te fi!"9# #(i,,#5 !e'%tation an& '!o&%$t# $an e !ea&i,* t!an#fe!a,e to fo!eign "a!(et#. G. B%i,&ing ne o! "o!e f,e6i,e $a'ai,itie# e.g. To*ota %i,&ing "%,ti',e "o&e, of $a!# f!o" a #ing,e ',atfo!" i!"# nee& to #t!engten tei! $o"'etiti)e $a'ai,itie# "a(ing te" a!&e! to i"itate. Ne $o"'eten$ie# an& $a'ai,itie# $an e a&&e&. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
E6i#ting $o"'eten$ie# $an e "a&e "o!e a&a'ta,e to $anging $%#to"e! !e8%i!e"ent#. E.g. ITC %#ing it# e6'e!ti#e in !%nning fi)e #ta! ote,# to $%#to"i+e foo& '!o&%$t# ,i(e atta Wat $an e te #t!ategi$ 'itfa,,# in an "at%!ing in&%#t!*3 1. A $o"'an* #o%,& not $oo#e a "i&&,e 'at eteen ,o $o#t5 &iffe!entiation an& fo$%#ing. 7. S,o to "o%nting a &efen#e again#t #tiffening $o"'etiti)e '!e##%!e#. E.g. HTM at$e# again#t Titan <. Con$ent!ating "o!e on #o!t-te!" '!ofitai,it* !ate! tan %i,&ing ,ong-te!" $o"'etiti)e 'o#ition. E.g. Uni,e)e! ,o#ing "a!(et #a!e to ,o$a, !an&# ,i(e Baoo, in toot'a#te >. Waiting fo! too ,ong to !e#'on& to '!i$e $%tting * !i)a,#. E.g. A"a##a&o! not !e#'on&ing to int!o&%$tion of #"a,,e! $a!# . O)e! e6'an&ing in te fa$e of #,oing g!ot. . O)e! #'en&ing on a&)e!ti#ing #a,e#to '!o"otion effo!t# in a ,o#ing to $o"at te g!ot #,o&on. G.an& ai,ing '%!#%e $o#t !e&%$tion at teeffo!t ea!,ie#t an& agg!e##i)e,*. St!ategie# fo! fi!"# in #tagnant o! &e$,ining in&%#t!ie# Ca!a$te!i#ti$#: De"an& i# g!oing #,oe! tan e$ono"*-i&e a)e!age. Ha!)e#ting te %#ine## to otain $a# f,o e.g. #e,,ing of i,,ette to P=5 #e,,ing o%t P!e'a!ing fo! $,o#e&on i# a #t!ateg* fo! %n$o""itte& fi!"#. E.g. go)e!n"ent #e,,ing Mo&e!n B!ea&# to HUL C,o#ing o'e!ation# i# a,a*# te ,a#t !e#o!t. Te 'e!fo!"an$e ta!get# #o%,& e $on#i#tent it a)ai,a,e "a!(et o''o!t%nitie#. E.g. ?a&i ga!"ent# Ca# f,o an& !et%!n-on-in)e#t"ent $!ite!ia a!e "o!e a''!o'!iate tan g!ot-o!iente& 'e!fo!"an$e "ea#%!e#. A$8%i#ition o! e6it of ea(e! fi!"# $!eate# o''o!t%nitie# fo! te !e"aining $o"'anie# to $a't%!e g!eate! "a!(et #a!e. St!ategie# tat $an e fo,,oe& 1. P%!#%e a fo$%#e& #t!ateg* ai"e& at te fa#te#t g!oing #eg"ent itin te in&%#t!* o$%#ing on te #eg"ent itin te in&%#t!* i$ i# g!oing i,, e,' $o"'anie# to e#$a'e #tagnating #a,e# an& '!ofit# an& e)en gain $o"'etiti)e a&)antage. E.g. Po,*e#te! ?a&i ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
7. St!e## &iffe!entiation a#e& on 8%a,it* i"'!o)e"ent an& '!o&%$t inno)ation. Inno)ation $an $!eate i"'o!tant ne g!ot #eg"ent#. Diffe!entiating a#e& on inno)ation e,'# in eing &iffe!ent an& "a(ing it &iffi$%,t fo! !i)a,# to i"itate. <. St!i)e to &!i)e $o#t# &on an& e$o"e te in&%#t!*9# ,o-$o#t ,ea&e! Potentia, $o#t-#a)ing a$tion# in$,%&e: $%tting "a!gina,,* enefi$ia, a$ti)itie# o%t of te )a,%e $ain o%t#o%!$ing f%n$tion# an& a$ti)itie# tat $an e 'e!fo!"e& "o!e $ea',* * o%t#i&e!# !e&e#igning inte!na, %#ine## '!o$e##e# to e6',oit $o#t$%tting $on#o,i&ating %n&e!%ti,i+e& '!o&%$tion fa$i,itie# a&&ing "o!e &i#t!i%tion $anne,# to en#%!e te %nit )o,%"e nee&e& fo! ,o-$o#t '!o&%$tion $,o#ing ,o-)o,%"e5 ig-$o#t !etai, o%t,et# '!%ning "a!gina, '!o&%$t# f!o" te fi!"9# offe!ing# Te "o#t $o""on #t!ategi$ "i#ta(e# 1. etting t!a''e& in a '!ofit,e## a! of att!ition 7. Di)e!ting too "%$ $a# o%t of te %#ine## too 8%i$(,* <. Being o)e! o'ti"i#ti$ ao%t te in&%#t!*9# f%t%!e an& #'en&ing too "%$ on i"'!o)e"ent# in anti$i'ation tat ting# i,, i"'!o)e. St!ategie# fo! $o"'eting in f!ag"ente& in&%#t!ie# Ca!a$te!i#ti$#: H%n&!e&# of #"a,, an& "e&i%" #i+e& $o"'anie#5 "an* '!i)ate,* e,& an& none it a #%#tantia, #a!e of tota, in&%#t!* #a,e. A#en$e of "a!(et ,ea&e!# it ,a!ge "a!(et #a!e o! i&e#'!ea& %*e! !e$ognition. e.g. !e#ta%!ant#5 $o"'%te! a!&a!e a##e",e!#5 o#'ita,# Rea#on# fo! #%'',*-#i&e f!ag"entation 1. Ma!(et &e"an& i# #o e6ten#i)e an& #o &i)e!#e tat )e!* ,a!ge n%"e! of fi!"# $an ea#i,* $oe6i#t t!*ing to a$$o""o&ate te !ange an& )a!iet* of %*e! '!efe!en$e# an& !e8%i!e"ent# an& to $o)e! a,, te nee&e& geog!a'i$ ,o$ation#. E.g. ote,# an& eate!ie# $ate!ing to )a!io%# ta#te# an& %&get# of $%#to"e!# 7. Lo ent!* a!!ie!# a,,o #"a,, fi!"# to ente! 8%i$(,* an& $ea',*. E.g. #ta!ting a !ea, e#tate %#ine## 2%#t nee&# a $onta$t n%"e! an& a #"a,, offi$e ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
<. An a#en$e of #$a,e e$ono"i$# 'e!"it# #"a,, $o"'anie# to $o"'ete on an e8%a, footing it ,a!ge! fi!"#. >. B%*e!# !e8%i!e !e,ati)e,* #"a,, 8%antitie# of $%#to"i+e& '!o&%$t#. . Te "a!(et fo! te in&%#t!*9# '!o&%$t o! #e!)i$e i# e$o"ing "o!e g,oa,5 '%tting $o"'anie# in "o!e an& "o!e $o%nt!ie# in te #a"e $o"'etiti)e "a!(et a!ena. e.g. inte!e#t #on * a%to"oi,e "an%fa$t%!e!# te o!,& o)e! to ,a%n$ of Nano . Te te$no,ogie# e"o&ie& in te in&%#t!*9# )a,%e $ain a!e e6',o&ing into #o "an* ne a!ea# an& a,ong #o "an* &iffe!ent 'at# tat #'e$ia,i+ation i# e##entia, 2%#t to (ee' a!ea#t in an* one a!ea of e6'e!ti#e. E.g !e#ta%!ant# #'e$ia,i+ing in a 'a!ti$%,a! )a!iet* G. Te in&%#t!* i# *o%ng an& $!o&e& it a#'i!ing $onten&e!#5 it no fi!" a)ing *et &e)e,o'e& te !e#o%!$e a#e5 $a'ai,itie# !e$ognition to $o""an& a #ignifi$ant "a!(et$o"'etiti)e #a!e. St!ategi$ o'tion#an& fo!"a!(et a f!ag"ente& in&%#t!* 1. Con#t!%$ting an& o'e!ating 4fo!"%,a4 fa$i,itie# Ti# a''!oa$ i# f!e8%ent,* e"',o*e& in !e#ta%!ant an& !etai,ing %#ine##e# o'e!ating at "%,ti',e ,o$ation#. It in)o,)e# $on#t!%$ting #tan&a!&i+e& o%t,et# in fa)o!a,e ,o$ation# at "ini"%" $o#t an& ten o'e!ating te" $o#t effe$ti)e,*. e.g. Pi++a H%t5 Cafe Coffee Da*5 A&iga9#5 MTR 7. Be$o"ing a ,o-$o#t o'e!ato! Co"'anie# $an #t!e## no-f!i,,# o'e!ation# feat%!ing ,o o)e!ea&5 ig'!o&%$ti)it*5 ,o-$o#t ,ao!5 ,ean $a'ita, %&get#. E.g. ,o $o#t eate!ie# ,i(e Da!#ini# S%$$e##f%, ,o-$o#t '!o&%$e!# $an %#e '!i$e-&i#$o%nting an& #ti,, ea!n '!ofit ao)e in&%#t!* a)e!age. <. S'e$ia,i+ing * '!o&%$t t*'e o$%# on one '!o&%$t o! #e!)i$e. e.g. Do#a Co!ne!#5 a%to-!e'ai! #o'# #'e$ia,i+ing in on,* one !an& of )ei$,e# >. S'e$ia,i+ing * $%#to"e! t*'e Cate! to $%#to"e!# inte!e#te& in ,o $o#t o! %ni8%e '!o&%$t att!i%te# o! $%#to"i+e& feat%!e#. e.g. On,* o%t&oo! $ate!e!# . o$%#ing on ,i"ite& geog!a'i$ a!ea Con$ent!ating $o"'an* effo!t# on a ,i"ite& geog!a'i$a, a!ea $an '!o&%$e g!eate! o'e!ating effi$ien$*5 #'ee& of &e,i)e!* an& $%#to"e! #e!)i$e an& '!o"ote #t!ong !an& e.g. S%'e!"a!(et# ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
St!ategie# a#e& on $o"'an* 'o#ition in te in&%#t!* St!ategie# fo! #%#taining !a'i& $o"'an* g!ot e.g. Ai!te, Co"'anie# tat a!e fo$%#e& on g!oing tei! !e)en%e# an& ea!ning# at a !a'i& o! ao)ea)e!age 'a$e *ea! afte! *ea! gene!a,,* a)e to &!aft a 'o!tfo,io of #t!ategi$ initiati)e# $o)e!ing t!ee o!i+on#. Ho!i+on 1 4So!t-2%"'4 #t!ategi$ initiati)e# to fo!tif* an& e6ten& te $o"'an*9# 'o#ition in e6i#ting %#ine##e# e.g. '!i$e $%tting * Ai!te, So!t 2%"' initiati)e# t*'i$a,,* in$,%&e a&&ing ne ite"# to te $o"'an*9# '!e#ent '!o&%$t ,ine5 e6'an&ing into ne geog!a'i$ a!ea# e!e te $o"'an* &oe# not *et a)e a "a!(et '!e#en$e5 an& ,a%n$ing offen#i)e# to ta(e "a!(et #a!e aa* f!o" !i)a,#. E.g. '!e'ai& $a!&# ,o '!i$e #t!ategie# ofe6i#t# Ai!te,in te Te $o"'an*9# o2e$ti)e '!e#ent i# to $a'ita,i+e f%,,* onan& ate)e! g!ot 'otentia, %#ine## a!ena#. Ho!i+on 7 4Me&i%"-2%"'4 #t!ategi$ initiati)e# to ,e)e!age e6i#ting !e#o%!$e# an& $a'ai,itie# * ente!ing ne %#ine##e# it '!o"i#ing g!ot 'otentia, e.g. ente!ing into < #eg"ent an& te DTH #eg"ent * Ai!te, Te#e initiati)e# e$o"e "o!e i"'o!tant a# te '!e#ent %#ine##e# ente! "at%!it* #tage it te g!ot !ate #,oing &on. Ho!i+on < 4Long-2%"'4 #t!ategi$ initiati)e# to ',ant te #ee&# fo! )ent%!e# in %#ine##e# tat &o not *et e6i#t e.g. fai,e& atte"'t * Ai!te, to a$8%i!e MTN5 fo!a* into S!i Lan(a * Ai!te, It in$,%&e# '%tting f%n&# in R=D '!o2e$t#5 in)e#ting in '!o"i#ing #ta!t-%' $o"'anie# $!eating in&%#t!ie# of te f%t%!e5 ,oo(ing fo! ne '!o&%$t#. e.g. Inte, in)e#t# "%,tii,,ion &o,,a! in #ta!t-%' $o"'anie#. Se,, en$o%!age# it# e"',o*ee# to $o"e %' it ne i&ea# Tata;# ente!ing &efen#e '!o&%$tion Te ten&en$* of "an* fi!"# i# to fo$%# on Ho!i+on 1 #t!ategie# an& &e)ote on,* #'o!a&i$ an& %ne)en attention to Ho!i+on 7 an& < #t!ategie#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
A #t%&* * M$?in#e* = Co"'an* #o# tat a !e,ati)e,* a,an$e& 'o!tfo,io of #t!ategi$ initiati)e# $o)e!ing a,, te t!ee o!i+on# a!e $!iti$a, to "aintain ao)e te in&%#t!* g!ot. E.g. initiati)e# * E to ,oo( fo! 'otentia, %#ine## in 77 A 'o!tfo,io of initiati)e# a,#o '!o)i&e# #o"e '!ote$tion again#t %ne6'e$te& a&)e!#it* in '!e#ent o! ne,* ente!e& %#ine##e#. Te !i#(# of '%!#%ing #t!ateg* 1. e$a%#e A $o"'an* '%!#%e a,, te o''o!t%nitie# tat a!e"%,ti',e a)ai,a,e in te o!i+on# en)i!on"ent of$annot !e#o%!$e $on#t!aint#. 7. Me&i%"-2%"' an& ,ong-2%"' initiati)e# $an $a%#e a $o"'an* to #t!a* fa! f!o" it# $o!e $o"'eten$e an& "a* en& %' t!*ing to $o"'ete in %#ine##e# fo! i$ it "a* e i,,#%ite&. E.g. L=T ente!ing $e"ent "an%fa$t%!ing %#ine## <. It i# &iffi$%,t to a$ie)e $o"'etiti)e a&)antage in "e&i%" an& ,ong 2%"' %#ine##e#5 if to#e %#ine##e# &o not "e# it te '!e#ent %#ine##e# an& !e#o%!$e #t!engt#. E.g. L=T ente!ing $e"ent "an%fa$t%!ing %#ine## >. Te 'a*off9# of ,ong-2%"' initiati)e# often '!o)e e,%#i)e not a,, te initiati)e# a!e #%$$e##f%,5 on,* a fe "a* e)o,)e into #ignifi$ant $ont!i%to!# to te $o"'an*9# !e)en%e an& '!ofit g!ot. . Te ,o##e# f!o" %n#%$$e##f%, ,ong-2%"' initiati)e# "a* e #%#tantia, to e!o&e gain# f!o" #%$$e##f%, initiati)e#. St!ategie# fo! in&%#t!* ,ea&e!# Ca!a$te!i#ti$# Te $o"'etiti)e 'o#ition# of in&%#t!* ,ea&e!# !ange f!o" 4#t!onge! tan a)e!age4 to 4'oe!f%,K e.g. oog,e an& Mi$!o#oft a!e 'oe!f%,5 Ai!te, i# #t!onge! tan a)e!age Lea&e!# a)e '!o)en #t!ategie#. E.g. a$8%i!ing an& t%!ning $a'ai,itie# of A!$e!o, Mitta, Te "ain $on$e!n fo! a ,ea&e! !e)o,)e# a!o%n& o to &efen& an& #t!engten it# ,ea&e!#i' 'o#ition. Te '%!#%it of in&%#t!* ,ea&e!#i' an& ,a!ge "a!(et #a!e i# '!i"a!i,* i"'o!tant e$a%#e of te $o"'etiti)e a&)antage an& '!ofitai,it* tat a$$!%e to eing te in&%#t!*9# igge#t $o"'an*. E.g . it e,'# in !ea$ing e$ono"i$# of #$a,e5 eing a te$no,og* ,ea&e! So"e of te #t!ategie# tat $an e fo,,oe& a!e: 1. Sta*-on-te-offen#i)e #t!ateg* Te $ent!a, goa, of ti# #t!ateg* i# to e a fi!#t-"o)e! an& a '!oa$ti)e "a!(et ,ea&e!. E.g. Mi$!o#oft5 oog,e ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
It !e#t# on te '!in$i',e tat #ta*ing a #te' aea& an& fo!$ing !i)a,# to fo,,o i# te #%!e#t 'at to in&%#t!* '!o"inen$e an& 'otentia, "a!(et &o"inan$e. E.g. Inte, Being te in&%#t!* #tan&a!& #ette! entai,# !e,ent,e## '%!#%it of $ontin%o%# i"'!o)e"ent# an& inno)ation. E.g. oog,e Inno)ation in)o,)e# te$ni$a, i"'!o)e"ent#5 ne an& ette! '!o&%$t#5 "o!e att!a$ti)e feat%!e#5 8%a,it* enan$e"ent#5 i"'!o)e& $%#to"e! #e!)i$e an& $%tting $o#t#. Initiati)e# to e6'an& o)e!a,, in&%#t!* &e"an& - #'%!!ing $!eation of ne fa"i,ie# of '!o&%$t#5 "a(ing '!o&%$t# "o!e $%#to"e! f!ien&,*5 &i#$o)e!ing ne %#e fo! te '!o&%$t an& att!a$ting ne %#e!#. E.g. No(ia in "oi,e an&#et 7. o!tif*-an&-&efen& #t!ateg* Te e##en$e of ti# #t!ateg* i# to "a(e it a!&e! fo! $a,,enge!# to gain g!o%n& an& fo! ne fi!"# E.g. Mi$!o#oft in"a!(et o'e!ating #*#te" Te goa,# of a #t!ong &efen#e a!e: to To ente!. o,& on to te '!e#ent #a!e St!engten te $%!!ent "a!(et 'o#ition P!ote$t te $o"'etiti)e a&)antage So"e of te &efen#e a$tion# $an e: Atte"'ting to !ai#e te $o"'etition fo! $a,,enge!# an& ne ent!ant# t!o%g in$!ea#e& #'en&ing fo! a&)e!ti#ing5 ige! ,e)e,# of $%#to"e! #e!)i$e an& igge! R=D #'en&ing. Int!o&%$ing "o!e '!o&%$t )e!#ion# o! !an&# to "at$ te '!o&%$t att!i%te# tat $a,,enge!# !an&# a)e o! to fi,, )a$ant ni$e#. E.g. No(ia A&&ing 'e!#ona,i+e& #e!)i$e# an& ote! e6t!a# tat oo#t $%#to"e! ,o*a,t* an& "a(e it a!&e! o! "o!e $o#t,* fo! $%#to"e!# to #it$ to !i)a, '!o&%$t#. E.g. ea!ning 'oint# #*#te" * $!e&it $a!&# ?ee'ing '!i$e# !ea#ona,e an& 8%a,it* att!a$ti)e B%i,&ing ne $a'a$it* aea& of "a!(et &e"an& to &i#$o%!age #"a,,e! $o"'etito!# f!o" a&&ing $a'a$it* of tei! on. E.g. No(ia #ta!ting "an%fa$t%!ing %nit in In&ia In)e#ting eno%g to !e"ain $o#t-$o"'etiti)e an& te$no,ogi$a,,* '!og!e##i)e. Patenting te fea#i,e a,te!nati)e te$no,ogie# Signing e6$,%#i)e $ont!a$t# it te e#t #%'',ie!# an& &ea,e! &i#t!i%to!#.
Wen i# ti# #%ita,e3 ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>1
Ti# #t!ateg* i# e#t #%ite& fo! $o"'anie# tat a)e a,!ea&* a$ie)e& in&%#t!* &o"inan$e an& &on9t i# to !i#( antit!%#t a$tion. E.g. Mi$!o#oft5 oog,e It i# a,#o #%ita,e fo! $on&ition# e!e a fi!" i#e# to %#e it# 'o#ition fo! '!ofit# an& $a# f,o e$a%#e te in&%#t!*9# '!o#'e$t# fo! g!ot a!e ,o an& f%!te! gain# in "a!(et #a!e &o not a''ea! '!ofita,e eno%g to go afte!. <. M%#$,e-f,e6ing #t!ateg* He!eo! te &o"inant ',a*e!offen#i)e# ',a*# to%g en #"a,,e! !i)a,# $a,,enge it '!i$e$%t# "o%nt ne "a!(et tat &i!e$t,* t!eaten it# 'o#ition. E.g. Mi$!o#oft;# !ea$tion to Net#$a'e !o#e! S'e$ifi$ !e#'on#e $an in$,%&e: @%i$(,* "at$ing an& e6$ee&ing $a,,enge!# '!i$e $%t#. E.g. 1 'ai#e 'e! #e$on& offe!# * Ai!$e, in !e#'on#e to Tata Do$o"o offe! U#ing ,a!ge! '!o"otiona, $a"'aign an& offe!ing ette! &ea,# to tei! "a2o! $%#to"e!#. E.g. %n&,ing of f!ee !o#e! * Mi$!o#oft Te ,ea&e!# "a* a,#o &i##%a&e &i#t!i%to!# f!o" $a!!*ing !i)a,# '!o&%$t#. P!o)i&e #a,e#'e!#on# it &o$%"ente& info!"ation ao%t te ea(ne##e# of $o"'eting fi!"# T!* to fi,, an* )a$ant 'o#ition in tei! on fi!"# * "a(ing att!a$ti)e offe!# to te ette! e6e$%ti)e# of !i)a, fi!"#. U#e )a!io%# a!"-ti#ting ta$ti$# to '%t '!e##%!e on '!e#ent $%#to"e!# not to %#e te '!o&%$t# of !i)a,#. ,i(e: ag!eeing fo! e6$,%#i)e a!!ange"ent# in !et%!n fo! ette! '!i$e# e.g. t*'e# #o,& to a%to"oi,e "an%fa$t%!e!# $a!ging te" ige! '!i$e if te* %#e $o"'etito!9# '!o&%$t# e.g. $a!ge!# ,e)ie& * BSNL fo! $a,,# o!iginating f!o" a $o"'etito! to tei! $%#to"e! ,an&,ine gi)e #'e$ia, &i#$o%nt# to $e!tain $%#to"e!# e.g. $o!'o!ate &i#$o%nt# offe!e& * fi)e #ta! ote,# '!efe!!e& t!eat"ent if te* &o not %#e an* '!o&%$t# of !i)a,# e.g. no $e$(in# fo! f!e8%ent f,*e!# offe!e& * "a2o! ai!,ine# Ri#(# R%nning afo%, of te antit!%#t ,a#. A,ienating $%#to"e!# it %,,*ing ta$ti$# A!o%#ing a&)e!#e '%,i$ o'inion. Page 1>7 ESHWARI.S---LORAA BUSINESS ACADEMY
St!ategie# fo! !%nne!-%' fi!"# Ca!a$te!i#ti$# R%nne!-%' o! 4#e$on&-tie!4 fi!"# a)e #"a,,e! "a!(et #a!e tan "a!(et ,ea&e!#. E.g. Mi$!o#oft an& Yaoo in on,ine #ea!$ So"e of te !%nne!-%' fi!"# $an e "a!(et $a,,enge!# * e"',o*ing offen#i)e #t!ategie# to gain "a!(et #a!e an& %i,& a #t!onge! "a!(et 'o#ition. E.g. Mi$!o#oft in on,ine #ea!$ Ote! !%nne!-%' $o"'etito!# a!e fo$%#e!#5 #ee(ing to i"'!o)e tei! ,ot * $on$ent!ating tei! attention on #e!)ing a ,i"ite& 'o!tion of tei! "a!(et. E.g. Ca)in$a!e in ai! $a!e #eg"ent So"e !%nne!-%' fi!"# "a* e te!"e& 'e!ennia, !%nne!-%'5 e$a%#e te* ,a$( te !e#o%!$e# an& $o"'etiti)e #t!engt# to &o "o!e tan $ontin%e in t!ai,ing 'o#ition#. E.g. Ni!"a in &ete!gent#
O#ta$,e# fo! fi!"# it #"a,, "a!(et #a!e# 1. Le## a$$e## to e$ono"i$# of #$a,e in "an%fa$t%!ing5 &i#t!i%ting5 o! "a!(eting an& #a,e# '!o"otion 7. Diffi$%,t* in gaining $%#to"e! !e$ognition <. Wea(e! ai,it* to %#e "a## "e&ia a&)e!ti#ing >. Diffi$%,t* in f%n&ing $a'ita, !e8%i!e"ent# St!ategi$ a''!oa$e# fo! !%nne!-%' $o"'anie# 1. Offen#i)e #t!ategie# to %i,& "a!(et #a!e e.g. Mi$!o#oft in on,ine #ea!$ A $a!&ina, !%,e in offen#i)e #t!ateg* i# to a)oi& atta$(ing a ,ea&e! ea&on it an i"itati)e #t!ateg* !ega!&,e## of te !e#o%!$e# an& #ta*ing 'oe! of te !%nne!-%' fi!". So"e of te offen#i)e# $an e: Pionee!ing a ,ea'f!og te$no,ogi$a, !ea(t!o%g e.g. ? '!o$e##o! f!o" AMD etting ne o! ette! '!o&%$t# into te "a!(et $on#i#tent,* aea& of !i)a,# an& %i,&ing a !e'%tation fo! '!o&%$t ,ea&e!#i' e.g. Tata Moto!# in 'a##enge! $a! #eg"ent Being "o!e agi,e an& inno)ati)e in a&a'ting to e)o,)ing "a!(et $on&ition# an& $%#to"e! e6'e$tation#. E.g. Ca)in$a!e a&o'te& #a$et# efo!e HUL o!ging att!a$ti)e #t!ategi$ a,,ian$e# it (e* &i#t!i%to!# an& &ea,e!#. E.g. A$8%i!ing of g!a'i$# $i' &e#ign $o"'an* * AMD ESHWARI.S---LORAA BUSINESS ACADEMY Page 1><
in&ing inno)ati)e a*# to &!a"ati$a,,* &!i)e &on $o#t# att!a$tion of ,oe! '!i$e# to in $%#to"e!#. E.g. ITC in C!afting an att!a$ti)e &iffe!entiation #t!ateg* a#e& on te$no,ogi$a, #%'e!io!it*5 o%t#tan&ing $%#to"e! #e!)i$e5 o! on,ine #o''ing. E.g. H*%n&ai in $a!#
an& ten %#ing te foo&# in &i#t!i%tion '!e"i%" 8%a,it*5 !a'i& '!o&%$t inno)ation
7. !ot )ia a$8%i#ition #t!ateg* Wi'!o $on#%"e! a$8%i!ingai!,ine# Can&!i(a !an& 7. a$ant ni$e #t!ateg* e.g.e.g. #%$$e##f%, #t!ateg*$a!e of Pa!a"o%nt o Ti# #t!ateg* fo$%#e# on #o"e ni$e# in $%#to"e! !e8%i!e"ent# i$ a)e een o)e!,oo(e& * te "a!(et ,ea&e!. o Te ni$e #o%,& e: F of #%ffi$ient #i+e F P!ofita,e F a# g!ot 'otentia, F e,, #%ite& to te fi!"# ai,it* F i# a!& fo! te ,ea&ing fi!" to #e!)e <. S'e$ia,i#t #t!ateg* e.g. SAP o A #'e$ia,i#t fi!" i,, fo$%# on one te$no,og*5 '!o&%$t o! '!o&%$t fa"i,*5 en& %#e o! "a!(et #a!e. o Te ai" i# to %#e $o"'an*9# !e#o%!$e #t!engt# an& $a'ai,itie# on %i,&ing $o"'etiti)e e&ge t!o%g ,ea&e!#i' in a #'e$ifi$ a!ea. . S%'e!io! '!o&%$t #t!ateg* e.g. Me!$e&e# Ben+ in 'a##enge! $a! He!e te fi!" %#e# &iffe!entiation a#e& fo$%#e& #t!ateg* it e"'a#i# on #%'e!io! '!o&%$t 8%a,it* o! %ni8%e att!i%te#. Sa,e# an& "a!(eting effo!t# a!e ai"e& &i!e$t,* at 8%a,it* $on#$io%# an& 'e!fo!"an$e o!iente& %*e!#. . Di#tin$ti)e i"age #t!ateg* So"e of te a*# to $!eate a &i#tin$t i"age a!e: $!eating a !e'%tation fo! $a!ging te ,oe#t '!i$e# e.g. Big Ba+aa! '!o)i&ing e#t 8%a,it* at goo& '!i$e e.g. To*ota it Le6%# going a,, o%t to gi)e #%'e!io! $%#to"e! #e!)i$e e.g. Oe!oi Hote,# &e#igning %ni8%e '!o&%$t att!i%te# e.g. A'',e eing a ,ea&e! in ne '!o&%$t int!o&%$tion e.g. A'',e G. Content fo,,oe! #t!ateg* e.g. HMT in at$e# Page 1>> ESHWARI.S---LORAA BUSINESS ACADEMY
Te fi!" &e,ie!ate,* !ef!ain f!o" initiating t!en&#etting #t!ategi$ "o)e# an& agg!e##i)e atte"'t# to ta(e $%#to"e!# f!o" ,ea&e!#. Te* &o not ant to $o"'ete it te ,ea&e! &i!e$t,*. Te* '!efe! &efen#e to offen#e. Te* o%,& !ate! !ea$t tan e '!oa$ti)e. E nine $e,, ',anning g!i& ene!a, E,e$t!i$ it te a##i#tan$e of M$?in#e* an& Co"'an* &e)e,o'e& ti# "at!i6. Ti# "a!ti6 in$,%&e# $e,,# a#e& on ,ong-te!" in&%#t!* att!a$ti)ene##/on Y-a6i# an& %#ine## #t!engt$o"'etiti)e 'o#ition /on -a6i#. Te in&%#t!* att!a$ti)ene## in$,%&e# Ma!(et #i+e5 Ma!(et g!ot !ate5 Ma!(et '!ofitai,it*5 P!i$ing t!en inten#it* O)e!a,, !i#( of an& !et%!n# in te in&%#t!*5 Ent!* Co"'etiti)e a!!ie!#5 O''o!t%nit* to!i)a,!*5 &iffe!entiate '!o&%$t# #e!)i$e#5 De"an& )a!iai,it*5 Seg"entation5 Di#t!i%tion #t!%$t%!e5 Te$no,og* &e)e,o'"ent B%#ine## #t!engt an& $o"'etiti)e 'o#ition in$,%&e# St!engt of a##et# an& $o"'eten$ie#5 Re,ati)e !an& #t!engt /"a!(eting5 Ma!(et #a!e5 Ma!(et #a!e g!ot5 C%#to"e! ,o*a,t*5 Re,ati)e $o#t 'o#ition /$o#t #t!%$t%!e $o"'a!e& it $o"'etito!#5 Re,ati)e '!ofit "a!gin# /$o"'a!e& to $o"'etito!#5 Di#t!i%tion #t!engt an& '!o&%$tion $a'a$it*5 Re$o!& of te$no,ogi$a, o! ote! inno)ation5 @%a,it*5 A$$e## to finan$ia, an& ote! in)e#t"ent !e#o%!$e#5 Manage"ent #t!engt
P,otting te Info!"ation: 1. Se,e$t fa$to!# to !ate te in&%#t!* fo! ea$ '!o&%$t ,ine o! %#ine## %nit. Dete!"ine te )a,%e of ea$ fa$to! on a #$a,e of 1 /)e!* %natt!a$ti)e to /)e!* att!a$ti)e5 an& "%,ti',*ing tat )a,%e * a eigting fa$to!. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
In&%#t!* att!a$ti)ene## . ^ fa$to! )a,%e1 6 fa$to! eigting1 fa$to! )a,%e7 6 fa$to! eigting7 fa$to! )a,%eN 6 fa$to! eigtingN 7. Se,e$t te (e* fa$to!# nee&e& fo! #%$$e## in ea$ of te '!o&%$t ,ine o! %#ine## %nit. Dete!"ine te )a,%e of ea$ (e* fa$to! in te $!ite!ia on a #$a,e of 1 /)e!* %natt!a$ti)e to /)e!* att!a$ti)e5 an& "%,ti',*ing tat )a,%e * a eigting fa$to!. B%#ine## #t!engt#$o"'etiti)e 'o#ition ^ (e* fa$to! )a,%e1 6 fa$to! fa$to! fa$to!o! eigting7 (e*$%!!ent fa$to! 'o#ition )a,%eN 6 fa$to! eigting1 eigtingN <.(e* P,ot ea$ )a,%e7 '!o&%$t6,ine9# %#ine## . %nit9# on a "at!i6. >. Te in&i)i&%a, '!o&%$t ,ine# o! %#ine## %nit# i# i&entifie& * a ,ette! an& ',otte& a# $i!$,e# on te E B%#ine## S$!een. . Te a!ea of ea$ $i!$,e i# in '!o'o!tion to te #i+e of te in&%#t!* in te!"# of #a,e#. Te 'ie #,i$e itin te $i!$,e# &e'i$t te "a!(et #a!e of ea$ '!o&%$t ,ine o! %#ine## %nit. . P,ot te fi!"9# f%t%!e 'o!tfo,io a##%"ing tat '!e#ent $o!'o!ate an& %#ine## #t!ategie# !e"ain %n$ange&. Ti# i# #on a# an a!!o i$ #ta!t# f!o" te $i!$,e !e'!e#enting te $%!!ent 'o#ition an& te ti' of te a!!o i,, e te tentati)e $ente! of te f%t%!e $i!$,e. St!ategi$ I"',i$ation# Re#o%!$e a,,o$ation !e$o""en&ation# $an e "a&e to g!o5 o,&5 o! a!)e#t a #t!ategi$ %#ine## %nit a#e& on it# 'o#ition on te "at!i6 a# fo,,o#: 1. !o #t!ong %#ine## %nit# in: att!a$ti)e in&%#t!ie# a)e!age %#ine## %nit# in att!a$ti)e in&%#t!ie# a)e!age %#ine## %nit# in: in&%#t!ie# ea( %#ine## in: ESHWARI.S---LORAA BUSINESS
#t!ong %#ine## %nit# in a)e!age in&%#t!ie#. 7. Ho,& a)e!age in&%#t!ie# #t!ong %#ine##e# in ea( in att!a$ti)e in&%#tie#. <. Ha!)e#t ea( %#ine## %nit# ACADEMY Page 1>
%natt!a$ti)e in&%#t!ie# a)e!age %#ine## %nit# in %natt!a$ti)e in&%#t!ie# ea( %#ine## %nit# in a)e!age in&%#t!ie#. Te!e a!e #t!ateg* )a!iation# itin te#e t!ee g!o%'#. o! e6a"',e5 itin te a!)e#t g!o%' te fi!" o%,& e in$,ine& to 8%i$(,* &i)e#t it#e,f of a ea( %#ine## in an %natt!a$ti)e in&%#t!*5 e!ea# it "igt 'e!fo!" a 'a#e& a!)e#t of an a)e!age %#ine## %nit in te #a"e in&%#t!*. E %#ine## #$!een !e'!e#ent# an i"'!o)e"ent o)e! te "o!e #i"',e BC g!ot-#a!e "at!i6.
Li"itation# It '!e#ent# #o"eat ,i"ite& )ie * $on#i&e!ing inte!a$tion# a"ong te %#ine## %nit# aIt neg,e$t# to a&&!e## tenot $o!e $o"'eten$ie# ,ea&ing to )a,%e $!eation Rate! tan #e!)ing a# te '!i"a!* too, fo! !e#o%!$e a,,o$ation5 'o!tfo,io "at!i$e# a!e ette! #%ite& to &i#',a*ing a 8%i$( #*no'#i# of te #t!ategi$ %#ine## %nit#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>G
F In)e#t E6'an&: In ti# _one te!e i# o''o!t%nit* to !o t!o%g f%!te! In)e#t"ent = E6'an#ion. Ti# +one i# $a!a$te!i+e& * ig %#ine## #t!engt = ig in&%#t!* att!a$ti)ene## i$ i# a I&ea, #it%ation fo! g!ot. Ho e)e! ti# #it%ation &oe# not !e"ain fo! a ,ong ti"e. F E6a"',e: Initia,,* IT in&%#t!* "o#t att!a$ti)e %t ,ate! on it a# fa$ing $o"'etition f!o" a,, #o!t# of ',a$e. F Se,e$tEa!n : Ti# +one '!e#ent# a "i6 #it%ation in i$ g!ot 'o##ii,it* i# ,o. Hoe)e! it# '!e#ent# a o''o!t%nitie# fo! #e,e$ti)e ea!ning. F Ha!)e#tDi)e#: In te $a#e of !e&-$e,, o!gani+ation a# to #to'. In ti# $a#e Ha!)e#ting o! Di)e#ting #%ita,e. Ha!)e#ting "ean# f!o" a %#ine## %t it&!aa,#t!ategie# i# not i""e&iate. Initia,,* fo$%# i# it&!a on $o#t-$%tting i.e In R=D an& a&)e!ti#ing5 te o2e$ti)e i# to ea!n #o!t te!" '!ofit. Ma!(et Att!a$ti)ene##: F Ann%a, "a!(et g!ot !ate F O)e!a,, "a!(et #i+e F Hi#to!i$a, '!ofit "a!gin ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>J
F F F F F C%!!ent #i+e of "a!(et Ma!(et #t!%$t%!e Ma!(et !i)a,!* De"an& )a!iai,it* ,oa, o''o!t%nitie# B%#ine## St!engt: F F F F F F F C%!!ent "a!(et #a!e B!an& i"age P!o&%$tion $a'a$it* Co!'o!ate i"age P!ofit "a!gin# !e,ati)e to $o"'etito!# R = D 'e!fo!"an$e P!o"otiona, effe$ti)ene## Te BC !ot-Sa!e Mat!i6: Te BC !ot-Sa!e Mat!i6 i# a 'o!tfo,io ',anning "o&e, &e)e,o'e& * B!%$e Hen&e!#on of te Bo#ton Con#%,ting !o%' in te ea!,* 1G9#. It i# a#e& on te o#e!)ation tat a $o"'an*9# %#ine## %nit# $an e $,a##ifie& into fo%! $atego!ie# a#e& on $o"ination# of "a!(et g!ot an& "a!(et #a!e !e,ati)e to te ,a!ge#t $o"'etito!5 en$e te na"e 4g!ot-#a!e4. Ma!(et g!ot #e!)e# a# a '!o6* fo! in&%#t!* att!a$ti)ene##5 an& !e,ati)e "a!(et #a!e #e!)e# a# a '!o6* fo! $o"'etiti)e a&)antage. Te g!ot-#a!e "at!i6 t%# "a'# te %#ine## %nit 'o#ition# itin te#e to i"'o!tant &ete!"inant# of '!ofitai,it*. BC !otSa!e Mat!i6 ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
Ti# f!a"eo!( a##%"e# tat an in$!ea#e in !e,ati)e "a!(et #a!e i,, !e#%,t in an in$!ea#e in te gene!ation of $a#. Ti# a##%"'tion often i# t!%e e$a%#e of tee6'e!ien$e $%!)e in$!ea#e& !e,ati)e "a!(et #a!e i"',ie# tat te fi!" i# "o)ing fo!a!& on te e6'e!ien$e $%!)e !e,ati)e to it# $o"'etito!#5 t%# &e)e,o'ing a $o#t a&)antage. A #e$on& a##%"'tion i# tat a g!oing "a!(et !e8%i!e# in)e#t"ent in a##et# to in$!ea#e $a'a$it* an& te!efo!e !e#%,t# in te $on#%"'tion of $a#. T%# te 'o#ition of a %#ine## on te g!ot-#a!e "at!i6 '!o)i&e# an in&i$ation of it# $a# gene!ation an& it# $a# $on#%"'tion. Hen&e!#on !ea#one& tat te $a# !e8%i!e& * !a'i&,* g!oing %#ine## %nit# $o%,& e otaine& f!o" te fi!"9# ote! %#ine## %nit# tat e!e at a "o!e "at%!e #tage an& gene!ating #ignifi$ant $a#. B* in)e#ting to e$o"e ,ea&e! in$%!)e a !a'i&,* g!oinga"a!(et5 te %#ine## %nit $o%,& te "o)e"a!(et a,ong #a!e te e6'e!ien$e an& &e)e,o' $o#t a&)antage. !o" ti# !ea#oning5 te BC !ot-Sa!e Mat!i6 a# o!n. Te fo%! $atego!ie# a!e: * * * * Dog# - Dog# a)e ,o "a!(et #a!e an& a ,o g!ot !ate an& t%# neite! gene!ate no! $on#%"e a ,a!ge a"o%nt of $a#. Hoe)e!5 &og# a!e $a# t!a'# e$a%#e of te "one* tie& %' in a %#ine## tat a# ,itt,e 'otentia,. S%$ %#ine##e# a!e $an&i&ate# fo! &i)e#tit%!e. @%e#tion "a!(# - @%e#tion "a!(# a!e g!oing !a'i&,* an& t%# $on#%"e ,a!ge a"o%nt# of $a#5 %t e$a%#e te* a)e ,o "a!(et #a!e# te* &o not gene!ate "%$ $a#. Te !e#%,t i# a ,a!ge net $a# $o"#%"'tion. A 8%e#tion "a!( /a,#o (non a# a 4'!o,e" $i,&4 a# te 'otentia, to gain "a!(et #a!e an& e$o"e a #ta!5 an& e)ent%a,,* a $a# $o en te "a!(et g!ot #,o#. If te 8%e#tion "a!( &oe# not #%$$ee& in e$o"ing te "a!(et ,ea&e!5 ten afte! 'e!a'# *ea!# of $a# $on#%"'tion it i,, &egene!ate into a &og en te "a!(et g!ot &e$,ine#. @%e#tion "a!(# "%#t e ana,*+e& $a!ef%,,* in o!&e! to &ete!"ine ete! te* a!e o!t te in)e#t"ent !e8%i!e& to g!o "a!(et #a!e. Sta!# - Sta!# gene!ate ,a!ge a"o%nt# of $a# e$a%#e of tei! #t!ong !e,ati)e "a!(et #a!e5 %t a,#o $on#%"e ,a!ge a"o%nt# of $a# e$a%#e of tei! ig g!ot !ate te!efo!e te $a# in ea$ &i!e$tion a''!o6i"ate,* net# o%t. If a #ta! $an "aintain it# ,a!ge "a!(et #a!e5 it i,, e$o"e a $a# $o en te "a!(et g!ot !ate &e$,ine#. Te 'o!tfo,io of a &i)e!#ifie& $o"'an* a,a*# #o%,& a)e #ta!# tat i,, e$o"e te ne6t $a# $o# an& en#%!e f%t%!e $a# gene!ation. Ca# $o# - A# ,ea&e!# in a "at%!e "a!(et5 $a# $o# e6iit a !et%!n on a##et# tat i# g!eate! tan te "a!(et g!ot !ate5 an& t%# gene!ate "o!e $a# tan te* $on#%"e. S%$ %#ine## %nit# #o%,& e 4"i,(e&45 e6t!a$ting te '!ofit# an& in)e#ting a# ,itt,e $a# a# 'o##i,e. Ca# $o# '!o)i&e te $a# !e8%i!e& to t%!n 8%e#tion "a!(# into "a!(et ,ea&e!#5 to $o)e! te a&"ini#t!ati)e $o#t# of te $o"'an*5 to f%n& !e#ea!$ an& &e)e,o'"ent5 to #e!)i$e te $o!'o!ate &et5 an& to 'a* &i)i&en&# to #a!eo,&e!#. Be$a%#e te $a# $o gene!ate# a !e,ati)e,* #ta,e $a# f,o5 it# )a,%e $an e ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
&ete!"ine& it !ea#ona,e a$$%!a$* * $a,$%,ating te '!e#ent )a,%e of it# $a# #t!ea" %#ing a &i#$o%nte& $a# f,o ana,*#i#. Un&e! te g!ot-#a!e "at!i6 "o&e,5 a# an in&%#t!* "at%!e# an& it# g!ot !ate &e$,ine#5 a %#ine## %nit i,, e$o"e eite! a $a# $o o! a &og5 &ete!"ine& #o,e* * ete! it a& e$o"e te "a!(et ,ea&e! &%!ing te 'e!io& of ig g!ot. Wi,e o!igina,,* &e)e,o'e& a# a "o&e, fo! !e#o%!$e a,,o$ation a"ong te )a!io%# %#ine## %nit# in a $o!'o!ation5 te g!ot#a!e "at!i6 a,#o $an e %#e& fo! !e#o%!$e a,,o$ation a"ong '!o&%$t# itin a #ing,e %#ine## %nit. It# #i"',i$it* i# it# #t!engt - te !e,ati)e 'o#ition# of te fi!"9# enti!e %#ine## 'o!tfo,io $an e &i#',a*e& in a #ing,e &iag!a". Li"itation# Te g!ot-#a!e "at!i6 on$e a# %#e& i&e,*5 %t a# #in$e fa&e& f!o" 'o'%,a!it* a# "o!e $o"'!een#i)e "o&e,# a)e een &e)e,o'e&. So"e of it# ea(ne##e# a!e: * * * Ma!(et g!ot !ate i# on,* one fa$to! in in&%#t!* att!a$ti)ene##5 an& !e,ati)e "a!(et #a!e i# on,* one fa$to! in $o"'etiti)e a&)antage. Te g!ot-#a!e "at!i6 o)e!,oo(# "an* ote! fa$to!# in te#e to i"'o!tant &ete!"inant# of '!ofitai,it*. Te f!a"eo!( a##%"e# tat ea$ %#ine## %nit i# in&e'en&ent of te ote!#. In #o"e $a#e#5 a %#ine## %nit tat i# a 4&og4 "a* e e,'ing ote! %#ine## %nit# gain a $o"'etiti)e a&)antage. Te "at!i6 &e'en&# ea)i,* %'on te !ea&t of te &efinition of te "a!(et. A %#ine## %nit "a* &o"inate it# #"a,, ni$e5 %t a)e )e!* ,o "a!(et #a!e in te o)e!a,, in&%#t!*. In #%$ a $a#e5 te &efinition of te "a!(et $an "a(e te &iffe!en$e eteen a &og an& a $a# $o. Wi,e it# i"'o!tan$e a# &i"ini#e&5 te BC "at!i6 #ti,, $an #e!)e a# a #i"',e too, fo! )ieing a $o!'o!ation9# %#ine## 'o!tfo,io at a g,an$e5 an& "a* #e!)e a# a #ta!ting 'oint fo! &i#$%##ing !e#o%!$e a,,o$ation a"ong #t!ategi$ %#ine## %nit#. Ret!en$"ent St!ateg* Ret!en$"ent i# a $o!'o!ate-,e)e, #t!ateg* tat #ee(# to !e&%$e te #i+e o! &i)e!#it* of an o!gani+ation9# o'e!ation#. Ret!en$"ent i# a,#o a !e&%$tion of e6'en&it%!e# in o!&e! to e$o"e finan$ia,,* #ta,e. Ret!en$"ent i# a '%,,a$( o! a it&!aa, f!o" offe!ing #o"e $%!!ent '!o&%$t# o! #e!)ing #o"e "a!(et#. In a "i,ita!* #it%ation a !et!en$"ent '!o)i&e# a #e$on& ,ine of &efen#e. Ret!en$"ent i# often a #t!ateg* e"',o*e& '!io! to o! a# 'a!t of a T%!na!o%n& #t!ateg*.
Ret!en$"ent #t!ateg* ESHWARI.S---LORAA BUSINESS ACADEMY Page 11
A !et!en$"ent g!an& #t!ateg* i# fo,,oe& en an o!gani+ation ai"# at a $ont!a$tion of it# a$ti)itie# t!o%g #%#tantia, !e&%$tion o! te e,i"ination of te #$o'e of one o! "o!e of it# %#ine##e# in te!"# of tei! !e#'e$ti)e $%#to"e! g!o%'#5 $%#to"e! f%n$tion#5 o! a,te!nati)e te$no,ogie# eite! #ing,* o! 2oint,* in o!&e! to i"'!o)e it# o)e!a,, 'e!fo!"an$e. E.g: A $o!'o!ate o#'ita, &e$i&e# to fo$%# on,* on #'e$ia, t!eat"ent an& !ea,i+e ige! !e)en%e# * !e&%$ing it# $o""it"ent to gene!a, $a#e i$ i# ,e## '!ofita,e. Te g!ot of in&%#t!ie# an& "a!(et# a!e t!eatene& * )a!io%# e6te!na, an& inte!na, &e)e,o'"ent# /E6te!na, &e)e,o'"ent# go)e!n"ent 'o,i$ie#5 &e"an& #at%!ation5 e"e!gen$e of #%#tit%te '!o&%$t#5 o! $anging $%#to"e! nee&#. Inte!na, De)e,o'"ent# 'oo! "anage"ent5 !ong #t!ategie#5 'oo! 8%a,it* of f%n$tiona, "anage"entte an&$o"'anie# #o on. In te#e #it%ation# te in&%#t!ie# an& "a!(et# an& $on#e8%ent,* fa$e te &ange! of &e$,ine an& i,, go fo! a&o'ting !et!en$"ent #t!ategie#. E.g: fo%ntain 'en#5 "an%a, t*'e !ite!#5 te,e '!inte!#5 #tea" engine#5 2%te an& 2%te '!o&%$t#5 #,i&e !%,e#5 $a,$%,ato!# an& oo&en to*# a!e #o"e '!o&%$t# tat a)e eite! &i#a''ea!e& o! fa$e &e$,ine. Te!e a!e t!ee t*'e# of !et!en$"ent #t!ategie# T%!na!o%n& St!ategie#5 Di)e#t"ent St!ategie# an& Li8%i&ation #t!ategie#. 1. T%!na!o%n& St!ategie# T%!n a!o%n& #t!ategie# &e!i)e# tei! na"e f!o" te a$tion in)o,)e& tat i# !e)e!#ing a negati)e t!en&. Te!e a!e $e!tain $on&ition# o! in&i$ato!# i$ 'oint o%t tat a t%!na!o%n& i# nee&e& fo! an o!gani+ation to #%!)i)e. Te* a!e: * * * * * * * Pe!#i#tent Negati)e $a# f,o# Negati)e P!ofit# De$,ining "a!(et #a!e Dete!io!ation in P*#i$a, fa$i,itie# O)e! "anning5 ig t%!no)e! of e"',o*ee#5 an& ,o "o!a,e Un$o"'etiti)e '!o&%$t# o! #e!)i$e# Mi# "anage"ent An o!gani+ation i$ fa$e# one o! "o!e of te#e i##%e# i# !efe!!e& to a# a V#i$(; $o"'an*. Te!e a!e t!ee a*# in i$ t%!na!o%n&# $an e "anage& * * Te e6i#ting $ief e6e$%ti)e an& "anage"ent tea" an&,e# te enti!e t%!na!o%n& #t!ateg* it te a&)i#o!* #%''o!t of a e6te!na, $on#%,tant. In anote! $a#e te e6i#ting tea" it&!a# te"'o!a!i,* an& an e6e$%ti)e $on#%,tant o! t%!na!o%n& #'e$ia,i#t i# e"',o*e& to &o te 2o. ESHWARI.S---LORAA BUSINESS ACADEMY Page 17
* Te ,a#t "eto& in)o,)e# te !e',a$e"ent of te e6i#ting tea" #'e$ia,,* te $ief e6e$%ti)e5 o! "e!ging te #i$( o!gani+ation it a ea,t* one. Befo!e a t%!n a!o%n& $an e fo!"%,ate& fo! an In&ian $o"'an*5 it a# to e fi!#t &e$,a!e& a# a #i$( $o"'an*. Te &e$,a!ation i# &one on te a#i# of te Si$( In&%#t!ia, Co"'anie# A$t /SICA5 1J5 i$ '!o)i&e# fo! a 8%a#i 2%&i$ia, o&* $a,,e& te Boa!& of In&%#t!ia, an& inan$ia, Re$on#t!%$tion /BIR i$ a$t# a# te $o!'o!ate &o$to! ene)e! $o"'anie# fa,, #i$(. 7. Di)e#t"ent St!ategie# A &i)e#t"ent #t!ateg* in)o,)e# ,i8%i&ation of a 'o!tion "a2o! &i)i#ion. P!ofit $ent!ete o! #a,e SBU. o! Di)e#t"ent i# %#%a,,* a 'a!tof of%#ine##5 o! a !eai,itation o! !e#t!%$t%!ing ',an an& i# a&o'te& en a t%!na!o%n& a# een atte"'te& %t a# '!o)e& to e %n#%$$e##f%,. Ha!)e#ting #t!ategie# a )a!iant of te &i)e#t"ent #t!ategie#5 in)o,)e a '!o$e## of g!a&%a,,* ,etting a $o"'an* %#ine## ite! aa* in a $a!ef%,,* $ont!o,,e& "anne! Rea#on# fo! Di)e#t"ent * * * * * * * * Te %#ine## tat a# een a$8%i!e& '!o)e# to e a "i#"at$ an& $annot e integ!ate& itin te $o"'an*. Si"i,a!,* a '!o2e$t tat '!o)e# to e in )ia,e in te ,ong te!" i# &i)e#te& Pe!#i#tent negati)e $a# f,o# f!o" a 'a!ti$%,a! %#ine## $!eate finan$ia, '!o,e"# fo! te o,e $o"'an*5 $!eating a nee& fo! te &i)e#t"ent of tat %#ine##. Se)e!it* of $o"'etition an& te inai,it* of a fi!" to $o'e it it "a* $a%#e it to &i)e#t. Te$no,ogi$a, %' g!a&ation i# !e8%i!e& if te %#ine## i# to #%!)i)e %t e!e it i# not 'o##i,e fo! te fi!" to in)e#t in it. A '!efe!a,e o'tion o%,& e to &i)e#t Di)e#t"ent "a* e &one e$a%#e * #e,,ing off a 'a!t of a %#ine## te $o"'an* "a* e in a 'o#ition to #%!)i)e A ette! a,te!nati)e "a* e a)ai,a,e fo! in)e#t"ent5 $a%#ing a fi!" to &i)e#t a 'a!t of it# %n'!ofita,e %#ine##. Di)e#t"ent * one fi!" "a* e a 'a!t of "e!ge! ',an e6e$%te& it anote! fi!"5 e!e "%t%a, e6$ange of %n'!ofita,e &i)i#ion# "a* ta(e ',a$e. La#t,* a fi!" "a* &i)e#t in o!&e! to att!a$t te '!o)i#ion# of te MRTP A$t o! oing to o)e!#i+e an& te !e#%,tant inai,it* to "anage a ,a!ge %#ine##. E.g: TATA g!o%' i# a ig,* &i)e!#ifie& entit* it a !ange of %#ine##e# %n&e! it# fo,&. Te* i&entifie& tei! non $o!e %#ine##e# fo! &i)e#t"ent. TOMCO a# &i)e#te& an& #o,& to Hin&%#tan Le)e!# a# #oa'# an& a &ete!gent a# not $on#i&e!e& a $o!e %#ine## fo! te Tata#. Si"i,a!,*5 te 'a!"a$e%ti$a,# $o"'anie# of te Tata#Me!in& an& Tata 'a!"a e!e &i)e#te& to Wo$(a!&t. Te $o#"eti$# $o"'an* La("e a# &i)e#te& an& #o,& to Hin&%#tan Le)e!#5 a# ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
e#i&e# eing a non $o!e %#ine##5 it a# fo%n& to e a non- $o"'etiti)e an& o%,& a)e !e8%i!e& #%#tantia, in)e#t"ent to e #%#taine&. <. Li8%i&ation St!ategie# A !et!en$"ent #t!ateg* i$ i# $on#i&e!e& te "o#t e6t!e"e an& %natt!a$ti)e i# te ,i8%i&ation #t!ateg*5 i$ in)o,)e# $,o#ing &on a fi!" an& #e,,ing it# a##et#. It i# $on#i&e!e& a# te ,a#t !e#o!t e$a%#e it ,ea&# to #e!io%# $on#e8%en$e# #%$ a# ,o## of e"',o*"ent fo! o!(e!# an& ote! e"',o*ee#5 te!"ination of o''o!t%nitie# e!e a fi!" $o%,& '%!#%e an* f%t%!e a$ti)itie# an& te #tig"a of fai,%!e Te '#*$o,ogi$a, i"',i$ation# * * Te ofo ,i8%i&ation $!eate a a& i"'a$t te $o"'an*;# !e'%tation. o! "an*'!o#'e$t# e6e$%ti)e# a!e $,o#e,* a##o$iate& fi!"#5on ,i8%i&ation "a* e a t!a%"ati$ e6'e!ien$e. Lega, a#'e$t# of ,i8%i&ation: Un&e! te Co"'anie# A$t 15 ,i8%i&ation i# te!"e& a# in&ing %'. Te A$t &efine# in&ing %' of a $o"'an* a# te '!o$e## e!e* it# ,ife i# en&e& an& it# '!o'e!t* a&"ini#te!e& fo! te enefit of it# $!e&ito!# an& "e"e!#. Te A$t '!o)i&e# fo! a ,i8%i&ato! o ta(e# $ont!o, of te $o"'an*5 $o,,e$t it# a##et#5 'a* it &et#5 an& fina,,* &i#t!i%te# an* #%!',%# a"ong te "e"e!# a$$o!&ing to tei! !igt#. Te #tai,it* g!an& #t!ateg* i# a&o'te& * an o!gani+ation en it atte"'t# at an in$!e"enta, i"'!o)e"ent of it# f%n$tiona, 'e!fo!"an$e * "a!gina,,* $anging one o! "o!e of it# %#ine##e# in te!"# of tei! !e#'e$ti)e $%#to"e! g!o%'#5 $%#to"e! f%n$tion#5 an& a,te!nati)e te$no,ogie# eite! #ing,* o! $o,,e$ti)e,* E.g: A $o'ie! "a$ine $o"'an* '!o)i&e# ette! afte! #a,e# #e!)i$e to it# e6i#ting $%#to"e! to i"'!o)e it# $o"'an* '!o&%$t i"age5 an& in$!ea#e te #a,e of a$$e##o!ie# an& $on#%"a,e# Ti# #t!ateg* "a* e !e,e)ant fo! a fi!" o'e!ating in a !ea#ona,* $e!tain an& '!e&i$ta,e en)i!on"ent. Stai,it* #t!ateg* $an e of t!ee t*'e# No Cange St!ateg*5 P!ofit St!ateg*5 Pa%#e P!o$ee& it $a%tion St!ateg*. 1. No-Cange St!ateg* It i# a $on#$io%# &e$i#ion to &o noting ne. Te fi!" i,, $ontin%e it it# '!e#ent %#ine## &efinition. Wen a fi!" a# a #ta,e inte!na, an& e6te!na, en)i!on"ent te fi!" i,, $ontin%e it it# '!e#ent #t!ateg*. Te fi!" a# no ne #t!engt# an& ea(ne##e# itin te o!gani+ation an& te!e i# no o''o!t%nitie# o! t!eat# in te e6te!na, en)i!on"ent. Ta(ing into a$$o%nt ti# #it%ation te fi!" &e$i&e# to "aintain it# #t!ateg*. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
Se)e!a, #"a,, an& "e&i%" #i+e& fi!" o'e!ating in a fa"i,ia! "a!(et- "o!e often a ni$e "a!(et tat i# ,i"ite& in #$o'e an& offe!ing '!o&%$t# o! #e!)i$e# t!o%g a ti"e te#te& te$no,og* !e,* on te No Cange St!ateg*. 7. P!ofit St!ateg* No fi!" $an $ontin%e it te No Cange St!ateg*. So"eti"e# ting# &o $ange an& te fi!" i# fa$e& it te #it%ation e!e it a# to &o #o"eting. A fi!" "a* a##e## te #it%ation an& a##%"e tat it# '!o,e" a!e #o!t ,i)e& an& i,, go aa* it ti"e. Ti,, ten a fi!" t!ie# to #%#tain it# '!ofitai,it* * a&o'ting a '!ofit #t!ateg* o! in#tan$e in a #it%ation en te '!ofit i# e$o"ing ,oe! fi!" ta(e# "ea#%!e# to !e&%$e in)e#t"ent#5 $%t $o#t#5 !ai#e '!i$e#5 in$!ea#e '!o&%$ti)it* an& a&o't ote! "ea#%!e# to #o,)e te te"'o!a!* &iffi$%,tie#. Te '!o,e" a!i#e# &%e to %nfa)o!a,e #it%ation ,i(e e$ono"i$ go)e!n"ent attit%&e5 an& in&%#t!* &on t%!n5 $o"'etiti)e '!e##%!e# an& !e$e##ion5 ,i(e. D%!ing ti# (in& of #it%ation tat te fi!" a##%"e# to e te"'o!a!* it o%,& a&o't '!ofit #t!ategie# So"e fi!"# to o)e!$o"e te#e &iffi$%,tie# o%,& #e,, off a##et# #%$ a# '!i"e ,an& in a $o""e!$ia, a!ea an& "o)e to #%%!#. Ote!# a)e !e"o)e& #o"e of it# non-$o!e %#ine## to !ai#e "one*5 i,e ote!# a)e &e$i&e& to '!o)i&e o%t#o%!$ing #e!)i$e to ote! o!gani+ation#. <. Pa%#e P!o$ee& it Ca%tion St!ateg* It i# e"',o*e& * te fi!" tat i# to te#t te g!o%n& efo!e "o)ing aea& it a f%,, f,e&ge& g!an& #t!ateg*5 o! * fi!"# tat a)e an inten#e 'a$e of e6'an#ion an& i# to !e#t fo! a i,e efo!e "o)ing aea&. Te '%!'o#e i# to a,,o a,, te 'eo',e in te o!gani+ation to a&a't to te $ange#. It i# a &e,ie!ate an& $on#$io%# atte"'t to 'o#t'one #t!ategi$ $ange# to a "o!e o''o!t%ne ti"e. E.g: In te In&ia #oe "a!(et &o"inate& * Bata an& Lie!t*5 Hin&%#tan Le)e!# ette! (non fo! #oa'# an& &ete!gent#5 '!o&%$e# #%#tantia, 8%antit* of #oe# an& #oe %''e!# fo! te e6'o!t "a!(et. In ,ate 75 it #ta!te& #e,,ing a fe to%#an& 'ai!# in te $itie# to fin& o%t te "a!(et !ea$tion. Ti# i# a 'a%#e '!o$ee& it $a%tion #t!ateg* efo!e it goe# f%,, #tea" into anote! MC #e$to! tat a# a ,ot of 'otentia, !ot #t!ateg* !ot i# a a* of ,ife. A,"o#t a,, o!gani+ation# ',an to e6'an&. Ti# #t!ateg* i# fo,,oe& en an o!gani+ation ai"# at ige! g!ot * !oa&ening it# one o! "o!e of it# %#ine## in te!"# of tei! !e#'e$ti)e $%#to"e! g!o%'#5 $%#to"e!# f%n$tion#5 an& a,te!nati)e te$no,ogie# #ing,* o! 2oint,* in o!&e! to i"'!o)e it# o)e!a,, 'e!fo!"an$e. Te!e a!e fi)e t*'e# of e6'an#ion /!ot #t!ategie# ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
1. 7. <. >. E6'an#ion t!o%g $on$ent!ation E6'an#ion t!o%g integ!ation E6'an#ion t!o%g &i)e!#ifi$ation E6'an#ion t!o%g $oo'e!ation 1. E6'an#ion t!o%g $on$ent!ation It in)o,)e# $on)e!ging !e#o%!$e# in one o! "o!e of fi!"# %#ine##e# in te!"# of tei! !e#'e$ti)e $%#to"e! nee $%#to"e! f%n$tion#5 o! a,te!nati)e te$no,ogie# eite! #ing,* o! 2oint,*5 in #%$ a "anne! tat it !e#%,t# in e6'an#ion#. A fi!" tat i# fa"i,ia! it an in&%#t!* o%,& nat%!a,,* ,i(e to in)e#t "o!e in (non %#ine## !ate! tan %n(non %#ine##. Con$ent!ation $an e &one t!o%g * * * Ma!(et Penet!ation: It in)o,)e# #e,,ing "o!e '!o&%$t# to te #a"e "a!(et * fo$%#ing inten#e,* on e6i#ting "a!(et# it it# '!e#ent '!o&%$t#5 in$!ea#ing %#age * e6i#ting $%#to"e!# an& in$!ea#ing "a!(et #a!e an& !e#t!%$t%!e# a "at%!e "a!(et * &!i)ing o%t $o"'etito!# E.g.: Lo '!i$ing #t!ategie# Ma!(et De)e,o'"ent: It in)o,)e# #e,,ing te #a"e '!o&%$t# to ne "a!(et# * att!a$ting ne %#e!# to it# e6i#ting '!o&%$t#. Ma!(et &e)e,o'"ent $an e geog!a'i$ i#e an& &e"og!a'i$ i#e. E.g.: ERO Co"'an* e&%$ate& #"a,, %#ine## ent!e'!ene%!# to $!eate ne "a!(et#. P!o&%$t De)e,o'"ent: It in)o,)e# #e,,ing ne '!o&%$t# to te #a"e "a!(et# * int!o&%$ing nee! '!o&%$t# in e6i#ting "a!(et#. E.g.: te to%!i#" in&%#t!* in In&ia a# not een a,e to att!a$t ne $%#to"e!# in #ignifi$ant n%"e!#. Ne '!o&%$t# #%$ a# #e,,ing In&ia a# a go,fing o! a*%e!)e&a-a#e& "e&i$a, t!eat"ent &e#tination a!e #o"e of te '!o&%$t &e)e,o'"ent effo!t# in te to%!i#" in&%#t!* to att!a$t "o!e to%!i#t#. A&)antage# of $on$ent!ation #t!ategie# * * * * * In)o,)e# "ini"a, o!gani+ationa, $ange# an& i# ,e## t!eatening. Ena,e# te fi!" to #'e$ia,i+e * gaining te in-&e't (no,e&ge of te %#ine##e#. Ena,e# te fi!" to &e)e,o' $o"'etiti)e a&)antage. De$i#ion-"a(ing $an e "a&e ea#i,* a# te!e i# a ig ,e)e, of '!o&%$ti)it*. S*#te"# an& '!o$e##e# itin te fi!" e$o"e fa"i,ia! to te 'eo',e in te o!gani+ation. Di#a&)antage# of $on$ent!ation #t!ategie# * It i# &e'en&ent on one in&%#t!* if te!e i# an* o!#e $on&ition in te in&%#t!* te fi!" i,, e affe$te&. Page 1 ESHWARI.S---LORAA BUSINESS ACADEMY
* * * a$to!# #%$ a# '!o&%$t o#o,e#$en$e5 fi$(,ene## of "a!(et5 e"e!gen$e of nee! te$no,ogie# a!e t!eat to $on$ent!ate& fi!" Mange!# "a* not e a,e to #%#tain inte!e#t an& fin& te o!( ,e## $a,,enging. It "a* ,ea& to $a# f,o '!o,e"#. 7. E6'an#ion t!o%g Integ!ation It i# &one e!e te $o"'an* atte"'t# to i&en te #$o'e of it# %#ine## &efinition in #%$ a "anne! tat it !e#%,t# in #e!)ing te #a"e #etIt ofi# $%#to"e!#. Te a,te!nati)e te$no,og* of tea$ti)it* %#ine##of %n&e!goe# $ange. $o"ing a$ti)itie# !e,ate& to te '!e#ent a fi!". a S%$ a $o"ination "a* e &one t!o%g )a,%e $ain. A )a,%e $ain i# a #et of inte!!e,ate& a$ti)it* 'e!fo!"e& * an o!gani+ation !igt f!o" te '!o$%!e"ent of a#i$ !a "ate!ia,# &on to te "a!(eting of fini#e& '!o&%$t# to te %,ti"ate $%#to"e!#. E.g.: Se)e!a, '!o$e## a#e& in&%#t!* #%$ a# 'et!o $e"i$a,#5 #tee,5 te6ti,e# of *&!o$a!on# a)e integ!ate fi!" A "a(e o! %* &e$i#ion i# ten "a&e en fi!"# i# to negotiate it te #%'',ie!# o! %*e!#. Te $o#t of "a(ing te ite"# %#e& in te "an%fa$t%!e of one# on# '!o&%$t# a!e to e e)a,%ate& again#t te $o#t of '!o$%!ing te" f!o" #%'',ie!#. If te $o#t of "a(ing i# ,e## tat te $o#t of '!o$%!e"ent ten te fi!" "o)e# %' te )a,%e $ain to "a(e te ite" it#e,f. Li(e i#e if te $o#t of #e,,ing te fini#e& '!o&%$t# i# ,e##e! tan te '!i$e 'ai& to te #e,,e!# to &o te #a"e ting ten te fi!" o%,& go fo! &i!e$t #e,,ing. A"ong te integ!ation #t!ategie# a!e of to t*'e;# )e!ti$a, an& o!i+onta, integ!ation. * * e!ti$a, Integ!ation: en an o!gani+ation #ta!t# "a(ing ne '!o&%$t# tat #e!)e it# on nee&# )e!ti$a, integ!ation ta(e# ',a$e. e!ti$a, integ!ation $o%,& e of to t*'e# Ba$( a!& an& fo!a!& integ!ation. Ba$(a!& integ!ation "ean# "o)ing a$( to te #o%!$e of !a "ate!ia,# i,e fo!a!& integ!ation "o)e# te o!gani+ation nea!e! to te %,ti"ate $%#to"e!. ene!a,,* en fi!"# )e!ti$a,,* integ!ate te* &o #o in a $o"',ete "anne! tat i# te* "o)e a$(a!& o! fo!a!& &e$i#i)e,* !e#%,ting in a f%,, integ!ation %t en a fi!" &oe# not $o""it it f%,,* it i# 'o##i,e to a)e 'a!tia, )e!ti$a, integ!ation #t!ategie# too. To #%$ 'a!tia, )e!ti$a, integ!ation #t!ategie# a!e Vta'e!; integ!ation an& V8%a#i; integ!ation. Ta'e! integ!ation !e8%i!e# fi!"# to "a(e a 'a!t of tei! on !e8%i!e"ent# an& to %* te !e#t f!o" o%t#i&e!#. T!o%g 8%a#i integ!ation #t!ategie# fi!" '%!$a#e "o#t of tei! !e8%i!e"ent# f!o" ote! fi!"# in i$ te* a)e an one!#i' #ta(e. An$i,,a!* in&%#t!ia, %nit# an& o%t#o%!$ing t!o%g #% $ont!a$ting a!e a&a'te& fo!"# of 8%a#i integ!ation. Ho!i+onta, Integ!ation: en an o!gani+ation ta(e# %' te #a"e t*'e of '!o&%$t# at te #a"e ,e)e, of '!o&%$tion o! "a!(eting '!o$e##5 it i# #ai& to fo,,o a #t!ateg* of o!i+onta, integ!ation. Wen a ,%ggage $o"'an* ta(e# o)e! it# !i)a, ,%ggage $o"'an*5 it i# Page 1G ESHWARI.S---LORAA BUSINESS ACADEMY
o!i+onta, integ!ation. Ho!i+onta, integ!ation #t!ateg* "a* e f!e8%ent,* a&o'te& it a )ie to e6'an& geog!a'i$a,,* * %*ing a $o"'etito!# %#ine##5 to in$!ea#e te "a!(et #a!e o! to enefit f!o" e$ono"i$# of #$a,e. <. E6'an#ion t!o%g Di)e!#ifi$ation Di)e!#ifi$ation i# a "%$ %#e& an& "%$ ta,(e& ao%t #et of #t!ategie#. It in)o,)e# a #%#tantia, $ange in te %#ine## &efinition #ing,* o! 2oint,*- in te!"# of $%#to"e! g!o%'# o! a,te!nati)e te$no,ogie# of one o! "o!e of a fi!";# %#ine##e#. . Te!e a!e to $atego!ie#5 $on$ent!i$ an& $ong,o"e!ate &i)e!#ifi$ation. Con$ent!i$ Di)e!#ifi$ation: en an o!gani+ation ta(e# %' an a$ti)it* in #%$ a "anne! tat i# !e,ate& to te e6i#ting %#ine## &efinition of one o! "o!e of fi!"# %#ine##e#5 eite! in te!"# of $%#to"e! g!o%'#5 $%#to"e!;# f%n$tion# a,te!nati)e te$no,ogie#5 it i# $a,,e& &i)e!#ifi$ation. Con$ent!i$o! &i)e!#ifi$ation "a* e of t!ee t*'e#: 1. $on$ent!i$ Ma!(eting !e,ate& $on$ent!i$ &i)e!#ifi$ation: en a #i"i,a! t*'e of '!o&%$t i# offe!e& it a e,' of %n!e,ate& te$no,og* fo! e.g.5 a $o"'an* in te #eing "a$ine %#ine## &i)e!#ifie# in to (it$en a!e an& o%#eo,& a'',ian$e#5 i$ a!e #o,& to o%#e i)e# t!o%g a $ain of !etai,# #to!e#. 7. Te$no,og*- !e,ate& $on$ent!i$ &i)e!#ifi$ation: en a ne t*'e of '!o&%$t o! #e!)i$e i# '!o)i&e& it te e,' of !e,ate& te$no,og*5 fo! e.g.5 a ,ea#ing fi!" offe!ing i!e'%!$a#e #e!)i$e# to in#tit%tiona, $%#to"e!# a,#o #ta!t# $on#%"e! finan$ing fo! te '%!$a#e of &%!a,e #ot in&i)i&%a, $%#to"e!#. <. Ma!(eting- te$no,og* !e,ate& $on$ent!i$ &i)e!#ifi$ation: en a #i"i,a! t*'e of '!o&%$t i# '!o)i&e& it te e,' of !e,ate& te$no,og*5 fo! e.g.5 a !ain $oat "an%fa$t%!e! "a(e# ote! !%e! a#e& ite"#5 #%$ a# ate! '!oof #oe# an& !%e! g,o)e# #o,& t!o%g te #a"e !etai, o%t,et# Cong,o"e!ate Di)e!#ifi$ation: en an o!gani+ation a&o't# a #t!ateg* i$ !e8%i!e# ta(ing of to#e a$ti)itie# i$ a!e %n!e,ate& to te e6i#ting %#ine##e# &efinition of one o! "o!e of it# %#ine##e# eite! in te!"# of tei! !e#'e$ti)e $%#to"e! g!o%'#5 $%#to"e! f%n$tion# o! a,te!nati)e te$no,ogie#. E6a"',e of In&ian $o"'an* i$ a)e a&o'te& a'a!t of g!ot an& e6'an#ion t!o%g $ong,o"e!ate &i)e!#ifi$ation te $,a##i$ e6a"',e# i# of ITC5 a $iga!ette $o"'an* &i)e!#if*ing into te ote, in&%#t!* >. E6'an#ion t!o%g Coo'e!ation Te te!" $oo'e!ation e6'!e##e# te i&ea of #i"%,taneo%# $o"'etition an& $oo'e!ation a"ong !i)a, fi!"# fo! "%t%a, enefit#. Coo'e!ati)e #t!ategie# $o%,& e of te fo,,oing t*'e#: ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
1. 7. <. >. Me!ge!# Ta(eo)e!# 0oint )ent%!e# St!ategi$ a,,ian$e# Me!ge!# St!ategie#: A "e!ge! i# a $o"ination of to o! "o!e o!gani+ation# in i$ one a$8%i!e# te a##et# an& ,iai,itie# of te ote! in e6$ange fo! #a!e# o! $a# o! ot te o!gani+ation a!e &i##o,)e& an& te a##et# an& ,iai,itie# a!e $o"ine& an& ne #to$( i# i##%e&. o! te o!gani+ation5 i$ a$8%i!e# anote!5 it i# an a$8%i#ition. o! te o!gani+ation5 i$ i# a$8%i!e&5 it i# a "e!ge!. If ot te o!gani+ation &i##o,)e# tei! i&entit* to $!eate a ne o!gani+ation5 it i# $on#o,i&ation. Te!e a!e &iffe!ent of "e!ge!# te* a!e o!i+onta, "e!ge!5 )e!ti$a, "e!ge!5 $on$ent!i$ "e!ge! t*'e# an& $ong,o"e!ate "e!ge!. * * * * Ho!i+onta, Me!ge!#: it ta(e# ',a$e en te!e i# a $o"ination of to o! "o!e o!gani+ation# in te #a"e %#ine##. E.g: A $o"'an* "a(ing footea! $o"ine# it anote! footea! $o"'an*5 o! a !etai,e! of 'a!"a$e%ti$a, $o"ine# it anote! !etai,e! in te #a"e %#ine##e#. e!ti$a, Me!ge!#: It ta(e# ',a$e en te!e i# a $o"ination of to o! "o!e o!gani+ation#5 not ne$e##a!i,* in te #a"e %#ine##5 i$ $!eate $o"',e"enta!itie# eite! in te!"# of #%'',* of !a "ate!ia,# /in'%t o! "a!(eting of goo&# an& #e!)i$e# /o%t'%t#. E.g: A footea! $o"'an* $o"ine# it a ,eate! tanne!* o! it a $ain #oe !etai, #to!e# Con$ent!i$ Me!ge!#: It ta(e# ',a$e en te!e i# a $o"ination of to o! "o!e o!gani+ation# !e,ate& to ea$ ote! eite! in te!"# of $%#to"e! f%n$tion#5 $%#to"e! g!o%'#5 o! te a,te!nati)e te$no,ogie# %#e&. E.g: A footea! $o"'an* $o"ining it a o#ie!* fi!" "a(ing #o$(# o! anote! #'e$ia,t* footea! $o"'an*5 o! it a ,eate! goo&# $o"'an* "a(ing '%!#e5 an& ag# an& #o on Cong,o"e!ate Me!ge!#: It ta(e# ',a$e en te!e i# a $o"ination of to o! "o!e o!gani+ation# %n!e,ate& to ea$ ote!5 eite! in te!"# of $%#to"e! f%n$tion#5 $%#to"e! g!o%'#5 o! a,te!nati)e te$no,ogie# %#e&. E.g: A footea! $o"'an* $o"ining it a 'a!"a$e%ti$a, fi!". Ta(eo)e! St!ategie#: Ta(eo)e! o! a$8%i#ition i# a 'o'%,a! #t!ategi$ a,te!nati)e a&o'te& * In&ian $o"'anie#. A$8%i#ition# %#%a,,* a!e a#e& on te #t!ong "oti)ation of te %*e! fi!" to a$8%i!e. Ta(eo)e!# a!e f!e8%ent,* $,a##ifie& a# o#ti,e ta(eo)e!# /i$ a!e again#t te i#e# of te a$8%i!e& fi!" an& f!ien&,* ta(eo)e!# /* "%t%a, $on#ent ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
* * !ien&,* ta(eo)e!# a!e e!e a ta(eo)e! i# not !e#i#te& o! o''o#e&5 * te e6i#ting "anage"ent o! '!ofe##iona,#. E.g: Tata Tea;# ta(eo)e! of Con#o,i&ate& Coffee /a g!oe! of $offee ean# an& A#ian Coffee /a '!o$e##o! i# an e6a"',e of a f!ien&,* ta(eo)e!. Ho#ti,e ta(eo)e!# i# e!e a ta(eo)e! i# !e#i#te&5 o! e6'e$te& to e o''o#e&5 * te e6i#ting "anage"ent o! '!ofe##iona,#. 0oint St!ategie#: )ent%!e# a!e aa te"'o!a!* #'e$ia, $a#e of $on#o,i&ation e!e to o!ent%!e "o!e $o"'anie# f!o"0oint a te"'o!a!* fo!" 'a!tne!#i' /a,#o $a,,e& a $on#o!ti%" fo! a #'e$ifie& '%!'o#e. Te* o$$%! en an in&e'en&ent fi!" i# $!eate& * at ,ea#t to ote! fi!"#. 0oint )ent%!e# "a* e %#ef%, to gain a$$e## to a ne %#ine## "ain,* %n&e! te#e $on&ition# * * * * Wen an a$ti)it* i# %ne$ono"i$a, fo! an o!gani+ation to &o a,one. Wen te !i#( of %#ine## a# to e #a!e&. Wen te &i#tin$ti)e $o"'eten$e of to o! "o!e o!gani+ation $an e !o%gt togete!. Wen te o!gani+ation a# to o)e!$o"e te %!&,e#5 #%$ a# i"'o!t 8%ota#5 ta!iff#5 nationa,i#ti$ 'o,iti$a, inte!e#t#5 an& $%,t%!a, !oa&,o$(#. St!ategi$ a,,ian$e#: Te* a!e 'a!tne!#i' eteen fi!"# e!e* tei! !e#o%!$e#5 $a'ai,itie# an& $o!e $o"'eten$ie# a!e $o"ine& to '%!#%e "%t%a, inte!e#t to &e)e,o'5 "an%fa$t%!e5 o! &i#t!i%te goo&# o! #e!)i$e#. Te!e a!e )a!io%# a&)antage#: * * * * To o! "o!e fi!"# %nite to '%!#%e a #et of ag!ee& %'on goa,# %t !e"ain in&e'en&ent #%#e8%ent to te fo!"ation of te a,,ian$e#. A 'oo,ing of !e#o%!$e#5 in)e#t"ent an& !i#(# o$$%!# fo! "%t%a, gain Te 'a!tne! fi!"# $ont!i%te on a $ontin%ing a#i# in one o! "o!e (e* #t!ategi$ a!ea#5 fo! e6a"',e5 te$no,og*5 '!o&%$t an& #o fo!t. St!ategi$ a,,ian$e# offe! a g!ot !o%te in i$ "e!ging one;# entit*5 a$8%i!ing o! eing a$8%i!e&5 o! $!eating a 2oint )ent%!e "a* not e !e8%i!e& ,oa, 'a!tne!# $an e,' ,o$a, fi!"# * &e)e,o'ing g,oa, 8%a,it* $on#$io%#ne##5 $!eating a&e!en$e to inte!nationa, 8%a,it* #tan&a! '!o)i&ing a$$e## to #tate of te a!t te$no,og*5 gaining ent!* to o!,& i&e "a## "a!(et#5 an& "a(ing f%n&# a)ai,a,e fo! e6'an#ion#. Re#t!%$t%!ing #t!ateg*: O!gani+ationa, Re#t!%$t%!ing o)e!# a!o%n& te $ange# in o!gani+ationa, &e#ign. It !ing# ao%t $ange# in &e$i#ion "a(ing5 info!"ation f,o an& "anage"ent #t*,e. To%g ti# !e#t!%$t%!ing5 2%#t ,i(e a,, ote! !e#t!%$t%!ing#5 i# initiate& * te CEO5 it !e8%i!e# te 'a!ti$i'ation of a,, ie!a!$ie# of an o!gani+ation5 e#'e$ia,,* te e"',o*ee#. O!gani+ationa, !e#t!%$t%!ing5 ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
$o"ine& it 'o!tfo,io !e#t!%$t%!ing an& finan$ia, !e#t!%$t%!ing "a(e# "eaningf%, $ange# "ate!ia,i+e an& to%$e# %'on te fo,,oing a#'e$t#: 1 Cent!a,i+ation&e$ent!a,i+ation of te o!gani+ation: %n$tion# o! %nit# of te o!gani+ation "a* e $ent!a,i+e& o! &e$ent!a,i+e& to $!eate ne ,in(age# to ette! i"',e"ent te #t!ateg*. Nat%!e of De$i#ion "a(ing in te o!gani+ation "a* e $ange& &%e to te $ange# in !e'o!ting ,e)e,# an& ie!a!$*. 7 O!gani+ationa, C%,t%!e: Te e##entia, fa!i$ of te fi!" i.e. it# $%,t%!e i# affe$te& a# a $on#e8%en$e of $ange# in !e'o!ting ,e)e,# an& ie!a!$i$a, ,e)e,#. < T!aining an& Re&e',o*"ent: I"'a!ting t!aining to te o!(fo!$e ena,e# te o!gani+ation to $o'e ette! it te $anging en)i!on"ent. At te #a"e ti"e #o"e e"',o*ee# nee& to e !e&e',o*e&. Hoe)e!5 e&%$ate& t!aining an& an& #(i,,e& !e&e',o*"ent "a* e ina&e8%ate at ti"e# te!efo!e in&%$ting '!ofe##iona,# at &iffe!ent ,e)e,#an& e$o"e# ne$e##a!*. > Cange# in HR Po,i$ie#: Te $%!!ent HR 'o,i$ie# of te o!gani+ation nee& to e $ange& in a$$o!&an$e it te $anging #$ena!io. Te HR &e'a!t"ent nee&# ena,e $ange "anage"ent. Rationa,i+ation of Pa* St!%$t%!e: Te '!e#ent 'a* #t!%$t%!e #o%,& e "o&ifie& an& !ee)a,%ate& to "aintain te inte!na, an& e6te!na, e8%it* a"ong te e"',o*ee#. S*"'to"# in&i$ating te nee& fo! o!gani+ationa, !e#t!%$t%!ing * * * * * * * * * Pa!t# of te o!gani+ation a!e #ignifi$ant,* o)e! o! %n&e! #taffe&. O!gani+ationa, $o""%ni$ation# a!e in$on#i#tent5 f!ag"ente&5 an& ineffi$ient. Te$no,og* an&o! inno)ation a!e $!eating $ange# in o!(f,o an& '!o&%$tion '!o$e##e#. Signifi$ant #taffing in$!ea#e# o! &e$!ea#e# a!e $onte"',ate&. Ne #(i,,# an& $a'ai,itie# a!e nee&e& to "eet $%!!ent o! e6'e$te& o'e!ationa, !e8%i!e"ent#. A$$o%ntai,it* fo! !e#%,t# a!e not $,ea!,* $o""%ni$ate& an& "ea#%!a,e !e#%,ting in #%2e$ti)e an& ia#e& 'e!fo!"an$e a''!ai#a,#. Pe!#onne, !etention an& t%!no)e! i# a #ignifi$ant '!o,e". Wo!(fo!$e '!o&%$ti)it* i# #tagnant o! &ete!io!ating. Mo!a,e i# &ete!io!ating Benefit# of O!gani+ationa, Re#t!%$t%!ing i. Loe! $o#t ii. Bette! fo!"%,ation an& i"',e"entation of #t!ategie# I##%e# in O!gani+ationa, Re#t!%$t%!ing i. C%,t%!e. ii. Don#i+ing iii. Lo## of E"',o*ee Mo!a,e. ESHWARI.S---LORAA BUSINESS ACADEMY Page 11
Te a''!oa$e# tat )a!io%# $o"'anie#5 ,a!ge an& #"a,,5 '%,i$ an& '!i)ate5 a&o'te& in tei! effo!t# to !e#t!%$t%!e in te!"# of DOWNSI_IN &iffe!e& in te!"# of o te* )iee& tei! e"',o*ee#. * * One g!o%' )iee& e"',o*ee# a# $o#t# to e $%t. Te#e a!e te 4&on#i+e!#4. Te ote! g!o%' )iee& e"',o*ee# a# a##et# to e &e)e,o'e&. Te#e a!e te 4!e#'on#i,e !e#t!%$t%!e!#.4 Te G '!in$i',e# of a #%$$e##f%, !e#t!%$t%!e E)en a# te e$ono"i$ o%t,oo(o'e!ate a''ea!#a# tote* !igten5 te fa$t "an* o!gani#ation# $an no ,onge! a& een. A (e*!e"ain# feat%!etat of ti# $anging ,an&#$a'e i# te nee& fo! o!gani#ation# to !e#t!%$t%!e. He!e a!e #e)en !oa& !e#t!%$t%!ing '!in$i',e# to e,' "a(e an* !e#t!%$t%!e a #%$$e##f%, one. 1. A,ign #t!%$t%!e to #t!ateg* A,, !e#t!%$t%!e# "%#t a,ign to #t!ateg*. Ti# "a* #ee" #e,f-e)i&ent5 *et a #ignifi$ant n%"e! of o!gani#ation# fai, to &o #o. o! e6a"',e5 if ,o$a, $on&ition# a!e a '!e&o"inant fa$to!5 ten #t!e## ,o$a, #a,e# an& "a!(eting f%n$tion# !ate! tan a $ent!a,i#e& ee"ot tat ten t!ie# to "at!i6 it ,o$a, e,e"ent#. 7. Re&%$e $o"',e6it* Si"',* '%t5 $o"',e6it* $o#t#. Wete! it i# a $o"',e6 o!gani#ationa, #t!%$t%!e5 a $o"',e6 '!o&%$t offe!ing o! $o"',e6 t!an#a$tiona, '!o$e##e#5 te a&&e& $o#t of $o"',e6it* $an e a &!ag on 'e!fo!"an$e. To "itigate $o"',e6it*5 te!e a!e t!ee $on#i&e!ation# tat e,' it o!gani#ationa, &e#ign: * De#ign #t!%$t%!e fo! #t!ateg* efo!e *o% &e#ign fo! #'e$ifi$ 'e!#onne,. O!gani#ationa, !e&e#ign# i$ a!e a $o"'!o"i#e eteen #t!ategi$ intent an& ,ine "anage"ent '!efe!en$e# ine)ita,* a&& $o"',e6it*. So5 i,e inte!na, 'o,iti$a, int!ig%e i# %na)oi&a,e5 at ,ea#t #ta!t it a $,ean an& $,ea! &e#ign tat "at$e# to #t!ateg*. * A)oi& "a(ing ,ea&e!#i' !o,e# too $o"',e6 /#ee '!in$i',e F. Page 17 ESHWARI.S---LORAA BUSINESS ACADEMY
* Mini"i#e te %#e of "at!i$e#. Te* int!o&%$e "ea#%!e"ent o)e!ea& an& a ,a$( of $,ea! &i!e$tion to te #taff. <. o$%# on $o!e a$ti)it* Re"o)e noi#e /ineffi$ien$* in '!o$e##e# an& enan$e $o!e efo!e !e#t!%$t%!ing !o,e#. Ti# "ean# tat *o% i,, nee& to (no at 'eo',e a!e &oing to&a* * otaining a &etai,e& %n&e!#tan&ing of ta#(# * !o,e. Ti# en#%!e# tat no )a,%e-a&&e& a$ti)itie# a!e t!on o%t en !e"o)ing a !o,e. Si"i,a!,*5 &%',i$ation an& !e&%n&ant a$ti)it* $an e !e"o)e& at te ti"e of te !e#t!%$t%!e. >. C!eate fea#i,e !o,e#'eo',e Don;t to o)e!,oa& !e#t!%$t%!e# ,ea)e an to o!gani#ation it fee! &o te!o,e# #a"e a"o%nt of o!(.gene!a,,* Wen !e#t!%$t%!ing !e&%$e ea&$o%nt5 "a(e #%!e *o% %n&e!#tan& te $%!!ent o!(,oa& of e"',o*ee#. Ti# i,, e,' to en#%!e *o% &e#ign !o,e# tat a!e neite! too ea)i,* ,a&en no! in&ee& too ,igt. %!te!"o!e5 !o,e &e#ign "%#t ta(e into a$$o%nt !ea,i#ti$ g!o%'ing# of #(i,,#. Pa$(ing a !o,e it too "an* &i#tin$t #(i,,-#et# !e&%$e# te 'oo, of &%!a,e $an&i&ate#. . Ba,an$e Von o!(; an& V#%'e!)i#o!* ,oa&; of "anage!# Te $a#e of ,ea&e!#i' o! K"anage"ent ,oa&ing $an e 'a!ti$%,a!,* t!o%,e#o"e in !e#t!%$t%!e#. Often5 te inai,it* of "anage!# to fo$%# on ,ea&e!#i' ta#(# &%e to in$!ea#e& o%t'%t !e8%i!e"ent# $an $!eate #ignifi$ant '!o,e"# fo! an o!gani#ation. o! e6a"',e5 ti"e #'ent "ento!ing an& $oa$ing #taff &!o'# off5 #taff e$o"e &i#engage&5 "o!e i##%e# a!i#e &%e to #taff e!!o!# an& "anage!# en& %' #'en&ing "o!e ti"e !e#o,)ing te". To en#%!e "anage"ent a!e a''!o'!iate,* ,oa&e&5 it;# $!iti$a, to a,an$e t!ee e,e"ent#: 1. Te n%"e! of #taff &i!e$t,* "anage& o! #%'e!)i#e&. 7. Staff ai,it* to 'e!fo!" o!( ito%t #%'e!)i#ion. <. Te a"o%nt of Von o!(; "anage!# a)e to &o on to' of tei! ,ea&e!#i' a$ti)it*. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
. I"',e"ent it $,a!it* Often te!e i# $onf%#ion in te fi!#t ee(# an& "ont# afte! an initia, !e#t!%$t%!e. Afte! a,,5 o i# #%''o#e& to e !e#'on#i,e fo! at3 Te an#e! i# to $,a!if* !o,e# an& !e#'on#ii,itie# f!o" te eginning5 i&entif* a,, f%n$tion# /a$ti)itie#5 ta#(# an& &e$i#ion# tat a)e to e a$$o"',i#e& fo! effe$ti)e o'e!ation5 $,a!if* o #o%,& e in)o,)e& an& e #'e$ifi$ ao%t a$$o%ntai,it*. G. Maintain f,e6ii,it* ina,,*5 it i# i"'o!tant not to $%t *o%! !e#o%!$e# too fine. If te o!gani#ationa, $ange i# "ate!ia,5 *o% i,, nee& !e#o%!$e f,e6ii,it* in te fi!#t fe "ont#. So e)en a# *o% #t!i)e to o'e!ate "o!e effi$ient,*5 e #%!e to gi)e *o%!#e,f #o"e !igg,e !oo" in *o%! #taffing. ,e6ii,it* a'',ie# not on,* to #taff "e"e!#5 %t to #taff $a'ai,it*. Lea)e *o%!#e,f an& *o%! ,ea&e!#i' #o"ein$,%&e: !oo" to !e#'on& $a'ai,it* ina!e te ne #t!%$t%!e. Co""on a*# totea" &o ti# a #tage&to t!an#ition #oga'# te!e fee! $a'ai,it* ga'# to "anage at a 'oint in ti"e5 an& a te"'o!a!* %#e of $ont!a$t !e#o%!$e# %nti, in-o%#e #taff e$o"e fa"i,ia! it tei! !o,e#. tt':.%ni)e!#a,tea$e!'%,i$ation#.$o""af!ee-'!o2e$t'<'age1.t" UNIT: STRATEY IMPLEMENTATION: ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
O!gani+ation# #%$$e##f%, at #t!ateg* i"',e"entation effe$ti)e,* "anage #i6 (e* #%''o!ting fa$to!#: 1. 7. <. >. . . A$tion P,anning O!gani+ation St!%$t%!e H%"an Re#o%!$e# Te Ann%a, B%#ine## P,an Monito!ing an& Cont!o, Lin(age. A$tion P,anning i!#t5 o!gani+ation# #%$$e##f%, at i"',e"enting #t!ateg* &e)e,o' &etai,e& a$tion ',an#... $!ono,ogi$a, ,i#t# of a$tion #te'# /ta$ti$# i$ a&& te ne$e##a!* &etai, to tei! #t!ategie#. An& a##ign !e#'on#ii,it* to a #'e$ifi$ in&i)i&%a, fo! a$$o"',i#ing ea$ of to#e a$tion #te'#. A,#o5 te* #et a &%e &ate an& e#ti"ate te !e#o%!$e# !e8%i!e& to a$$o"',i# ea$ of tei! a$tion #te'#. T%# te* t!an#,ate tei! !oa& #t!ateg* #tate"ent into a n%"e! of #'e$ifi$ o!( a##ign"ent#. St!%$t%!e Ne6t5 to#e #%$$e##f%, i"',e"enting #t!ateg* gi)eO!gani+ationa, to%gt to tei! o!gani+ationa, #t!%$t%!e. Te* at a#( if tei! inten&e& #t!ateg* fit# tei! $%!!ent #t!%$t%!e. An& te* a#( a &ee'e! 8%e#tion a# e,,... 4I# te o!gani+ation9# $%!!ent #t!%$t%!e a''!o'!iate to te inten&e& #t!ateg*34 We9!e !e"in&e& e!e of a $,ient e o!(e& it #o"e *ea!# ago. Te $o"'an* a# e6'e!ien$ing '!o,e"# i"',e"enting it# #t!ateg* $a,,ing fo! te &e)e,o'"ent of to ne '!o&%$t#. Te !ea#on te fi!" a& een %na,e to &e)e,o' to#e '!o&%$t# a# #i"',e... te* a& ne)e! o!gani+e& to &o #o. La$(ing te ne$e##a!* $o""it"ent fo! ne '!o&%$t &e)e,o'"ent5 "anage"ent &i&n9t e#ta,i# an R=D g!o%'. Rate!5 it a##igne& it# "an%fa$t%!ing enginee!ing g!o%' te 2o of ne '!o&%$t &e)e,o'"ent... an& i!e& to 2%nio! enginee!# fo! te ta#(. Sin$e te '!i"a!* f%n$tion of te "an%fa$t%!ing enginee!ing g!o%' a# to (ee' te fa$to!* %""ing5 to#e enginee!# (e't getting '%,,e& off tei! 4ne '!o&%$t4 '!o2e$t# an& into te !o,e of te "an%fa$t%!ing #%''o!t. Re#%,t no ne '!o&%$t#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
H%"an Re#o%!$e a$to!# O!gani+ation# #%$$e##f%, at #t!ateg* i"',e"entation $on#i&e! te %"an !e#o%!$e fa$to! in "a(ing #t!ategie# a''en. %!te!5 te* !ea,i+e tat te %"an !e#o%!$e i##%e i# !ea,,* a to 'a!t #to!*. i!#t5 $on#i&e!ation of %"an !e#o%!$e# !e8%i!e# tat "anage"ent tin( ao%t te o!gani+ation9# $o""%ni$ation nee&#. Tat te* a!ti$%,ate te #t!ategie# #o tat to#e $a!ge& it &e)e,o'ing te $o!!e#'on&ing a$tion #te'# /ta$ti$# f%,,* %n&e!#tan& te #t!ateg* te*9!e to i"',e"ent. Se$on&5 "anage!# #%$$e##f%, at i"',e"entation a!e aa!e of te effe$t# ea$ ne #t!ateg* i,, a)e on tei! %"an !e#o%!$e nee&#. Te* a#( te"#e,)e# te 8%e#tion#... 4Ho "%$ $ange &oe# ti# #t!ateg* $a,, fo!34 An&5 4Ho 8%i$(,* "%#t e '!o)i&e fo! tat $ange34 An&5 4Wat a!e te %"an !e#o%!$e i"',i$ation# of o%! an#e!# In an#e!ing te#e 8%e#tion#5 &e$i&e ete! to to to#e a,,o to ti"e8%e#tion#34 fo! e"',o*ee# to g!o t!o%g e6'e!ien$e5te*9,, to int!o&%$e t!aining5 o! to i!e ne e"',o*ee#. Te Ann%a, B%#ine## P,an O!gani+ation# #%$$e##f%, at i"',e"entation a!e aa!e of tei! nee& to f%n& tei! inten&e& #t!ategie#. An& te* egin to tin( ao%t tat ne$e##a!* finan$ia, $o""it"ent ea!,* in te ',anning '!o$e##. i!#t5 te* 4a,,'a!(4 te finan$ia, !e8%i!e"ent# en te* fi!#t &e)e,o' tei! #t!ateg*. Late! en &e)e,o'ing tei! a$tion ',an#5 te* 4fi!" %'4 tat $o""it"ent. A# a $,ient of o%!# e6',ain#5 te* 4&o,,a!i+e4 tei! #t!ateg*. Tat a*5 te* ,in( tei! #t!ategi$ ',an to tei! ann%a, %#ine## ',an /an& tei! %&get. An& te* e,i"inate te 4#%!'!i#e#4 te* "igt ote!i#e !e$ei)e at %&geting ti"e. Monito!ing = Cont!o, Monito!ing an& $ont!o,,ing te ',an in$,%&e# a 'e!io&i$ ,oo( to #ee if *o%9!e on $o%!#e. It a,#o in$,%&e# $on#i&e!ation of o'tion# to get a #t!ateg* on$e &e!ai,e& a$( on t!a$(. To#e o'tion# /,i#te& in o!&e! of in$!ea#ing #e!io%#ne## in$,%&e $anging te #$e&%,e5 $anging te a$tion #te'# /ta$ti$#5 $anging te #t!ateg* o! /a# a ,a#t !e#o!t $anging te o2e$ti)e. /o! "o!e on ti# 'oint5 #ee 4Monito!ing I"',e"entation of Yo%! St!ategi$ P,an.4 Lin(age - Te o%n&ation fo! E)e!*ting E,#e Man* o!gani+ation# #%$$e##f%,,* e#ta,i# te ao)e fi)e #%''o!ting fa$to!#. Te* &e)e,o' a$tion ',an#5 $on#i&e! o!gani+ationa, #t!%$t%!e5 ta(e a $,o#e ,oo( at tei! %"an ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
!e#o%!$e nee f%n& tei! #t!ategie# t!o%g tei! ann%a, %#ine## ',an5 an& &e)e,o' a ',an to "onito! an& $ont!o, tei! #t!ategie# an& ta$ti$#. An& *et te* #ti,, fai, to #%$$e##f%,,* i"',e"ent to#e #t!ategie# an& ta$ti$#. Te !ea#on5 "o#t often5 i# te* ,a$( ,in(age. Lin(age i# #i"',* te t*ing togete! of a,, te a$ti)itie# of te o!gani+ation...to "a(e #%!e tat a,, of te o!gani+ationa, !e#o%!$e# a!e 4!oing in te #a"e &i!e$tion.4 It i#n9t eno%g to "anage one5 to o! a fe #t!ateg* #%''o!ting fa$to!#. To #%$$e##f%,,* i"',e"ent *o%! #t!ategie#5 *o%9)e go to "anage te" a,,. An& "a(e #%!e *o% ,in( te" togete!. St!ategie# !e8%i!e 4,in(age4 ot )e!ti$a,,* an& o!i+onta,,*. e!ti$a, ,in(age# e#ta,i# $oo!&ination an& #%''o!t eteen $o!'o!ate5 &i)i#iona, an& &e'a!t"enta, ',an#. o! e6a"',e5 fo!fo! &e)e,o'"ent of a ne e &!i)en *aa&i)i#iona, $o!'o!ate #t!ateg* o2e$ti)e$a,,ing $a,,ing g!ot5 'e!a'# -'!o&%$t an& on #o%,& a (no,e&ge of a)ai,a,e !e#o%!$e# - $a'ita, !e#o%!$e# a)ai,a,e f!o" $o!'o!ate a# e,, a# %"an an& te$no,ogi$a, !e#o%!$e# in te R=D &e'a!t"ent. Lin(age# i$ a!e o!i+onta, - a$!o## &e'a!t"ent#5 a$!o## !egiona, offi$e#5 a$!o## "an%fa$t%!ing ',ant# o! &i)i#ion# !e8%i!e $oo!&ination an& $oo'e!ation to get te o!gani+ationa, %nit# 4a,, ',a*ing in a!"on*.4 o! e6a"',e5 a #t!ateg* $a,,ing fo! int!o&%$tion of a ne '!o&%$t !e8%i!e# te $o"ine& effo!t# of an& t%# $oo!&ination an& $oo'e!ation a"ong te R=D5 te "a!(eting5 an& te "an%fa$t%!ing &e'a!t"ent#. o! "o!e on te #%2e$t of ,in(age5 ',ea#e #ee Lin(age: Te o%n&ation fo! E)e!*ting E,#e. Re,ation Beteen St!ateg* o!"%,ation An& St!ateg* I"',e"entation: In o!&e! to a$ie)e it# o2e$ti)e#5 an o!gani+ation "%#t not on,* fo!"%,ate %t a,#o i"',e"ent it# #t!ategie# effe$ti)e,*. Te ig%!e !e'!e#ent# te i"'o!tan$e of ot ta#(# in "at!i6 fo!" an& #%gge#t# te '!oa,e o%t$o"e# of te fo%! 'o##i,e $o"ination# of te#e )a!ia,e#: - S%$$e## i# te "o#t ,i(e,* o%t$o"e en #t!ateg* i# a''!o'!iate an& i"',e"entation goo&. Ro%,ette in)o,)e# #it%ation e!ein a 'oo! #t!ateg* i# i"',e"ente& e,,. - T!o%,e i# $a!a$te!i+e& * #it%ation# e!ein an a''!o'!iate #t!ateg* i# 'oo!,* i"',e"ente&. - ai,%!e in)o,)e# #it%ation# e!ein a 'oo! #t!ateg* i# 'oo!,* i"',e"ente&. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
Diagno#ing * a #t!ateg* fai,e& in te !o%,ette5 t!o%,e5 an& fai,%!e $e,,# in o!&e! to fin& a !e"e&* !e8%i!e# te ana,*#i# of ot fo!"%,ation an& i"',e"entation. S.Ce!to an& 0. Pete! '!o'o#e& a fi)e-#tage "o&e, of te #t!ateg* i"',e"entation '!o$e##: 1. &ete!"ining o "%$ te o!gani+ation i,, a)e to $ange in o!&e! to i"',e"ent te #t!ateg* %n&e! $on#i&e!ation5 %n&e! $on#i&e!ation 7. ana,*+ing te fo!"a, an& info!"a, #t!%$t%!e# of te o!gani+ation <. ana,*+ing te 4$%,t%!e4 of te o!gani+ation >. #e,e$ting an a''!o'!iate a''!oa$ to i"',e"enting te #t!ateg* . i"',e"enting te #t!ateg* an& e)a,%ating te !e#%,t#. I"',e"entation i# #%$$e##f%,,* initiate& in t!ee inte!!e,ate& #tage#: 1. I&entifi$ation of "ea#%!a,e5 "%t%a,,* &ete!"ine& ann%a, o2e$ti)e#. 7. De)e,o'"ent of #'e$ifi$ #t!ategie#. <. De)e,o'"ent an& $o""%ni$ation of $on$i#e 'o,i$ie# to f%n$tiona, g%i&e &e$i#ion#. A ene!a, !a"eo!( o! St!ateg* I"',e"entation: Te fi!#t #te' in i"',e"entation i# i&entif*ing te a$ti)itie#5 &e$i#ion#5 an& !e,ation#i'# $!iti$a, to a$$o"',i#ing te a$ti)itie#. Te!e a!e #i6 '!in$i'a, a&"ini#t!ati)e ta#(# tat #a'e a "anage!9# a$tion agen&a fo! i"',e"enting #t!ateg*. In gene!a,5 e)e!* %nit of an o!gani+ation a# to a#(5 4Wat i# !e8%i!e& fo! %# to i"',e"ent o%! 'a!t of te o)e!a,, #t!ategi$ ',an an& o $an e et# get it &one34. Te #'e$ifi$ $o"'onent# of ea$ of te #i6 #t!ateg*-i"',e"entation ta#(#: 1. B%i,&ing an o!gani+ation $a'a,e of e6e$%ting te #t!ateg*. Te o!gani+ation "%#t a)e te #t!%$t%!e ne$e##a!* to t%!n te #t!ateg* into !ea,it*. %!te!"o!e5 te fi!"9# 'e!#onne, "%#t 'o##e## te #(i,, nee&e& to e6e$%te te #t!ateg* #%$$e##f%,,*. Re,ate& to ti# i# te nee& to a##ign te !e#'on#ii,it* fo! a$$o"',i# (e* i"',e"entation ta#(# to te !igt in&i)i&%a,# o! g!o%'#. 7. E#ta,i#ing a #t!ateg*-#%''o!ti)e %&get. If te fi!" i# to a$$o"',i# #t!ategi$ o2e$ti)e#5 to' "anage"ent "%#t '!o)i&e te 'eo',e5 e8%i'"ent5 fa$i,itie#5 an& ote! !e#o%!$e# to $a!!* o%t it# 'a!t of te #t!ategi$ ',an. %!te!5 on$e te #t!ateg* a# een &e$i&e& on5 te (e* ta#(# to 'e!fo!"e& an& (in&# of &e$i#ion !e8%i!e& "%#t e i&entifie&5 fo!"a, ',an# "%#t a,#o e &e)e,o'e&. Te ta#(# #o%,& e a!!ange& in a #e8%en$e $o"'!i#ing a ',an of a$tion itin ta!get# to e a$ie)e& at #'e$ifi$ &ate#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
<. In#ta,,ing inte!na, a&"ini#t!ati)e #%''o!t #*#te"#. Inte!na, #*#te"# a!e 'o,i$ie# an& '!o$e&%!e# to e#ta,i# &e#i!e& t*'e# of ea)io!5 info!"ation #*#te"# to '!o)i&e #t!ateg*-$!iti$a, info!"ation on a ti"e,* a#i#5 an& ate)e! in)ento!*5 "ate!ia,# "anage"ent5 $%#to"e! #e!)i$e5 $o#t a$$o%nting5 an& ote! a&"ini#t!ati)e #*#te"# a!e nee&e& to gi)e te o!gani+ation i"'o!tant #t!ateg*-e6e$%ting $a'ai,it*. Te#e inte!na, #*#te"# "%#t #%''o!t te "anage"ent '!o$e##5 te a* te "anage!# in an o!gani+ation o!( togete!5 a# e,, a# "onito! #t!ategi$ '!og!e##. >. De)i#ing !ea!&# an& in$enti)e# tat a!e tigt,* ,in(e& to o2e$ti)e# an& #t!ateg*. Peo',e an& &e'a!t"ent# of te fi!" "%#t e inf,%en$e&5 t!o%g in$enti)e#5 $on#t!aint#5 $ont!o,5 #tan&a! an& !ea! to a$$o"',i# te #t!ateg*. Sa'ing $%,t%!e te $o!'o!ate to fit teto #t!ateg*. A /an& #t!ateg*#%''o!ti)e. $o!'o!ate $a%#e#$%,t%!e te o!gani+ation o!( a!& inte,,igent,* toa!& te a$$o"',i#"ent of te #t!ateg*. . E6e!$i#ing #t!ategi$ ,ea&e!#i'. St!ategi$ ,ea&e!#i' $on#i#t# of otaining $o""it"ent to te #t!ateg* an& it# a$$o"',i#"ent. It a,#o in)o,)e# te $on#t!%$ti)e %#e of 'oe! an& 'o,iti$#5 an& 'o,iti$# in %i,&ing a $on#en#%# to #%''o!t te #t!ateg*. Te G-#9# !a"eo!( M$?in#e* an& Co"'an* a)e &e)e,o'e& a "o&e, (no a#5 4te #e)en e,e"ent# of #t!ategi$ fit54 o! te 4G-S9#.4 G-S9# in$,%&e: 1. 7. <. >. . . G. #t!ateg* /te $oe!ent #et of a$tion# #e,e$te& a# a $o%!#e of a$tion #t!%$t%!e /te &i)i#ion of ta#(# a# #on on te o!gani+ation $a!t #*#te"# /te '!o$e##e# an& f,o# tat #o o an o!gani+ation get# ting# &one #t*,e /o "anage"ent ea)e# #taff /te 'eo',e in te o!gani+ation #a!e&-)a,%e# /)a,%e# #a!e& * a,, in te o!gani+ation an& #(i,,# /$a'ai,itie# 'o##e##e& * te o!gani+ation. Te %n&e!,*ing $on$e't of te "o&e, i# tat a,, #e)en of te#e )a!ia,e# "%#t 4fit4 it one anote! in o!&e! fo! #t!ateg* to e #%$$e##f%,,* i"',e"ente&. O'e!ationa,i+ing St!ateg* Int!o&%$tion Te o,e $on$e't of #t!ateg* an& #t!ategi$ tin(ing i# t*'i$a,,* a&)an$e& it an a,"o#t "*#ti$a, a%!a a# a to'i$ tat i# &ee',* inte,,e$t%a, an& $o"',e6. Te #%2e$t i# in&ee& $!iti$a, to %#ine## teo!*5 an& te!e a# een #ignifi$ant to%gt an& "%$ !e#'e$te& !ain'oe! a'',ie& ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
to &efining it5 ana,*+ing it an& a&)i#ing ao%t it. Hoe)e! at te en& of te &a* it i# i"'o!tant to !e"e"e! tat fi!" i#n;t 2%&ge& * it# #t!ateg* %t * it# #%$$e## a# a %#ine##. B%#ine## #%$$e## $o"e# f!o" i"',e"entation. B%#ine##e# nee& a #t!ateg*. B%t te* nee& #t!ategi$ tin(ing e)en "o!e. Te* &on;t nee& o)e! $o"',i$ate& o! o)e! n%an$e& $on$e't#. Te* &on;t nee& an*one to te,, te" at tei! #t!ateg* #o%,& e /at an* '!i$e. Mo#t fi!"# to%g $o%,& %#e a &i#$i',ine& a''!oa$ to e,' #%!fa$e an& o!gani+e at te* a,!ea&* (no a# one!# an& o'e!ato!# ao%t tei! %#ine##. A'',*ing ti# (no,e&ge i# te gi#t of O'e!ationa,i+ing #t!ateg*. St!ateg* Define& Let;# #ta!t it at #t!ateg* i# not. It i# not: P,anning inan$ia, "anage"ent Inno)ation Manage"ent #*#te" A &i!t* o!& 0%#t te '!o)in$e of ig $o"'anie#. St!ateg* i# #i"',* te '!o$e## of &efining &e$i#ion# o! $oi$e# !e8%i!e& to "eet #'e$ifi$ %#ine## o2e$ti)e#. Note te e"'a#i# on '!o$e##. Te o%t'%t of te '!o$e## i# te $oi$e# te fi!" a# "a&e ao%t o te* i,, a$$o"',i# #o"eting. An o!gani+ation a# to #e'a!ate te "ean# of a$ie)e"ent f!o" te en&# o! te o2e$ti)e# te* a)e &efine&. S%$$e## i# &efine& #o,e,* * te fi!" an& it# #ta(eo,&e!#. In o!&e! to &e)e,o' a )i#ion *o% fi!#t a)e to %n&e!#tan& e!e *o% a!e in o!&e! to #et te $onte6t fo! tat )i#ion. Te )i#ion g%i&e# *o%! e6a"ination of te f%n&a"enta, tenet# fo! an* %#ine##. In te $onte6t of *o%! )i#ion *o% a#( an& an#e! "an* 8%e#tion#5 &efine goa,#5 #et o2e$ti)e# an& &e)e,o' #'e$ifi$ o'e!ating ',an#. St!ateg* an& #t!ategi$ tin(ing often e$o"e $onf%#e&. Yo% "a* a)e a $o"',e6 an& &etai,e& #t!ateg* o! *o% "a* 2%#t a)e a #et of i&ea#. Yo%! #t!ateg* $o%,& e a oat an$o! &i#g%i#e& a# an i"'o!tant ,oo(ing in&e! it %n&!e&# of 'age#5 o! it $o%,& e a n%"e! of to-&o ,i#t#. Te '!o$e## * i$ *o% &e)e,o'e& an* o! a,, of te#e i# a$$%!ate,* ,ae,e& #t!ategi$ tin(ing. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
O'e!ationa,i+ing Te fo!"at of te o%t'%t i# noe!e nea! a# $!iti$a, a# *o%! ai,it* to e g%i&e& * it to %#ine## #%$$e##. Tat ai,it* i# often $a,,e& o'e!ationa, effe$ti)it*. At A!(et*'e e $a,, it o'e!ationa,i+ing a #t!ateg* %t it "%#t e te goa, of an* #t!ategi$ '!o$e##. Te &i#$i',ine an& #(i,, nee&e& to i"',e"ent o! &e',o* a #t!ateg* i# e)e!* it a# !a!e a# te e6'e!ti#e an& &e&i$ation !e8%i!e& to $!aft #t!ateg*. Te to "%#t e #een a# &iffe!ent #i&e# of te #a"e $oin. i"'a$t#5 it i# %#%a,,* te negati)e one# tat $on$e!n %# in te $onte6t of i"',e"enting #t!ateg*. Te "e!e a$t of &efining "et!i$# fo! "anaging '!og!e## again#t o2e$ti)e# #o%,& fo!$e &i#$%##ion an& ana,*#i# of 'o##i,e !i#(# an& %n$e!taintie#. Ann%a, o2e$ti)e#: E#ta,i#ing Ann%a, O2e$ti)e# in St!ateg* I"',e"entation P!o$e##: E#ta,i#ing ann%a, o2e$ti)e# i# a &e$ent!a,i+e& a$ti)it* tat &i!e$t,* in)o,)e# a,, "anage!# in an o!gani+ation. A$ti)e 'a!ti$i'ation in e#ta,i#ing ann%a, o2e$ti)e# $an ,ea& to a$$e'tan$e an& $o""it"ent. Ann%a, o2e$ti)e# a!e e##entia, fo! #t!ateg* i"',e"entation e$a%#e te* / 1 !e'!e#ent te a#i# fo! a,,o$ating !e#o%!$e# / 7 a!e a '!i"a!* "e$ani#" fo! e)a,%ating "anage!#9 / < a!e te "a2o! in#t!%"ent fo! "onito!ing '!og!e## toa!& a$ie)ing ,ong-te!" o2e$ti)e# an& / > e#ta,i# o!gani+ationa,5 &i)i#iona,5 an& &e'a!t"enta, '!io!itie#. Con#i&e!a,e ti"e an& effo!t #o%,& e &e)ote& to en#%!ing tat ann%a, o2e$ti)e# a!e e,, $on$ei)e&5 $on#i#tent it ,ong-te!" o2e$ti)e#5 an& #%''o!ti)e of #t!ategie# to e i"',e"ente&. A''!o)ing5 !e)i#ing5 o! !e2e$ting ann%a, o2e$ti)e# in "%$ "o!e tan a !%e!-#ta"' a$ti)it*. Te '%!'o#e of ann%a, o2e$ti)e# $an e #%""a!i+e& a # fo,,o#. C,ea!,* #tate& an& $o""%ni$ate& o2e$ti)e a!e $!iti$a, to #%$$e## in a,, t*'e# an& #i+e# of fi!"#. Ann%a, o2e$ti)e#5 #tate& in te!"# of '!ofitai,it*5 g!ot5 an& "a(e! #a!e * %#ine## #eg"ent5 geog!a'i$ a!ea5 $%#to"e! g!o%'#5 an& '!o&%$t5 a!e $o""on in o!gani+ation. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G1
Ann%a, o2e$ti)e# #o%,& e "ea#%!a,e5 $on#i#tent5 !ea#ona,e5 $a,,enging5 $,ea!5 $o""%ni$ate& t!o%go%t te o!gani+ation5 $a!a$te!i+e& * an a''!o'!iate ti"e &i"en#ion5 an& a$$o"'anie& * $o""en#%!ate !ea!&# an& #an$tion#. Too often5 o2e$ti)e# a!e #tate& in gene!a,itie#5 it ,itt,e o'e!ationa, %#ef%,ne##. Ann%a, o2e$ti)e#5 #%$ a# 4to i"'!o)e $o""%ni$ation4 o! 4to i"'!o)e 'e!fo!"an$e54 a!e not $,ea!5 #'e$ifi$5 o! "ea#%!a,e. O2e$ti)e# #o%,& #tate 8%antit*5 8%a,it*5 $o#t5 an& ti"e-an& a,#o e )e!ifia,e. Te!"# an& '!a#e# #%$ a# "a6i"i+e5 "ini"i+e5 a# #oon a# 'o##i,e5 an& a&e8%ate #o%,& e a)oi&e&. Ann%a, o2e$ti)e# #o%,& e $o"'ati,e it e"',o*ee#99 an& "anage!#99 )a,%e# an& #o%,& e #%''o!te& * $,ea!,* #tate& 'o,i$ie#. Mo!e of #o"eting i# not a,a*# ette!. I"'!o)e& 8%a,it* o! !e&%$e& $o#t "a*5 fo! e6a"',e5 e "o!e i"'o!tant tan 8%antit*. It i# i"'o!tant to tie !ea!&# an& #an$tion# to ann%a, o2e$ti)e# #o tat e"',o*ee# an& "ange!# %n&e!#tan& tat a$ie)ing o2e$ti)e# i# $!iti$a, to #%$$e##f%, #t!ateg* i"',e"entation. C,ea! ann%a, o2e$ti)e# &o not g%a!antee #%$$e##f%, #t!ateg* i"',e"entation5 %t te* &o in$!ea#e te ,i(e,ioo& tat 'e!#ona, an& o!gani+ationa, ai"# $an e a$$o"',i#e&. O)e!e"'a#i# on a$ie)ing o2e$ti)e# $an !e#%,t in %n&e#i!a,e $on&%$t5 #%$ a# fa(ing te n%"e!#5 &i#to!ting te !e$o! an& ,etting o2e$ti)e# e$o"e en&# in te"#e,)e#. Manage!# "%#t e a,e!t to te#e 'otentia, '!o,e"#. %n$tiona, St!ategie# Te #%$$e## of *o%! %#ine##-%nit #t!ateg* &e'en&# not on,* on o e,, *o%! fi!" 'o#ition# it#e,f an& $o"'ete# in te gi)en "a!(et #eg"ent5 %t a,#o on o e,, *o% $oo!&inate te )a!io%# f%n$tion# !e8%i!e& to &e#ign5 "an%fa$t%!e5 &e,i)e!5 an& #%''o!t te '!o&%$t o! #e!)i$e. Te!efo!e5 f%n$tiona, #t!ategie# a!e )ita,,* i"'o!tant. Te* $an e a "a2o! &ete!"inant of te $o"'etiti)e a&)antage of *o%! %#ine##5 #in$e te* a!e a#e& on $o"'eten$ie# e"anating f!o" *o%! fi!"9# inte!na, '!o$e##e#. Te#e inte!na, '!o$e##e# a&& )a,%e /te )a,%e $ain of te %#ine## an& gi)e te fi!" te ai,it* to i"',e"ent $e!tain %#ine##-%nit #t!ategie#. a,%e $ain an& f%n$tiona, #t!ategie# a!e #%''o!te& * too,# #%$ a# tota, 8%a,it* "anage"ent5 !eenginee!ing5 an& ti"e-a#e& $o"'etition. Te#e te$ni8%e#5 oe)e!5 a!e not #t!ateg* too,# in ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G7
te"#e,)e#5 e$a%#e te* on,* #%''o!tQnot &ete!"ineQat *o%! $o"'an*9# %ni8%e an& #%#taina,e $o"'etiti)e a&)antage i,, e. Te!e a!e #e)e!a, t*'e# of f%n$tiona, #t!ategie#5 "an* of i$ a!e a&&!e##e& in ote! $o%!#e# in te t*'i$a, %#ine## $%!!i$%,%". Mo&%,e 1> of *o%! te6t fo$%#e# on ne '!o&%$t &e)e,o'"entinno)ation an& !e#ea!$ an& &e)e,o'"ent /R=Dte$no,og* #t!ategie#. Mai&i8%e an& Pat$ #%gge#t fo%! "a2o! te$no,og*-!e,ate& #t!ategie# *o%! fi!" "a* $oo#e. Ea$ a# &iffe!ent !e8%i!e"ent# fo! R=D5 "an%fa$t%!ing5 "a!(eting5 finan$e5 o!gani+ation an& ti"ing. Te te$no,og* #t!ateg* a&o'te& * *o%! $o"'an* "a* e te '!o'%,#i)e fo!$e ein& ote! a$tion# *o% ta(e. A fi!#t-to-"a!(et #t!ateg* "ean# getting te '!o&%$t to te "a!(et efo!e te $o"'etition &oe#. Ti# #t!ateg* !e8%i!e# e6ten#i)e !e#ea!$ an& e"'a#i+e# "e&i%"-#$a,e It i,, i"'o!tantan& to &e)e,o'"ent #t!e## #ti"%,ation of '!i"a!* &e"an& an&"an%fa$t%!ing. f,e6ii,it*. Yo%! fi!"e #o%,& a,#o en$o%!age !i#(-ta(ing5 #in$e in te fi!#t-to-"a!(et #t!ateg* *o% "a* nee& a$$e## to !i#( $a'ita,. ina,,*5 *o%! $o"'an* i,, ant to ente! te "a!(et a# ea!,* a# 'o##i,e in te '!o&%$t9# ,ife $*$,e. In te #e$on&-to-"a!(et te$no,og* #t!ateg*5 *o% i,, ant to ente! te "a!(et en te '!o&%$t i# 2%#t eginning it# g!ot #tage. Ti# #t!ateg* !e8%i!e# a&)an$e&5 f,e6i,e5 an& !e#'on#i)e !e#ea!$ an& &e)e,o'"ent5 #in$e it i# )e!* i"'o!tant fo! *o% to e a,e to &iffe!entiate *o%! '!o&%$t f!o" te o!igina, an& to #ti"%,ate #e$on&a!* &e"an&. Yo%! fi!" #o%,& a,#o e a,e to #ing 8%i$(,* into "e&i%"-#$a,e "an%fa$t%!ing5 an a$ti)it* tat "a* !e8%i!e a$$e## on #o!t noti$e to "e&i%" to ,a!ge 8%antitie# of $a'ita,. ,e6ii,it* an& effi$ien$* a!e te %++ o!&# if *o% $oo#e ti# 4fa#t fo,,oe!4 #t!ateg*. In te $o#t "ini"i+ation o! 4,ate-to-"a!(et4 #t!ateg*5 *o% atte"'t /afte! noting *o%! $o"'etition9# ta$ti$# an& !e#%,t# to a)oi& "a(ing tei! "i#ta(e#. In ti# #t!ateg*5 *o%! '!o&%$t ente!# te "a!(et &%!ing te ,ateESHWARI.S---LORAA BUSINESS ACADEMY Page 1G<
g!ot o! ea!,*-"at%!ing #tage# in it# ,ife $*$,e. o! ti# #t!ateg* to e #%$$e##f%,5 *o%! $o"'an* "%#t "ini"i+e #e,,ing an& &i#t!i%tion $o#t#5 a)e a$$e## to ,a!ge a"o%nt# of $a'ita,5 an& a)e te $a'ai,itie# fo! effi$ient5 ,a!ge-#$a,e '!o&%$tion. Wen %#ing ti# #t!ateg*5 *o% #o%,& fo$%# *o%! R=D on &e)e,o'ing #(i,,# in $o#t-effe$ti)e '!o&%$tion. Yo%! $o"'an* o!gani+ation #o%,& #t!e## ie!a!$i$a, $ont!o,5 effi$ien$*5 an& enfo!$e"ent of '!o$e&%!e#. In a "a!(et #eg"entation #t!ateg*5 *o% i,, gene!a,,* ente! te "a!(et &%!ing te g!ot #tage of te '!o&%$t ,ife $*$,e5 a,to%g *o% "a* ente! at a,"o#t an* #tage. Ti# #t!ateg* i# often %#e& * #"a,,e! '!o&%$e!# o a)e i&entifie& an& !ea$e& $e!tain #eg"ent# of te "a!(et. A fa)o!a,e !e,ation#i' a# %#%a,,* een a$ie)e& * offe!ing a 'a!ti$%,a! feat%!e o! #'e$ia, #e!)i$e a#o!gani+ation 'a!t of te &e'a!t"ent# '!o&%$t. ,e6ii,it* i# )ita, in ot te "an%fa$t%!ing an& of *o%! $o"'an* in '!a$ti$ing "a!(et #eg"entation. Yo% i,, nee& finan$ia, a$(ing in "e&i%" to ,a!ge a"o%nt#5 an& *o%! R=D &e'a!t"ent "%#t (e* it# o'e!ation# toa!& $%#to" enginee!ing an& a&)an$e& '!o&%$t-&e#ign. W* i# Con$i#e Co""%ni$ation I"'o!tant fo! De)e,o'ing Effe$ti)e St!ategi$ Lea&e!#i'3 Con$i#e $o""%ni$ation i# e##entia, fo! te #%$$e## of an* o!gani+ation an& i# e#'e$ia,,* i"'o!tant to &e)e,o' effe$ti)e #t!ategi$ ,ea&e!#i'. Te fo$%# of #t!ategi$ ,ea&e!#i' i# to %i,& an& "aintain a #%#taina,e $o"'etiti)e a&)antage fo! te o!gani+ation5 a$$o!&ing to Ra,' Sta$*5 a%to! of 4Lea!ning a# an A$ti)it* of Inte!&e'en&ent Peo',e.4 Con$i#e $o""%ni$ation i# #ignifi$ant in &e)e,o'ing effe$ti)e #t!ategi$ ,ea&e!#i'5 a# it i# t*'i$a,,* te !e#'on#ii,it* of ,ea&e!# to t!an#,ate te &e#i!e# of to#e at te %''e! e$e,on# of te o!gani+ation to to#e at te otto". 1. St!ategi$ Manage"ent o Te #t!ategi$ ',anning '!o$e## i# a $o""on "eto& %#e& to &e)e,o' an& "aintain a #%#taina,e $o"'etiti)e a&)antage fo! an o!gani+ation. In te #t!ategi$ ',anning '!o$e##5 o!gani+ationa, ,ea&e!# &e)e,o' a "i##ion #tate"ent fo! te o!gani+ation5 e6',aining it# !ea#on fo! e6i#ten$e. Manage!# an& ,ea&e!# "%#t ten &e)e,o' #t!ategie# to "eet ti# '%!'o#e. Te &e)e,o'"ent of effe$ti)e #t!ategi$ ,ea&e!#i' i# )ita, to te #%$$e## of te ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G>
#t!ategi$ ',anning '!o$e##5 an& $on$i#e $o""%ni$ation i# an e##entia, e,e"ent of ti# &e)e,o'"ent. A,ign"ent o St!ategi$ ,ea&e!#i' t*'i$a,,* in)o,)e# te a,ign"ent of te &a*-to-&a* o!( a$ti)itie# it te o!gani+ation9# "i##ion #tate"ent %#ing #t!ategi$ ,ea&e!#i'. Con$i#e $o""%ni$ation i# e##entia, to te #%$$e## of an* #t!ategi$ "anage"ent ',an. o! o'e!ationa, a$ti)itie# to a,ign it te "i##ion #tate"ent5 #t!ategi$ ,ea&e!# "%#t en#%!e tat"%#t o!(e!# "aintain $,ea! %n&e!#tan&ing of tat "i##ion #tate"ent. Senio! "anage!# en$o%!age tea$,a!ifi$ation of e6'e$tation# #o o!(e!#9 %n&e!#tan&ing of at i# e6'e$te& of te" "ea#%!e# %' to #t!ategi$ ,ea&e!#i' "et!i$#. Sen&e!Re$ei)e! Co""%ni$ation Mo&e, o One of te "o#t e##entia, ta#(# of te #t!ategi$ ,ea&e! i# to $o""%ni$ate o!gani+ationa, #t!ategie# to to#e o i,, i"',e"ent te". Con$i#e $o""%ni$ation i# a )ita, e,e"ent in ti# '!o$e##. Te #en&e!!e$ei)e! $o""%ni$ation "o&e, i# a %#ef%, too, fo! &e)e,o'ing te#e $o!e $o"'eten$ie# itin #t!ategi$ ,ea&e!#. E)e!* $o""%ni$ation in)o,)e# a #en&e! an& a !e$ei)e!. o! #t!ategi$ ,ea&e!# to e t!%,* effe$ti)e5 te* "%#t %n&e!#tan& te i"'o!tan$e of $on$i#e $o""%ni$ation# to en#%!e te "e##age# te* #en& to o!(e!# a!e !e$ei)e& in te "anne! inten&e&. Lea&e!# )#. Manage!# o Wi,e not a,, ,ea&e!# a!e ne$e##a!i,* "anage!#5 it i# e##entia, tat a,, "anage!# e '!o'e!,* &e)e,o'e& to '!o)i&e effe$ti)e #t!ategi$ ,ea&e!#i' fo! te o!gani+ation. Wa!!en Benni#5 a%to! of 4On Be$o"ing a Lea&e!54 &e#$!ie# #e)e!a, &iffe!en$e# eteen ,ea&e!# an& "anage!#. o! e6a"',e5 "anage!# a!e a&"ini#t!ato!#5 i,e ,ea&e!# a!e inno)ato!#. Manage!# fo$%# on $o"',eting ta#(#5 i,e ,ea&e!# fo$%# on 'eo',e. Con$i#e $o""%ni$ation i# an e##entia, too, of te effe$ti)e ,ea&e!. In#tit%tiona,i+ing te #t!ategi$ #t!%$t%!e: In#tit%tiona,i+ation of St!ateg*: Te fi!#t a#i$ a$tion tat i# !e8%i!e& fo! '%tting a #t!ateg* into o'e!ation i# it# in#tit%tiona,i+ation. Sin$e #t!ateg* &oe# not e$o"e eite! a$$e'ta,e o! effe$ti)e * )i!t%e of eing e,, &e#igne& an& $,ea!,* anno%n$e&5 te #%$$e##f%, i"',e"entation of #t!ateg* !e8%i!e# tat te #t!ateg* f!a"e! a$t# a# it# '!o"ote! an& &efen&e!. Often #t!ateg* $oi$e e$o"e# a 'e!#ona, $oi$e of te #t!ategi#t e$a%#e i# 'e!#ona,it* )a!ia,e# e$o"e an inf,%entia, fa$to! in #t!ateg* fo!"%,ation. T%#5 it e$o"e# a 'e!#ona, #t!ateg* of te #t!ategi#t. Te!efo!e5 te!e i# an %!gent nee& fo! te in#tit%tiona,i+ation of #t!ateg* e$a%#e ito%t it5 te #t!ateg* i# #%2e$t to eing ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
%n&e!"ine&. Te!efo!e5 it i# te !o,e of te #t!ategi#t to '!e#ent te #t!ateg* to te "e"e!# of te o!gani+ation in a a* tat a''ea,# to te" an& !ing# tei! #%''o!t. Ti# i,, '%t o!gani+ationa, 'eo',e to fee, tat it i# tei! on #t!ateg* !ate! tan te #t!ateg* i"'o#e& on te". S%$ a fee,ing $!eate# $o""it"ent #o e##entia, fo! "a(ing #t!ateg* #%$$e##f%,. ORMUTIN UNCTIONAL STRATEY Re$a,, f!o" Ca'te! > tat f%n$tiona, #t!ateg* '!o)i&e# an a$tion ',an fo! #t!ateg* i"',e"entation at te ,e)e, of te o!( g!o%' an& in&i)i&%a,. It '%t# $o!'o!ate an& %#ine## #t!ateg* into o'e!ation * &efining te a$ti)itie# nee&e& fo! i"',e"entation. De'en&ing on te #'e$ifi$ #t!ateg* e g!o%'# i"',e"ente&5 #t!ateg* na* nee& to e fo!"%,ate& * a )a!iet* of to o!( itin f%n$tiona, te o!gani+ation Con#i&e!5 fo! e6a"',e5 te f%n$tiona, #t!ategie# tat o%,& e ne$e##a!* if Co$a-Co,a &e$i&e& to &e)e,o' a ne ,ine of f!%it 2%i$e#. Te !e#ea!$ an& &e)e,o'"ent &e'a!t"ent o%,& a)e to &e)e,o' a fo!"%,a te "a!(eting &e'a!t"ent o%,& a)e to $on&%$t ta#te te#t#5 &e)e,o' '!o"otiona, $a"'aign#5 an& i&entif* te a''!o'!iate &i#t!i%tion $anne,# an& te '!o&%$tion &e'a!t"ent o%,& a)e to '%!$a#e ne e8%i'"ent an& 'e!a'# %i,& ne fa$i,itie# to '!o&%$e te f!%it 2%i$e ,ine. Ta,e .> o%t,ine# 2%#t a fe of te f%n$tiona, #t!ategie# ne$e##a!* to int!o&%$e a ne ,ine of f!%it 2%i$e#. Te "o#t #ignifi$ant $a,,enge ,ie# in $oo!&inating te a$ti)itie# of te )a!io%# o!( g!o%'# tat "%#t o!( togete! to i"',e"ent te #t!ateg*. Te #t!ategie# "%#t e $on#i#tent ot itin ea$ f%n$tiona, a!ea of te %#ine## /#%$ a# te "a!(eting &e'a!t"ent an& eteen f%n$tiona, a!ea# /#%$ a# te "a!(eting &e'a!t"ent an& te '!o&%$tion &e'a!t"ent.>J o! e6a"',e5 if Co$a-Co,a9# ne f!%it 2%i$e ,ine i# to e '!i$e& at a '!e"i%" ,e)e,5 it "%#t e '!o"ote& to %*e!# o &e#i!e a '!e"i%" '!o&%$t an& &i#t!i%te& t!o%g $anne,# tat !ea$ to#e %*e!#. Te#e "a!(eting &e$i#ion# "%#t e $on#i#tent. %!te!5 te '!o&%$tion &e'a!t"ent "%#t '%!$a#e ig8%a,it* !a "ate!ia,# an& '!o&%$e a '!o&%$t tat i# o!t* of a '!e"i%" '!i$e. Wito%t $on#i#ten$* itin an& eteen te o!( g!o%'# of te o!gani+ation5 te i"',e"entation '!o$e## i# #%!e to fai,. EERY BUSINESS UNIT DEELOPS UNCTIONAL STRATEIES OR EACH MA0OR DEPARTMENT * * * * MAR?ETIN STRATEY INANCIAL STRATEY RESEARCH = DEELOPMENT STRATEY OPERATIONS STRATEY ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
* * * * PURCHASIN STRATEY LOISTICS STRATEY HUMAN RESOURCES STRATEY INORMATION TECHNOLOY STRATEY BASIC MAR?ET-PRODUCT STRATEIES : THE CUSTOMERPRODUCT DECISION: MAR?ETIN STRATEIES: THE CUSTOMER-PRODUCT DECISION: MAR?ET PENETRATION STRATEY /Sta* in $%!!ent "a!(et# it e6i#ting '!o&%$t# INCREASE RATE O PURCHASECONSUMPTION ATTRACT RIAL;S CUSTOMERS BUY OUT RIALS CONERT NON-USERS INTO CURRENT USERS MAR?ET DEELOPMENT STRATEY /in& ne "a!(et# fo! $%!!ent '!o&%$t# ENTER NEW EORAPHICAL MAR?ETS IND NEW /De)e,o' USES OR ne EISTIN PRODUCTS IND NEW TARET MAR?ETS PRODUCT DEELOPMENT STRATEY '!o&%$t# fo! e6i#ting "a!(et# IMPROE EATURES IMPROE @UALITYRELIABILITYDURABILITY ENHANCE AESTHETICSSTYLIN ADD MODELS ESHWARI.S---LORAA BUSINESS ACADEMY Page 1GG
DIERSIICATION STRATEY /De)e,o' ne '!o&%$t# fo! ne "a!(et# THE > KP;S O MAR?ETIN: MAR?ETIN MI ISSUES P!o&%$t St!ateg* S'e$if*ing te e6a$t '!o&%$t o! #e!)i$e to e offe!e& P!o"otion St!ateg* Ho te '!o&%$t o! #e!)i$e i# to e $o""%ni$ate& to $%#to"e!# Canne, o! KP,a$e St!ateg* Se,e$ting te "eto& fo! &i#t!i%ting te '!o&%$t o! #e!)i$e P!i$e St!ateg* E#ta,i#ing a '!i$e fo! te '!o&%$t o! #e!)i$e KS(i" '!i$ing /ig en *o% a!e a 'ionee! KPenet!ation '!i$ing /,o %i,&# "a!(et #a!e# KD*na"i$ '!i$ing /'!i$e# )a!* f!e8%ent,* a#e& on &e"an&a)ai,ai,it* Di#t!i%te t!o%g &ea,e! neto!(# o! t!o%g "e!$an&i#e!#3 Se,, &i!e$t,* to $on#%"e!# on o! t!o%g "a## inte!net3 KP%# - #'en& on '!o"otion# an& t!o%g &i#$o%nt# to#to!e# '%# '!o&%$t# KP%,, - #'en& to %i,& !an& aa!ene## #o $on#%"e!# i,, a#( fo! it * na"e Ne o! e6i#ting '!o&%$t3 `fo! ne o! e6i#ting $%#to"e!#3 INANCIAL MANAEMENT STRATEIES: CAPITAL AC@UISITIONS Det Le)e!age5 Sto$( Sa,e#5 = ain# f!o" O'e!ation# E8%it* finan$ing i# '!efe!!e& fo! !e,ate& &i)e!#ifi$ation Page 1GJ ESHWARI.S---LORAA BUSINESS ACADEMY
Det finan$ing i# '!efe!!e& fo! %n!e,ate& &i)e!#ifi$ation Le)e!age& %*o%t# /LBO# "a(e te a$8%i!e& fi!" 'a* off te &et CAN WE ROW BY RELYIN ON ONLY INTERNAL CASH LOWS3 DO STOC? SALES DILUTE OWNERSHIP CONTROL3 DOES A LARE DEBT RATIO CRIPPLE UTURE ROWTH3 DOES STRON LEERAE BOOST EARNINS PER SHARE3 DOES HIH DEBT DETER TA?EOER ATTEMPTS3 DO MOST LBO# UNDERPERORM <-> YEARS ATER THE BUYOUT3 RESOURCE ALLOCATIONS Di)i&en Sto$( P!i$e5 = Rein)e#t"ent Rein)e#t ea!ning# in fa#t-g!oing $o"'anie# ?ee'ing te #to$(o,&e!# $ontente& &i)i&en&# U#e of #to$( #',it# o! !e)e!#e# to "aintain ig it #to$($on#i#tent '!i$e# T!a$(ing #to$( (ee'# inte!e#t in / $o"'an*5 %t &oe#n;t a,,o ta(eo)e! RESEARCH = DEELOPMENT STRATEIES: LEEL O INNOATION Pionee! /Lea&e! ). Co'* Cat /o,,oe! Te$no,ogi$a, ,ea&e!#i' fit# e,, it &iffe!entiation A Kfo,,oe! #t!ateg* "a(e# #en#e it $o#t-,ea&e! #t!ategie# A!e e ette! at fin&ing a'',i$ation# an& $%#to"e! a&a'tation# tan a$t%a,,* in)enting #o"eting !ea,,* ne3 Diffe!ent t*'e# of R = D /a#i$5 '!o&%$t5 '!o$e## We!e i# te fi!";# i#to!i$ e6'e!ti#e a&)antage3 Ho $o"'etent a!e te R = D Pe!#onne,3 AC@UISITION O TECHNOLOY Inte!na,,* &e)e,o'e& ). a$8%i!e& f!o" o%t#i&e Te$no,og* KS$o%t# St!ategi$ Te$no,og* A,,ian$e# A$8%i!e "ino!it* #ta(e in '!o"i#ing ig-te$ )ent%!e#
OPERATIONS STRATEIES: ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
MANUACTURIN LOCATION Inte!na, P!o&%$tion ). O%t#o%!$ing Do"e#ti$ P,ant# ). Inte!nationa, Lo$ation# SYSTEM LAYOUT P!o&%$t ). P!o$e## La*o%t# 0o So'# ). Ma## P!o&%$tion 0o #o'#"a,, at$ '!o&%$tion fit# e,, it a &iffe!entiation #t!ateg* Contin%o%# '!o&%$tion &e&i$ate& t!an#fe! ,ine# e,'# a$ie)e $o#t ,ea&e!#i' U#e of !oot# an& CADCAM ). Lao! inten#e "an%fa$t%!ing Mo&%,a! Man%fa$t%!ing an& 2%#t-in-ti"e &e,i)e!* of #%a##e",ie# Contin%o%# i"'!o)e"ent #*#te"# ,oe! $o#t# an& in$!ea#e 8%a,it* PURCHASIN STRATEIES: SOURCIN
COMPONENTS AND SUPPLIES WHERE CAN THE HIHEST @UALITY COMPONENTS BE OUND3 O%t#o%!$ing /o%! fi!" %*# e)e!*ting B%*ing on te O'en Ma!(et /S'ot /'!i$e# f,%$t%ate Long-Te!" Cont!a$t# it M%,ti',e S%'',ie!# /,o i& So,e So%!$ing Pa!a,,e, /on,* one #%'',ie! i"'!o)e# 8%a,it* /to #ta(e #%'',ie!# '!ote$tion Ba$(a!& Integ!ation /o%! fi!" a# So%!$ing an one!#i' in te'!o)i&e# #%'',ie!# e %#e @%a#i-integ!ation /"ino!it* one!#i' 'o#ition in a #%'',ie! Ta'e!e& /'!o&%$e #o"e of at e nee&5 %t not a,, %,, /'!o&%$e a,, of o%! on nee&# U#e of Co"'onent In)ento!ie# ). 0%#t-in-ti"e #%'',* &e,i)e!* LOISTICS STRATEIES: DO WE HAE OODS THAT MUST BE TRANSPORTED OR DELIERED3 TYPE O MATERIALS TRANSPORTED /B%,(* o! Co"'a$t3 Ra Mate!ia,#5 S%'',ie#5 = Co"'onent# ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
ini#e& oo&# BEST MODE O TRANSPORTATION AIR RAIL TRUC? BARE DO WE WANT DEPENDABILITY5 LOW COST5 OR HIH @UALITY SERICE3 OUTSOURCE TRANSPORTATION OR DO IT YOURSEL3 CONTRACT WITH OTHERS U#e M%,ti',e Si''e!# ). 0%#t One /UPS3 Con#i&e! at$ &e,i)e!ie# ). 0%#t-in-ti"e a!!ange"ent#3 OWNERSHIP IN DISTRIBUTION CHAIN @%a#i Ta'e!e& %,, HUMAN RESOURCES STRATEIES: TALENT AC@UISITION Re$!%it f!o" O%t#i&e ). Inte!na, De)e,o'"ent Re8%i!e e6'e!ien$e&5 ig,*-#(i,,e& o!(e!# ). Ke i,, t!ain *o% Offe! Kto' &o,,a! age# = enefit# ). "ento!ing an& a $a!ee! WOR? ARRANEMENTS In&i)i&%a, 0o# ). Tea" Po#ition# Na!!o,*-&efine& 2o# ). Po#ition# it &i#$!etion an& a%tono"* On-'!e"i#e# Wo!( ). Te,e$o""%ting O'tion# MOTIATION = APPRAISAL E6t!in#i$ ). Int!in#i$ Rea!& S*#te"# A##e##"ent ). fo! &e)e,o'"ent a##e##"ent INORMATION fo! !ea!&# SYSTEMS In$enti)e# fo! i&ea# = o!igina,it* in$enti)e# fo!). $onfo!"it*3 STRATEIES: WOR?ER PRODUCTIITY = CONNECTIITY E"',o*ee# $an e neto!(e& togete! a$!o## te g,oe In#tant t!an#,ation #ofta!e fo! g,oa, fi!"# Ko,,o te S%n Manage"ent `'a## '!o2e$t# on to te ne6t tea" ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J1
SALES = INENTORY MANAEMENT Inte!net #a,e# an& &e)e,o'"ent of $%#to"e! &ataa#e# In#tant #a,e# !e'o!t# a,,o i""e&iate in)ento!* !eo!&e!# SHIPPIN = TRAC?IN OODS EDE Poe!Si' #ofta!e`#to!e# a&&!e##e#5 '!int# ,ae,#5 et$. T!a$(ing te '!og!e## of 'a$(age #i'"ent`EDE = UPS WHICH UNCTIONS CAN WE OUTSOURCE3 LOBAL OUTSOURCIN INCREASES EICIENCY = @UALITY A)e!age# !e&%$tion in $o#t# an& 1 in$!ea#e in $a'a$it* an& 8%a,it* U' to G of Boeing ',ane# a!e o%t#o%!$e&..%i,t in 2%#t > "o# ). 1 *ea! AMA SUREY -- > OUTSOURCE AT LEAST ONE ACTIITY GJ ene!a, = A&"ini#t!ati)e a$ti)itie# GG H%"an Re#o%!$e# T!an#'o!tation Di#t!i%tion < Info!"ation S*#te"# 1 Ma!(eting 1J=inan$e = A$$o%nting 7 e!e &i#a''ointe& in Man%fa$t%!ing tei! o%t#o%!$ing !e#%,t# 1 !o%gt te o%t#o%!$e& a$ti)it* a$( Kin-o%#e MOST LI?ELY ACTIITIES TO OUTSOURCE C%#to"e! Se!)i$e Boo((ee'inginan$ia,C,e!i$a, Sa,e#Te,e"a!(eting Softa!e P!og!a""ing Mai,!oo"
OUTSOURCIN DISADANTAES: CUSTOMER COMPLAINTS = UNEPECTED DELAYS LOC?ED INTO LON-TERM CONTRACTS THAT COMPETITIE ESHWARI.S---LORAA BUSINESS ACADEMY AREN;T Page 1J7
THE IRM DOESN;T LEARN NEW S?ILLS = DEELOP CORE COMPETENCIES A SUREY O 17
OUTSOURCIN IRMS Ha,f of te '!o2e$t# %n&e!ta(en fai,e& to a$ie)e te anti$i'ate& #a)ing# Softa!e '!o&%$e& in In&ia a& 1 "o!e %g# tan $o"'a!a,e US '!o2e$t# SEEN MA0OR OUTSOURCIN ERRORS O%t#o%!$ing a$ti)itie# tat #o%,&n;t e o%t#o%!$e& ai,e& to (ee' $o!e a$ti)itie# Kin-o%#e Se,e$ting te !ong )en&o! Pi$(e& a )en&o! tat a#n;t t!%#to!t*5 o! o ,a$(# #tate-of-te a!t '!o$e##e# W!iting a 'oo! $ont!a$t Ba,an$e of 'oe! fa)o!# te )en&o!`,o$(e& in o)e! a ,ong 'e!io& of ti"e O)e!,oo(ing 'e!#onne, i##%e#`"* a!ea of e6'e!ti#e a# o%t#o%!$e& Lo#ing Cont!o, o)e! te O%t#o%!$e& A$ti)it*`We;!e at tei! "e!$* O)e!,oo(ing te i&&en $o#t# of o%t#o%!$ing`T!an#a$tion fee#3 ai,ing to ',an an e6it #t!ateg*`Ho $anOUTSOURCE e !e)e!#e o%t of ti# &ea,3 SUCCESSUL ?EY TO SUCCESS: ONLY ACTIITIES THAT ARE NOT RELATEDOUTSOURCIN: TO THE IRM;S DISTINCTIE COMPETENCIES TOTAL ALUE-ADDED to i!";# PRODUCTS = SERICES LOW HIH --------------------------------------------TAPERED INTERATION ULL ERTICAL INTERATION HIH ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J<
ACTIITY;S POTENTIAL OR COMPETITIE ADANTAE P!o&%$e So"e Inte!na,,* P!o&%$e A,, Inte!na,,* --------------------------------------------OUTSOURCE COMPLETELY B%* on O'en Ma!(et LOW OUTSOURCE COMPLETELY U#e Long-Te!" Cont!a$t# -------------------------------------------STRATEIES TO AOID: DUMB STRATEIES OLLOW THE LEADER We $an &o tat too`%t "a*e it;# not o!t $o'*ing HIT ANOTHER HOME RUN A 'ionee! $o"'an* ,oo(ing to get ,%$(* again ARMS RACE Batt,e# i$ in$!ea#e $o#t# an& &e$!ea#e !e)en%e# DO EERYTHIN Offe!ing #o"eting fo! e)e!*one`t!*ing to ',ea#e e)e!*one LOSIN HAND Po%!ing &on te (noto,e`in)e#t"ent e$a%#e of '!io! $o""it"ent# NONE O THESE STRATEIES WILL CREATE A SUSTAINABLE COMPETITIE ADANTAE OR THE IRM INSTITUTIONALI_IN STRATEY ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J>
Wi,e f%n$tiona, #t!ategie# a!e e##entia, to te #t!ateg* i"',e"entation '!o$e##5 it i# a,#o i"'o!tant tat te #t!ateg* e in#tit%tiona,i+e& itin te o!gani+ation. In#tit%tiona,i+ing a #t!ateg* "ean# tat e)e!* "e"e!5 o!( g!o%'5 &e'a!t"ent5 an& &i)i#ion of te o!gani+ation #%#$!ie# to an& #%''o!t# te o!gani+ation9# #t!ateg* it it# ',an# an& a$tion#. Teo!* #%gge#t# tat a fit "%#t e6i#t eteen te #t!ateg* of te o!gani+ation an& it# #t!%$t%!e5 $%,t%!e5 an& ,ea&e!#i' if te #t!ateg* i# to e in#tit%tiona,i+e&. Ea$ of te#e to'i$# i,, e e6a"ine& in "%$ g!eate! &etai, in a #%#e8%ent $a'te! /o!gani+ationa, #t!%$t%!e in Ca'te! 5 $%,t%!e in Ca'te! 115 an& ,ea&e!#i' in Ca'te! 1<5 %t e!e e i,, !ief,* &i#$%## tei! !e,ation#i' to #t!ateg*. O!gani+ationa, St!%$t%!e O!gani+ationa, #t!%$t%!e5 "o#t $o""on,* a##o$iate& it te o!gani+ationa, $a!t5 &efine# te '!i"a!* !e'o!ting !e,ation#i'# tat e6i#t itin an o!gani+ation.> Te #t!%$t%!e of an o!gani+ation e#ta,i#e# it# $ain of $o""an& an& it# ie!a!$* of !e#'on#ii,it*5 a%to!it*5 an& a$$o%ntai,it*. De'a!t"enta,i+ation of o!gani+ationa, a$ti)itie# i# te fo$%# of te #t!%$t%!ing '!o$e##. O!gani+ing o!( !e#'on#ii,itie# into &e'a!t"ent# !e8%i!e# g!o%'ing in&i)i&%a,# on te a#i# of te ta#(# te* 'e!fo!". If5 fo! e6a"',e5 o!( %nit# a!e #t!%$t%!e& #o tat a,, '!o&%$tion ta#(# a!e g!o%'e& togete!5 a,, "a!(eting ta#(# a!e g!o%'e& togete!5 an& a,, finan$e ta#(# a!e g!o%'e& togete!5 ten te &e'a!t"ent# a!e o!gani+e& on te a#i# of f%n$tion. Si"i,a!,*5 if o!( %nit# a!e #t!%$t%!e& #o tat a,, ta#(# !e,ate& to #e!)ing te U.S. "a!(et a!e g!o%'e& togete!5 a,, ta#(# fo! te E%!o'ean "a!(et a!e g!o%'e& togete!5 an& a,, ta#(# fo! te A#ian "a!(et a!e g!o%'e& togete!5 ten o!gani+ationa, "e"e!# a!e g!o%'e& a$$o!&ing to te geog!a'i$ "a!(et #e!)e&. A,f!e& Can&,e!5 one of te ea!,ie#t !e#ea!$e!# in te a!ea of #t!ateg*5 o!igina,,* a&)an$e& te i&ea tat 4#t!%$t%!e fo,,o# #t!ateg*.41 In e##en$e5 Can&,e!9# fin&ing# in&i$ate tat an o!gani+ation9# #t!ateg* #o%,& inf,%en$e it# $oi$e of o!gani+ationa, #t!%$t%!e. o! e6a"',e5 o!gani+ation# tat '%!#%e g!ot t!o%g '!o&%$t &e)e,o'"ent "a* enefit f!o" a #t!%$t%!e tat i# &e'a!t"enta,i+e& * '!o&%$t#. In $ont!a#t5 to#e tat '%!#%e a geog!a'i$ "a!(et &e)e,o'"ent #t!ateg* "a* fin& an a!ea-a#e& #t!%$t%!e to e "o#t #%ita,e5 %!te!"o!e5 en an o!gani+ation fai,# to $ange it# #t!%$t%!e in !e#'on#e to $ange# in it# #t!ateg*5 it i,, "o#t ,i(e,* e6'e!ien$e o'e!ationa, '!o,e"# tat i,, e)ent%a,,* !e#%,t in &e$,ining 'e!fo!"an$e.7 Sin$e Can&,e!9# $,a##i$ !e#ea!$5 a #ignifi$ant o&* of !e#ea!$ a# &e)e,o'e& tat #%gge#t# tat o!gani+ation# #o%,& &e)e,o' #t!%$t%!e# tat a!e ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
a''!o'!iate fo! an& #%''o!ti)e of tei! #t!ategie#. In fa$t5 #e)e!a, #t%&ie# a)e #%$$e##f%,,* ,in(e& a #t!ateg*-#t!%$t%!e fit to #%'e!io! finan$ia, 'e!fo!"an$e.< In Ca'te! 5 a n%"e! of o!gani+ationa, #t!%$t%!e# i,, e i&entifie& an& &i#$%##e&. In a&&ition5 e i,, e6a"ine te a&)antage# an& &i#a&)antage# of te &iffe!ent #t!%$t%!e# a# e,, a# tei! #%itai,it* fo! )a!*ing #t!ategi$ $on&ition#. O!gani+ationa, C%,t%!e Te #e$on& o!gani+ationa, $o"'onent tat #o%,& e in a,ign"ent it an o!gani+ation9# #t!ateg* i# o!gani+ationa, $%,t%!e. O!gani+ationa, $%,t%!e !efe!# to te #*#te" of #a!e& e,ief# an& )a,%e# tat &e)e,o'# itin an o!gani+ation. It g%i&e# of$,a##i$ an& gi)e# "eaning to te "e"e!# of te $o"'anie# o!gani+ation.> Pete!# te an& ea)io! Wate!"an9# #%!)e* of A"e!i$a9# e#t-"anage& a# &!an attention to te $ont!i%tion of o!gani+ationa, $%,t%!e to #t!ategi$ #%$$e##. Pete!# an& Wate!"an att!i%te& te #%$$e## of #%$ fi!"# a# P!o$te! = a",e5 ene!a, E,e$t!i$5 an&
De)e,o'ing a #t!ong5 'e!)a#i)e o!gani+ationa, $%,t%!e a# e$o"e "o!e $a,,enging a# te o!( fo!$e in te Unite& State# a# e$o"e "o!e $%,t%!a,,* &i)e!#e. A# e "entione& in Ca'te! 15 'eo',e it &iffe!ent a$(g!o%n f!o" &iffe!ent nation#5 o! it &iffe!ent $%,t%!a, f!a"e# of !efe!en$e# often a)e )e!* &i)e!#e )ie# ao%t o!gani+ation# an& o te* #o%,& f%n$tion. Rea$ing ag!ee"ent $an e "o!e &iffi$%,t in #%$ g!o%'#Qot in e#ta,i#ing $o""on goa,# an& in &ete!"ining "eto&# fo! a$ie)ing to#e goa,#. Manage!# "%#t e '!e'a!e& to o!( a!&e! an& "o!e $!eati)e,* to en#%!e tat a #t!ong o!gani+ationa, $%,t%!e e6i#t# itin $%,t%!a,,* &i)e!#e o!gani+ation#. O!gani+ationa, Lea&e!#i' Lea&e!#i' i# te ti!& o!gani+ationa, $o"'onent tat #o%,& e in a,ign"ent it te #t!ateg* of te o!gani+ation. If an o!gani+ation i# to i"',e"ent it# #t!ateg* effe$ti)e,*5 it "%#t a)e te a''!o'!iate ,ea&e!#i'.G Wito%t effe$ti)e ,ea&e!#i'5 it i# %n,i(e,* tat te o!gani+ation i,, !ea,i+e te enefit# of it# #e,e$te& #t!ateg*. Ti# i# 'a!ti$%,a!,* t!%e en a 8%a,it* o!ientation i# a (e* a#'e$t of it# #t!ateg*.J At te to' of o!gani+ation "%#t e te )i#iona!* ,ea&e!. S%$ ,ea&e!# $an en)i#ion te f%t%!e5 $o""%ni$ate tei! )i#ion to to#e a!o%n& te"5 e"'oe! te 'eo',e of te o!gani+ation to "a(e te )i#ion a''en5 an& !ea!& te" en it e$o"e# a !ea,it*. Bi,, ate# of Mi$!o#oft a# often een &e#$!ie& a# a )i#iona!* ,ea&e!. ate# #a an o''o!t%nit* to !e&efine te "a!(et fo! 'e!#ona, $o"'%ting o'e!ating #*#te"# an& "a&e tat )i#ion a !ea,it* it te int!o&%$tion of Mi$!o#oft Win&o#. Te effe$ti)e i"',e"entation of tat #t!ateg* a# "a&e Mi$!o#oft one of te "o#t #%$$e##f%, o!gani+ation# in te Unite& State#. E8%a,,* i"'o!tant to #t!ateg* i"',e"entation i# effe$ti)e ,ea&e!#i' in te !an(# of "anage!#. In to&a*9# o!gani+ation#5 te* "a* e tea" ,ea&e!#5 $oa$e#5 o! $a"'ion# !ate! tan t!a&itiona, "i&&,e "anage!#5 %t te i&ea i# te #a"e. Te#e in&i)i&%a,# "%#t &o ate)e! i# ne$e##a!* to en#%!e tat tei! o!( g!o%'# a!e "a(ing a $ont!i%tion toa!& f%,fi,,ing te "i##ion of te o!gani+ation5 a$ie)ing it# goa,#5 an& i"',e"enting it# #t!ateg*. Canon5 te 1 i,,ion "a(e! of $a"e!a#5 $o'ie!#5 '!inte!#5 ESHWARI.S---LORAA BUSINESS ACADEMY Page 1JG
an& fa6 "a$ine#5 att!i%te# it# #%$$e## to #t!ong ,ea&e!#i' t!o%go%t te o!gani+ation. Lea&e!#i' i# &i#$%##e& in Ca'te! 1<5 e!e e e6a"ine te !e,ation#i' eteen ,ea&e!#i' an& #t!ateg* in g!eate! &etai,. It i# e##entia, fo! an o!gani+ation to &e)e,o' te #*#te"# ne$e##a!* to #%''o!t it# #t!ateg*. St!%$t%!e5 $%,t%!e5 an& ,ea&e!#i' a!e a"ong te a#'e$t# of an o!gani+ation9# #*#te" tat a!e 'a!ti$%,a!,* !e,e)ant fo! effe$ti)e #t!ateg* i"',e"entation. Wen a #t!ateg* i# eing i"',e"ente&5 it i# a,#o )e!* i"'o!tant to "onito! ot te #%$$e## of te i"',e"entation '!o$e## an& te effe$ti)ene## of te #t!ateg*. St!ategi$ $ont!o, '!o)i&e# te "e$ani#" fo! &oing 2%#t tat. ROLE O EECTIE LEADERSHIP IN STRATEY IMPLEMENTATION 1. INTRODUCTION Effe$ti)e ,ea&e!#i' i# !e8%i!e& to ,ea& an& toeffe$ti)e,*. g%i&e te #%o!&inate# to ROLE 'e!fo!" o!gani+ationa, ta#(# effi$ient,* an& 7. LEADERSHIP IN IMPLEMNTATION St!ategi$ ,ea&e!#i' ',a*# an i"'o!tant !o,e in #t!ateg* i"',e"entation. Te !o,e of EECTIE LEADERSHIP in #t!ateg* i"',e"entation $an e e6',aine& a# fo,,o#: 1. Int!o&%$ing Cange: Cange i# a "%#t fo! o!gani+ationa, g!ot an& &e)e,o'"ent. Wito%t $ange#5 an o!gani#ation o%,& ,ea& to &oo". Te!efo!e5 int!o&%$ing $ange# in te o!gani#ation i# one of te '!i"e !e#'on#ii,itie# of te ,ea&e!#i'. O!gani#ationa, $ange# ta(e# ',a$e a# a !e#%,t of $ange# in te$no,og*5 $on#%"e!;# ta#te#5 ,i(e# an& &i#,i(e#5 $ange# in $o"'etito!#; #t!ateg*5 'o,iti$a, $ange#5 et$. O!gani#ation# a)e to !e#'on& an& a&2%#t to te $ange# in te en)i!on"ent. ai,%!e to &o #o o%,& !e#%,t in 'oo! 'e!fo!"an$e of te o!gani#ation an& %,ti"ate,* $,o#%!e. Cange# affe$t te e6i#ting e8%i,i!i%" in te o!gani#ation5 an& te!efo!e5 ,ea&e!#i' #o%,& en#%!e tat $ange# &o not gene!ate !e#i#tan$e on te 'a!t of te 'eo',e in te o!gani#ation. o! ti# '%!'o#e5 te ,ea&e!#i' #o%,& $on#i&e! te fo,,oing a#'e$t#: * Wi,e int!o&%$ing a $ange5 te!e #o%,& e $on$e!n fo! te 'eo',e a# e,, a# fo! te o2e$ti)e# of te o!gani#ation. * E"',o*ee# #o%,& e en$o%!age& to 'a!ti$i'ate in te '!o$e## of $ange !igt f!o" te initiation #tage. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1JJ
* * * Cange #o%,& e int!o&%$e& it o2e$ti)e e6',anation. Lea&e!#i' #o%,& $!eate a '#*$o,ogi$a, $,i"ate #%ita,e fo! $ange. Cange #o%,& e int!o&%$e& on i"'e!#ona, !e8%i!e"ent# !ate! tan on 'e!#ona, g!o%n&#. 7. Integ!ating Conf,i$ting Inte!e#t#: O!gani#ation $on#i#t# of )a!io%# 'eo',e5 g!o%'#5 &e'a!t"ent# o! #%-%nit#. E)e!* 'e!#on on g!o%' "a* a)e $e!tain inte!e#t#5 i$ "a* $,a# it to#e of ote!# in te o!gani#ation. o! in#tan$e5 te!e $an e $onf,i$t of inte!e#t eteen te #%'e!io! an& #%o!&inate#5 to' ,e)e, an& te ,oe! ,e)e,5 te!o,e '!o&%$tion &e'a!t"ent an& "a!(eting an& #o Te!efo!e5 aneteen i"'o!tant of ,ea&e!#i' at )a!io%# ,e)e,# &e'a!t"ent5 i# to integ!ate teon. $onf,i$ting inte!e#t# of 'eo',e an& g!o%'# in te o!gani#ation. It i# to e note& tat #o"e a"o%nt of $onf,i$t# a!e &e#i!a,e in te o!gani#ation. Ti# i# e$a%#e #o"e $onf,i$t# fa$i,itate $ange in te o!gani#ation. Conf,i$t# "a* a!i#e &%e to '!o,e"# in te f%n$tioning in te o!gani#ation. Conf,i$t# !ing to #%!fa$e &o!"ant o! ,atent '!o,e"# an& e,' te o!gani#ation in #o,)ing it. Te #o,%tion to te '!o,e" often !e8%i!e# $ange# in te o!gani#ation. It i# a,#o t!%e tat $onf,i$t# $an $!eate '!o,e"# in te o!gani#ation. A"ong ote! ting#5 $onf,i$t# affe$t inte!-'e!#ona, !e,ation#. Ti# i# e$a%#e ea$ 'e!#on o! g!o%' t!ie# to fin& fa%,t# it ote!# !ate! tan t!*ing to #o!t o%t te $onf,i$t. Peo',e in)o,)e& in $onf,i$t "a* #'!ea& fa,#e info!"ation. Te!e i# ,o## of t!%#t an& fait in ea$ ote!. In gene!a,5 $onf,i$t# $an a&)e!#e,* affe$t te 'e!fo!"an$e of te o!gani#ation. Te!efo!e5 effe$ti)e ,ea&e!#i' i# !e8%i!e& in #o!ting o%t $onf,i$t# in te o!gani#ation. <. De)e,o'ing Lea&e!#i' Ai,it* of Manage!#: - Manage!# nee& to e effe$ti)e ,ea&e!#. Ti# i# e$a%#e "anage!# nee& to inf,%en$e an& in#'i!e te #%o!&inate# in o!&e! to a$$o"',i# te o!gani#ationa, goa,#. o! ti# '%!'o#e5 te!e i# a nee& to &e)e,o' ,ea&e!#i' ai,itie# in te "anage!#. Te!e a!e #e)e!a, "ea#%!e#5 i$ $an e %#e& fo! &e)e,o'ing ,ea&e!#i' ai,it* of te "anage!#: * Lea&e!#i' t!aining in i$ t!aining '!og!a""e# $an e %n&e!ta(en to e6'o#e "anage!# to )a!io%# ,ea&e!#i' '!o,e"# an& #it%ation#. * Inte!na, e6'o#%!e e!e "anage!# $an e e6'o#e& to )a!io%# #it%ation# in te o!gani#ation #%$ a# #o,)ing of $onf,i$t#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
* Ca,,enging ta#(# $an e #et * to' "anage"ent to e a$ie)e& * "anage!# itin a $e!tain ti"e f!a"e. * A%tono"* an& a$$o%ntai,it* e!e "anage!# $an e '!o)i&e& it eno%g a%tono"* to an&,e $e!tain #it%ation# an& te* #o%,& e e,& a$$o%nta,e fo! tei! a$tion#. >. Effe$ti)e ,ea&e!#i' i# !e8%i!e& fo!De)e,o'ing &e)e,o'ingA''!o'!iate a''!o'!iateO!gani#ationa, o!gani#ationa,C,i"ate:$,i"ate in te o!gani#ation. O!gani#ationa, $,i"ate !efe!# to a #et of )a,%e#5 e,ief# an& no!"# tat a!e #a!e& * an o!gani#ation;# "e"e!#. Te o!gani#ationa, $,i"ate gi)e# a &i#tin$t i&entit* to an o!gani#ation. It inf,%en$e# te "o!a,e5 "oti)ation an& 'e!fo!"an$e of it# "e"e!#. So"e of te i"'o!tant feat%!e# of o!gani#ationa, $,i"ate a!e: * It i# a $o"ination of #o$ia,5 $%,t%!a,5 '*#i$a,5 '#*$o,ogi$a,5 an& ote! $on&ition# itin an o!gani#ation. * * It e)o,)e# o)e! a fai!,* ,ong 'e!io& of ti"e. It $an e !e,ati)e,* #ta,e o)e! a 'e!io& of ti"e. Hoe)e!5 te!e "a* e $ange# in o!gani#ationa, $,i"ate5 it a $ange in to' "anage"ent5 o! "anage"ent;# 'i,o#o'*. * It gi)e# a #e'a!ate i&entit* to te o!gani#ation a# $o"'a!e& to ote! o!gani#ation#5 a# ea$ o!gani#ation a# it# on #et of )a,%e#5 e,ief#5 '!a$ti$e#5 e"otion#5 et$. To a&o't a''!o'!iate o!gani#ationa, $,i"ate5 te ,ea&e!#i'5 e#'e$ia,,* at te to' "anage"ent ,e)e, "%#t a&o't $e!tain 'o,i$ie# an& '!a$ti$e#: * * * * * * Hig #tan&a!&# of e6$e,,en$e in e)e!* a!ea of o'e!ation# an& e)a,%ation. Hig #tan&a!&# of "o!a, $a!a$te!5 e#'e$ia,,* at te to' "anage"ent ,e)e,. En$o%!age"ent fo! inno)ation it $on#e8%ent f!ee&o" to a$t %'on te i&ea#. P!o'e! &e,egation of a%to!it* t!o%go%t te o!gani#ation. Mat$ing !ea!&# it 'e!fo!"an$e !ate! tan on #%2e$ti)e g!o%n&#. Sit%ationa, ,ea&e!#i' #t*,e it ig $on$e!n ot fo! 'eo',e5 an& o2e$ti)e# of te o!gani#ation. . De)e,o'ing Moti)ationa, S*#te":- One of te i"'o!tant !o,e# of ,ea&e!#i' i# to "oti)ate5 'eo',e in te o!gani#ation. Moti)ation i# )ita, fo! ette! 'e!fo!"an$e on te 'a!t of te 'eo',e. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
Te ,ea&e!#i' "%#t e a &*na"i$ fo!$e in "oti)ating 'eo',e in)o,)e& in #t!ateg* i"',e"entation. Te ,ea&e!#i' "%#t %n&e!#tan& te '!o$e## of "oti)ation5 i$ in)o,)e#: * P!e#en$e of nee&#: - E)e!* 'e!#on a# $e!tain a"o%nt of nee i$ $an !ange f!o" '*#io,ogi$a, nee&# to #e,f-a$t%a,i#ation nee&#. * Effo!t#: - An in&i)i&%a, '%t# in i# effo!t# in o!&e! to #ati#f* #%$ nee&#. Te "o!e te nee te "o!e a!e te effo!t#. * * Pe!fo!"an$e: - Te effo!t# of a 'e!#on ,ea& i" into $e!tain o!( 'e!fo!"an$e. Rea!&#: - oo& 'e!fo!"an$e i# !ea!&e& it "oneta!* an&o! non-"oneta!* in$enti)e#. Te ,ea&e!#i' #o%,& note tat "oti)ation i# a $ontin%o%# '!o$e##. Ti# i# e$a%#e %"an nee&# an& a!e en&ing. Wen one ,ea&e!#i' nee& i# #ati#fie&5 anote! nee& e"e!ge# tat&e#i!e# nee&# to ene)e! #ati#fie&. Te!efo!e5 "%#t i&entif* te e"e!ging nee&# of te 'eo',e an& #t!i)e to #ati#f* #%$ nee&# at !eg%,a! inte!)a,# t!o%g a '!o'e! "i6 of "oneta!* an& non-"oneta!* in$enti)e#. . C,a!it* in oa,#: - Te ,ea&e! "%#t #et $,ea! an& e,, &efine& goa,# an& o2e$ti)e#. Befo!e #etting goa,#5 te ,ea&e! "%#t ana,*#e te inte!na, an& e6te!na, en)i!on"ent. Te ,ea&e! "a* $on#%,t i# #%o!&inate# efo!e fina,i+ing te goa,#. A ,ea&e! $an e effe$ti)e en te!e i# $,a!it* in goa,# an& !o,e# to e 'e!fo!"e& to a$ie)e to#e goa,#. In te a#en$e of $,ea! goa,#5 te ,ea&e! "a* not e a,e to get te #%''o!t an& $o""it"ent f!o" te #%o!&inate# in te 'e!fo!"an$e of te a$ti)itie#. G. Re,ation#: - Te ,ea&e! "%#t "aintain e6$e,,ent !e,ation# it i# #%o!&inate#5 an& a,#o it te ote! &e'a!t"enta, ea&#. Te ,ea&e! on i# on "a* &e)e,o' goo& !e,ation# it i# #%o!&inate#5 %t e a,#o nee&# e6$e,,ent #%''o!t f!o" te o!gani#ation to &e)e,o' an& "aintain goo& !e,ation# it te #%o!&inate#. oo& !e,ation# fa$i,itate inte!-'e!#ona, !e,ation# eteen te ,ea&e! an& i# #%o!&inate#. Te!efo!e5 te ,ea&e! #o%,& a)e #%#tantia, o,& o)e! te !e#o%!$e# an& a%to!it* !e8%i!e& to "anage te #%o!&inate# an& to get te o!( &one f!o" te". J. Lea&e!#i' St*,e#: - A ,ea&e! o%,& e effe$ti)e5 if e a&o't# te !igt ,ea&e!#i' #t*,e &e'en&ing %'on te #it%ation. He $an e a%to$!ati$5 e#'e$ia,,*5 en te #it%ation i# 8%ite &e"an&ing an& te!e i# ,itt,e ti"e to $on#%,t #%o!&inate#. He "a* a&o't $on#%,tati)e ,ea&e!#i' #t*,e5 e#'e$ia,,* en #%o!&inate# )ie# an& #%gge#tion# a!e i"'o!tant in &e$i#ion-"a(ing. He ESHWARI.S---LORAA BUSINESS ACADEMY Page 11
"a* a,#o fo,,o 'a!ti$i'ati)e ,ea&e!#i' #t*,e5 e#'e$ia,,*5 en te 'a!ti$i'ation of te #%o!&inate# i# )ita, in &e$i#ion-"a(ing. <. LEADERSHIP STYLES E)e!* "anage! &e)e,o'# a #t*,e in "anaging te a$ti)itie#. S%$ #t*,e# )a!* f!o" ,ea&e! to ,ea&e!5 f!o" #it%ation to #it%ation5 an& f!o" o!gani#ation to o!gani#ation. Te "ain t*'e# of ,ea&e!#i' #t*,e# a!e a# fo,,o#: 1. A%to$!ati$ #t*,e: An a%to$!at i# te one o ta(e# a,, &e$i#ion# * i"#e,f an& e6'e$t# to e oe*e& * i# #%o!&inate#. Te #%o!&inate# a)e no #$o'e to 8%e#tion te #%'e!io!. Ce!tain 'oint# to e note& in ti# !e#'e$t: * * * * Te #%'e!io! "a(e# te &e$i#ion. Te #%'e!io! &oe# not $on#%,t te #%o!&inate# in &e$i#ion "a(ing. Te i# !e#'on#i,e eteen #%'e!io! an& #%'e!io! #%o!&inate# a!e fo!"a,.fo! te &e$i#ion. Te !e,ation# Ti# #t*,e i# #%ita,e en: * * * @%i$( &e$i#ion# a!e to e "a&e. S%o!&inate# a!e ine6'e!ien$e& an& it &oe# not "a(e an* #en#e to $on#%,t te". S%o!&inate# a!e not affe$te& * te &e$i#ion#. 7. B%!ea%$!ati$ #t*,e: Ti# t*'e of ,ea&e!#i' #t*,e i# "o!e fo,,oe& in go)e!n"ent &e'a!t"ent#. Te %!ea%$!at# often fo,,o !%,e# an& !eg%,ation# in tota,it*. Te* &o not %#e tei! &i#$!etion5 e)en to &o aa* it "o!e fo!"a,itie#. Te* #t!i$t,* fo,,o te #$a,a! $ain '!in$i',e5 e)en in te $a#e of %!gen$*. Te fo,,oing 'oint# to e note&: * Te %!ea%$!at ta(e# te &e$i#ion# * #t!i$t,* fo,,oing te fo!"a,itie#5 o! !%,e# an& !eg%,ation#. * * * Te #%o!&inate# a!e often not $on#%,te&. Te %!ea%$!at "a* a)oi& !e#'on#ii,it*. Te !e,ation# eteen #%'e!io! an& #%o!&inate# a!e fo!"a,. Page 17 ESHWARI.S---LORAA BUSINESS ACADEMY
* Ti# #t*,e !e#%,t# in &e,a* an& !e& ta'i#"5 an& %nante& 'a'e! o!(. <. Con#%,tati)e St*,e: In ti# t*'e5 te ,ea&e! $on#%,t# i# #%o!&inate# efo!e ta(ing a &e$i#ion. Te ,ea&e! fee,# tat it i# a,a*# a&)i#a,e to $on#%,t te #%o!&inate#. Ti# t*'e of ,ea&e! i# o'en "in&e& an& o%,& e,$o"e #%gge#tion# f!o" te #%o!&inate# efo!e "a(ing a &e$i#ion. Te fo,,oing 'oint# to e note&: * * Te #%'e!io! $on#%,t# te #%o!&inate# efo!e "a(ing a &e$i#ion. Te #%o!&inate# "a* gi)e tei! #%gge#tion# o! $o""ent#5 i$ te #%'e!io! "a* o! "a* not a$$e't. * * * !e,ation# Te #%'e!io! "a(e#te te#%'e!io! &e$i#ion. Te #%'e!io! i#a!e !e#'on#i,e Te eteen an& #%o!&inate# info!"a,. fo! te &e$i#ion. Ti# t*'e #t*,e i# #%ita,e en: * * * Te!e i# no %!gen$* of te &e$i#ion5 i$ a,,o# te ,ea&e! to $on#%,t #%o!&inate#. Te #%gge#tion# an& te $o""ent# of te #%o!&inate# a!e )ita, in "a(ing a &e$i#ion. Te #%o!&inate# a!e e6'e!ien$e& an& "at%!e& an& $an '!o)i&e #%gge#tion an& $o""ent#. >. Pa!ti$i'ati)e #t*,e: Te ,ea&e! not on,* $on#%,t# te #%o!&inate#5 %t a,,o# te" to ta(e 'a!t in &e$i#ion "a(ing. Te fo,,oing 'oint# a!e to e note&: * * * * Te #%'e!io! $on#%,t# i# #%o!&inate# efo!e "a(ing i# &e$i#ion. Te ,ea&e! a,ong it te g!o%' ta(e# 'a!t in &e$i#ion "a(ing. Bot te ,ea&e! an& te g!o%' #a!e te !e#'on#ii,it* fo! "a(ing te &e$i#ion. Te !e,ation# a!e info!"a,. Ti# t*'e #t*,e i# #%ita,e en: * * * !o%' &e$i#ion "a(ing i# !e8%i!e&. Te!e i# an i""e&iate 'o##ii,it* of o''o#ition f!o" a g!o%' of fo,,oe!#. Te!e a!e e6'e!ien$e& an& "at%!e& fo,,oe!#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1<
. Lai##e+-fai!e #t*,e: Ti# #t*,e ai"# at $!eating a fa"i,* at"o#'e!e itin te o!gani#ation. Te ,ea&e! i# !e#'e$te& an& t!eate& a# a fate! fig%!e * te #%o!&inate#. Te fo,,oing 'oint# to e note&: * * * * * Ti# #t*,e i# "o#t,* fo,,oe& in 0a'ane#e o!gani#ation#. Te ,ea&e! $on#i&e!# i"#e,f a# a 'a!ent fig%!e. Te ,ea&e! "a* $on#%,t i# #%o!&inate#. Mo#t,* te ,ea&e! ta(e# te &e$i#ion. Te !e,ation# a!e )e!* o"e,*. Ti# t*'e of #t*,e i# "o!e #%ita,e in #"a,, o!gani#ation#5 e!e te!e a!e an&f%,# of e"',o*ee#5 an& 2%#t one ,ea&e! o! o##. Te ,ea&e! a&)i#e#5 g%i&e#5 an& e,'# te #%o!&inate# e)en &%!ing tei! 'e!#ona, a!&#i'#. . So$io$!ati$ St*,e: So$io$!ati$ atte"'t to !%n tei! o!gani#ation# ,i(e a #o$ia, $,%. Te* e,ie)e tat goo& fe,,o#i' o! f!ien&#i' i# "o!e i"'o!tant tan '!o&%$ti)it*. Te* (ee' 'eo',e a''* e)en at te $o#t of te o!gani#ation. Te* e,ie)e in a a!" an& ',ea#ant at"o#'e!e. o! te"5 te inte!e#t of te #%o!&inate# $o"e# fi!#t5 an& tan tat of te o!gani#ation. Te fo,,oing 'oint# a!e to e note&: * Te #%'e!io! ta(e te &e$i#ion * (ee'ing te inte!e#t of te #%o!&inate#. Te inte!e#t of te o!gani#ation "a* e #e$on&a!*. * Te #%'e!io! $on#%,t# te #%o!&inate# fo! &e$i#ion "a(ing. G. Ne%!o$!ati$ St*,e: A Ne%!o$!ati$ ,ea&e! i# ig,* ta#( o!iente& an& ant# to get te ting# &one at an* $o#t. He i# ig,* #en#iti)e an& get# 8%i$(,* %'#et at fai,%!e#. Te fo,,oing 'oint# a!e to e note&: * * * Te ,ea&e! "a* e e$$ent!i$ an& e"otiona,. Te ,ea&e! "a* not $on#%,t te #%o!&inate# in &e$i#ion "a(ing. Te ,ea&e! i# !e#'on#i,e fo! &e$i#ion "a(ing5 %t e "a* #ift te !e#'on#ii,it* on to i# #%o!&inate#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1>
J. Sit%ationa, St*,e: No-a-&a*#5 in "o#t e,, "anage& o!gani#ation#5 te "anage!# fo,,o #it%ationa, ,ea&e!#i' #t*,e. Ti# "ean#5 te ,ea&e!#i' #t*,e )a!ie# &e'en&ing %'on te #it%ation. In ote! o! te ,ea&e! "a* e a%to$!ati$ at ti"e#5 $on#%,tati)e at ti"e#5 an& 'a!ti$i'ati)e at ti"e#5 &e'en&ing %'on te &e$i#ion an& te #it%ation. Lea&e!#i' fo! #t!ateg* i"',e"entation an& $ange "anage"ent A%te%! %n$tie O!gani#atie Don Ta'#$ott St!ateg* teo!i#t an& CEO of Ne Pa!a&ig" Ne Pa!a&ig" Lea&e!#i' "o!e tan ,ea&e!#i' an&of ,ea&e!#i' o! te,,ing 'eo',e ati# toao%t &o. In$!ea#ing $o"',e6it* ea)io%! an& te !o,e (no,e&ge#t*,e5 o!( "ean# tat 'eo',e no ',an tei! on o!( an& "a(e tei! on &e$i#ion#. Effe$ti)e ,ea&e!#i' in)o,)e# a ,ot of "anage"ent "anaging te 'eo',e '!o$e##e# in te o!gani#ation #o tat 'eo',e $an a,ign te"#e,)e# to te #t!ateg*. Hen!* Mint+e!g "a(e# te $a#e tat too "an* '!o,e"# in o!gani#ation# a!e $a%#e& * #e'a!ating te ,ea&e!#i' an& "anage"ent !o,e# /KCo""%nit*-#i' i# te an#e! inan$ia, Ti"e#. Lea&e!# a!e !e#'on#i,e fo! fo!"%,ating an& $o""%ni$ating te #t!ateg* - %t !e#'on#ii,it* &oe#n;t #to' te!e. Te* "%#t a,#o "anage te a,ign"ent of 'eo',e fo! #t!ateg* i"',e"entation. Te* nee& to en#%!e tat te 'eo',e in te o!gani#ation %n&e!#tan& te #t!ateg*5 %* into it5 an& a,ign tei! &e$i#ion# an& a$tion# a$$o!&ing,*. An& ti# a,ign"ent nee&# to e "ea#%!e& an& "onito!e&. A,igning *o%! 'eo',e to i"',e"ent te #t!ateg* ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
In te "o#t a#i$ te!"#5 a #t!ateg* i# noting "o!e tan a &efinition of at *o% i,, #e,,5 to o" *o% i,, #e,, it5 o *o% i,, #e,, it an& e!e *o% i,, #e,, it. Ta(en togete!5 te#e a,#o &efine *o%! $%#to"e! )a,%e '!o'o#ition. Ha)e a $,ea! #t!ateg* an& %n&e!#tan& it# i"',i$ation# t!o%go%t *o%! $o"'an* Te fo%! &o"inant t*'e# of #t!ategie# Q P!i$e5 P!o&%$t5 P!o&%$t /'!e"i%"ig en& an& C%#to"e! S'e$ifi$ So,%tion# Q #o%,& a,, e a#e& on a $,ea! $%#to"e! )a,%e '!o'o#ition. Diffe!ent #t!ategie# !e8%i!e &iffe!ent o!gani#ationa, ea)io%!# - an& te!efo!e &iffe!ent ,ea&e!#i' #(i,,#. Co""%ni$ate an& gette %*-in Effe$ti)e ,ea&e!#i' "ean# $o""%ni$ating te #t!ateg*te in #t!ateg* a ,ang%age tat 'eo',e in an o!gani#ation %n&e!#tan&. Effe$ti)e ,ea&e!# $e$( to en#%!e 'eo',e (no at te #t!ateg* "ean# fo! te" an& tei! 2o5 tat te* %* in to te #t!ateg*5 an& ten #%''o!t it. A,ign te o!gani#ation to i"',e"ent te #t!ateg* Te attit%&e# an& ea)io%!# of te 'eo',e in an* o!gani#ation a!e &!i)en * #i6 &i"en#ion# of 'eo',e '!o$e##e#: $%#to"e! '!o'o#ition5 #t!ateg* $o""it"ent5 '!o$e##e# = #t!%$t%!e5 ea)io%! of ,ea&e!#5 'e!fo!"an$e "et!i$# an& $%,t%!e. Lea&e!# ,ea& an& "anage #t!ateg* i"',e"entation * a,igning 'eo',e %#ing te#e ,e)e!#. Mea#%!e an& "onito! te a,ign"ent of 'eo',e to te #t!ateg* Effe$ti)e ,ea&e!# $e$( tei! a##%"'tion# * en#%!ing 'eo',e a,ign"ent i# "ea#%!e& an& "onito!e&. Effe$ti)e "ea#%!e"ent# a!e in ,ine it te #t!ategi$ o2e$ti)e#5 an& a$tion# ta(en in one o! "o!e a!ea# "%#t e #%''o!te& * a$tion# in te ote! a!ea# to get te !igt !e#%,t. Te a* to a$ie)e #t!ateg* i"',e"entation i# not 2%#t * te,,ing 'eo',e at to &o. ItZ# * $o""%ni$ating te #t!ateg* in a a* tat e)e!*one $an %n&e!#tan& an& %* into5 an& #ee o te* $an $ont!i%te. Ten *o% '%t te 'eo',e '!o$e##e# in ',a$e to ena,e an& en$o%!age #t!ateg* i"',e"entation. Manage"ent Cent!e E%!o'e $an e,' *o% to &o ti# - at MCE5 e &o not e,ie)e tat effe$ti)e ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
,ea&e!#i' i# on,* a "atte! of ea)io%! an& #t*,e. Effe$ti)e ,ea&e!#i' i# a,#o ao%t fo!"%,ating te #t!ateg* an& #t!ateg* i"',e"entation. B* te en& of ti# &e$a&e e "a* ,oo( a$( on te i#to!* of te $o!'o!ation an& #ee tat te #%!)i)o!# fo%n& itin te"#e,)e# te ,ea&e!#i'5 not 2%#t to fo!ge #"a!t #t!ategie#5 %t a,#o to e6e$%te te". C%,t%!e: Co!'o!ate $%,t%!e an& #t!ateg* i"',e"entation o,(ta,e# at e&E6 ao%n& ao%t a &e,i)e!* 'e!#on o a# gi)en te !ong (e* to a e&E6 &!o' o6. So ing!aine& a# te Kne6t-&a* &e,i)e!* tat e!e te &e,i)e!* 'e!#on %no,te& o6 $%,t%!e f!o" it#of a#e an& too( it a$(g%a!antee to te offi$e it a# '!ie& o'en. Te te $ontent# e!e &e,i)e!e& te ne6t &a*. It i# not i"'o!tant ete! ti# fo,(ta,e i# t!%e o! not. Wat i# i"'o!tant i# tat ti# #to!* i,,%#t!ate# e&e6;# $o!'o!ate $%,t%!e: e)e!* e"',o*ee e,'# in te a$ie)e"ent of e&E6;# !e'%tation of !e,ia,e o)e!nigt &e,i)e!*. A,, o!gani+ation# a)e tei! on fo,(ta,e. Wat;# *o%!#3 KTi# i# te a* e &o ting# a!o%n& e!e. Do *o% not te,, ti# to e)e!* e"',o*ee o 2oin# *o%! o!gani+ation3 Yo%! o!gani+ation a# it# on o!( en)i!on"ent5 it# on a* of &oing ting#5 it# on '!o$e##e# an& it# on 'o,iti$#. Ho *o%! o!gani+ation a''!oa$e# '!o,e"#5 at it e,ie)e# in an& it# to%gt '!o$e## &efine# it# 'e!#ona,it*. Ti# i# at i# $o!'o!ate $%,t%!e. It i# o!n o%t of *o%! o!gani+ation;# e,ief# an& 'i,o#o'ie# ao%t * it &oe# ting# te a* it &oe#. It i# o!n o%t of o *o% it *o%! #ta(eo,&e!#. Con#i#tent,* &oing te ting# *o% &o !e#%,t# in *o%! $o!'o!ate $%,t%!e. C%,t%!e i# fo!"e& * #$!eening an& #e,e$ting ne e"',o*ee# o #a!e te #a"e )a,%e# a# *o%! o!gani+ation. Hoe)e!5 $%,t%!e e)o,)e#5 it i# not #tati$. Bot inte!na, /i!ing5 #taff t%!no)e!5 et$ an& e6te!na, /te$no,og*5 $o"'etition5 et$. fa$to!# #a'e *o%! $%,t%!e. Yo%! e,ief#5 )i#ion5 o2e$ti)e# an& %#ine## '!a$ti$e# "a* e $o"'ati,e it $%,t%!e. If ti# i# te $a#e5 *o%! $%,t%!e e$o"e# a )a,%a,e a,,* in #t!ateg* i"',e"entation. On te ote! an&5 if te!e i# $onf,i$t ten *o% &o not a)e a #t!ateg*-$%,t%!e fit an& *o% nee& to &o #o"eting ao%t it 8%i$(,*. ESHWARI.S---LORAA BUSINESS ACADEMY Page 1G
St!ong $%,t%!e# '!o"ote #%$$e##f%, #t!ateg* i"',e"entation i,e ea( $%,t%!e# &o not. B* #t!ong $%,t%!e5 I "ean te!e i# a #a!e& e,ief in '!a$ti$e#5 no!"# an& ote! '!a$ti$e# itin te o!gani+ation tat e,'# ene!gi+e e)e!*one to &o tei! 2o# to '!o"ote #%$$e##f%, #t!ateg* i"',e"entation. o! e6a"',e5 if *o%! $%,t%!e i# %i,t a!o%n& ,i#tening to $%#to"e!# an& e"'oe!ing e"',o*ee# /ot a%to!it* an& !e#'on#ii,it*5 it '!o"ote# te e6e$%tion of a #t!ateg* tat #%''o!t# #%'e!io! $%#to"e! #e!)i$e. In ea( $%,t%!e#5 e"',o*ee# a)e no '!i&e in one!#i' of o!(5 o!( i# #,o''*5 te!e a!e )e!* fe )a,%e# an& 'eo',e fo!" 'o,iti$a, g!o%'# itin te o!gani+ation. S%$ $%,t%!e# '!o)i&e ,itt,e o! no a##i#tan$e to i"',e"ent #t!ateg*. So"e ti"e ago5 I a# o!(ing it a #"a,, %#ine## tat in te #ofta!e in&%#t!*. a&Ieen in %#ine## fo! a n%"e! of *ea!# efo!e I!e-o!( a# !o%gt One of teTe* ting# noti$e& initia,,* a# tat te!e a# $on#tant i.e.in. %,( of te &e)e,o'e!#; ti"e a# #'ent in fi6ing %g# in#tea& of ne &e)e,o'"ent o!(. De,i)e!a,e# e!e a,a*# ,ate. C%#to"e!# o &i& !e$ei)e te '!o&%$t fo%n& te #ofta!e %gg*. Te o!gani+ation;# !e'%tation #%ffe!e& a# a !e#%,t. To $o"at ti# e initiate& a n%"e! of "ea#%!e# f!o" ,etting %n'!ofita,e $%#to"e!# go to int!o&%$ing ti"e t!a$(ing5 et$. B%t e fo!got te "o#t f%n&a"enta, a#'e$t to initiate a $ange in te $%,t%!e. De)e,o'e!# ,oo(e& at o%! initiati)e# it #(e'ti$i#". I a# to,& #tate"ent# ,i(e KTi# i,, ne)e! o!( o! KWait fo! a fe &a*# an& e i,, !e)e!t a$( to te o,& a* of &oing ting#. We &i& e)ent%a,,* fig%!e it o%t an& #ta!te& to i"',e"ent a $ange in $%,t%!e. Canging a $%,t%!e i# te to%ge#t of a,, "anage"ent ta#(#. It ta(e# ti"e to $ange %nea,t* $%,t%!e an& *o% "a* a)e to ee& o%t o#ta$,e# to a ea,t* $%,t%!e. Ti# e6'e!ien$e a# a )a,%a,e ,e##on fo! "e. In ea( $%,t%!e#5 'eo',e &o not ta(e !i#(# tat i# nee&e& to #%$$ee&. Te* e,ie)e in "o)ing $a%tio%#,*5 '!efe!!ing to fo,,o tan ,ea&. In to&a*;# &*na"i$ %#ine## o!,&5 #t!ategie# a!e &*na"i$. Hen$e5 it i# %t ,ogi$a, tat *o%! o!gani+ationa, $%,t%!e a# to e &*na"i$ too. It nee&# to a&a't to te &e"an&# of %#ine##. In #%$ $%,t%!e#5 a,, e"',o*ee# a)e $onfi&en$e in te tea"# ai,it* to "eet an* $a,,enge. In "* '!ofe##iona, $a!ee!5 I a)e a,a*# ta(en te a''!oa$ of &oing ate)e! i# ne$e##a!* to en#%!e o!gani+ationa, #%$$e## itin te o%n&# of o!gani+ationa, $o!e )a,%e# an& e,ief#. A# a CEO ESHWARI.S---LORAA BUSINESS ACADEMY Page 1J
*o% nee& to en$o%!age ti# $%,t%!e. In fa$t5 *o% #o%,& $on#$io%#,* #ee(5 !e$!%it5 t!ain an& '!o"ote in&i)i&%a,# o e6iit #%$ ent!e'!ene%!#i' $a'ai,itie# Eti$a, an& #o$ia, !e#'on#ii,it*: no St!ategi$ a%&it an& $ont!o,: Te #t!ategi$ a%&it In o%! int!o&%$tion to %#ine## #t!ateg*5 e e"'a#i#e& te !o,e of te 4%#ine## en)i!on"ent4 in #a'ing #t!ategi$ tin(ing an& &e$i#ion-"a(ing. Te e6te!na, en)i!on"ent in i$ a %#ine## o'e!ate# $an $!eate o''o!t%nitie# i$ a %#ine## $an e6',oit5 a# e,, a# t!eat# i$ $o%,& &a"age a %#ine##. Hoe)e!5 to e in a 'o#ition to e6',oit o''o!t%nitie# o! !e#'on& to t!eat#5 a %#ine## nee&# to a)e te !igti# !e#o%!$e# an& $a'ai,itie# in ',a$e. i"'o!tant of %#ine## #t!ateg* $on$e!ne& it en#%!ing tat te#e An !e#o%!$e# an&'a!t $o"'eten$ie# a!e %n&e!#too& an& e)a,%ate& - a '!o$e## tat i# often (non a# a 4St!ategi$ A%&it4. Te '!o$e## of $on&%$ting a #t!ategi$ a%&it $an e #%""a!i#e& into te fo,,oing #tage#: /1 Re#o%!$e A%&it: Te !e#o%!$e a%&it i&entifie# te !e#o%!$e# a)ai,a,e to a %#ine##. So"e of te#e $an e one& /e.g. ',ant an& "a$ine!*5 t!a&e"a!(#5 !etai, o%t,et# e!ea# ote! !e#o%!$e# $an e otaine& t!o%g 'a!tne!#i'#5 2oint )ent%!e# o! #i"',* #%'',ie! a!!ange"ent# it ote! %#ine##e#. Yo% $an !ea& "o!e ao%t !e#o%!$e# e!e. /7 a,%e Cain Ana,*#i#: ESHWARI.S---LORAA BUSINESS ACADEMY Page 1
a,%e Cain Ana,*#i# &e#$!ie# te a$ti)itie# tat ta(e ',a$e in a %#ine## an& !e,ate# te" to an ana,*#i# of te $o"'etiti)e #t!engt of te %#ine##. Inf,%entia, o!( * Mi$ae, Po!te! #%gge#te& tat te a$ti)itie# of a %#ine## $o%,& e g!o%'e& %n&e! to ea&ing#: /1 P!i"a!* A$ti)itie# - to#e tat a!e &i!e$t,* $on$e!ne& it $!eating an& &e,i)e!ing a '!o&%$t /e.g. $o"'onent a##e",* an& /7 S%''o!t A$ti)itie#5 i$ i,#t te* a!e not &i!e$t,* in)o,)e& in '!o&%$tion5 "a* in$!ea#e effe$ti)ene## o! effi$ien$* /e.g. %"an !e#o%!$e "anage"ent. It i# !a!e fo! a %#ine## to %n&e!ta(e a,, '!i"a!* an& #%''o!t a$ti)itie#. a,%e Cain Ana,*#i# i# one a* of i&entif*ing i$ a$ti)itie# a!e e#t %n&e!ta(en * a %#ine## an& i$ a!e e#t '!o)i&e& * ote!# /4o%t#o%!$e&4. Yo% !ea& "o!e a!e ao%t a,%e Cain Ana,*#i# /< Co!eto Co"'eten$e Ana,*#i#: Co!e$an $o"'eten$ie# to#e $a'ai,itie# tat e!e. a!e $!iti$a, a %#ine## a$ie)ing $o"'etiti)e a&)antage. Te #ta!ting 'oint fo! ana,*#ing $o!e $o"'eten$ie# i# !e$ogni#ing tat $o"'etition eteen %#ine##e# i# a# "%$ a !a$e fo! $o"'eten$e "a#te!* a# it i# fo! "a!(et 'o#ition an& "a!(et 'oe!. Senio! "anage"ent $annot fo$%# on a,, a$ti)itie# of a %#ine## an& te $o"'eten$ie# !e8%i!e& to %n&e!ta(e te". So te goa, i# fo! "anage"ent to fo$%# attention on $o"'eten$ie# tat !ea,,* affe$t $o"'etiti)e a&)antage. Yo% $an !ea& "o!e ao%t te $on$e't of Co!e Co"'eten$ie# e!e. /> Pe!fo!"an$e Ana,*#i# Te !e#o%!$e a%&it5 )a,%e $ain ana,*#i# an& $o!e $o"'eten$e ana,*#i# e,' to &efine te #t!ategi$ $a'ai,itie# of a %#ine##. Afte! $o"',eting #%$ ana,*#i#5 8%e#tion# tat $an e a#(e& tat e)a,%ate te o)e!a,, 'e!fo!"an$e of te %#ine##. Te#e 8%e#tion# in$,%&e: - Ho a)e te !e#o%!$e# &e',o*e& in te %#ine## $ange& o)e! ti"e ti# i# 4i#to!i$a, ana,*#i#4 - Ho &o te !e#o%!$e# an& $a'ai,itie# of te %#ine## $o"'a!e it ote!# in te in&%#t!* 4in&%#t!* no!" ana,*#i#4 - Ho &o te !e#o%!$e# an& $a'ai,itie# of te %#ine## $o"'a!e it 4e#t-in-$,a##4 - e!e)e! tat i# to e fo%n&- 4en$"a!(ing4 ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
- Ho a# te finan$ia, 'e!fo!"an$e of te %#ine## $ange& o)e! ti"e an& o &oe# it $o"'a!e it (e* $o"'etito!# an& te in&%#t!* a# a o,e3 - 4!atio ana,*#i#4 / Po!tfo,io Ana,*#i#: Po!tfo,io Ana,*#i# ana,*#e# te o)e!a,, a,an$e of te #t!ategi$ %#ine## %nit# of a %#ine##. Mo#t ,a!ge %#ine##e# a)e o'e!ation# in "o!e tan one "a!(et #eg"ent5 an& often in &iffe!ent geog!a'i$a, "a!(et#. La!ge!5 &i)e!#ifie& g!o%'# often a)e #e)e!a, &i)i#ion# /ea$ $ontaining "an* %#ine## %nit# o'e!ating in 8%ite &i#tin$t in&%#t!ie#. An i"'o!tant o2e$ti)e of a #t!ategi$ a%&it i# to en#%!e tat te %#ine## 'o!tfo,io i# #t!ong an& tat %#ine## %nit# !e8%i!ing in)e#t"ent an& "anage"ent attention a!e ig,igte&. Ti# i# i"'o!tant - a %#ine## #o%,& a,a*# $on#i&e! i$ "a!(et# a!e "o#t att!a$ti)e an& i$ %#ine## a)e te 'otentia, to a$ie)e a&)antage ini&e,* te "o#t att!a$ti)e "a!(et#.%nit# T!a&itiona,,*5 to ana,*ti$a, "o&e,# a)e een %#e& to %n&e!ta(e 'o!tfo,io ana,*#i#: - Te Bo#ton Con#%,ting !o%' Po!tfo,io Mat!i6 /te 4Bo#ton Bo64 - Te M$?in#e*ene!a, E,e$t!i$ !ot Sa!e Mat!i6 / SWOT Ana,*#i#: SWOT i# an a!e)iation fo! St!engt#5 Wea(ne##e#5 O''o!t%nitie# an& T!eat#. SWOT ana,*#i# i# an i"'o!tant too, fo! a%&iting te o)e!a,, #t!ategi$ 'o#ition of a %#ine## an& it# en)i!on"ent. Rea& "o!e ao%t it e!e. In o!&e! to ette! %n&e!#tan& at #t!ategi$ $ont!o, 'e!fo!"an$e "ea#%!e# a!e an& o a "anage! $an ta(e #%$ "ea#%!e"ent#5 e nee& to int!o&%$e to i"'o!tant to'i$#: /1 #t!ategi$ a%&it# an& /7#t!ategi$ a%&it "ea#%!e"ent "eto&#. St!ategi$ A%&it# ESHWARI.S---LORAA BUSINESS ACADEMY Page 71
A #t!ategi$ a%&it i# an e6a"ination an& e)a,%ation of a!ea# affe$te& * te o'e!ation of a #t!ategi$ "anage"ent '!o$e## itin an o!gani+ation. A #t!ateg* a%&it "a* e nee&e& %n&e! te fo,,oing $on&ition#: * * * * Pe!fo!"an$e in&i$ato!# #o tat a #t!ateg* i# not o!(ing o! i# '!o&%$ing negati)e #i&e effe$t#. Hig-'!io!it* ite"# in te #t!ategi$ ',an a!e not eing a$$o"',i#e&. A #ift o! $ange o$$%!# in te e6te!na, en)i!on"ent. Manage"ent i#e#: /1 to fine-t%ne a #%$$e##f%, #t!ateg* an& /7 to en#%!e tat a #t!ateg* tat a# o!(e& in te 'a#t $ontin%e# to e in t%ne it #%t,e inte!na, o! e6te!na, $ange# tat "a* a)e o$$%!!e&. A##e##ing Te i!"9# O'e!ationa, An& St!ategi$ Hea,t To ai& in $ont!o,5 fi!"# i,, o$$a#iona,,* 'e!fo!" a%&it# to en#%!e tat $e!tain a#'e$t# of tei! o'e!ation# a!e in o!&e!. S%$ a%&it "a* in$,%&eo'e!ationa, a%&it# /a##e##ing te fi!"9# o'e!ating ea,t an& #t!ategi$ a%&it# /a##e##ing te fi!"9# #t!ategi$ ea,t. Mea#%!e# Of O!gani+ationa, Hea,t Mea#%!e# o! in&i$ato!# of a fi!"9# $%!!ent o'e!ating an& #t!ategi$ ea,t a!e #on in Ta,e - an& -. A# te ta,e# #o5 to a##e## a fi!"9# $%!!ent o'e!ating ea,t5 #o!tte!" finan$ia,5 "a!(et5 te$no,ogi$a,5 an& '!o&%$tion 'o#ition a!e %#e&5 i,e $%!!ent #t!ategi$ ea,t i# a#e& on #t!ategi$ "a!(et 'o#ition5 te$no,ogi$a, 'o#ition5 '!o&%$tion $a'ai,itie#5 an& finan$ia, ea,t. St!ategi$ A%&it Mea#%!e"ent Meto&# Te!e a!e #e)e!a, gene!a,,* a$$e'te& "eto&# fo! "ea#%!ing o!gani+ationa, 'e!fo!"an$e. One a* fo! $atego!i+ing te#e "eto&# &i)i&e# into te &i#tin$t t*'e#: 8%a,itati)e an& 8%antitati)e. Hoe)e!5 a fe "eto&# &o not fa,, neat,* into one o! ote! of te#e $atego!ie# %t !ate! a!e a $o"ination of ot t*'e#. @%a,itati)e O!gani+ationa, Mea#%!e"ent# Te!e i# no %ni)e!#a,,* en&o!#e& ,i#t of $!iti$a, 8%e#tion# &e#igne& to !ef,e$t i"'o!tant fa$et# of o!gani+ationa, o'e!ation#. Hoe)e!5 #e)e!a, tat "igt e %#ef%, to te '!a$ti$ing "anage!# a!e '!e#ente& e,o. Sa"',e @%e#tion# to e a#(e& fo! @%a,itati)e O!gani+ationa, Mea#%!e"ent * * A!e te finan$ia, 'o,i$ie# it !e#'e$t to in)e#t"ent` &i)i&en&# an& finan$ing $on#i#tent it o''o!t%nitie# ,i(e,* to e a)ai,a,e3 Ha# te $o"'an* &efine& te "a!(et #eg"ent# in i$ it inten&# to o'e!ate #%ffi$ient,* #'e$ifi$a,,* it !e#'e$t to ot '!o&%$t ,ine# an& "a!(et #eg"ent#3 Ha# it $,ea!,* &efine& te (e* $a'ai,itie# nee&e& fo! #%$$e##3 Page 77 ESHWARI.S---LORAA BUSINESS ACADEMY
* * * * * * Doe# te $o"'an* a)e a )ia,e ',an fo! &e)e,o'ing a #ignifi$ant Wi,, an& &efen#i,e #%'e!io!it* o)e! $o"'etition it !e#'e$t to te#e $a'ai,itie#3 te %#ine## #eg"ent# in i$ te $o"'an* o'e!ate# '!o)i&e a&e8%ate o''o!t%nitie# fo! a$ie)ing $o!'o!ate o2e$ti)e#3 Do te* a''ea! a# att!a$ti)e a# to "a(e it ,i(e,* tat an e6$e##i)e a"o%nt of in)e#t"ent i,, e &!an to te "a!(et f!o" ote! $o"'anie#3 I# a&e8%ate '!o)i#ion eing "a&e to &e)e,o' att!a$ti)e ne in)e#t"ent o''o!t%nitie#3 A!e te "anage"ent5 finan$ia,5 te$ni$a, an& ote! !e#o%!$e# of te $o"'an* !ea,,* a&e8%ate to 2%#tif* an e6'e$tation of "aintaining #%'e!io!it* o)e! $o"'etition in te (e* a!ea# of $a'ai,it*3 Doe# te $o"'an* a)e o'e!ation# in i$ it i# not !ea#ona,e to e6'e$t to e "o!e $a'a,e tan $o"'etition3 If #o5 $an te oa!& e6'e$t te" to gene!ate a&e8%ate !et%!n# on in)e#te& $a'ita,3 I# te!e an* 2%#tifi$ation fo! in)e#ting f%!te! in #%$ o'e!ation#5 e)en 2%#t to "aintain te"3 Ha# te $o"'an* #e,e$te& %#ine## tat $an !einfo!$e ea$ ote! * $ont!i%ting 2oint,* to te &e)e,o'"ent of (e* $a'ai,itie#3 O! a!e te!e $o"'etito!# tat a)e $o"ination# of o'e!ation# i$ '!o)i&e te" it an o''o!t%nit* to gain #%'e!io!it* in te (e* !e#o%!$e a!ea#3 Can te $o"'an*9# #$o'e of o'e!ation# e !e)i#e& #o a# to i"'!o)e it# 'o#ition )i#--)i# $o"'etition3 To te e6tent tat o'e!ation# a!e &i)e!#ifie&5 a# te $o"'an* !e$ogni+e& an& '!o)i&e& fo! te #'e$ia, "anage"ent an& $ont!o, #*#te"# !e8%i!e&3 @%a,itati)e O!gani+ationa, Mea#%!e"ent# Te!e i# no %ni)e!#a,,* en&o!#e& ,i#t of $!iti$a, 8%e#tion# &e#igne& to !ef,e$t i"'o!tant fa$et# of o!gani+ationa, o'e!ation#. Hoe)e!5 #e)e!a, tat "igt e %#ef%, to te '!a$ti$ing "anage!# a!e '!e#ente& e,o. Sa"',e @%e#tion# to e a#(e& fo! @%a,itati)e O!gani+ationa, Mea#%!e"ent * * * * A!e te finan$ia, 'o,i$ie# it !e#'e$t to in)e#t"ent` &i)i&en&# an& finan$ing $on#i#tent it o''o!t%nitie# ,i(e,* to e a)ai,a,e3 Ha# te $o"'an* &efine& te "a!(et #eg"ent# in i$ it inten&# to o'e!ate #%ffi$ient,* #'e$ifi$a,,* it !e#'e$t to ot '!o&%$t ,ine# an& "a!(et #eg"ent#3 Ha# it $,ea!,* &efine& te (e* $a'ai,itie# nee&e& fo! #%$$e##3 Doe# te $o"'an* a)e a )ia,e ',an fo! &e)e,o'ing a #ignifi$ant an& &efen#i,e #%'e!io!it* o)e! $o"'etition it !e#'e$t to te#e $a'ai,itie#3 Wi,, te %#ine## #eg"ent# in i$ te $o"'an* o'e!ate# '!o)i&e a&e8%ate o''o!t%nitie# fo! a$ie)ing $o!'o!ate o2e$ti)e#3 Do te* a''ea! a# att!a$ti)e a# to "a(e it ,i(e,* tat an e6$e##i)e a"o%nt of in)e#t"ent i,, e &!an to te "a!(et f!o" ote! $o"'anie#3 I# a&e8%ate '!o)i#ion eing "a&e to &e)e,o' att!a$ti)e ne in)e#t"ent o''o!t%nitie#3 ESHWARI.S---LORAA BUSINESS ACADEMY Page 7<
* * * * A!e te "anage"ent5 finan$ia,5 te$ni$a, an& ote! !e#o%!$e# of te $o"'an* !ea,,* a&e8%ate to 2%#tif* an e6'e$tation of "aintaining #%'e!io!it* o)e! $o"'etition in te (e* a!ea# of $a'ai,it*3 Doe# te $o"'an* a)e o'e!ation# in i$ itoa!& i# not !ea#ona,e to e6'e$t to e "o!e $a'a,e tan $o"'etition3 If #o5 $an te e6'e$t te" to gene!ate a&e8%ate !et%!n# on in)e#te& $a'ita,3 I# te!e an* 2%#tifi$ation fo! in)e#ting f%!te! in #%$ o'e!ation#5 e)en 2%#t to "aintain te"3 Ha# te $o"'an* #e,e$te& %#ine## tat $an !einfo!$e ea$ ote! * $ont!i%ting 2oint,* to te &e)e,o'"ent of (e* $a'ai,itie#3 O! a!e te!e $o"'etito!# tat a)e $o"ination# of o'e!ation# i$ '!o)i&e te" it an o''o!t%nit* to gain #%'e!io!it* in te (e* !e#o%!$e a!ea#3 Can te $o"'an*9# #$o'e of o'e!ation# e !e)i#e& #o a# to i"'!o)e it# 'o#ition )i#--)i# $o"'etition3 To te e6tent tat o'e!ation# a!e &i)e!#ifie&5 a# te $o"'an* !e$ogni+e& an& '!o)i&e& fo! te #'e$ia, "anage"ent an& $ont!o, #*#te"# !e8%i!e&3 Te E)a,%ation Of Co!'o!ate St!ateg* Ea$ o!gani+ation a# it# on a''!oa$ to e)a,%ation. Te!e a!e not a#o,%te an#e!# a# to te '!o'e! e)a,%ation #tan&a!&#. Hoe)e!5 te!e a!e t!ee a#i$ 8%e#tion# to a#( in #t!ateg* e)a,%ation: 1. I# te e6i#ting #t!ateg* an* goo&3 7. Wi,, te e6i#ting #t!ateg* e goo& in te f%t%!e3 <. I# te!e a nee& to $ange a #t!ateg*3 Te fi!#t 8%e#tion "a* nee& a&&itiona, &etai,ing to in&i$ate ete! te $%!!ent #t!ateg* i# %#ef%, an& enefi$ia, to te o!gani+ation. Se*"o%! Ti,,e# a# !itten a $,a##i$ a!ti$,e on te 8%a,itati)e a##e##"ent of o!gani+ationa, 'e!fo!"an$e. Ti# a!ti$,e #e!)e# #e)e!a, 'a!ti$%,a! 8%e#tion# to e a#(e& fo! e)a,%ation. Te#e 8%e#tion# a!e: 1. I# te #t!ateg* inte!na,,* $on#i#tent3 Inte!na, $on#i#ten$* !efe!# to te $%"%,ati)e i"'a$t of )a!io%# #t!ategie# on te o!gani+ation#. A$$o!&ing to Ti,,e#5 a #t!ateg* "%#t e 2%&ge& not on,* in !e,ation#i'# to ote! #t!ategie#. 7. I# o!gani+ation# #t!ateg* $on#i#tent it it# en)i!on"ent3 An i"'o!tant te#t of #t!ateg* i# ete! te $o#en #t!ateg* in $on#i#tent it en)i!on"ent /$on#tit%ent &e"an $o"'etition5 e$ono"*5 '!o&%$t in&%#t!* ,ife $*$,e5 #%'',ie!#5 $%#to"e!# - ete! te !ea,,* "a(e #en#e it !e#'e$t to at i# going on o%t#i&e. <. I# te #t!ateg* a''!o'!iate in )ie of a)ai,a,e !e#o%!$e#3 Re#o%!$e# a!e to#e ting# tat $o"'an* i# o! a# an& tat e,' it to a$ie)e it# $o!'o!ate o2e$ti)e#. In$,%&e& a!e "one*5 $o"'eten$e5 fa$i,itie# an& ote!. Wito%t a''!o'!iate !e#o%!$e#5 o!gani+ation #i"',* $annot "a(e #t!ategi$ o!(. ESHWARI.S---LORAA BUSINESS ACADEMY Page 7>
>. Doe# te #t!ateg* in)o,)e an a$$e'ta,e &eg!ee of !i#(3 St!ateg* an& !e#o%!$e#5 ta(en togete!5 &ete!"ine te &eg!ee of !i#( i$ te $o"'an* i# %n&e!ta(en. Ea$ $o"'an* "%#t &ete!"ine te a"o%nt of !i#( it i#e# to in$%!. Ti# i# a $!iti$a, "anage!ia, $oi$e. In atte"'ting to a##e## te &eg!ee of !i#( a##o$iate& it a 'a!ti$%,a! #t!ateg*5 "anage"ent "%#t a##e## #%$ i##%e# a# te tota, a"o%nt of !e#o%!$e# a #t!ateg* !e8%i!e#5 te '!o'o!tion of te o!gani+ation9# !e#o%!$e# tat a #t!ateg* i,, $on#%"e5 an& te a"o%nt of ti"e tat "%#t e $o""itte&. . Doe# te #t!ateg* a)e an a''!o'!iate ti"e o!i+on3 A #ignifi$ant 'a!t of e)e!* #t!ateg* i# te ti"e o!i+on on i$ it i# a#e&. o! e6a"',e5 a ne '!o&%$t &e)e,o'e&5 a ',ant '%t on #t!ea"5 a &eg!ee of "a!(et 'enet!ation5 e$o"e #ignifi$ant #t!ategi$ o2e$ti)e# on,*to ifi"',e"ent a$$o"',i#e& a $e!tain ti"e. Manage"ent "%#t en#%!e tatte#e te ti"e ne$e##a!* te * #t!ateg* i# $on#i#tent. In$on#i#ten$* eteen to )a!ia,e# $an "a(e it i"'o##i,e to !ea$ goa,# in a #ati#fa$to!* a*. . I# te #t!ateg* o!(a,e3 @%antitati)e O!gani+ationa, Mea#%!e"ent# @%antitati)e "ea#%!e"ent# '!o)i&e info!"ation an& in#igt a# to o e,, an o!gani+ation i# a$$o"',i#ing it# goo&# an& o2e$ti)e#. In atte"'ting to e)a,%ate te effe$ti)ene## of $o!'o!ate #t!ateg* 8%antitati)e,*5 e $an #ee o te fi!" a# &one $o"'a!e& it it# on i#to!*5 o! $o"'a!e& it it# $o"'etito!#. Man* 8%antitati)e "ea#%!e# "a* e &e)e,o'e& to &ete!"ine 'e!fo!"an$e !e#%,t#. Te#e #tan&a!&# e6'!e##e& in 8%antitati)e te!"# in$,%&e: 1. 7. <. >. . . G. J. Sa,e# /g!ot of #a,e# Net '!ofit Di)i&en& !et%!n# Ret%!n on e8%it* Ret%!n on in)e#t"ent Ret%!n on $a'ita, Ma!(e! #a!e Ea!ning# 'e! #a!e Te ,i#t i# ,ong an& "an* ote! fa$to!# $o%,& e in$,%&e&. Te o2e$ti)e of a,, of te#e en&ea)o!# i# finan$ia, $ont!o,. B%t finan$ia, $ont!o, i# on,* 'a!t of te tota, #t!ategi$ "anage"ent $ont!o, '!o$e##. M%$ of te a$ti)it* affe$t# finan$ia, 'e!fo!"an$e in non finan$ia, nat%!e. Ti# in$,%&e $on#i&e!ation of ,ao! effi$ien$* an& '!o&%$ti)it* '!o&%$tion 8%antit* t%!no)e!5 an& ta!&ine## on a )e!* ,i"ite& a#i#5 %"an !e#o%!$e# a$$o%nting an& 'e!#onne, #ati#fa$tion "ea#%!e# "o!e $o""on,*5 "anage"ent * o2e$ti)e# #*#te"# #o$ia, ana,*#i# o'e!ationa, a%&it# of an* f%n$tiona,5 &i)i#iona,5 o! #taff $o"'onent5 &i#t!i%tion $o#t an& effi$ien$* "anage"ent a%&it# "o&e,ing an& #o fo!t. Te ,i#t i# a,"o#t en&,e## an& te!e i# no ti"e to &i#$%## ea$ ite" e!e. ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
Wi$ fa$to!# #o%,& e %#e&3 E#ta,i#ing te #tan&a!&# an& to,e!an$e ,i"it i# not a# ea#* a# e "igt e6'e$t. Manage!# nee& to fi!#t &efine te $!iti$a, #%$$e## fa$to!# - te fa$to!# i$ a!e "o#t i"'o!tant to te #t!ateg* an& eing #%$$e##f%, in te %#ine##. Mo#t of te#e "ea#%!e# a!e inte!na,. B%t o2e$ti)e a##e##"ent# $an a,#o e "a&e * $o"'a!ing te fi!"9# !e#%,t# of #i"i,a! fi!"# /#ee #e$tionBen$"a!(ing Be,o e '!e#ent a #et of o!ti,e g%i&e,ine# tat "anage!# "igt fo,,o in &e#igning an& i"',e"enting "o!e $o"'!een#i)e #t!ategi$ a%&it#. A #t!ategi$ a%&it i# $on&%$te& in t!ee 'a#e#: &iagno#i# to i&entif* o5 e!e5 an& in at '!io!it* in-&e't ana,*#e# nee& to e "a&e fo$%#e& ana,*#i# an& gene!ation an& te#ting !e$o""en&ation. O2e$ti)it* an& te ai,it* to a#( $!iti$a,5 '!oing 8%e#tion# a!e (e*'a#e !e8%i!e"ent# a #t!ategi$ a%&it. one: Diagno#i# Te &iagno#ti$ in$,%&e#fo! te$on&%$ting f,oing ta#(#: 1. Re)ie (e* Pa#e &o$%"ent #%$ a#: o St!ategi$ ',an o B%#ine## o! o'e!ationa, ',an# o O!gani+ationa, a!!ange"ent# o Ma2o! 'o,i$ie# go)e!ning "atte!# #%$ a# !e#o%!$e a,,o$ation an& 'e!fo!"an$e "ea#%!e"ent. 7. Re)ie finan$ia,5 "a!(et5 an& o'e!ationa, 'e!fo!"an$e again#t en$"a!(# an& in&%#t!* no!"# to i&entif* 2et )a!ian$e# an& e"e!ging t!en&#. <. ain an %n&e!#tan&ing of: o P!in$i'a, !o,e#5 !e#'on#ii,itie#5 an& !e'o!ting !e,ation#i'#. o De$i#ion - "a(ing '!o$e##e# an& "a2o! &e$i#ion# "a&e. o Re#o%!$e#5 in$,%&ing '*#i$a, fa$i,itie#5 $a'ita,5 "anage"ent5 te$no,og*. o Inte!!e,ation#i'# eteen f%n$tiona, #taff# an& %#ine## o! o'e!ating %nit#. >. I&entif* #t!ategi$ i"',i$ation# of #t!ateg* fo! o!gani+ation #t!%$t%!e5 ea)io! 'atte!n#5 #*#te"#5 an& '!o$e##e#. o Define inte!!e,ation#i'# an& ,in(age# to #t!ateg*. . Dete!"ine inte!na, an& e6te!na, 'e!#'e$ti)e#. o S%!)e* te attit%&e# an& 'e!$e'tion# of #enio! an& "i&&,e "anage!# an& ote! (e* e"',o*ee# to a##e## te e6tent to i$ te#e a!e $on#i#tent it te #t!ategi$ &i!e$tion of te fi!". One a* to a$$o"',i# ti# ta#( i# t!o%g $a!ef%,,* fo$%#e& inte!)ie# an& o! 8%e#tionnai!e#5 e!ein e"',o*ee# a!e a#(e& to i&entif* an& "a(e t!a&e-off# a"ong te o2e$ti)e# an& )a!ia,e# te* $on#i&e! "o#t i"'o!tant. o Inte!)ie a $a!ef%,,* #e,e$te& #a"',e of $%#to"e!# an& '!o#'e$ti)e $%#to"e!# an& ote! (e* e6te!na, #o%!$e# to gain %n&e!#tan&ing of o te $o"'an* i# )iee&. . I&entif* a#'e$t# of te #t!ateg* tat a!e o!(ing e,,. o!"%,ate *'ote#e# !ega!&ing '!o,e"# an& o''o!t%nitie# fo! i"'!o)e"ent a#e& on te fin&ing# ao)e. Define o an& in at o!&e! ea$ #o%,& e '%!#%e&. Pa#e to: o$%#e& ana,*#i# ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
1. Te#t te *'ote#e# $on$e!ning '!o,e"# an& o''o!t%nitie# fo! i"'!o)e"ent t!o%g ana,*#i# of #'e$ifi$ i##%e#. o I&entif* inte!!e,ation#i'# an& &e'en&en$ie# a"ong $o"'onent# of te #t!ategi$ #*#te". 7. o!"%,ate $on$,%#ion# a# to ea(ne##e# in #t!ateg* fo!"%,ation5 i"',e"entation &efi$ien$ie#5 o! inte!a$tion# eteen te to. Pa#e t!ee: Re$o""en&ation# 1. De)e,o' a,te!nati)e #o,%tion# to '!o,e"# an& a*# of $a'ita,i+ing on o''o!t%nitie#. o Te#t bte#e a,te!nati)e#c in ,igt of tei! !e#o%!$e !e8%i!e"ent#5 !i#(5 !ea! '!io!itie#5 an& ote! a'',i$a,e "ea#%!e#. 7. De)e,o' #'e$ifi$ !e$o""en&ation#. o De)e,o' an integ!ate&5 "ea#%!a,e5 an& ti"e - 'a#e& a$tion ',an to i"'!o)e #t!ategi$ !e#%,t#. #t!ategi$ no E)a,%ation: #t!ategi$ $ont!o, g%i&ing an& e)a,%ating te #t!ateg*: Nat%!e of !e)ie: St!ategi$ E)a,%ate effe$ti)ene## of o!gani#ationa, #t!ateg* in a$ie)ing o!gani#ationa, o2e$ti)e# Pe!fo!" te ta#( of (ee'ing o!gani#ation on t!a$( I"'o!tan$e of St!ategi$ E)a,%ation: Te nee& fo! fee&a$( A''!ai#a, an& !ea!& Ce$( on te )a,i&it* of #t!ategi$ $oi$e Cong!%en$e eteen &e$i#ion# an& inten&e& #t!ateg* ESHWARI.S---LORAA BUSINESS ACADEMY Page 7G
S%$$e##f%, $%,"ination of te #t!ategi$ "anage"ent '!o$e## C!eating in'%t# fo! ne #t!ategi$ ',anning Ai,it* to $oo!&inate te ta#(# 'e!fo!"e& Ba!!ie!# in E)a,%ation: Li"it# of Cont!o,# Diffi$%,tie# in "ea#%!e"ent Re#i#tan$e to e)a,%ation So!tte!"i#" Re,*ing on effi$ien$* )e!#%# effe$ti)ene## Re8%i!e"ent# of Effe$ti)e E)a,%ation: Cont!o, #o%,& in)o,)e on,* te "ini"%" a"o%nt of info!"ation Cont!o, #o%,& "onito! on,* "anage!ia, a$ti)itie# an& !e#%,t# Cont!o, #o%,& e ti"e,* Long te!" an& #o!t te!" $ont!o, e #tan&a!&# %#e& Cont!o, #o%,& ai" at 'in'ointing e6$e'tion# Rea!&# fo! "eeting o! #o%,& e6$ee&ing #o%,& e e"'a#i+e& St!ategi$ Cont!o, : o%! T*'e# of St!ategi$ Cont!o,#: ESHWARI.S---LORAA BUSINESS ACADEMY Page 7J
P!e"i#e Cont!o, I"',e"entation Cont!o, St!ategi$ S%!)ei,,an$e S'e$ia, a,e!t $ont!o, P!e"i#e Cont!o,: P!e"i#e# $ont!o, i# ne$e##a!* to i&entif* te (e* a##%"'tion# an& it# i"',e"entation. P!e"i#e# $ont!o, #e!)e# te '%!'o#e of $ontin%a,,* te#ting te a##%"'tion# to fin& o%t ete! te* a!e #ti,, )a,i& o! not. Ti# ena,e# te #t!ategi#t# to ta(e $o!!e$ti)e a$tion at te !igt ti"e !ate! tan $ontin%ing it a #t!ateg* i$ i# a#e& on e!!oneo%# a##%"'tion#. I"',e"entation Cont!o,: I"',e"entation $ont!o, i# ai"e& at e)a,%ating ete! te ',an#5 '!og!a""e#5 an& '!o2e$t# a$t%a,,* g%i&ing te o!gani+ation toa!&# it# '!e&ete!"ine& o2e$ti)e# o! not.a!e St!ategi$ S%!)ei,,an$e: St!ategi$ #%!)ei,,an$e ai"e& at a "o!e gene!a,i+e& an& o)e!a!$ing $ont!o, K&e#igne& to "onito! a !oa& !ange of e)ent# in#i&e an& o%t#i&e te $o"'an* tat a!e ,i(e,* to t!eaten te $o%!#e of a fi!";# #t!ateg*. S'e$ia, A,e!t Cont!o,: ESHWARI.S---LORAA BUSINESS ACADEMY Page 7
S'e$ia, a,e!t $ont!o,5 i$ i# a#e& on a t!igge! "e$ani#" fo! !a'i& !e#'on#e an& i""e&iate !ea##e##"ent of #t!ateg* in te ,igt of #%&&en an& %ne6'e$te& e)ent# O'e!ationa, Cont!o,: Ai"e& at te a,,o$ation an& %#e of o!gani#ationa, !e#o%!$e# Con$e!ne& it a$tion o! 'e!fo!"an$e Ho &o St!ategi$ Cont!o, an& O'e!ationa, Cont!o, Diffe!: Att!i%te St!ategi$ Cont!o, O'e!ationa, Cont!o, 1. Ba#i$ 8%e#tion A!e e "o)ing in te !igt &i!e$tion3 Ho a!e e 'e!fo!"ing3 7. Ai" P!oa$ti)e5 $ontin%o%# 8%e#tioning a#i$ &i!e$tion of #t!ateg* A,,o$ationf%t%!e an& %#e of o!gani#ation a, !e#o%!$e#of <.te Main Con$e!n Stee!ing te o!gani+ation;# &i!e$tion >. o$%# E6te!na, en)i!on"ent A$tion $ont!o, Inte!na, o!gani+ation . Ti"e Ho!i+on Longte!" So!t- te!" . Main Te$ni8%e# En)i!on"enta, #$anning5 info!"ation gate!ing5 8%e#tioning an& !e)ie B%&get#5 #$e&%,e#5 Page 71 ESHWARI.S---LORAA BUSINESS ACADEMY
an& MBO P!o$e## of E)a,%ation: Setting #tan&a!&# of 'e!fo!"an$e Mea#%!e"ent of 'e!fo!"an$e Ana,*+ing )a!ian$e# Ta(ing $o!!e$ti)e a$tion Setting of Stan&a!&#: @%antitati)e C!ite!ia F F It a# 'e!fo!"e& a# $o"'a!e& to it# 'a#t a$ie)e"ent# It# 'e!fo!"an$e it te in&%#t!* a)e!age o! tat of "a2o! $o"'etito!# @%a,itati)e C!ite!ia Te!e a# to e a #'e$ia, #et of 8%a,itati)e $!ite!ia fo! a #%2e$ti)e a##e##"ent of te fa$to!# ,i(e $a'ai,itie#5 $o"'eten$ie#5 !i#(- ea!ing $a'a$it*5 #t!ategi$ $,a!it*5 f,e6ii,it*5 an&$o!e o!(ai,it* Mea#%!e"ent of Pe!fo!"an$e: Te e)a,%ation '!o$e## o'e!ate# at te 'e!fo!"an$e ,e)e, a# a$tion ta(e# ',a$e. Stan&a!&# of 'e!fo!"an$e a$t a# te en$"a!( again#t i$ te a$t%a, 'e!fo!"an$e i# to e $o"'a!e&. It i# i"'o!tant5 oe)e!5 to %n&e!#tan& o te "ea#%!e"ent of 'e!fo!"an$e $an ta(e ',a$e. ESHWARI.S---LORAA BUSINESS ACADEMY Page 711
Ana,*+ing a!ian$e#: Te "ea#%!e"ent of a$t%a, 'e!fo!"an$e an& it# $o"'a!i#on it #tan&a!& o! %&gete& 'e!fo!"an$e ,ea&# to an ana,*#i# of )a!ian$e#. B!oa&,*5 te fo,,oing t!ee #it%ation# "a* a!i#e: Te a$t%a, 'e!fo!"an$e "at$e# te %&gete& 'e!fo!"an$e Te a$t%a, 'e!fo!"an$e &e)iate# 'o#iti)e,* o)e! te %&get 'e!fo!"an$e Te a$t%a, 'e!fo!"an$e &e)iate# negati)e,* f!o" te %&gete& Ta(ing Co!!e$ti)e A$tion#: Te!e a!e t!ee $o%!#e# fo! $o!!e$ti)e a$tion: $e$(ing of 'e!fo!"an$e5 $e$(ing of #tan&a! an& !efo!"%,ating #t!ategie#5 ',an#5 an& o2e$ti)e#. Te$ni8%e# of St!ategi$ E)a,%ation an& Cont!o,: E)a,%ation Te$ni8%e# fo! St!ategi$ Cont!o, E)a,%ation Te$ni8%e# fo! O'e!ationa, Cont!o, E)a,%ation Te$ni8%e# fo! St!ategi$ Cont!o,: Te$ni8%e# fo! #t!ategi$ $ont!o, $o%,& e $,a##ifie& into to g!o%'# on te a#i# of te t*'e of en)i!on"ent fa$e& * te o!gani#ation. Te o!gani#ation tat o'e!ate in a !e,ati)e #ta,e en)i!on"ent "a* %#e #t!ategi$ "o"ent%" $ont!o,5 i,e to#e i$ fa$e a !e,ati)e,* t%!%,ent en)i!on"ent "a* fin& #t!ategi$ ,ea' $ont!o, "o!e a''!o'!iate. E)a,%ation Te$ni8%e# fo! O'e!ationa, Cont!o,: ESHWARI.S---LORAA BUSINESS ACADEMY Page 717
O'e!ationa, $ont!o, i# ai"e& at te a,,o$ation an& %#e of o!gani#ationa, !e#o%!$e# Te e)a,%ation te$ni8%e# a!e $,a##ifie& into t!ee 'a!t#: Inte!na, ana,*#i# Co"'a!ati)e ana,*#i# Co"'!een#i)e ana,*#i#. E#ta,i#ing #t!ategi$ $ont!o,: tt':.a,,%#ine##.$o""anage"enten$"a!(ing-#t!ategi$-',anning7JJ-1.t", St!ategi$ Cont!o,: A Ne Pe!#'e$ti)e Mo#t $o""entato!# o%,& ag!ee it te &efinition of #t!ategi$ $ont!o, offe!e& * S$en&e, an& Hofe!: 4St!ategi$ $ont!o, fo$%#e# on te &%a, 8%e#tion# of ete!: /1 #t!ateg* eing i"',e"ente& ',anne& !efe!# an& /7to te !e#%,t# '!o&%$e& * te te #t!ateg* a!e i# to#e inten&e&.4 Ti#a# &efinition te t!a&itiona, !e)ie an& fee&a$( #tage# i$ $on#tit%te# te ,a#t #te' in te #t!ategi$ "anage"ent '!o$e##. No!"ati)e "o&e,# of te #t!ategi$ "anage"ent '!o$e## a)e &e'i$te& it a# in$,%&ing te!e '!i"a!* #tage#: #t!ateg* fo!"%,ation5 #t!ateg* i"',e"entation5 an& #t!ateg* e)a,%ation /$ont!o,. St!ateg* e)a,%ation# $on$e!ne& '!i"a!i,* it t!a&itiona, $ont!o,# '!o$e##e# i$ in)o,)e# te !e)ie an& fee&a$( of 'e!fo!"an$e to &ete!"ine if ',an#5 #t!ategie#5 an& o2e$ti)e# a!e eing a$ie)e&5 it te !e#%,ting info!"ation eing %#e& to #o,)e '!o,e"# o! ta(e $o!!e$ti)e a$tion#. Re$ent $on$e't%a, $ont!i%to!# to te #t!ategi$ $ont!o, ,ite!at%!e a)e a!g%e& fo! anti$i'ato!* fee&fo!a!& $ont!o,#5 tat !e$ogni+e a !a'i&,* $anging an& %n$e!tain e6te!na, en)i!on"ent. S$!e*ogg an& Stein"ann /1JG a)e "a&e a '!e,i"ina!* effo!t5 in &e)e,o'ing ne #*#te" to o'e!ate on a $ontin%o%# a#i#5 $e$(ing an& $!iti$a,,* e)a,%ating a##%"'tion#5 #t!ategie# an& ESHWARI.S---LORAA BUSINESS ACADEMY Page 71<
!e#%,t#. Te* !efe! to #t!ategi$ $ont!o, a# 4te $!iti$a, e)a,%ation of ',an#5 a$ti)itie#5 an& !e#%,t#5 te!e* '!o)i&ing info!"ation fo! te f%t%!e a$tion4. S$!e*ogg an& Stein"ann a#e& on te #o!t$o"ing# of fee&a$(-$ont!o,. To $ent!a, $a!a$te!i#ti$# if ti# fee&a$( $ont!o, i# ig,* 8%e#tiona,e fo! $ont!o, '%!'o#e# in #t!ategi$ "anage"ent: /afee&a$( $ont!o, i# 'o#t-a$tion $ont!o, an& / #tan&a!&# a!e ta(en fo! g!ante&. S$!e*ogg an& Stein"ann '!o'o#e& an a,te!nati)e to te $,a##i$a, fee&a$( "o&e, of $ont!o,: a <-#te' "o&e, of #t!ategi$ $ont!o, i$ in$,%&e# '!e"i#e $ont!o,5 i"',e"entation $ont!o,5 an& #t!ategi$ #%!)ei,,an$e. Pea!$e an& Roin#on e6ten&e& ti# "o&e, an& a&&e& a $o"'onent 4#'e$ia, a,e!t $ont!o,4 to &ea, #'e$ifi$a,,* it ,o '!oai,it*5 ig i"'a$t t!eatening nat%!e te#e fo%! #t!ateg* #t!ategi$ $ont!o,# i# #%""a!i+e& in ig%!e ->. e)ent#. Ti"e /t Te "a!(# teof 'oint e!e fo!"%,ation #ta!t#. P!e"i#e $ont!o, i# e#ta,i#e& at te 'oint in ti"e of initia, '!e"i#ing /t . !o" e!e on '!o"i#e $ont!o, a$$o"'anie# a,, f%!te! #e,e$ti)e #te'# of '!e"i#ing in ',anning an& i"',e"enting te #t!ateg*. Te #t!ategi$ #%!)ei,,an$e of e"e!ging e)ent# 'a!a,,e,# te #t!ategi$ "anage"ent '!o$e## an& !%n# $ontin%o%#,* f!o" ti"e /t t!o%g /t . Wen #t!ateg* i"',e"entation egin# /t 5 te ti!& $ont!o, &e)i$e5 i"',e"entation $ont!o, i# '%t into a$tion an& !%n t!o%g te en& of te ',anning $*$,e /t . S'e$ia, a,e!t $ont!o,# a!e $on&%$te& o)e! te enti!e ',anning $*$,e. P!o"i#e Cont!o,: P,anning '!e"i#e#a##%"'tion# a!e e#ta,i#e& ea!,* on in te #t!ategi$ ',anning '!o$e## an& a$t a# a a#i# fo! fo!"%,ating #t!ategie#. 4P!e"i#e $ont!o, a# een &e#igne& to $e$( #*#te"ati$a,,* an& $ontin%o%#,* ete! o! not te '!e"i#e# #et &%!ing te ',anning an& i"',e"entation '!o$e## a!e #ti,, )a,i&. ESHWARI.S---LORAA BUSINESS ACADEMY Page 71>
It in)o,)e# te $e$(ing of en)i!on"enta, $on&ition#. P!e"i#e# a!e '!i"a!i,* $on$e!ne& it to t*'e# of fa$to!#: * En)i!on"enta, fa$to!# /fo! e6a"',e5 inf,ation5 te$no,og*5 inte!e#t !ate#5 !eg%,ation5 an& &e"og!a'i$#o$ia, $ange#. In&%#t!* fa$to!# /fo! e6a"',e5 $o"'etito!#5 #%'',ie!#5 #%#tit%te#5 an& a!!ie!# to ent!*. * A,, '!e"i#e# not !e8%i!e te #a"e a"o%nt of ,i(e,* $ont!o,. "%#t #e,e$t to#e "a* '!e"i#e# an& )a!ia,e# tat /aa!e toTe!efo!e5 $ange an&"anage!# / o%,& a "a2o! i"'a$t on te $o"'an* an& it# #t!ateg* if te &i&. I"',e"entation Cont!o, St!ategi$ i"',antation $ont!o, '!o)i&e# an a&&itiona, #o%!$e of fee&fo!a!& info!"ation. 4I"',e"entation $ont!o, i# &e#igne& to a##e## ete! te o)e!a,, #t!ateg* #o%,& e $ange& in ,igt of %nfo,&ing e)ent# an& !e#%,t# a##o$iate& it in$!e"enta, #te'# an& a$tion# tat i"',e"ent te o)e!a,, #t!ateg*.4 St!ategi$ i"',e"entation $ont!o, &oe# not !e',a$e o'e!ationa, $ont!o,. Un,i(e o'e!ation# $ont!o,5 #t!ategi$ i"',e"entation $ont!o, $ontin%o%#,* 8%e#tion# te a#i$ &i!e$tion of te #t!ateg*. Te to a#i# t*'e# of i"',e"entation $ont!o, a!e: 1. Monito!ing #t!ategi$ t!%#t# /ne o! (e* #t!ategi$ '!og!a"#. To a''!oa$e# a!e %#ef%, in ena$ting i"',e"entation $ont!o,# fo$%#e& on "onito!ing #t!ategi$ t!%#t#: /1 one a* i# to ag!ee ea!,* in te ',anning '!o$e## on i$ t!%#t# a!e $!iti$a, fa$to!# in te #%$$e## of te #t!ateg* o! of tat t!%#t /7 te #e$on& a''!oa$ i# to %#e #to'go a##e##"ent# ,in(e& to a #e!ie# of "eaningf%, t!e#o,&# /ti"e5 $o#t#5 !e#ea!$ an& &e)e,o'"ent5 #%$$e##5 et$. a##o$iate& it 'a!ti$%,a! t!%#t#. 7. Mi,e#tone Re)ie#. Mi,e#tone# a!e #ignifi$ant 'oint# in te &e)e,o'"ent of a '!og!a""e5 #%$ a# 'oint# e!e ,a!ge $o""it"ent# of !e#o%!$e# "%#t e "a&e. A "i,e#tone !e)ie %#%a,,* in)o,)e# a f%,,-#$a,e !ea##e##"ent of te #t!ateg* an& ESHWARI.S---LORAA BUSINESS ACADEMY Page 71
te a&)i#ai,it* of $ontin%ing o! !efo$%#ing te &i!e$tion of te $o"'an*. In o!&e! to $ont!o, te $%!!ent #t!ateg*5 "%#t e '!o)i&e& in #t!ategi$ ',an#. St!ategi$ S%!)ei,,an$e Co"'a!e& to '!e"i#e $ont!o, an& i"',e"entation $ont!o,5 #t!ategi$ #%!)ei,,an$e i# &e#igne& to e a !e,ati)e,* %nfo$%#e&5 o'en5 an& !oa& #ea!$ a$ti)it*. 4... #t!ategi$ #%!)ei,,an$e i# &e#igne& to "onito! a !oa& !ange of e)ent# in#i&e an& o%t#i&e te $o"'an* tat a!e ,i(e,* to t!eaten te $o%!#e of te fi!"9# #t!ateg*.4 Te a#i$ i&ea ein& #t!ategi$ #%!)ei,,an$e i# tat #o"e fo!" of gene!a, "onito!ing of "%,ti',e info!"ation #o%!$e# #o%,& e en$o%!age&5 it te #'e$ifi$ intent eing te o''o!t%nit* toto %n$o)e! i"'o!tant *eta* %nanti$i'ate& info!"ation. St!ategi$ #%!)ei,,an$e a''ea!# e #i"i,a! in #o"e to 4en)i!on"enta, #$anning.4 Te !ationa,e5 oe)e!5 i# &iffe!ent. En)i!on"enta,5 #$anning %#%a,,* i# #een a# 'a!t of te $!ono,ogi$a, ',anning $*$,e &e)ote& to gene!ating info!"ation fo! te ne ',an. B* a* of $ont!a#t5 #t!ategi$ #%!)ei,,an$e i# &e#igne& to #afeg%a!& tee#ta,i#e& #t!ateg* on a $ontin%o%# a#i#. S'e$ia, A,e!t Cont!o, Anote! t*'e of #t!ategi$ $ont!o, i# a #'e$ia, a,e!t $ont!o,. 4A #'e$ia, a,e!t $ont!o, i# te nee& to to!o%g,*5 an& often !a'i&,*5 !e$on#i&e! te fi!"9# a#i# #t!ateg* a#e& on a #%&&en5 %ne6'e$te& e)ent.4 Te ana,*#t# of !e$ent $o!'o!ate i#to!* a!e f%,, of #%$ 'otentia,,* ig i"'a$t #%!'!i#e# /i.e.5 nat%!a, &i#a#te!#5 $e"i$a, #'i,,#5 ',ane $!a#e#5 '!o&%$t &efe$t#5 o#ti,e ta(eo)e!# et$.. Wi,e Pea!$e an& Roin#on #%gge#t tat #'e$ia, a,e!t $ont!o, e 'e!fo!"e& on,* &%!ing #t!ateg* i"',e"entation5 P!e,e !e$o""en&# tat e$a%#e #'e$ia, a,e!t $ont!o,# a!e ESHWARI.S---LORAA BUSINESS ACADEMY Page 71
!ea,,* a #%#et of #t!ategi$ #%!)ei,,an$e tat te* e $on&%$te& t!o%go%t te enti!e #t!ategi$ "anage"ent '!o$e##. Te $a!a$te!i#ti$# of ea$ $ont!o, $o"'onent a!e &etai,e& in Ta,e ->5 in$,%&ing te $o"'onent9# '%!'o#e5 "e$ani#" %#e& to i"',e"ent it5 te '!o$e&%!e to e fo,,oe&5 &eg!ee of fo$%#ing5 info!"ation #o%!$e#5 an& o!gani+ationa,'e!#onne, to e %ti,i+e&. St!ategi$ Cont!o, P!o$e## A,to%g $ont!o, #*#te"# "%#t e tai,o!e& to #'e$ifi$ #it%ation#5 #%$ #*#te"# gene!a,,* fo,,o te #a"e a#i$ '!o$e##. Rega!&,e## of te t*'e o! ,e)e,# of $ont!o, #*#te"# an o!gani+ation nee $ont!o, "a* e &e'i$te& a# a #i6-#te' fee&a$( "o&e,: 1.to Dete!"ine at7. toSet $ont!o,. Wat a!e te Wat o2e$ti)e# te o!gani+ation o'e# a$$o"',i#3 $ont!o, #tan&a!&#. a!e te ta!get# an& to,e!an$e#3 <. Mea#%!e 'e!fo!"an$e. Wat a!e te a$t%a, #tan&a! >. Co"'a!e te 'e!fo!"an$e te 'e!fo!"an$e to te #tan&a!&#.Ho e,, &oe# te a$t%a, "at$ te ',an3 . Dete!"ine te !ea#on# fo! te &e)iation#. A!e te &e)iation# &%e to inte!na, #o!t$o"ing# o! &%e to e6te!na, $ange# e*on& te $ont!o, of te o!gani+ation3 . Ta(e $o!!e$ti)e a$tion. A!e $o!!e$tion# nee&e& in inte!na, a$ti)itie# to $o!!e$t o!gani+ationa, #o!t$o"ing#5 o! a!e $ange# nee&e& in o2e$ti)e# &%e to e6te!na, e)ent#3 ee&a$( f!o" e)a,%ating te effe$ti)ene## of te #t!ateg* "a* inf,%en$e "an* of ote! 'a#e# on te #t!ategi$ "anage"ent '!o$e##. A e,,-&e#igne& $ont!o, #*#te" i,, %#%a,,* in$,%&e fee&a$( of $ont!o, info!"ation to te in&i)i&%a, o! g!o%' 'e!fo!"ing te $ont!o,,e& a$ti)it*. Si"',e fee&a$( #*#te"# "ea#%!e o%t'%t# of a '!o$e## an& fee& into te #*#te" o! te in'%t# of a #*#te" $o!!e$ti)e a$tion# to otain &e#i!e& o%t'%t#. Te $on#e8%en$e of %ti,i+ing te fee&a$( $ont!o, #*#te"# i# tat te %n#ati#fa$to!* 'e!fo!"an$e $ontin%e# ESHWARI.S---LORAA BUSINESS ACADEMY Page 71G
%nti, te "a,f%n$tion i# &i#$o)e!e&. One a##o$iate& it fee&a$( $ont!o, #*#te"# #*#te"# "onito! in'%t# into a '!o$e## to ',anne& if te* a!e not5 te in'%t#5 o! to otain &e#i!e& !e#%,t#.
te$ni8%e fo! !e&%$ing te '!o,e"# i# fee&fo!a!& $ont!o,. ee&fo!a!& a#$e!tain ete! te in'%t# a!e a# 'e!a'# te '!o$e##5 a!e $ange& in o!&e!
Dete!"ine Wat To Cont!o, Te fi!#t #te' in te $ont!o, '!o$e## i# &ete!"ining te "a2o! a!ea# to $ont!o,. Manage!# %#%a,,* a#e tei! "a2o! $ont!o,# on te o!gani+ationa, "i##ion5 goa,# an& o2e$ti)e# &e)e,o'e& &%!ing te ',anning '!o$e##. Manage!# "%#t "a(e $oi$e# e$a%#e it i# e6'en#i)e an&In )i!t%a,,* to $ont!o, e)e!* a#'e$t "%#t of te o!gani+ation9# a$ti)itie#. &e$i&ing i"'o##i,e at to $ont!o,5 te o!gani+ation $o""%ni$ate t!o%g te a$tion# of it# e6e$%ti)e# tat #t!ategi$ $ont!o, i# a nee&e& a$ti)it*. Wito%t to' "anage"ent9# $o""it"ent to $ont!o,,ing a$ti)itie#5 te $ont!o, #*#te" $o%,& e %#e,e##. Set Cont!o, Stan&a!&# Te #e$on& #te' in te $ont!o, '!o$e## i# e#ta,i#ing #tan&a!&#. A$ont!o, #tan&a!&# i# a ta!get again#t i$ #%#e8%ent 'e!fo!"an$e i,, e $o"'a!e&. Stan&a!&# a!e te $!ite!ia tat ena,e "anage!# to e)a,%ate f%t%!e5 $%!!ent5 o! 'a#t a$tion#. Te* a!e "ea#%!e& in a )a!iet* of a*#5 in$,%&ing '*#i$a,5 8%antitati)e5 an& 8%a,itati)e te!"#. i)e a#'e$t# of te 'e!fo!"an$e $an e "anage& an& $ont!o,,e&: 8%antit*5 8%a,it*5 ti"e $o#t5 an& ea)io!. Ea$ a#'e$t of $ont!o, "a* nee& a&&itiona, $atego!i+ing. An o!gani+ation "%#t i&entif* te ta!get#5 &ete!"ine te to,e!an$e# to#e ta!get#5 an& #'e$if* te ti"ing of $on#i#tent it te o!gani+ation9# goa,# &efine& in te fi!#t #te' of &ete!"ining at to $ont!o,. o! e6a"',e5 #tan&a!&# "igt in&i$ate o e,, a '!o&%$t i# "a&e o! o effe$ti)e,* a #e!)i$e i# to e &e,i)e!e&. Stan&a!&# "a* a,#o !ef,e$t #'e$ifi$ a$ti)itie# o! ea)io!# tat a!e ne$e##a!* to a$ie)e o!gani+ationa, goa,#. oa,# a!e t!an#,ate& into 'e!fo!"an$e #tan&a!&# * "a(ing te" "ea#%!a,e. An o!gani+ationa, goa, to in$!ea#e "a!(et #a!e5 fo! e6a"',e5 "a* e t!an#,ate& into a to'-"anage"ent 'e!fo!"an$e #tan&a!& to in$!ea#e "a!(et #a!e * 1 ESHWARI.S---LORAA BUSINESS ACADEMY Page 71J
'e!$ent itin a te,)e-"ont 'e!io&. He,'f%, "ea#%!e# of #t!ategi$ 'e!fo!"an$e in$,%&e: #a,e# /tota,5 an& * &i)i#ion5 '!o&%$t $atego!*5 an& !egion5 #a,e# g!ot5 net '!ofit#5 !et%!n on #a,e#5 a##et#5 e8%it*5 an& in)e#t"ent $o#t of #a,e#5 $a# f,o5 "a!(et #a!e5 '!o&%$t 8%a,it*5 )a,%e& a&&e&5 an& e"',o*ee# '!o&%$ti)it*. @%antifi$ation of te o2e$ti)e #tan&a!& i# #o"eti"e# &iffi$%,t. o! e6a"',e5 $on#i&e! te goa, of '!o&%$t ,ea&e!#i'. An o!gani+ation $o"'a!e# it# '!o&%$t it to#e of $o"'etito!# an& &ete!"ine# te e6tent to i$ it 'ionee!# in te int!o&%$tion of a#i# '!o&%$t an& '!o&%$t i"'!o)e"ent#. S%$ #tan&a!&# "a* e6i#t e)en to%g te* a!e not fo!"a,,* an& e6',i$it,* #tate&. Setting te ti"ing a##o$iate& it te #tan&a!&# i# a,#o a '!o,e" fo! "an* o!gani+ation#. It i# not %n%#%a, fo!"%#t #o!t-te!" at te e6'en#e of ,ong-te!" Manage"ent &e)e,o'o2e$ti)e# #tan&a!&# to in e a,,"et 'e!fo!"an$e a!ea# to%$e& on *o2e$ti)e#. e#ta,i#e& o!gani+ationa, goa,#. Te )a!io%# fo!"# #tan&a!&# a!e &e'en& on at i# eing "ea#%!e& an& on te "anage!ia, ,e)e, !e#'on#i,e fo! ta(ing $o!!e$ti)e a$tion. Co""on,* %#e# a# an e6a"',e5 te fo,,oing eigt t*'e# of #tan&a!&# a)e een #et * ene!a, E,e$t!i$ : * P!ofitai,it* #tan&a!&# : Te#e #tan&a!&# in&i$ate o "%$ '!ofit ene!a, E,e$t!i$ o%,& ,i(e to "a(e in a gi)en ti"e 'e!io&. Ma!(et 'o#ition #tan&a!&# : Te#e #tan&a!&# in&i$ate te 'e!$entage of tota, '!o&%$t "a!(et tat $o"'an* o%,& ,i(e to in f!o" $o"'etito!#. P!o&%$ti)it* #tan&a!&# : Te#e '!o&%$tion-o!iente& #tan&a!&# in&i$ate )a!io%# a$$e'ta,e !ate# i$ fina, '!o&%$t# #o%,& e gene!ate& itin te o!gani+ation. P!o&%$t ,ea&e!#i' #tan&a!&# : P!o&%$t ,ea&e!#i' #tan&a!&# in&i$ate at ,e)e,# of '!o&%$t inno)ation o%,& "a(e 'eo',e )ie ene!a, E,e$t!i$ '!o&%$t# a# ,ea&e!# in te "a!(et. Pe!#onne, &e)e,o'"ent #tan&a!&# : Pe!#onne, &e)e,o'"ent #tan&a!&# ,i#t a$$e'ta,e of '!og!e## in ti# a!ea. E"',o*ee attit%&e #tan&a!&# : Te#e #tan&a!&# in&i$ate attit%&e# tat ene!a, E,e$t!i$ e"',o*ee# #o%,& a&o't. * * * * * ESHWARI.S---LORAA BUSINESS ACADEMY Page 71
* P%,i$ !e#'on#ii,it* #tan&a!&# : A,, o!gani+ation# a)e $e!tain o,igation# to #o$iet*. ene!a, E,e$t!i$9# #tan&a!&# in ti# a!ea in&i$ate a$$e'ta,e ,e)e,# of a$ti)it* itin te o!gani+ation &i!e$te& toa!& ,i)ing %' to #o$ia, !e#'on#ii,itie#. Stan&a!&# !ef,e$ting a,an$e eteen #o!t-!ange an& ,ong-!ange goa,# . Stan&a!&# in ti# a!ea in&i$ate at te a$$e'ta,e ,ong- an& #o!t - !ange goa,# a!e an& te !e,ation#i' a"ong te". * C!iti$a, Cont!o, Point# an& Stan&a!&#. Te '!in$i',e of $!iti$a, 'oint $ont!o,5 one of te "o!e i"'o!tant $ont!o, '!in$i',e#5 #tate#: 4Effe$ti)e $ont!o, !e8%i!e# attention again#t ',an#4. Te!e a!e5 oe)e!5 no #'e$ifi$ $ata,og of $ont!o,# a)ai,a,e to a,, "anage!# e$a%#e of te 'e$%,ia!itie# of )a!io%# ente!'!i#e# an& &e'a!t"ent#5 te )a!iet* of '!o&%$t# an& #e!)i$e# to e "ea#%!e&5 an& te inn%"e!a,e ',anning '!og!a"# to e fo,,oe&. Mea#%!e Pe!fo!"an$e On$e #tan&a!&# a!e &ete!"ine&5 te ne6t #te' i# "ea#%!ing 'e!fo!"an$e. Te a$t%a, 'e!fo!"an$e "%#t e $o"'a!e& to te #tan&a!&#. In #o"e o!( ',a$e#5 ti# 'a#e "a* !e8%i!e on,* )i#%a, o#e!)ation. In ote! #it%ation#5 "o!e '!e$i#e &ete!"ination# a!e nee&e&. Man* t*'e# of "ea#%!e"ent# ta(en fo! $ont!o, '%!'o#e# a!e a#e& on #o"e fo!" of i#to!i$a, #tan&a!&. Te#e #tan&a!&# $an e a#e& on &ata &e!i)e& f!o" te PIMS /'!ofit i"'a$t of "a!(et #t!ateg* '!og!a"5 '%,i#e& info!"ation tat i# '%,i$,* a)ai,a,e5 !ating# of '!o&%$t #e!)i$e 8%a,it*5 inno)ation !ate#5 an& !e,ati)e "a!(et #a!e# #tan&ing#. PIMS a# &e)e,o'e& * P!ofe##o! Si&ne* Soeff,e! of Ha!)a!& Uni)e!#it* in te 1#. St!ategi$ $ont!o, #tan&a!&# a!e a#e& on te '!a$ti$e of $o"'etiti)e en$"a!(ing - te '!o$e## of "ea#%!ing a fi!"9# 'e!fo!"an$e again#t tat of te to' 'e!fo!"an$e in it# in&%#t!*. /#ee ,a#t 'a!t of ti# Ca'te! Te '!o,ife!ation of $o"'%te!# tie& into neto!(# a# "a&e it 'o##i,e fo! "anage!# to otain %'-to-"in%te #tat%# !e'o!t# on a )a!iet* of 8%antitati)e 'e!fo!"an$e "ea#%!e#. Manage!# #o%,& e $a!ef%, to o#e!)e an& "ea#%!e in a$$%!ate,* efo!e ta(ing $o!!e$ti)e a$tion. Co"'a!e Pe!fo!"an$e To Stan&a!&# Te $o"'a!ing #te' &ete!"ine# te &eg!ee of )a!iation eteen a$t%a, 'e!fo!"an$e an& #tan&a!&. If te fi!#t to 'a#e# a)e een &one e,,5 te ti!& 'a#e of te $ont!o,,ing '!o$e## - $o"'a!ing 'e!fo!"an$e it #tan&a!&# - #o%,& e #t!aigtfo!a!&. Hoe)e!5 #o"eti"e# it i# &iffi$%,t to "a(e te !e8%i!e& $o"'a!i#on# /e.g.5 ea)io!a, #tan&a!&#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77
So"e &e)iation# f!o" te #tan&a!& "a* e 2%#tifie& e$a%#e of $ange# in en)i!on"enta, $on&ition#5 o! ote! !ea#on#. Dete!"ine Te Rea#on# o! Te De)iation# Te figt #te' of te $ont!o, '!o$e## in)o,)e# fin&ing o%t: 4* 'e!fo!"an$e a# &e)iate& f!o" te #tan&a!" Ca%#e# of &e)iation $an !ange f!o" #e,e$te& a$ie)e o!gani+ationa, o2e$ti)e#. Pa!ti$%,a!,*5 te o!gani+ation nee&# to a#( if te &e)iation# a!e &%e to inte!na, #o!t$o"ing# o! e6te!na, $ange# e*on& te $ont!o, of te o!gani+ation. A gene!a, $e$(,i#t #%$ a# fo,,oing $an e e,'f%,: * * * * * A!e te #tan&a!&# a''!o'!iate fo! te #tate& o2e$ti)e an& #t!ategie#3 A!e te o2e$ti)e# an& $o!!e#'on&ing #ti,, a''!o'!iate in ,igt of te $%!!ent en)i!on"enta, #it%ation3 A!e te #t!ategie# fo! a$ie)ing te o2e$ti)e# #ti,, a''!o'!iate in ,igt of te $%!!ent en)i!on"enta, #it%ation3 A!e te fi!"9# o!gani+ationa, #t!%$t%!e5 #*#te"# /e.g.5 info!"ation5 an& !e#o%!$e #%''o!t a&e8%ate fo! #%$$e##f%,,* i"',e"enting te #t!ategie# an& te!efo!e a$ie)ing te o2e$ti)e#3 A!e te a$ti)itie# eing e6e$%te& a''!o'!iate fo! a$ie)ing #tan&a!&3 Te ,o$%# of te $a%#e5 eite! inte!na, o! e6te!na,5 a# &iffe!ent i"',i$ation# fo! te (in&# of $o!!e$ti)e a$tion. Monito!ing 'e!fo!"an$e an& e)a,%ating &e)iation#: !eat a,%e f!o" Monito!ing an& E)a,%ation A# #tate& #e)e!a, ti"e# t!o%go%t ti# ,i!a!* to'i$# /an& in "ate!ia,# ,in(e& f!o" it5 too "an* #t!ategi$ ',an# en& %' $o,,e$ting &%#t on a #e,f. Monito!ing an& e)a,%ating te ',anning a$ti)itie# an& #tat%# of i"',e"entation of te ',an i# -- fo! "an* o!gani+ation# -- a# i"'o!tant a# i&entif*ing #t!ategi$ i##%e# an& goa,#. One a&)antage of "onito!ing an& e)a,%ation i# to en#%!e tat te o!gani+ation i# fo,,oing te &i!e$tion e#ta,i#e& &%!ing #t!ategi$ ',anning. Te ao)e a&)antage i# o)io%#. A&%,t# ten& to ,ea!n e#t en te*9!e a$t%a,,* &oing #o"eting it ne info!"ation an& "ate!ia,# an& ten te*9!e $ontin%ing to !ef,e$t on tei! e6'e!ien$e#. Yo% $an ,ea!n a g!eat &ea, ao%t *o%! o!gani+ation an& o to "anage it * $ontin%ing to "onito! te i"',e"entation of #t!ategi$ ',an#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 771
Note tat ',an# a!e g%i&e,ine#. Te* a!en9t !%,e#. It9# O? to &e)iate f!o" a ',an. B%t ',anne!# #o%,& %n&e!#tan& te !ea#on fo! te &e)iation# an& %'&ate te ',an to !ef,e$t te ne &i!e$tion. Re#'on#ii,itie# fo! Monito!ing an& E)a,%ation Te #t!ategi$ ',an &o$%"ent #o%,& #'e$if* o i# !e#'on#i,e fo! te o)e!a,, i"',e"entation of te ',an5 an& a,#o o i# !e#'on#i,e fo! a$ie)ing ea$ goa, an& o2e$ti)e. Te &o$%"ent #o%,& a,#o #'e$if* o i# !e#'on#i,e to "onito! te i"',e"entation of te ',an an& "a&e &e$i#ion# a#e& on te !e#%,t#. o! e6a"',e5 te oa!& "igt e6'e$t te $ief e6e$%ti)e to !eg%,a!,* !e'o!t to te f%,, oa!& ao%t te goa,#. #tat%# In of t%!n5 i"',e"entation5 toa!& ea$ of te o)e!a,, #t!ategi$ te $ief in$,%&ing e6e$%ti)e '!og!e## "igt e6'e$t !eg%,a! #tat%# !e'o!t# f!o" "i&&,e "anage!# !ega!&ing te #tat%# toa!& tei! a$ie)ing te goa,# an& o2e$ti)e# a##igne& to te". ?e* @%e#tion# Wi,e Monito!ing an& E)a,%ating Stat%# of I"',e"entation of te P,an 1. A!e goa,# an& o2e$ti)e# eing a$ie)e& o! not3 If te* a!e5 ten a$(no,e&ge5 !ea!& an& $o""%ni$ate te '!og!e##. If not5 ten $on#i&e! te fo,,oing 8%e#tion#. 7. Wi,, te goa,# e a$ie)e& a$$o!&ing to te ti"e,ine# #'e$ifie& in te ',an3 If not5 ten *3 <. So%,& te &ea&,ine# fo! $o"',etion e $ange& /e $a!ef%, ao%t "a(ing te#e $ange# -- (no * effo!t# a!e ein& #$e&%,e efo!e ti"e# a!e $ange&3 >. Do 'e!#onne, a)e a&e8%ate !e#o%!$e# /"one*5 e8%i'"ent5 fa$i,itie#5 t!aining5 et$. to a$ie)e te goa,#3 . A!e te goa,# an& o2e$ti)e# #ti,, !ea,i#ti$3 . So%,& '!io!itie# e $ange& to '%t "o!e fo$%# on a$ie)ing te goa,#3 G. So%,& te goa,# e $ange& /e $a!ef%, ao%t "a(ing te#e $ange# -(no * effo!t# a!e not a$ie)ing te goa,# efo!e $anging te goa,#3 ESHWARI.S---LORAA BUSINESS ACADEMY Page 777
J. Wat $an e ,ea!ne& f!o" o%! "onito!ing an& e)a,%ation in o!&e! to i"'!o)e f%t%!e ',anning a$ti)itie# an& a,#o to i"'!o)e f%t%!e "onito!ing an& e)a,%ation effo!t#3 !e8%en$* of Monito!ing an& E)a,%ation Te f!e8%en$* of !e)ie# &e'en&# on te nat%!e of te o!gani+ation an& te en)i!on"ent in i$ it9# o'e!ating. O!gani+ation# e6'e!ien$ing !a'i& $ange f!o" in#i&e an&o! o%t#i&e te o!gani+ation "a* ant to "onito! i"',e"entation of te ',an at ,ea#t on a "ont,* a#i#. Boa!&# of &i!e$to!# #o%,& #ee #tat%# of i"',e"entation at ,ea#t on a 8%a!te!,* a#i#. Cief e6e$%ti)e# #o%,& #ee #tat%# at ,ea#t on a "ont,* a#i#. Re'o!ting Re#%,t# of Monito!ing an& E)a,%ation A,a*# !ite &on te #tat%# !e'o!t#. In te !e'o!t#5 &e#$!ie: 1. An#e!# to te ao)e (e* 8%e#tion# i,e "onito!ing i"',e"entation. 7. T!en&# !ega!&ing te '!og!e## /o! ,a$( te!eof toa!& goa,#5 in$,%&ing i$ goa,# an& o2e$ti)e# <. Re$o""en&ation# ao%t te #tat%# >. An* a$tion# nee&e& * "anage"ent De)iating f!o" P,an It;# O? &o &e)iate f!o" te ',an. Te ',an i# on,* a g%i&e,ine5 not a #t!i$t !oa&"a' i$ "%#t e fo,,oe&. U#%a,,* te o!gani+ation en&# %' $anging it# &i!e$tion #o"eat a# it '!o$ee&# t!o%g te $o"ing *ea!#. Cange# in te ',an %#%a,,* !e#%,t f!o" $ange# in te o!gani+ation;# e6te!na, en)i!on"ent an&o! $,ient nee&# !e#%,t in &iffe!ent o!gani+ationa, goa,#5 $ange# in te a)ai,ai,it* of !e#o%!$e# to $a!!* o%t te o!igina, ',an5 et$. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77<
Te "o#t i"'o!tant a#'e$t of &e)iating f!o" te ',an i# (noing * *o%;!e &e)iating f!o" te ',an5 i.e.5 a)ing a #o,i& %n&e!#tan&ing of at;# going on an& *. Canging te P,an Be #%!e #o"e "e$ani#" i# i&entifie& fo! $anging te ',an5 if ne$e##a!*. o! e6a"',e5 !ega!&ing $ange#5 !ite &on: 1. Wat i# $a%#ing $ange# to e "a&e. 7. W* te $ange# #o%,& e "a&e /te 4*4 i# often &iffe!ent tan 4at i# $a%#ing4 te $ange#. <. Te $ange# to "a&e5 in$,%&ing to goa,#5 o2e$ti)e#5 !e#'on#ii,itie# an& ti"e,ine#. Manage te )a!io%# )e!#ion# of te ',an /in$,%&ing * a ne &i#$%## &ate on an& ea$!ite ne )e!#ion of $an te e ',an. A,a*# (ee' o,& ',anning $o'ie# of te'%tting ',an. A,a*# &on at ,ea!ne& f!o" !e$ent a$ti)it* to "a(e te ne6t #t!ategi$ ',anning a$ti)it* "o!e effi$ient. THE NATURE O STRATEY EALUATION A. I"'o!tan$e of St!ateg* E)a,%ation 1. Te #t!ategi$-"anage"ent '!o$e## !e#%,t# in &e$i#ion# tat $an a)e #ignifi$ant5 ,ong-,a#ting $on#e8%en$e#. E!!oneo%# #t!ategi$ &e$i#ion# $an inf,i$t #e)e!e 'ena,tie# an& $an e e6$ee&ing,* &iffi$%,t5 if not i"'o##i,e5 to !e)e!#e. 7. Mo#t #t!ategi#t# ag!ee5 te!efo!e5 tat #t!ateg* e)a,%ation i# )ita, to an o!gani+ation;# e,,-eing ti"e,* e)a,%ation# $an a,e!t "anage"ent to '!o,e"# o! 'otentia, '!o,e"# efo!e a #it%ation e$o"e# $!iti$a,. <. St!ateg* e)a,%ation in$,%&e# t!ee a#i$ a$ti)itie#: a. E6a"ining te %n&e!,*ing a#e# of a fi!";# #t!ateg*. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77>
. Co"'a!ing e6'e$te& !e#%,t# it a$t%a, !e#%,t#. $. Ta(ing $o!!e$ti)e a$tion# to en#%!e tat 'e!fo!"an$e $onfo!"# to ',an#. >. Te #t!ateg*-e)a,%ation #tage of te #t!ategi$-"anage"ent '!o$e##. . St!ateg* e)a,%ation $an e a $o"',e6 an& #en#iti)e %n&e!ta(ing. Too "%$ e"'a#i# on e)a,%ating #t!ategie# "a* e e6'en#i)e an& $o%nte!'!o&%$ti)e. Yet5 too ,itt,e o! no e)a,%ation $an $!eate e)en o!#e '!o,e"#. St!ateg* e)a,%ation i# e##entia, to en#%!e tat #tate& o2e$ti)e# a!e eing a$ie)e&. . It i# i"'o##i,e to &e"on#t!ate $on$,%#i)e,* tat a 'a!ti$%,a! #t!ateg* i# o'ti"a,5 %t it $an e e)a,%ate& fo! $!iti$a, f,a#. He!e a!e fo%! $!ite!ia to %#e in e)a,%ating a #t!ateg*: a. . $. &. $on#i#ten$* $on#onan$e fea#ii,it* a&)antage G. Te#e t!en&# "a(e #t!ateg* e)a,%ation &iffi$%,t: a. . $. &. e. f. &!a"ati$ in$!ea#e in en)i!on"enta, $o"',e6it* &iffi$%,t in '!e&i$ting f%t%!e in$!ea#ing n%"e! of )a!ia,e# !a'i& !ate of o#o,e#$en$e in$!ea#e in te n%"e! of o!,& e)ent# affe$ting o!gani+ation &e$!ea#ing ti"e #'an# fo! ',anning B. Te P!o$e## of E)a,%ating St!ategie# 1. St!ateg* e)a,%ation i# ne$e##a!* fo! a,, #i+e# an& (in&# of o!gani+ation#. a. St!ateg* e)a,%ation #o%,& initiate "anage!ia, 8%e#tioning of e6'e$tation# an& a##%"'tion#5 t!igge! a !e)ie of o2e$ti)e# an& )a,%e#5 an& #ti"%,ate $!eati)it* in gene!ating a,te!nati)e# an& fo!"%,ating $!ite!ia of e)a,%ation. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77
7. E)a,%ating #t!ategie# on a $ontin%o%# !ate! tan a 'e!io&i$ a#i# a,,o# en$"a!(# of '!og!e## to e e#ta,i#e& an& "o!e effe$ti)e,* "onito!e&. <. Manage!# an& e"',o*ee# of te fi!" #o%,& $ontin%a,,* e aa!e of '!og!e## eing "a&e toa!& a$ie)ing te fi!";# o2e$ti)e#. A# $!iti$a, #%$$e## fa$to!# $ange5 o!gani+ationa, "e"e!# #o%,& e in)o,)e& in &ete!"ining a''!o'!iate $o!!e$ti)e a$tion#. A STRATEY-EALUATION RAMEWOR? Te #t!ateg*-e)a,%ation a$ti)itie# in te!"# of (e* 8%e#tion# tat #o%,& e a&&!e##e&5 a,te!nati)e an#e!# to to#e 8%e#tion#5 an& a''!o'!iate a$tion# fo! an o!gani+ation to ta(e. A. Re)ieing Ba#e# of St!ateg* 1. B* &e)e,o'ing a !e)i#e& EE Mat!i6 an& IE Mat!i65 te %n&e!,*ing a#e# of an o!gani+ation;# #t!ateg* $an e a''!oa$e& an& !e)iee&. a. A !e)i#e& IE Mat!i6 #o%,& fo$%# on $ange# in te o!gani+ation;# "anage"ent5 finan$ea$$o%nting5 '!o&%$tiono'e!ation#5 R=D5 an& MIS #t!engt# an&"a!(eting5 ea(ne##e#. . A !e)i#e& EE Mat!i6 #o%,& in&i$ate o effe$ti)e,* a fi!";# #t!ategie# a)e een in !e#'on#e to (e* o''o!t%nitie# an& t!eat#. B. Mea#%!ing O!gani+ationa, Pe!fo!"an$e 1. Anote! i"'o!tant #t!ateg*-e)a,%ation a$ti)it* i# "ea#%!ing o!gani+ationa, 'e!fo!"an$e. Ti# a$ti)it* in$,%&e# $o"'a!ing e6'e$te& !e#%,t# to a$t%a, !e#%,t#5 in)e#tigating &e)iation# f!o" ',an#5 e)a,%ating in&i)i&%a, 'e!fo!"an$e5 an& e6a"ining '!og!e## eing "a&e toa!& "eeting #tate& o2e$ti)e#. Bot ,ong-te!" an& ann%a, o2e$ti)e# a!e $o""on,* %#e& in ti# '!o$e##. 7. ai,%!e to "a(e #ati#fa$to!* '!og!e## toa!& a$$o"',i#ing ,ong-te!" o! ann%a, o2e$ti)e# #igna,# a nee& fo! $o!!e$ti)e a$tion. II. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77
<. @%antitati)e $!ite!ia $o""on,* %#e& to e)a,%ate #t!ategie# a!e finan$ia, !atio#5 i$ #t!ategi#t# %#e to "a(e t!ee $!iti$a, $o"'a!i#on#: a. $o"'a!ing te fi!";# 'e!fo!"an$e o)e! &iffe!ent ti"e 'e!io . $o"'a!ing te fi!";# 'e!fo!"an$e to $o"'etito!#5 an& $. $o"'a!ing te fi!";# 'e!fo!"an$e to in&%#t!* a)e!age#. >. ?e* finan$ia, !atio# fo! "ea#%!ing o!gani+ationa, 'e!fo!"an$e: a. !et%!n on in)e#t"ent . !et%!n on e8%it* $. '!ofit "a!gin &. "a!(et #a!e e. &et to e8%it* f. ea!ning# 'e! #a!e g. #a,e# g!ot . a##et g!ot C. Ta(ing Co!!e$ti)e A$tion 1. Te fina, #t!ateg*-e)a,%ation a$ti)it*5 ta(ing $o!!e$ti)e a$tion5 !e8%i!e# "a(ing $ange# to !e'o#ition a fi!" $o"'etiti)e,* fo! te f%t%!e. 7. E6a"',e# of $ange# tat "a* e nee&e& a!e a,te!ing an o!gani+ation;# #t!%$t%!e5 !e',a$ing one o! "o!e (e* in&i)i&%a,#5 #e,,ing a &i)i#ion5 o! !e)i#ing a %#ine## "i##ion. <. Ta(ing $o!!e$ti)e a$tion !ai#e# e"',o*ee#; an& "anage!#; an6ietie#. Re#ea!$ #%gge#t# tat 'a!ti$i'ation in #t!ateg*-e)a,%ation a$ti)itie# i# one of te e#t a*# to o)e!$o"e in&i)i&%a,#; !e#i#tan$e to $ange. III. PUBLISHED SOURCES O STRATEY-EALUATION INORMATION A. E6a"',e# of He,'f%, P%,i$ation# 1. A n%"e! of '%,i$ation# a!e e,'f%, in e)a,%ating a fi!";# #t!ategie#. o! e6a"',e5 o!t%ne ann%a,,* i&entifie# an& e)a,%ate# te o!t%ne 15 /te ,a!ge#t "an%fa$t%!e!# an& te o!t%ne /te ,a!ge#t !etai,e!#5 t!an#'o!tation $o"'anie#5 %ti,itie#5 an(#5 in#%!an$e $o"'anie#5 an& &i)e!#ifie& finan$ia, $o!'o!ation# in te Unite& State#. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77G
7. Anote! e6$e,,ent e)a,%ation of $o!'o!ation# in A"e!i$a5 KTe Ann%a, Re'o!t on A"e!i$an In&%#t!*5 i# '%,i#e& ann%a,,* in te 0an%a!* i##%e of o!e#. B%#ine## Wee(5 In&%#t!* Wee(5 an& D%n;# B%#ine## Mont a,#o 'e!io&i$a,,* '%,i# &etai,e& e)a,%ation# of A"e!i$an %#ine##e# an& in&%#t!ie#. I. CHARACTERISTICS O AN EECTIE EALUATION SYSTEM A. St!ateg* e)a,%ation "%#t "eet #e)e!a, a#i$ !e8%i!e"ent# to e effe$ti)e. 1. St!ateg*-e)a,%ation a$ti)itie# "%#t e e$ono"i$a, too "%$ info!"ation $an e 2%#t a# a& a# too ,itt,e info!"ation. 7. St!ateg*e)a,%ation a$ti)itie# #o%,& a,#o e "eaningf%, te* #o%,& #'e$ifi$a,,* !e,ate to a fi!";# o2e$ti)e#. <. St!ateg*-e)a,%ation a$ti)itie# #o%,& '!o)i&e ti"e,* info!"ation on o$$a#ion an& in #o"e a!ea#5 "anage!# "a* nee& info!"ation &ai,*. >. St!ateg* e)a,%ation &e#igne& to '!o)i&e a t!%e 'i$t%!e of at i#%ni8%e a''ening. B. Te!e #o%,& i# "o!ee tan one i&ea, #t!ateg*-e)a,%ation #*#te". Te $a!a$te!i#ti$# of an o!gani+ation5 in$,%&ing it# #i+e5 "anage"ent #t*,e5 '%!'o#e5 '!o,e"#5 an& #t!engt# $an &ete!"ine a #t!ateg*-e)a,%ation an& $ont!o, #*#te";# fina, &e#ign. . CONTINENCY PLANNIN A. E##en$e of Contingen$* P,anning 1. A a#i$ '!e"i#e of goo& #t!ategi$ "anage"ent i# tat fi!"# ',an a*# to &ea, it %nfa)o!a,e an& fa)o!a,e e)ent# efo!e te* o$$%!. 7. Contingen$* ',an# $an e &efine& a# a,te!nati)e ',an# tat $an e '%t into effe$t if $e!tain (e* e)ent# &o not o$$%! a# e6'e$te&. B. Effe$ti)e Contingen$* P,anning In)o,)e# Te#e Ste'#: 1. I&entif* ot enefi$ia, an& %nfa)o!a,e e)ent# tat $o%,& 'o##i,* &e!ai, te #t!ateg* o! #t!ategie#. 7. S'e$if* t!igge! 'oint#. E#ti"ate en $ontingent e)ent# a!e ,i(e,* to o$$%!. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77J
<. A##e## te i"'a$t of ea$ $ontingent e)ent. E#ti"ate te 'otentia, enefit o! a!" of ea$ $ontingent e)ent. >. De)e,o' $ontingen$* ',an#. Be #%!e tat te $ontingen$* ',an# a!e $o"'ati,e it $%!!ent #t!ateg* an& finan$ia,,* fea#i,e. . A##e## te $o%nte!i"'a$t of ea$ $ontingen$* ',an. Tat i#5 e#ti"ate o "%$ ea$ $ontingen$* ',an i,, $a'ita,i+e on o! $an$e, o%t it# a##o$iate& $ontingent e)ent. . Dete!"ine ea!,* a!ning #igna,# fo! (e* $ontingent e)ent#. Monito! te ea!,* a!ning #igna,#. G. De)e,o' a&)an$e& a$tion ',an# to ta(e a&)antage of te a)ai,a,e ,ea& ti"e. I. AUDITIN A. A%&iting i# &efine& * te A"e!i$an A$$o%nting A##o$iation /AAA a# Ka #*#te"ati$ '!o$e## of o2e$ti)e,* otaining an& e)a,%ating e)i&en$e !ega!&ing a##e!tion# ao%t e$ono"i$ a$tion# an& e)ent# to a#$e!tain te &eg!ee of $o!!e#'on&en$e to#e a##e!tion# e#ta,i#e& $!ite!ia5 $o""%ni$ating te !e#%,t#eteen to inte!e#te& %#e!#. 1.an& Peo',e o 'e!fo!" a%&it#an& $an e &i)i&e& into t!ee g!o%'#: in&e'en&ent a%&ito!#5 go)e!n"ent a%&ito!#5 an& inte!na, a%&ito!#. 7. To go)e!n"ent agen$ie#5 te ene!a, A$$o%nting Offi$e /AO an& te Inte!na, Re)en%e Se!)i$e /IRS5 e"',o* go)e!n"ent a%&ito!# !e#'on#i,e fo! "a(ing #%!e tat o!gani+ation# $o"',* it fe&e!a, ,a#5 #tat%te#5 an& 'o,i$ie#. B. Te En)i!on"enta, A%&it 1. o! an in$!ea#ing n%"e! of fi!"#5 o)e!#eeing en)i!on"enta, affai!# i# no ,onge! a te$ni$a, f%n$tion 'e!fo!"e& * #'e$ia,i#t# !ate!5 it a# e$o"e an i"'o!tant #t!ategi$-"anage"ent $on$e!n. It #o%,& e a# !igo!o%# a# a finan$ia, a%&it. 7. It #o%,& in$,%&e t!aining o!(#o'# in i$ #taff e,' &e#ign an& i"',e"ent te 'o,i$*. It #o%,& e %&gete& an& a)e f%n&# a,,o$ate& to en#%!e it# )iai,it*. <. A State"ent of En)i!on"enta, Po,i$* #o%,& e '%,i#e& 'e!io&i$a,,*. ESHWARI.S---LORAA BUSINESS ACADEMY Page 77
II. USIN COMPUTERS TO EALUATE STRATEIES Wen '!o'e!,* &e#igne&5 in#ta,,e&5 an& o'e!ate&5 a $o"'%te! neto!( $an effi$ient,* a$8%i!e info!"ation '!o"'t,* an& a$$%!ate,*. Neto!(# $an a,,o &i)e!#e #t!ateg*-e)a,%ation !e'o!t# to e gene!ate& fo!5 an& !e#'on&e& * &iffe!ent ,e)e,# an& t*'e# of "anage!#. ----------------------------------------END O STRATEIC NOTES--------------------ESHWARI.S---LORAA BUSINESS ACADEMY Page 7<
