UNIT – I

Strategic Management Definition:

Strategic management is the process of setting goals, procedures, and objectives in order to
make a company or organization more competitive.

“Strategy is the determination of the basic long term goals and objectives of an enterprise and
the adoption of the course of action and the allocation of resources necessary for carrying out
these goals.” - Alfrred D. Chandler.

“A strategy is a unified, comprehensive, and integrated plan that relates the strategic advantages
of the firm to the challenges of the environment. It is designed to ensure that the basic objectives
of the enterprise are achieved through proper execution by the organization.” - Lawrence R.
Jauch & William F. Glueck.

Strategic Management Process

Strategic management process is a continuous culture of appraisal that a business adopts to
outdo the competitors. Simple as it may sound, this is a complex process that also covers
formulating the organization’s overall vision for present and future objectives.
There are five strategic management process steps that must be followed in their chronological
order.

1. Goal setting

This is essentially clarifying the organization’s vision. The vision will include short-term and
long-term objectives, the processes by which they can be accomplished, and the persons
responsible for implementing each task that culminates in the set goals.

2. Analysis

Analysis involves gathering the data and information that is relevant to accomplishing the set
goals. It also covers understanding the needs of the business in the market and examining any
internal and external data that may affect the organization’s goals.

3. Strategy Formulation

A business will only succeed if it has the resources required to reach the goals set in the first
step. The process of formulating a strategy to achieve this may involve identifying which
external resources the business needs to succeed, and which goals must be prioritized.

4. Strategy Implementation

Since the purpose of strategic management process is to propel an organization to its objectives,
an implementation plan must be put in place before the process is considered viable. Everyone
in the organization must understand the process and know what their duties and responsibilities
are in order to fit in with the organization’s overall goal.

5. Evaluation and Control

STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
The evaluation and control actions for the strategic management process include performance
appraisal as well constant review of both internal and external issues. Where necessary, the
management of the organization can implement corrective actions to ensure success of the
SMP.

Tasks of Strategic Management

 Developing a Strategic Vision and Mission

 Setting Objectives
 Crafting a Strategy
 Implementing the Strategy
 Evaluating Performance and Initiating Corrective Adjustments

Factors shaping Strategy

Organizations do not exist in a vacuum. Many factors enter into the forming of a company's
strategy. These forces, conditions, situations, events, and relationships over which the
organization has little control are referred to collectively as the organization's environment.
In general terms, environment can be broken down into three areas:
1. The macro-environment, or general environment (remote environment) - that is,
economic, social, political and legal systems in the country;
2. Operating environment - that is, competitors, markets, customers, regulatory
agencies, and stakeholders; and
3. The internal environment - that is, employees, managers, union, and board
directors.

Developing Strategic Vision, Mission, Objectives

Vision
A vision statement identifies where the organization wants or intends to be in future or where
it should be to best meet the needs of the stakeholders. It describes dreams and aspirations for
future. For instance, Microsoft‘s vision is ―to empower people through great software, any
time, any place, or any device.‖ Wal-Mart‘s vision is to become worldwide leader in retailing.
A vision is the potential to view things ahead of themselves. It answers the question ―where
we want to be‖. It gives us a reminder about what we attempt to develop. A vision statement is
for the organization and it‘s members, unlike the mission statement which is for the
customers/clients. It contributes in effective decision making as well as effective business
planning. It incorporates a shared understanding about the nature and aim of the organization
and utilizes this understanding to direct and guide the organization towards a better purpose. It
describes that on achieving the mission, how the organizational future would appear to be. An
effective vision statement must have following features

a. It must be unambiguous.
b. It must be clear.

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Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
c. It must harmonize with organization‘s culture and values.

d. The dreams and aspirations must be rational/realistic.

e. Vision statements should be shorter so that they are easier to memorize

Mission
Mission statement is the statement of the role by which an organization intends to serve it‘s
stakeholders. It describes why an organization is operating and thus provides a framework
within which strategies are formulated. It describes what the organization does (i.e., present
capabilities), who all it serves (i.e., stakeholders) and what makes an organization unique (i.e.,
reason for existence). A mission statement differentiates an organization from others by
explaining its broad scope of activities, its products, and technologies it uses to achieve its
goals and objectives. It talks about an organization‘s present (i.e., ―about where we are‖).For
instance, Ex: Microsoft‘s mission is to help people and businesses throughout the world to
realize their full potential. Wal-Mart‘s mission is ―To give ordinary folk the chance to buy
the same thing as rich people.‖ Mission statements always exist at top level of an organization,
but may also be made for various organizational levels. Chief executive plays a significant role
in formulation of mission statement. Once the mission statement is formulated, it serves the
organization in long run, but it may become ambiguous with organizational growth and
innovations. In today‘s dynamic and competitive environment, mission may need to be
redefined. However, care must be taken that the redefined mission statement should have
original fundamentals/components. Mission statement has three main components-a statement
of mission or vision of the company, a statement of the core values that shape the acts and
behaviour of the employees, and a statement of the goals and objectives.

Features of a Mission
a. Mission must be feasible and attainable. It should be possible to achieve it.

b. Mission should be clear enough so that any action can be taken.

c. It should be inspiring for the management, staff and society at large.
d. It should be precise enough, i.e., it should be neither too broad nor too narrow.

e. It should be unique and distinctive to leave an impact in everyone‘s mind.

f. It should be analytical, i.e., it should analyse the key components of the strategy.

g. It should be credible, i.e., all stakeholders should be able to believe it.

Goals and objective

A goal is a desired future state or objective that an organization tries to achieve. Goals specify
in particular what must be done if an organization is to attain mission or vision. Goals make
mission more prominent and concrete. They co-ordinate and integrate various functional and
departmental areas in an organization. Well-made goals have following features

1. These are precise and measurable.

2. These look after critical and significant issues.
3. These are realistic and challenging.
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
4. These must be achieved within a specific time frame.

5. These include both financial as well as non-financial components.

Objectives
Objectives are defined as goals that organization wants to achieve over a period of time. These
are the foundation of planning. Policies are developed in an organization so as to achieve these
objectives. Formulation of objectives is the task of top level management. Effective objectives
have following features

1. These are not single for an organization, but multiple.

2. Objectives should be both short-term as well as long-term.
3. Objectives must respond and react to changes in environment, i.e., they must be flexible.

4. These must be feasible, realistic and operational

Strategies
A strategy of a corporation is a comprehensive master plan stating how corporation will achieve
its mission and its objectives. It maximizes competitive advantage and minimizes competitive
disadvantage. The typical business firm usually considers three types of strategy: corporate,
business and functional.

Policies
A policy is a broad guideline for decision making that links the formulation of strategy with its
implementation. Companies use policies to make sure that the employees throughout the firm
make decisions and take actions that support the corporation‘s mission, its objectives and its
strategies.

Crafting & Executing Strategy

Strategic management is a dynamic process .it is continual, evolving, iterative process. It means
that it cannot be a rigid, stepwise collection of few activities arranged in a sequential order
rather it is a continually evolving mosaic of relevant activities. Managers perform these
activities in any order contingent upon the situation they face at a particular time. And this is
to be done again & again over the time as the situation demands.

There are four major phases of strategic management process which are as under.
A) Establishment of strategic intent.

B) Formulation of strategies.
C) Implementation of strategies.

D) Strategic evaluation.
A. Establishment of strategic intent: It is a first step in strategic management Process. It
involves the hierarchy of objectives that an organization set for itself. Generally it includes
vision, mission, business definition and objectives establishing the hierarchy of strategic intent
which includes –

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
1. Creating and communicating a vision.

2. Designing the mission statement.

3. Defining the business.

4. Adopting the business model.

5. Setting objectives.

The hierarchy of strategic intent lays the foundation for strategic management of any
organization. The strategic intent makes clear what organization stand for. In the hierarchy, the
vision intent serves the purpose of stating what the organization wishes to achieve in the long
run. The mission relates the organization to the society. The business definition explains the
businesses of the organization in terms of customer needs, customer groups and alternative
technologies. The business model clarifies how the organization creates revenue. And the
objectives of the organizations state what is to be achieved in a given period of time.

B. Formulation of strategy: Formulation of strategy is relates to strategic planning. It is done

at different levels i.e. corporate, business, and operational level. The strategic formulation
consists of the following steps.
1. Framing of mission statement: Here the mission states the philosophy and purpose of the
organization. And all most all business frames the mission statement to keep its activities in
the right direction.
2. Analysis of internal & external environment: The management must conduct an analysis of
internal and external environment. Internal environment consists of manpower, machines, and
other sources which resides within the organization and easily alterable and adjustable. These
sources reveal the strength and weakness of the organization.
External environmental factor includes government, competitions, consumers, and
technological developments. These are not adjustable and controllable and relates to
organizations opportunities and threats

3. Setting of objectives: After SWOT analysis, the management is able to set objectives in key
result areas such as marketing, finance, production, and human resources etc. While setting
objectivities in these areas the objectives must be realistic, specific, time bound, measurable,
and easy attainable.
4. Performance comparison: By undertaking gap analysis management must compare and
analyze its present performance level with the desired future performance. This enables the
management to find out exact gap between present and future performance of the organization.
If there is adequate gap then, the management must think of strategic measures to bridge the
gap.
5. Alternative strategies: After making SWOT analysis and gap analysis management needs to
prepare (frame) alternative strategies to accomplish the organizational objectives. It is
necessary as some strategies are to be hold and others to be implemented.
6. Evaluation of strategies: The management must evaluate the benefits and costs of each every
alternative strategy in term of sales, market share, profit, goodwill and the cost incurred on the
part of the strategy in terms of production, administration, and distribution costs.
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
7. Choice of strategy: It is not possible to any organization to implement all strategies therefore
management must be selective. It has to select the best strategy depending on the situation and
it has to consider in terms of its costs and benefits etc.
C. Strategy Implementation: Once the strategies are formulated the next step is to implement
them. The strategic plan is put into action through six sub processes known as project,
procedural, resource allocation, structural, behavioural, and functional implementation. The
project implementation deals with the setting up of organization. Procedural implementation
deals with the different aspects of the regulatory framework within which organizations have
to operate. Resource allocation relates to the procurement and commitment of resources for
implementation. The structural aspect of implementation deals with the design of
organizational structures and systems and reorganizing so as to match the structure to the needs
of strategy. The behavioural aspects consider the leadership style for implementing strategies
and other issues like corporate culture, corporate politics, and use of power, personal values
and business ethics and social he responsibilities. The functional aspects relates to the policies
to be formulated in different functional areas. The operational implementation deals with the
productivity, processes, people and pace of implementing the strategies.

For any strategy implementation there are five major steps.

1. Formulation of plans.
2. Identification of activities.

3. Grouping of activities.
4. Organizing resources.

5. Allocation of resources.
D. Strategic Evaluation: Strategic evaluation appraises the implementation of strategies and
measures organizational performance. The feedback from strategic evaluation is meant to
exercise control over the strategic management process. Here the managers try to assure that
strategic choice is properly implemented and is meeting the objectives of the firm. It consists
of certain elements which are given below.
1. Setting of standards:- The strategists need to set standards, targets to implement the
strategies. it should be in terms of quality, quantity, costs and time. The standard should be
definite and acceptable by employees as well as should be achievable.

2. Measurement of Performance:- Here actual performances are measured in terms of quality,

quantity, cost and time.
3. Comparison Of Actual Performance With Set Targets:- The actual performance needs to be
compared with standards and find out variations, if any.

4. Analyzing Deviation And Taking Corrective Measures:- If any deviation is found then
higher authorities tries to find out the causes of it and accordingly as per its nature takes
corrective steps. Here some time authority may re-set its goals, objectives or its planning,
policies and standards.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
A model of Strategy & Elements

Strategy Positioning
Strategic positioning is focused on how an organization sets itself apart from the competition
and delivers a benefit to target customers.
Successful start-ups initially focus on how they plan to position themselves in the market.
Strategic positioning refers to how powerful the brand is in the customers' minds, what the
company's message is, and how the organization sees itself in the market.

Selling a great product or service isn't enough to ensure a company's success. Many times,
inferior companies sell more products/services due to the way they have positioned themselves.
Start-ups have to create a unique positioning strategy that influences the customers' minds to
choose the organization's product or service which can solve a problem.

Positioning influences the pricing, marketing, and sales strategy. To be successful, the strategy
needs to make sense to different target groups of customers.

Unsuccessful positioning strategies focus on proving a company is better than the competition,
rather than different. Effective strategic positioning ensures that an organization's marketing
tactics are oscillating with customers and obliging them to take some sort of action.

Without communicating a product/service's best qualities to a customer segment, an

organization can't grow. When an organization is planning how it wants to position itself, it
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
must consider how the competitive landscape will influence its marketing plans.

Good positioning allows consumers to know why the organization's product/service is

preferable to the competition. In a growing market where consumer needs change every day,
it's essential to find a way to stand out.

Creating a branding and marketing strategy by utilizing the best messaging channels are part
of employing this positioning strategy.

Choices – Strategy in action

According to Porter there are three potentially successful generic strategies (see Figure 7-3) to
cope up with the five competitive forces as well as gain advantage (See Figure 7-2and Table
7- 3). These are:

1. Overall cost leadership

2. Differentiation and
3. Focus

Overall Cost Leadership

In this strategy company makes all possible attempts to achieve the lowest costs in production
and marketing. The aim is to gain a large market share. Efficiency is the keyword guiding all
decisions to keep the costs low.

Differentiation
Here the aim is to achieve class leadership by creating something, which is perceived as unique.
Creating highly differentiated products and marketing programmes-like design or brand image,
customer service or dealer network, or any other feasible dimension can achieve it. Companies
pursuing this strategy have major strengths in R&D design, quality control and marketing.
Chiragh Din Shirts, Bata Shoes, OTIS Elevators, Cini Fans are some examples where this
strategy seems to be the dominant guiding force.
Focus

The underlying assumption in ‘Focus’ is that a firm should be able to serve a narrow strategic
target effectively and efficiently. As a result the firm achieves either differentiation from
meeting the need of a particular target, on both. Genteel’, a liquid detergent for expensive
clothes by Swastik, and Ponds Talcum Powder are some handy examples for this strategy.
Table 7-3 Requirements for generic competitive strategies.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
UNIT – II
INTRODUCTION
Business decisions are influenced by two sets of factors known as internal environmental
factors and external environmental factors. Therefore these two factors are very important to
any business so for its decisions are concerned. The internal factors are also known as
controllable factors as they can be managed and control by the business as per its need necessity
or requirements. These factors are being resided with company premises are known as internal
factors. External factors are as residing outside the business is not controllable. As the
environmental factors are beyond the control of a business organization, its success will depend
mostly on the adaptability of the business to the environment. In other word if the business is
able to property design and adjust the controllable (internal) factors to take advantages of the
opportunities and combat the threats in the environments. These are certain challenges faced
by business units, among all those one most critical challenge is to cope up with the
environmental dynamics of change. Which many a time assumes the nature of turbulence. In
fact business environmental exposes two challenges to the organization such as –
i) The challenge to combat environmental threat.
ii) To exploit the business opportunities. To come up with the solution of these two
there is new of environmental analysis.
Environmental analysis is the first step in strategic management. Here strategists monitor the
economic governmental, legal, market, technological, geographical and social settings to
determine opportunities and threats to the business. So in this chapter we are discuss the
business environment in detail before formulating and implementing strategies.

Meaning and Definition of Business Environment:

It is said that the business cannot live exist, survive in its isolation. It need support from
different aspects of its surrounding. That surrounding factors around the business is known as
environment. It may be living or non - living but its support, positive response is essential for
business smooth functioning. Therefore we can summarize environment as all those factors or
forces, residing besides the business and affecting its functions or various decisions of the
business.
A business environment consists of two types of environment known as internal environment
and external environment.

According to Keith Davis “Environment of the business means the aggregate of all conditions,
events and influences that surround and affect it”.

According to Arthur M. Weimer’s opinion, “Business environment encompasses the climate

or set of conditions, economic, social, political or institutional in which business operations are
conducted.”
FEATURES

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Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
1) Environment is dynamic in nature: It keeps on changing as changes are going to take place.

2) It has direct and indirect impact: Environment gives direct and sometimes indirect effect on
the working of the business.
3) It has two types of factors: Environment mainly consists of two type of factors namely
internal and external environmental factors.

4) It is not separable from business: Environment is integral part of business. Without the
support of either internal or external forces business can’t run or operate.

5) Impact on business decisions: Due to environment business can take proactive or reactive
decisions in its operation to make operation more beneficial.
6) It regulates the scope of business: Environment directs to the business, whether its has to
with or without internal or external forces consideration. For example Govt. bans something
so business should think of and according more forward.

7) It is multi-dimensional: This it always consider both aspects of a force i.e. its positive as
well as negative impacts.
COMPONENTS / PARTS OF BUSINESS ENVIRONMENT
There are two major parts of or components of business environment known as –
i) Internal Environment
ii) External environment

The external environment is divided into two parts known as

i) Micro component of environment and
ii) Macro component of environment

1. Internal Environment:
Internal environmental factors are these, which resides within company premises and are easily
adjustable and controllable. Company as per its necessity & requirements, moulds it and take
appropriate support from these factors, so that business activity can run safety & smoothly.

i) Value System : The value system is helm (the position of control) of affairs of the founders.
Therefore it is widely acknowledge fact that the extent to which the value system is shared by
all in the organization is an important factor contributing to success. For example, Murugappa

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
group had taken over the E.I.D. porry group, which is one of the most profitable businesses. Its
one of ailing business was liquor, which was sold off by Murugappa, as it did not fit into its
value system.
ii) Mission and Objectives: Mission is basic or fundamental cause because of what the company
came into existence. It is company’s domain, priorities, or ways of development. Generally
company is objectives are consistent with mission statements. Therefore it is always advisable
to the company to Frame a mission statement and then to list out various objectives. The study
analysis of internal environment enabled the company to find out, whether the objectives are
in line with mission statement or not.
iii) Plans & Policies : Plans & policies are nothing but deciding in advance, of a
particular activity i.e. what is to be done, how it is to be done, when it is to be done
etc. and according executing them to attain the success. Here business unit need to
frame there plans & policies with the consultation of business objectives and
available resources. Here internal environment analysis will help to the firm to
know the appropriateness of plans & policies.
iv) Human Resources : Human resources are most important resources among the required
all types of resources by the firm. There resources are very sensible; therefore every
business need to tackle them with carefulness and cautiousness, because the survival and
success of the firm is largely depends on the quality of human resources. The internal
environmental analysis in respect of human resources reveals the shortcomings of human
resources and measures need to be undertaken for its creativeness.
iv) Physical Resources : Physical resources consist of machines, equipments, buildings
furniture’s and fixtures. The analysis of these resources reveals the deficiencies of
these resources. The business may take corrective steps to remove these
deficiencies.
v) Financial resources: Finance is the back bone of each & every business. So every
business needs to have proper financial management, which includes the
consideration of financial sources. Financial policies, financial positions, capital
structure, management of working & fixed capital, build up adequate reserves for
future etc. The analysis of there resources reveals that the soundness of its financial
position.
vi) Labour management relations: It is stated that the business flourish to a greater
extent, if it is supported by labour / human resources well. Even if there are certain
shortcomings on the part of other physical, natural, resources, but there is good
relation between management and labour then there would not be a problem. To
keep a good relationship with labours a management needs to take care of all types
of problems of the labour. It includes salary, wages, facilities allowances, good
working conditions, their promotion transfer, etc.

The analysis & internal environmental discloses the certain short comings.
2. External Environment :
External environment is also important in survival and success of the business unit.
External environment means those factors or forces which resides outside the business, but

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Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
has its influence over the functioning of the business. As these forces resides outside, does
not have control over them. The environment factors are of two types known as

i) Micro Environment : Micro environmental factors mean those which are very close and
direct effect factors. It includes suppliers, competitor’s customers, marketing
intermediaries and the public at large. These factors are more intimately linked with the
company than the macro factors. These factors are giving individual effect on each
company rather than a particular industry. Let’s see the all these factors in detail.

a) Suppliers : It is important force in micro environment. This force supplies the inputs like
raw materials and other supplies. This is important because of supplying smoother
functioning of the business. The supply is very sensitive. So many companies give high
importance to vendor development. The company never depended on a single supplier
because if they back out, or any other problem with that supplier may seriously affect the
company.

b) Customers : Customer is the king of the market. Therefore every company strives to
create & sustain customers in the market. So that it can survive & be success in the market.
In fact monitoring the customer sensitivity is the pre-requisite for the business success.
There are different categories of customers like individuals, household industries and other
commercial establishments and govt. etc. Depending on a single customer is dangerous to
the company as it place to the company in poor bargaining position and customer’s
switching to competitors may lead to closure of the company. Therefore the choice of
customer segment should be made with the full consideration of profitability, stability of
demand, growth prospects and the extent of competition.
c) Competitors : In simple word competition means the firms which market the same
products. Here all those who compute for the discretionary income of the consumer are
considered as competitors. Discretionary income of the consumers means creating
consumers decisions for similar or equivalent needs products. For example for A T.V.
manufacturer another T.V. manufacturer is not only a competitors but refrigerators,
cooking ranges, or other saving and investment institutions, as they are attracting
consumers towards their product.
d) Marketing Intermediaries : Marketing intermediaries means those who are helping
company to supply goods from manufacturing company to customer it includes agents and
merchants who help company to find customers sales it’s the products or those who are
physically distributing the goods from their origin to their destination. It includes
warehousing, transportations, marketing firms, or promoting companies products. These
intermediaries are vital link between the company and the final users. So the wrong choice
of the marketing intermediaries may cost the company heavily.

2) Macro - Environment : Macro environment is not that much immediate environment of

a company. This macro environment factors are for away from the company but it gives
indirect effects on companies functioning. The micro environment operates in a large macro
environment forces that shapes opportunities and pose threats to the company. It includes
demographic, economic, natural, social and technological environmental forces or factors.
a) Demographic environment: It is relates to human population with reference to its size,
density, literary rate, gender, age, occupations etc. By going through all these elements of
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
35 demographic environment business units decides its production and distribution
strategies property. It also gives effect on technology intensive business for its product if
the high population growth rate exists or vice versa. Again the occupational and spatial
nobilities of population have implications for business. i.e. it labour is easily moveable
from one business to another, as well as other region, then its supply will be smooth
otherwise business have to face labour problem.
b) Economic Environment: Economic conditions, economic policies and the economic
system are the important external factors which are framing economic environment for a
business. The economic conditions of a country means the nature of the economy, the level
(slope) of development of economy, economic conditions, the level of income of the
people, or distribution of income and assets etc. These factors are important while
determining the business strategies, for example in a developing country the low income
may be the cause for very low demand for a product, here business can’t increase the
purchasing power of the people to generate higher demand for its product. So here the
company should emphasis an reduction of prices for higher sale. The economic policy of
the govt. has great impact on business in this case same business are favorably affected and
same are adversely affected by government policy. For example if govt. wants to protect
home industries then its affects import competing industries. On the other hand if a
liberalization of the import policy may create difficulties to home industry. The economic
system refers to the kind of economy; the country has i.e. free market economy, capitals or
socialist economy.

c) Natural Environment : If consists of geographical and ecological factors such as natural

resources endowments, weather and climatic conditions, location aspects in the global
context, port facilities, etc. which are relevant to business. The geographical and ecological
factors influence the location of certain industries. For example industry with high material
index tend to be located near the raw material sources in the same way climate or weather
conditions matter a lot in certain industries like cotton textile industry. The ecological
factors have great importance. Say govt. policies aimed at the preservation of
environmental purity and 36 ecological balance have resulted in additional responsibilities
and problems for business. Same of these have dead business towards increase in cost of
production and distribution.
d) Social - Cultural environment: Socio cultural fabric is on important environmental
factors that would be analysed while formulation business strategies. For a successful
business, the buying and consumption habits of the people, their languages, beliefs and
values, customs and traditions, taste and preferences and education level should have to be
considered and then it has to decide its strategy so that it will be fit in social - cultural
environment.
e) Technological environment: Technological environment are relate to technological
know - how, used in business. It is expected that business need to introduce and use latest
technology in their production. But technological developments sometimes pose problems
to business as business are not able to cope up with developed technology and hence its
existence came into danger. The technological development may increase demand for a
production too. For example in India as we are having frequent power flections, if the

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Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
business introduces voltage stabilizers then definitely there will be growing demand for
electrical appliances.

f) Political environment: The government is the care taker of all of us. So it also takes care
of business too. While working on business govt. frames certain policies as per its ideology.
So whenever govt. through its policy brightness the prospects of some enterprises may pose
a threat to same others. For example liberalization has opened up same opportunities to
same business at the some time it has give set back to same business. In our country the
govt. is not a static. It changes after every five years. So whenever new govt. comes into
power its changes its policy which affects business positively or negatively.

ENVIRONMENT SCANNING:
Environment is surrounding around the business with which business is able to move /
function smoothly and regularly and continuously. Here scanning means looking into all
aspect of environments parts. Here environmental analysis enables a business firm to
identity its strengths weaknesses, opportunities and threats.
The proper evaluation or analysis of environment helps a firm to formulate effective
strategies in various areas of its functions. The significance of environment scanning will
be explained as under.
Importance of Environmental Scanning : Following are the points suggest importance of
scanning of business environment.

i) Identification of strengths : The analysis of internal environment helps to

identify the strength of the firm and every organization put its all efforts to
maintain and improve its strengths. For example every business will see that
how we maintain competent & dedicated employees. What will be ways
with which we can pursue good HRP & HRD and what will be the methods
with which we may have good & improved & latest technology etc.
ii) Identification of weaknesses : The business analysis give idea about
business weakness. The weaknesses are barriers in the process of
development. There for every organization try to point out its drawback and
will try to improve it. Then the weakness may be in terms of its technology,
HR, lack of finance or in any other areas.
iii) Identification of opportunities : Opportunities generally resides outside the
business. Therefore external environment analysis helps to point out and use
for business benefits. Business also undertake all those efforts to grab that
opportunities. For example it govt. gives concession or subsidies. Then
business may cut its products prices and may gain large sell advantage of
products.

iv) Identification of threat : The business may have threats from its competitions or
rivals and others. Therefore environmental analysis helps to identify those threats
and helps to defuse them before it affects on business or its functioning.
iv) Effective planning : Environmental scanning help to business in the
preparation of effective plan. The planning is the guide of the business or so
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 it is to be prepared defect free. Environmental analysis does that and helps
business.
v) Survival and growth of business : Survival and growth are two basic
objectives of any business. Without attainment of there two, there is no
meaning to the existence of business. So analysis 38 of environment ensures
the existence of there two objectives and according business unit.
vi) Facilitates organising of Resources : Business units needs different
resources, it includes natural, physical, Human resources etc. There
resources are limited in number. Therefore it should be used in very
conscious way. The analysis of environment enables business to organize
all these resources in required and logical manner.
vii) Flexibility in operations: A study of environment enables a firm to adjust its
activities depending upon the changing situation.
ix) Corporate image: Corporate image means create mental picture of the firm in
the minds of customer. Due to the analysis of environment, there is over all
improvement in the performance of the business, and its effect is there is good
image of the business among all i.e. customer dealer, suppliers etc.
x) Motivation to employees : Because of environmental analysis there are goods
decisions, improved performances, and introduction of new HR policies, employees in the
organization are motivated.

Techniques of environmental scanning :

There are various techniques of environmental scanning. Some of the important techniques are
explain as follows:

i) Forecasting
ii) Scenarios
iii) Spying
iv) Gathering verbal information
v) QUEST (quick environmental scanning technique)

Industry analysis: BCG, GE and Add Little Models for understanding industry, Key Drivers
for Change

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 STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Ad Little Matrix:

The ADL Matrix or Arthur D Little Strategic Condition Matrix is a Portfolio Management
technique that is based on the Product Life Cycle (PLC). It is developed in the 1980’s by Arthur
D. Little, Inc. (ADL), one of the best-known consulting firms, intended to help a company
manage its collection of product businesses as a portfolio.

Like other portfolio planning matrices, the ADL matrix represents a company’s various
businesses in a 2-dimensional matrix. It is a structured methodology for consideration of
strategies which are dependent on the life cycle of the industry. The ADL approach uses the
dimensions of environment assessment and business – strength assessment ie. Competitive
Position and Industry Maturity.

The environment assessment is an identification of the industry’s life cycle and the business
strength assessment is a categorization of the company’s SBU’s into one of five competitive
positions, these five competitive positions by four life cycle stages. The combination between
the dimensions yields 5 (competitive positions) by 4 (life cycle stages) matrix. The positioning
in the matrix identifies a general strategy.

The Competitive Position

STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 Company’s competitive position is determined by strategic actions and competitor’s strategies.
Quality and strength of competitive position are indicators of company’s strength. The ADL
matrix categorizes every segment of company according to its position which can be
dominant,strong, favorable, tenable or weak.

1. Dominant: This is a comparatively rare and typically short-lived. In many cases is either to a
monopoly or a strong and protected technology leadership.
2. Strong: Market share is strong and stable, regardless of competitors. The firm has a
considerable degree of freedom over its choice of strategies and is often able to act without its
market position being unduly threatened by its competitors.
3. Favorable: Business line enjoys competitive advantages in certain segments of market.
However there are many rivals, and no clear leader among stronger rivals. Results in the market
leaders a reasonable degree of freedom.
4. Tenable: Position in overall market is small or niche, either geographical or defined by
product. Competitors are getting stronger.
5. Weak: Continuous loss of market share. Business line is too small to maintain
profitability.

Industry Maturity

Industry maturity could almost be renamed into “Industry life cycle”. Of course not only
industries should be considered here but also segments. There are four categories of industry
maturity: embryonic, growth, mature and aging.

1. Embryonic: The introduction stage, characterized by rapid market growth, very little
competition, new technology, high investment and high prices.
2. Growth: The market continues to strengthen, sales increase, few (if any) competitors exist,
and company reaps rewards for bringing a new product to market.
3. Mature: The market is stable, there is a well-established customer base, market share is stable,
there are lots of competitors, and energy is put toward differentiating from competitors.
4. Aging: Demand decreases, companies start abandoning the market, the fight for market share
among remaining competitors gets too expensive, and companies begin leaving or
consolidating until the market is demise.

Positioning into one of the four categories is a very sophisticated procedure and depends on
many factors.

Four steps in creating ADL Matrix:

1. Determining the SBU’s of the company (strategic segmentation done by clearly defined
procedures)
2. Identifying phases of industrial maturity for each SBU (this should be done for each business
in all SBU’s)
3. Determine SBU’s competitive position (company’s competitiveness in specific, narrow
defined industry)

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
4. Plotting sizes and positions of SBU’s on ADL Matrix

ADL matrix has several limitations. The main limitations are;

1. The life cycle has no standard length,

2. Determining the current position of an industry in its life cycle is awkward,
3. The length of life cycle may be influenced by competitors.

SWOC Analysis

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Porter’s Diamond Model

Porter’s Diamond Model is a Tool that analyzes Countries or Regions to describe what
characterizes their Competitiveness. As its name indicates, it was created by Michael Porter.
Its main objective is to explain why companies or sectors in certain countries are more
competitive in the global market than those in other countries.

The 4 Attributes studied by the Porter Diamond Model are:

 Firm Strategy, Structure and Rivalry.

 Demand Conditions.
 Related and Supporting Industries.
 Factor Conditions.

Porter's Diamond Model works as follows

1. Analyze the Value Chain of your Company. Processes and Activities create its Added Value.

2. For each Activity in the Value Chain, analyze the Country where your Company is located.
Using the Porter’s Diamond Model.

3. Look for existing Synergies in the Domestic Market of your Country. Analyze the Strengths
of your Country, and use them (Cheap labor, Raw materials, Education, etc).

4. Lean on other Regions to overcome the Weaknesses of your Country. Buying cheaper Raw
materials, hiring more trained professionals, etc.

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Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Value-Chain Analysis:

The term value chain refers to the various business activities and processes involved in creating
a product or performing a service. A value chain can consist of multiple stages of a product or
service’s lifecycle, including research and development, sales, and everything in between.
According to Porter’s definition, all of the activities that make up a firm's value chain can be
split into two categories that contribute to its margin: primary activities and support activities.

Primary activities are those that go directly into the creation of a product or the execution of a
service, including:

 Inbound logistics: Activities related to receiving, warehousing, and inventory management

of source materials and components
 Operations: Activities related to turning raw materials and components into a finished
product
 Outbound logistics: Activities related to distribution, including packaging, sorting, and
shipping
 Marketing and sales: Activities related to the marketing and sale of a product or service,
including promotion, advertising, and pricing strategy
 After-sales services: Activities that take place after a sale has been finalized, including
installation, training, quality assurance, repair, and customer service

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Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Secondary activities help primary activities become more efficient—effectively creating a
competitive advantage—and are broken down into:

 Procurement: Activities related to the sourcing of raw materials, components, equipment,

and services
 Technological development: Activities related to research and development, including
product design, market research, and process development
 Human resources management: Activities related to the recruitment, hiring, training,
development, retention, and compensation of employees
 Infrastructure: Activities related to the company’s overhead and management, including
financing and planning
Value chain analysis is a means of evaluating each of the activities in a company’s value chain
to understand where opportunities for improvement lie.

Conducting a value chain analysis prompts you to consider how each step adds or subtracts
value from your final product or service. This, in turn, can help you realize some form of
competitive advantage, such as:

 Cost reduction, by making each activity in the value chain more efficient and, therefore, less
expensive
 Product differentiation, by investing more time and resources into activities like research
and development, design, or marketing that can help your product stand out
Typically, increasing the performance of one of the four secondary activities can benefit at
least one of the primary activities.

HOW TO CONDUCT A VALUE CHAIN ANALYSIS

1. Identify Value Chain Activities

2. Determine the Cost and Value of Activities

3. Identify Opportunities for Competitive Advantage

Core competencies- Cost Efficiency, Capability building and management

Core competencies are the resources and capabilities that comprise the strategic advantages
of a business. A modern management theory argues that a business must define, cultivate, and
exploit its core competencies in order to succeed against the competition.

 Core competencies are the defining characteristics that make a business or an

individual stand out from the competition.
 Identifying and exploiting core competencies is seen as important for a new business
making its mark or an established company trying to stay competitive.
 A company's people, physical assets, patents, brand equity, and capital can all make a
contribution to a company's core competencies.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  The idea of core competencies was first proposed in the 1990s as a new way to judge
business managers compared to how they were judged in the 1980s.
 Examples of companies that have core competencies that have allowed them to remain
successful for decades include McDonald's, Apple, and Walmart.
Core Competencies in Business

A business can choose to be operationally excellent in a number of different ways. Below are
common core competencies found in business

 Greatest Quality Products.

 Most Innovative Technology
 Best Customer Service
 Largest Buying Power
 Strongest Company Culture
 Fastest Production or Delivery
 Lowest Cost Provider
 Highest Degree of Flexibility

How to Identify Core Competencies

Some core competencies develop naturally, while other core competencies must be
consciously and strategically formed over time. Whether a company is yet for form or has
existed for a while, here are ways for organizations to identify what their core competencies
are or could be.

Review the company's mission statement, value statement, or slogan

Compare the company to its competitors

Interview internal staff or major customers

Brainstorm what benefits the company provides customers

Understand the processes required to make goods.

Identify unique aspects of the company

Advantages and Disadvantages of Core Competencies

Advantages

Core competencies are difficult to imitate. It often takes a long period of time (or large sums
of capital) to develop core competencies. Once a company has achieved a core competency,
it often has a major advantage over its competitors in the marketplace.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Core competencies may also be transferrable across different industries or product lines. For
example, with a platform of being an incredibly innovative company, Apple has expanded
into new product lines, different sectors, and varying geographical regions. An advantage of
a company may be able to be applied widely.

Last, core competencies naturally enhance the marketability of a product. Spirit Airlines' core
competency of offering the cheapest flights on average is not only its strength, it doubles as a
company slogan. Though this may mean some consumers are naturally adverse to the
company, it also means Spirit's brand image is clearly defined and recognizable.

Disadvantages

Just as difficult as a core competency is to create, it may be equally as difficult to change. This
may inadvertently cause the company's brand image to falter and be confusing. For example,
McDonald's was once known for indoor playgrounds and Ronald McDonald. Though the
company has shifted away from this culture, long-time consumers may still associate the brand
with old core competencies.

Core competencies also naturally limit the flexibility of a company. Consider a low-
price retailer such as Wal-Mart. The company may struggle to launch high-end, more
expensive product lines with greater margins because consumers may not appropriately
associate the product with the company.

A company may also "lose the forest among the trees" if it gives too much attention to
developing a core competency. The ultimate goal of a company is not to possess core
competencies; its purpose is to generate revenue through the sale of products. Therefore,
companies may spend tremendous amounts of time or capital without an overarching strategy
that makes sense.

Core Competencies

Pros
 Are not easily replicable since they take long or large investments
 Is often difficult for competitors to overcome once a core competency has been
achieved
 May be able to be translated to different products, sectors, or business opportunities
 Enhances the company's brand image and may make marketing endeavors more easily
understood

Cons
 May result in a company being tied to an outdated, no-longer-used core competency
 May reduce the overall flexibility of a company
 May require large time or capital requirements
 May result in a company focusing too heavily on core competencies instead of a single
cohesive strategy

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Unit - III

Competing in Emerging Industries:

• Lack of Consensus regarding which

competing technology will win out

• Low entry barriers

• Experience curve effects – cost reduction as

volume builds

• First-time Users; inducing initial purchase and

overcoming customer concerns.

• First generation products – buyers delay

purchase until technology matures
FEATURES OF

• Possible difficulties in securing EMERGING INDUST

FEATURES OF

EMERGING INDUSTRY

Research Methodology

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
• Firms struggle to fund R & D,

Operations and build resource

capabilities for rapid growth

• An emerging industry is one in the formative

stage.

• Many companies striving to establish a strong Strategies for competing in Em

foothold in an emerging industry are in start-
up mode.

• They are busily perfecting technology, adding

people, acquiring or constructing facilities,
gearing up operations, and trying to broaden
distribution & gain buyer acceptance.

• The business models and strategies of co’ s in

emerging industry are unproved.

• There are important product design problems

and technological problems that remain to be
worked out.

• Market is new and unproved – speculation

about-function, fast growth, how big it will
get. Less historical info, Lots of Guesswork.

• Technological know-how is proprietary and

closely guarded – in-house by pioneering
firms, patents & unique technical expertise are
key factors in securing competitive advantage.

• No consensus regarding several competing

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 technologies will win out or prove decisive in winning buyer favour

• Entry barriers tend to be relatively low even

for start-up (large well-known, opportunity-
seeking companies with ample resources and
competitive capabilities are likely to enter if
the industry has promise for explosive growth
or if its emergence threatens their present
business.)
Challenges when comp
• Since all buyers are first-time users, the
marketing task is to induce initial purchase
and to overcome customer concerns about
product features, performance reliability and
conflicting claims of rival firms.

• Many potential buyers expect first-generation

products to be rapidly improved, so they delay
purchase until technology and product design
mature and second-or-third generation
products appear on the market.

• Sometimes, firms have trouble securing ample

supplies of raw materials and components
(until suppliers gear up to meet the industry’s needs)

• The 2 critical issues confronting firms in an

emerging industry are:

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 1. How to finance initial operations until sales and revenues take off
2. What market segments and competitive advantages to go after in trying to
secure a front-runner position.

• Competitive strategies keyed either low cost or differentiation are

usually viable
• Lack of established ‘rules of the game’ gives industry participants
Challenges when comp
considerable freedom to experiment with a variety of different
strategic approaches.

• Win early industry leadership by employing a Bold & Creative

strategy.

• Push to perfect Technology, improve product quality, and develop

attractive performance features.

• Move quickly when a dominant technology emerges

• Form Strategic alliances with : Key suppliers or

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 Co’s having related technological expertise.

• Capture potential First-mover Advantages

• Pursue: New customers and user applications;

Entry into new geographical areas.

• Focus Advertising emphasis on :

Increasing frequency of use; Creating brand loyalty

• Use Price Cuts to attract price-sensitive buyers.

• Try to win the early race for industry leadership with risk-taking
entrepreneurship and a bold creative strategy.

• Push to perfect the technology, improve product quality, and

develop additional attractive performance features.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
• As technological uncertainty clears and a dominant technology emerges, adopt it
quickly.
• Strategic succession in an emerging industry calls for bold entrepreneurship, a
willingness to pioneer and take risks, an intuitive feel for what buyers will like,
quick response to new developments, and opportunistic strategy making.
• Form strategic alliances with key suppliers to gain access to specialized skills,
technological capabilities, and critical materials or components.

• Acquire or form alliances with companies that have related or

complementary technological expertise as a means of helping
outcompete rivals on the basis of
technological superiority.

• Try to capture any first-mover advantages associated with early

commitments to
promising technologies.

• Pursue new customer groups, new user applications,

and entry into new geographical areas.

• Make it easy and cheap for first-time buyers to try the

industry’s first-gen product.

• Use price cuts to attract the next layer of price-sensitive

Strategic Avenues for co
buyers into the market.

Strategic Avenues for competing in an Emerging Industry

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
• The early leaders in an emerging industry cannot rest on their laurels; they must
drive hard to strengthen their resource capabilities and build a position strong
enough to ward off new-comers and compete successfully for the long haul.

• Young companies in fast-growing markets face 3 strategic hurdles:

1. Managing their own rapid expansion,

2. Defending against competitors trying to horn in on their success,

3. Building a competitive position extending beyond their initial product

or market.

• Up-coming companies can help their cause by selecting

knowledgeable members for their boards of directors, by hiring
entrepreneurial managers with experience in guiding young businesses
through the start-up and take-off stages, by concentrating on out-
innovating the competition, and perhaps by merging with or acquiring
another firm to gain added expertise and a stronger resource base.

Strategic Avenues for co

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Strategies for Competing in Fragm
Features:

The standout competitive feature of a fragmented industry is the absence

of market leaders with king-sized market shares or widespread buyer
recognition.

In fragmented industries competitors usually have wide enough strategic

latitude

(1) to either compete broadly or focus and

STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Reasons for Supply-Side Fragmenta
(2) to pursue a low-cost, differentiation-based or best-cost competitive
advantage.

1. Any of several reasons can account for why the supply side of an industry is
fragmented:

a. Market demand is so extensive and so diverse that very

larges numbers of firms can easily coexist trying to
accommodate the range and variety of buyer preferences
and requirements and to cover all the needed geographic
locations

b. Low entry barriers allow small firms to enter quickly and

cheaply

c. An absence of scale economies permits small companies to

compete on an equal cost footing with larger firms

d. Buyers require relatively small quantities of customized

products

e. The market for the industry’s product or service is

becoming more global, putting companies in more and
more countries in the same competitive market

f. The technologies embodied in the industry’s value chain are

exploding into so many new areas and along so many
different paths that specialization is essential just to keep
abreast in any one area of expertise

g. The industry is young and crowded with aspiring

contenders, with no firm having yet developed the resource
base, competitive capabilities, and market recognition to
command a significant market share

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Strategy Options for a Fragmented Industry
2. Some fragmented industries consolidate over time as
growth slows and the market matures.

3. Competitive rivalry in fragmented industries can vary from

moderately strong to fierce.

4. Competitive strategies based on either low cost or product

differentiation are viable unless the industry’s product is
highly standardized or a commodity.

5. Focusing on a well-defined market niche or buyer segment

usually offers more competitive advantage potential than
striving for broader market appeal.

1Suitable competitive strategy options in a fragmented industry include:

a. Constructing and operating “formula” facilities – This strategic

approach is frequently employed in restaurant and retailing businesses
operating at multiple locations.

b. Becoming a low-cost operator – When price competition is intense

and profit margins are under constant pressure, companies can stress
no-frills operations featuring low overhead, high productivity/low-cost
labor.

c. Specializing by product type – When a fragmented industry’s

products include a range of styles or services, a strategy to focus on one
product or service category can be effective.

d. Specialization by customer type – A firm can stake out a market

niche in a fragmented industry by catering to those customers who are
interested in low prices, unique product attributes, customized features,
carefree service, or other extras.

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Strategies for Sustaining Rapid Company Growth

e. Focusing on a limited geographic area – Even though a firm in a

fragmented industry cannot win a big share of total industrywide sales.
It can still try to dominate a local or regional geographic area.

2. In fragmented industries, firms generally have the strategic freedom to

pursue broad or narrow market targets and low-cost or differentiation-based
competitive advantages. Many different strategic approaches can exist side-by-
side.

1. Companies that are focused on growing their revenues and earnings at a rapid or
aboveaverage pace year after year generally have to craft a portfolio of strategic
initiatives covering three horizons:

a. Horizon 1: “Short-jump” strategic initiatives to fortify and extend the

company’s position in existing businesses

b. Horizon 2: “Medium-jump” strategic initiatives to leverage existing

resources and capabilities by entering new businesses with promising growth
potential

c. Horizon 3: “Long-jump” strategic initiatives to plant the seeds for ventures

in businesses that do not yet exist

1. There are risks to pursuing a diverse strategy portfolio aimed at sustained

growth:

a.A company cannot place bets on every opportunity that appears lest it
stretch its resources too thin
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The Risks of
Strategies forPursuing
IndustryMultiple
Leaders Stra
b. Medium-jump and long-jump initiatives can cause a company
to stray far from its core competencies and end up trying to compete in
businesses for which it is ill suited

c. It can be difficult to achieve competitive advantage in medium- and

long-jump product families and businesses that prove not to mesh well
with a company’s present businesses and resource strengths

The two best tests of success of a stay-on-the-defensive strategy are

(1) the extent to which it keeps rivals in a reactive mode, struggling to keep
up and

(2) whether the leader is growing faster than the industry as a whole and
wresting market share from rivals.

1. The competitive positions of industry leaders normally range

from “stronger than average” to “powerful.”

2. Leaders are typically well known and strongly entrenched

leaders have proven strategies.

3. The main strategic concern for a leader revolves around how

to defend and strengthen its leadership position, perhaps
becoming the dominant leader as opposed to just a leader.

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Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Three contrasting strategic postures are
leaders:
4. The pursuit of industry leadership and large market share is
primarily important because of the competitive advantage and
profitability that accrue to being the industry’s biggest
company.
Industry leaders can strengthen their
longterm competitive positions with
strategies keyed to aggressive offense,
aggressive defense, or muscling
smaller rivals and
customers into behaviors that bolster its
own market standing.
a. Stay-on-the-defensive strategy: The central goal of a stay-on-the-
defensive strategy is to be a firstmover. It rests on the principle that staying a
step ahead and forcing rivals into a catch-up mode is the surest path to industry
prominence and potential market dominance. Being the industry standard setter
entails relentless pursuit of continuous improvement and innovation. The array
of options for a potent stay-on-the-defensive strategy can include initiatives to
expand overall industry demand.

b. Fortify-and-defend strategy: The essence of “fortify-and defend” is to

make it harder for challengers to gain ground and for new firms to enter.
Specific defensive actions can include: (1) attempting to raise the competitive
ante for challengers and new entrants via increased spending for advertising,
higher levels of customer service, and bigger R&D outlays, (2) introducing
more product versions or brands to match the product attributes that challenger
brands have or to fill vacant niches that competitors could slip into, (3) adding
personalized services and other extras that boost customer loyalty and make it
harder and more costly for customers to switch to rival products, (4) keeping
prices reasonable and quality attractive, (5) building new capacity ahead of
market demand to discourage smaller competitors from adding capacity of their
own,

(6) investing enough to remain cost-competitive and

technologically progressive,

(7) patenting the feasible alternative technologies, and

(8) signing exclusive contracts with the best suppliers and

dealer distributors.
STRATEGIC MANAGEMENT, MBA IV SEM
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A fortify-and-defend strategy best suits firms that have
already achieved industry dominance and do not wish
to risk antitrust action.

A fortify-and-defend strategy always

entails trying to grow as fast as the
market as a whole and requires
reinvesting enough capital in the
business to protect the leader’s ability
to compete.
c. Muscle-flexing strategy: Here a
dominant leader plays a competitive
hardball when smaller rivals rock the
boat with price cuts or mount any new
market offensives that directly threaten
its position. Specific responses can
include quickly matching or exceeding
challengers’ price cuts, using large
promotional campaigns to counter
challengers’ moves to gain market share,
and offering better deals to their major
customers. The leader may also use
various arm-twisting tactics to pressure
present customers not to use the products
of rivals. The obvious risks of a muscle-
flexing strategy are running afoul of the
antitrust laws, alienating customers with
bullying tactics, and arousing adverse
public opinion.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Strategies for Runner
-Up Firms

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 Obstacles for Firms with Small
1. Runner-up or second-tier firms have smaller market shares
than first-tier industry leaders.

2. Runner-up firms can be:

a. Market challengers – employing offensive strategies to gain market

share and build a stronger market position

b. Focusers – seeking to improve their lot by concentrating their

attention on serving a limited portion of the market

c. Perennial runner-ups – lacking the resources and competitive strengths

to do more than continue in trailing positions and/or content to follow the
trendsetting moves of the market leaders

1. In industries where big size is definitely a key success factor, firms with small
market shares have some obstacles to overcome:

a. Less access to economies of scale in manufacturing, distribution,

or marketing and sales promotion

b. Difficulty in gaining customer recognition

c. Weaker ability to use mass media advertising

d. Difficulty in funding capital requirements

2. The competitive strategies most underdogs use to build market share and
achieve critical scale economies are based on:

a. Using lower prices to win customers from weak higher-cost rivals

b. Merging with or acquiring rival firms to achieve the size needed

to capture greater scale economies

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 c. Investing in new cost-saving facilities and equipment, perhaps
relocating operations to countries where costs are significantly
lower

d. Pursuing technological innovations or radical value chain

revamping to achieve dramatic cost savings

3. However, it is erroneous to view runner-up firms as inherently less profitable

or unable to hold their own against the biggest firms.

Strategic Approaches for Runner-Up

Companies:

Rarely can a runner-up firm successfully

challenge an industry leader with a
copycat strategy
1. Runner-up companies can have considerable strategic flexibility and can
consider any of the following seven approaches:

a. Offensive Strategies to Build Market Share: A challenger firm needs a

strategy aimed at building a competitive advantage of its own. The best “mover-
and-shaker” offensives usually involve one of the following approaches: (1)
pioneering a leapfrog technological breakthrough, (2) getting new or better
products into the market consistently ahead of rivals and building a reputation
for product leadership, (3) being more agile and innovative in adapting to
evolving market conditions and customer expectations than slower-to-change
market leaders, (4) forging attractive strategic alliances with key distributors,
dealers, or marketers of complementary products, (5) finding innovative ways
to dramatically drive down costs and then using the attraction of lower prices to
win customers from higher-cost, higher-priced rivals, and (6) crafting an
attractive differentiation strategy based on premium quality, technological
superiority, outstanding customer service, rapid product innovation, or
convenient online shopping options.

b. Growth-via-Acquisition Strategy: One of the most frequently used

strategies employed by ambitious runner-up companies is merging with or
acquiring rivals to form an enterprise that has greater competitive strength and a
larger share of the overall market.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
c. Vacant-Niche Strategy: This version of a focused strategy involves
concentrating on specific customer groups or end-user applications that market
leaders have bypassed or neglected.

d. Specialist Strategy: A specialist firm trains its competitive effort on one

technology, product or product family, end use, or market segment. The aim is
to train the company’s resource strengths and capabilities on building
competitive advantage through leadership in a specific area.

e. Superior Product Strategy: The approach here is to use a differentiation-

based focused strategy keyed to superior product quality or unique attributes.

f. Distinctive Image Strategy: Some runner-up companies build their

strategies around ways to make themselves stand out from competitors. A
variety of distinctive strategies can be used.

g. Content Follower Strategy: Content followers deliberately refrain from

initiating trendsetting strategic moves and from aggressive attempts to steal
customers away from the leaders. Followers prefer approaches that will not
provoke competitive retaliation, often opting for focus and differentiation
strategies that keep them out of the leader’s path.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Strategies for Weak and- Crisisridden
3. Some of the most common causes of business trouble are:

(1) Taking on too much debt,

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Turnaround Strategies for Business
The strategic options for a
competitively weak company include
waging a modest offensive to improve
its position, defending its present
position, being acquired by another
company, or employing an end-game
strategy.
1. A firm in an also-ran or declining competitive position has four basic
strategic options:

a. Offensive turnaround strategy – If it can come up with the

financial resources, it can launch an offensive turnaround strategy
keyed either to low cost or new differentiation themes

b. Fortify-and-defend strategy – Using variations of its present

strategy and fighting hard to keep sales, market share, profitability, and
competitive position at current levels

c. Fast-exit strategy – Get out of the business either by selling

out to another firm or by closing down operations if a buyer cannot be
found

d. End-game or slow-exit strategy – Keeping reinvestment to a

bare bones minimum and taking actions to maximize short-term cash
flows in preparation for an orderly market exit

1. Turnaround strategies are needed when a business worth

rescuing goes into crisis; the objective is to arrest and reverse the sources
of competitive and financial weakness as quickly as possible.

2. Management’s first task in formulating a suitable turnaround

strategy is to diagnose what lies at the root of poor performance. The next
task is to decide whether the business can be saved or whether the
situation is hopeless.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
4. Curing these kinds of problems and achieving a successful busines
actions:
(2) overestimating the potential for sales growth,

(3) ignoring the profit-depressing effects of an overly aggressive effort to

buy market share with deep cost cuts,

(4) being burdened with heavy fixed costs,

(5) betting on R&D efforts but failing to come up with effective

innovations,

(6) betting on technological long-shots,

(7) being too optimistic about the ability to penetrate new markets,

(8) making frequent changes in strategy, and

a. Selling Off Assets: Asset-reduction strategies are essential when cash
flow is a critical consideration and when the most practical ways to generate
cash are (1) through sale of some of the firm’s assets and

(2) through retrenchment.

b. Strategy Revision: When weak performance is caused by bad strategy,

the task of strategy overhaul can proceed along any of several paths:

(1) shifting to a new competitive approach to rebuild the firm’s market

position,

(2) overhauling internal operations and functional area strategies to better

support the same overall business strategy,

(3) merging with another firm in the industry and forging a new strategy
keyed to the newly merged firm’s strengths, and

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
End -Game Strategies
Liquidation
–
(4) retrenching into a reduced core of products and customers more closely
matched to the firm’s strengths.
Boosting Revenues: Revenue increasing turnaround efforts aim at generating increased
sales volume. Attempts to increase revenues and sales volume are necessary (1)
when there is little or no room in the operating budget to cut expenses and still
break even and (2) when the key to restoring profitability is increased use of
existing capacity.

d. Cutting Costs: Cost-reducing turnaround strategies work best when an

ailing firm’s value chain and cost structure are flexible enough to permit radical
surgery, when operating insufficiencies are identifiable and readily correctable,
when the firm’s costs are obviously bloated, and when the firm is relatively
close to its break-even point.

e. Combination Efforts: Combination turnaround strategies are usually

essential in grim situations that require fast action on a broad front.
Combination actions frequently come into play when new managers are brought
in and given a free hand to make whatever changes they see fit. Turnaround
efforts tend to be high-risk undertakings and they often fail.

1. Of all the strategic alternatives, liquidation is the most

unpleasant and painful because of the hardships of job elimination and the
effects of business closings on local communities.

2. In hopeless situations, an early liquidation effort usually serves

ownerstockholder interests better than an inevitable bankruptcy.

1. An end-game or slow-exist strategy steers a middle course between

preserving the status quo and exiting as soon as possible.

2. Harvesting is a phasing-down strategy that involves sacrificing market

position in return for bigger near-term cash flows or current profitability.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
3. A slow-exit strategy is a reasonable strategic option for a weak business in
the following circumstances:

a. When the industry’s long-term prospects are unattractive

b. When rejuvenating the business would be too costly or at best

marginally profitable

c. When the firm’s market share is becoming increasingly costly to

maintain or defend

d. When reduced levels of competitive effort will not trigger an

immediate or rapid falloff in sales

When the enterprise can redeploy the freed resources in higher-

opportunity areas

When the business is not a crucial or core component of a

diversified company’s overall lineup of businesses

When the business does not contribute other desired features to a

company’s overall business portfolio

4. End-game strategies make the most sense for diversified companies that have
sideline or noncore business units in weak competitive positions or in unattractive
industries.

10 Commandments for Crafting Successful Business

Strategies
a. Place top priority on crafting and executing strategic moves that enhances the
company’s competitive position for the long term

b. Be prompt in adapting to changing market conditions, unmet customer needs,

buyer wishes for something better, emerging technological alternatives, and new
initiatives of competitors

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Matching Strategy to Any Industry and Company Situation

c. Invest in creating a sustainable competitive advantage

d. Avoid strategies capable of succeeding only in the most optimistic

circumstances

e. Do not underestimate the reactions and the commitment of rival firms

f. Consider that attacking competitive weakness is usually more profitable and less
risky than attacking competitive strength g. Be judicious in cutting prices
without an established cost advantage
h. Strive to open up very meaningful gaps in quality or service or performance
features when pursuing a differentiation strategy

i. Avoid stuck-in-the-middle strategies that represent compromise between lower

costs and greater differentiation and between broad and narrow market appeal

j. Be aware that aggressive moves to wrest market share away from rivals often
provoke retaliation in the form of a price war

1. Aligning a company’s strategy with its overall situation starts

with a quick diagnosis of the industry environment and the firm’s
competitive standing in the industry.

2. In crafting the overall strategy, there are several pitfalls to avoid:

a. Designing an overly ambitious strategic plan

b. Selecting a strategy that represents a radical departure from or

abandonment of the cornerstones of the company’s prior success

c. Choosing a strategy that goes against the grain of the

organization’s culture or conflicts with the values and
philosophies of the most senior executives

d. Being unwilling to commit wholeheartedly to one of the five

competitive strategies
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Unit – IV:

A company’s Menu of Strategy Options

Many companies now find themselves thrust into 2 very demanding competitive races:

 1. The global race to build a presence in many different national markets and join
the ranks of companies recognized as global market leaders.

 2. The race to seize opportunities on the frontiers of advancing technology and

build the resource strengths and business capabilities to compete successfully in
the industries and product markets of the future.

 Even the largest and most financially sound companies have concluded that
simultaneously running the races for global market leadership and for a stake in
the industries of the future requires more diverse and expansive skills, resources,
technological expertise and competitive capabilities than they can assemble and
manage alone.

 Such companies, along with others that are missing opportunities, have
determined that the fastest way to fill the gap is often to these companies to form
STRATEGIC ALLIANCES or COLLABORATIVE PARTNERSHIPS in which 2
or more companies join forces to achieve mutually beneficial strategic outcomes.

 STRATEGIC ALLIANCES go beyond normal co-to-co dealings but fall short of

merger or full joint venture partnership with formal ownership ties.

STRATEGIC ALLIANCE
 Alliances have become so essential to the competitiveness of companies in may
industries that they are a core element of today’s business strategies.

 Toyota has forged long-term strategic partnerships with many of its suppliers of
automotive parts and components.

 Microsoft collaborates very closely with independent software developers that

create new programs to run on the next-generation versions of Windows.

 Oracle is said to have over 15,000 alliances.

 Time warner, IBM, and Microsoft each have over 200 partnerships with e-
business enterprises.

 Since 1998, Samsung has entered into 34 major SA involving Sony, Yahoo,
HewlettPackard, Intel, Microsoft, Dell, Mitsubishi and Rockwell Automation.

 In the personal computer industry, alliances are pervasive because the different
components of PCs and the software to run them are supplied by so many
different companies.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  While a few companies have the resources and capabilities to pursue their
strategies alone, it is becoming increasingly common for companies to pursue
their strategies in collaboration with suppliers, distributors, makers of
complementary products and sometimes even select competitors.

How strategic Alliances are Advantageous

 The best alliances are highly selective, focusing on particular value chain
activities and on obtaining a particular competitive benefit.

 Competitive advantage can emerge if the combined resources and capabilities of a

company and its allies give it an edge over rivals.

 The most common reasons why companies enter into SA are to collaborate on
technology or development of promising new products, to overcome deficits in
their technical and manufacturing expertise, to acquire altogether new
competencies, to improve supply chain efficiency, to gain economies of scale in
production / marketing, and to acquire or improve market access through joint
marketing agreements.

 A co. that is racing for global market leadership can enhance its chances for
success by using alliances to:

 Get into critical country markets quickly and accelerate the process of building a
potent global market presence.

 Gain inside knowledge about unfamiliar markets and culture through alliance with
local partners.

 Access valuable skills and competencies that are concentrated in particular

geographic locations.

 A co. can enhance its market standing by using alliance to:

 Establish a stronger beachhead for participating in the target technology or
industry.

 Master new technologies and build new expertise and competencies faster than
would be possible through internal efforts.

 Open up broader opportunities in the target industry by melding the firm’s own
capabilities with the expertise and resources of partners.

 Manufacturing allies can also learn much about how to improve their quality
control and production procedures by studying one another’s manufacturing
methods. For Example

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  IBM and Dell computer formed an alliance whereby Dell agreed to purchase $16
billion in parts and components from IBM for use in Dell’s PCs, servers and
workstations over a 3 year period.

 Dell determined that IBM’s growing expertise and capabilities in PC components

justified using IBM as a major supplier even though Dell and IBM competed in
supplying laptop computers and servers to corporate customers.

 Strategic cooperation is a much-favoured, indeed necessary, approach in

industries where new technological developments are occurring at a furious pace
along many different paths and where advances in one technology spill over to
affect others.

 Whenever industries are experiencing high-velocity technological change in many

areas simultaneously, firms find it virtually essential to have cooperative
relationships with other enterprises to stay on the leading edge of technological
and product performance even in their own area of specialization.

Why many alliances are unstable & Breakup

 The stability of an alliance depends on how well the partners work together, their
success in adapting to changing internal and external conditions, and their
willingness to renegotiate the bargain if circumstances so warrant.

 Unless partners place a high value on the skills, resources and contributions each
brings to the alliance and the cooperative arrangement results in valuable win-win
outcomes, it is doomed.

 Many alliances are dissolved after a few years. The high ‘divorce rate’ among
strategic allies has several causes –

 Diverging objectives & priorities, an inability to work well together, changing

conditions that render the purpose of the alliance obsolete, the emergence of more
attractive technological paths, and market place rivalry between one or more
allies.

 Experience indicates that alliances stand a reasonable chance of helping a c.

reduce competitive disadvantage but very rarely have they proved a durable
device for achieving a competitive edge.

MERGER & ACQUISITION STRATEGIES

 Mergers and Acquisitions are much-used strategic options.

 Ownership ties are more permanent than partnership ties, allowing the operations
of the M /A participants to be tightly integrated and creating more in-house
control and autonomy.
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  The difference between a M & A relates more to the details of ownership,
management control and financial agreements than to strategy and competitive
advantage.

 The resources, competencies and competitive capabilities of the newly created

enterprise end up much the same whether the combination is the result of
acquisition or merger.

 Many M & A are driven by strategies to achieve one of the following 5 strategic
objectives:

 To pave the way for the acquiring company to gain more market share and further
create a more efficient operations out of the combined companies by closing high-
cost plants and eliminating surplus capacity industry-wide.

 To expand a co.’s geographic coverage.

 To extend the co.’s business into new product categories or international markets.
 To gain quick access to new technologies and avoid the need for a timeconsuming
R & D effort.

 To try to invent a new industry and lead the convergence of industries whose
boundaries are being blurred by changing technologies and new market
opportunities.

VERTICAL INTEGRATION STRATEGIES

 It involves expanding the firm’s range of activities backward into sources of

supply and / or forward toward end users.

 Vertical integration strategies can aim at

 full integration (participating in all stages of the industry value chain) or
 Partial integration (building positions in selected stages of the industry’s total
value chain)

 The only good reason for investing co. resources in VI is to strengthen the firm’s
competitive position.

 Integrating backward generates cost savings only when the volume needed is big
enough to capture the same scale economies suppliers have and when suppliers’
production efficiency can be matched or exceeded with no drop-off in quality and
NPD capability.

 BVI produces a differentiation based competitive advantage. It also includes

decreasing the co.’s dependence on suppliers and lessening the co.’s vulnerability
to powerful suppliers

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  The strategic impetus for forward integration is to gain a better access to end users
and better market visibility.

 It is advantageous for manufacturer to integrate forward into wholesaling or

retailing via co-owned distributorship or chain of retail stores.

 Via internet.
 Bypassing regular wholesale / retail channels in favour of direct sales and internet
retailing may lower distribution costs, produce a relative cost advantage over
certain rivals, and result in lower selling prices to end users.

 Increases business risk, locks a firm into relying on its own in-house activities.
 Capacity-matching problems, VI calls for radically different skills and business
capabilities. It isn’t simple or profitable as it sounds.

 VI can be a Strength or Weakness to firm - Whether VI can enhance the

performance strategy – critical activities in ways that lower cost, build expertise
of increase differentiation, the impact of VI on investment costs, flexibility and
response times across value chain activities, whether VI substantially enhances a
co.’s Competitiveness.

OUTSOURCING STRATEGIES advantages

 An activity can be performed more cheaply by outside specialists

 An activity can be performed better by outside specialists
 The activity is not crucial to the firm’s ability to achieve sustainable competitive
advantage and wont hollow out its core competencies, capabilities or technical
know-how.

 It reduces the co.’s risk exposure to changing technology and / or changing buyer
preferences.

 It streamlines co. operations in ways that cut the time it takes to get newly
developed products into the market place, lower internal coordination costs, or
improve organizational flexibility.

 It allows company to concentrate on strengthening and leveraging its core

competencies.

 A company should generally not perform any value chain activity internally that
can be performed more efficiently or effectively by its outside business partners –
the chief exception is when an activity is strategically crucial and internal control
over that activity is deemed essential.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  Relying on outside specialists to perform certain value chain activities offers a
no.of strategic advantages.

 Obtaining high quality and / or cheaper components or services than internals

sources can provide.

 Improving the co.’s ability to innovate by allying with ‘best-in-world’ suppliers

who have considerable intellectual capital and innovative capabilities of their
own.

 Enhancing the firm’s strategic flexibility should customer needs and market
conditions suddenly shift – frequently quicker, easier, less risky, and cheaper.

 Increasing the firm’s ability to assemble diverse kinds of expertise speedily and
efficiently.

 Allowing the firm to concentrate its resources on performing those activities

internally that it can perform better than outsiders or that it needs to have under its
direct control.

Offensive Strategies

 Competitive advantage is achieved by successful offensive strategic moves –

initiatives calculated to yield a cost advantage, a differentiation advantage, or a
resource advantage.

 In contrast, defensive strategies can protect competitive advantage but rarely are
the basis for creating the advantage.

 Ideally, an offensive move builds competitive advantage quickly; the longer it

takes, the more likely it is that rivals will spot the move, see its potential, and
begin a counter response.

 However, competent, resourceful competitors can be counted on to counter

attack with initiatives to overcome any market disadvantage they face - few
companies will allow themselves to be outcompeted without a fight.

Basic types of Offensive Strategies:

 Every company go on the offensive to improve its market position. While
offensive attacks may or may not be aimed at particular rivals, they usually are
motivated by a desire to win sales and market share at the expense of other
companies in the industry.

 6 types of Offensive strategies:

 Initiatives to match or exceed competitor strengths
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  Initiatives to capitalize on competitor weaknesses
 Simultaneous initiatives on many fronts
 End-run offensives
 Guerrilla offensives
 Preemptive strikes

Initiatives to match or exceed competitor strengths

 1. When a co. has no choice but to try to whittle away at a strong rival’s
competitive advantage.

 2. When it is possible to gain profitable market share at the expense of rivals

despite whatever resource strengths and capabilities they have.

 Attacking a powerful rival’s strengths may be necessary when the rival has either
a superior product offering or superior organizational resources and capabilities.

 AMD (Advanced Micro Devices) – Intel

 The classic avenue for attacking a strong rival is to offer an equally good product
at a lower price.

 Leapfrogging into next-gen technologies to make the rival’s product obsolete,

adding new features that appeal to the rival’s customers, running comparison ads,
constructing major new plant capacity in the rival’s backyard, expanding product
line to match the rivals model for model and developing customer service
capabilities that the targeted rival doesn’t have.

 General Motors repeatedly attacked rival car makers with aggressive rebates and
0% financing.

Initiatives to capitalize on Competitor Weaknesses

 Initiatives that exploit competitor weaknesses stand a better chance of succeeding
than do those that challenge competitor strengths, especially if the weaknesses
represent important vulnerabilities and the rival is caught by surprise with no
ready defence.

 Going after the customers of those rivals whose products lag on quality, features
or product performance.

 Making special sales pitches to the customers of those rivals who provide subpar
customer service.

 Trying to win customers away from rivals with weak brand recognition.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 Emphasizing sales to buyers in geographic regions where a rival has a weak
market share or is exerting less competitive effort.

 Paying special attention to buyer segments that a rival is neglecting or is weakly

equipped to serve.

Simultaneous initiatives on many fronts.

 A co. may see merit in launching a grand offensive involving multiple initiatives
as:

 Price cuts, increased advertising, additional performance features, new models and
styles, customer service improvements and such promotions as free samples,
coupons, rebates, and in-store displays, etc.,

 Launched more or less concurrently across a wide geographic front

 Such all-out campaigns can force a rival into many defensive actions to protect
different pieces of its customer base simultaneously and thus divide its attention.

 Multifaceted offensives have their best chance of success when a challenger not
only comes up with an especially attractive product or service but also has the
brand awareness and distribution clout to get buyer’s attention.

End-run Offensives

 The idea of an end-run offensive is to maneuver around competitors, capture

unoccupied or less contested market territory, and change the rules of the competitive
game in the aggressor’s favour. Exapmle:

 Introducing new products that redefine the market and the terms of competition
…….. (Digital cameras – reel cameras, Landline – Wireless)

 Launching initiatives to build strong positions in geographic areas where close rivals
have little or no market presence…… (race for Global Market Leadership)

 Trying to create new segments by introducing products with different attributes and
performance features to better meet the needs of selected buyers…. (BMW, LEXUS,
ACURA)

 Leapfrogging into next-gen technologies to supplant existing technologies, products

or services (LCD-LED, Online shift, YouTube)

Guerrilla Offensives

 These are particularly well suited to small challengers who have neither the
resources nor the market visibility to mount a full-fledged attack on industry
leaders.
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  Guerrilla offensives use the hit-and-run principle – an underdog tries to grab sales
and market share wherever and whenever it catches rivals napping or spots an
opening through which to lure customers away.

 Guerrilla offensives can involve making scattered, random raids on the leaders’
customers with such tactics as occasional lowballing on price; surprising key
rivals with sporadic but intense bursts of promotional activity; or undertaking
special campaigns to attract buyers away from rivals plagued with a strike or
problems in meeting delivery schedules.

 Guerrillas can promote the quality of their products when rivals have quality
control problems or announce guaranteed delivery times when competitors’
deliveries are running behind or significantly boost their commitment to prompt
technical support when buyers are frustrated by the calibre of the support offered
by industry leaders.

Preemptive Strikes
 Preemptive strategies involve moving first to secure and advantageous position
that rivals are prevented or discouraged from duplicating.

 What makes a move preemptive is its one-of-a-kind nature – whoever strikes first
stands to acquire competitive assets that rivals can’t readily match.

 There are several ways a firm can bolster its competitive capabilities with
preemptive moves:

 1. securing exclusive or dominant access to the best distributors in a particular

geographic region or country;

 2. moving to obtain the most favourable site along a heavily travelled throughfare,
at a new interchange or intersection, in a new shopping mall, in a natural beauty
spot, close to cheap transportation or raw materials supplies or market outlets, and
so on;

 3. trying up the most reliable, high-quality suppliers via exclusive partnership,

long-term contracts or acquisition.

 To be successful, a preemptive move doesn’t have to totally block rivals from

following or copying; it merely needs to give a firm a prime position that is not
easily circumvented

Choosing which rivals to attack

 Market leaders that are vulnerable
 Runner-up firms with weaknesses where the challenger is strong
 Struggling enterprises that are on the verge of going under
 Small local and regional firms with limited capabilities

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Choosing the basis for attack
 Core competencies, resource strengths, competitive capabilities
 The center piece of the offensive can be an important core competence, a unique
competitive capability, much improved performance features , an innovative
new product, technological superiority, a cost advantage in mfg and distribution,
or some kind of differentiation strategy.

DEFENSIVE STRATEGIES

 It is just as important as discern when to fortify a co.’s present market position

with defensive actions as it is to seize the initiatives and launch strategic
offensives.

 Defensive strategies can be either of 2 forms: Blocking Challengers & Signaling

the Likelihood of Strong Retaliation.

Blocking The Avenues Open to Challengers

 There are many ways to throw obstacles in the path of challengers.

 A defender can participate in alternative technologies to reduce the threat rivals
will attack with a better technology.

 A defender can introduce new features, add new models, or broaden its product
line to close off gaps and vacant niches to would-be challengers.

 It can thwart the efforts of rivals to attack with a lower price by maintaining
economy – priced options of it own.

 It can try to discourage buyers from trying competitors’ brands via such actions as
lengthening warranty coverages, offering free training and support services,
developing the capability to deliver spare parts to users faster than rivals can,
providing coupons and sample giveaways to buyers most prone to experiment,
and making early announcements about impending new products or price changes
to induce potential buyers to postpone switching.

 It can challenge the quality or safety of rivals’ products in regulatory proceedings

– a favourite tactic of the pharmaceutical firms in trying to delay the introduction
of competing prescription drugs.

 Finally, a defender can grant dealers and distributors volume discount or better
financing terms to discourage them from experimenting with other suppliers, or it
can convince them to handle its product line exclusively and force competitors to
use other distribution outlets.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Signalling challengers that Retaliation is Likely

 The goal of signalling challengers that strong retaliation is likely in the event of an
attack is either to dissuade challengers from attacking at all or to divert them to
less threatening options.

 Either goal can be achieved by letting challengers know the battle will cost more
than its worth.

 Would-be challengers can be signalled by:

 1. Publicly announcing management’s commitment to maintain firm’s present

market share.

 2. Publicly commiting the co. to match competitors’ terms or prices.

 3. Maintaining a war chest of cash and marketable securities.

 4. Making an occasional strong counter response to the moves of weak

competitors to enhance the firm’s image as a tough defender.

STRATEGIES FOR USING THE INTERNET AS A DISTRIBUTION CHANNEL

 Co.s today must wrestle with the issue of how to use the Internet in positioning
themselves in the marketplace. Whether to use their website, as a way to
disseminate product info, as a minor distribution channel, as one of several
important distribution channels, as the primary distribution channel or as the co.’s
only distribution channel.

 Brick-and-click strategies:

 The manufacturer’s profit margin from online sales is bigger than that from sales
through wholesaler / retailer

 Encouraging buyers to visit the co.’s website helps educate them to the ease and
convenience of purchasing online, thus encouraging more and more buyers to
migrate buying online

 Selling directly to end users allow a mfg to make greater use of build-to-order mfg
and assembly as a basis for bypassing traditional distribution channels
entirely.(Dell)

 Strategies for Online Enterprises:

 The capability to deliver unique value to buyers

 Deliberate efforts to engineer a value chain that enables differentiation, lower

costs or better value for the money

 An innovative, fresh and entertaining website

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 A clear focus on a limited no.of competencies and a relatively specialized no. Of
value chain activities

 Innovative marketing techniques that are efficient in reaching the targeted

audience and effective in stimulating purchases Minimal reliance on ancillary
revenues.

First mover Advantages & Disadvantages

 When to make a strategic move is often a crucial decision

 Being first to initiate a strategic move can strengthen co.’s market position when:

 1. Pioneering helps build a firm’s image & reputation to buyers

 2. early commitments to new technologies, new-style components, distribution

channels, cost advantage over rivals

 3. first time customers remain strongly loyal to pioneering firms making repeat
purchases.

 4. moving first constitutes a preemptive strike

Later mover advantages

 1. pioneering leadership is more costly than imitating followership and only

negligible experience or learning curve benefits accrue to the leader (a condition
that allows a follower to endup with lower costs than first-mover)

 2. the products of an innovator are somewhat primitive and donot live up to buyer
expectations, thus clever follower to win disenchanted buyers away from the
leader.

 3. technology is advancing rapidly, fast followers opening leapfrog a first mover

with more attractive and full feature second and third generation products.

 4. Mistakes can be addressed.

INTERNATIONAL STRATEGY

1. To achieve lower costs and enhance the firm’s competitiveness

2. To capitalize on its core competencies
3. To spread its business risk across a wider market base

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
* Expanding into foreign markets offers potential for increased revenues, profits, and
long-term growth and becomes especially attractive option when a co.’s home markets
are mature.

* Many companies are driven to sell in more than one country because domestic
sales volume is not large enough to fully capture manufacturing economies of scale
and improve the firm’s cost competitiveness.

* A company spreads business risk by operating in no.of different foreign markets

ather than depending entirely on operations in its domestic markets.

DIFFERENCES BETWEEN COMPETING INTERNATIONALLY &

COMPETING GLOBALLY

A company will start to compete internationally by entering just one or may be a

select few foreign markets. Competing on a truly global scale comes later, after the
co. has established operations on several continents and is racing against rivals for
global market leadership.

International competitor (co. that operates in a few foreign countries) Global

competitor (co. that markets its products in 50 to 100 countries and is expanding its
opertions into additional country markets annually.)
CROSS COUNTRY DIFFERENCES IN CULTURAL, DEMOGRAPHIC, AND
MARKET CONDITIONS

Cultures and lifestyles are the most obvious areas in which countries of the world
differ; sometimes product designs suitable in one country are inappropriate in
another.

In France consumers prefer top-loading washing machines, while in most other

European countries consumers prefer front-loading machines. Northern Europeans
want large refrigerators because they tend to shop once a week in supermarkets;
southern Europeans can get by on small refrigerators because they shop daily. In
- coun
parts of asia refrigerators are a status symbol and may be placed in the living room,
leading preferences for stylish designs and colors, in other Asian countries household
space is constrained and many refrigerators are only 4 feet high.
Market growth varies from country to country. In emerging markets like India,
China, Brazil and Malaysia, market growth potential is far higher than in the more
mature economies like Canada and Japan. The marketplace is intensely competitive
in some countries and only moderately contested in others. One of the biggest
concerns of companies competing in foreign markets is whether to customize their
offerings in each different country market to match the tastes and preferences of local
buyers or whether to offer a mostly standardized product world-wide.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
The products of a co. that is responsive to local tastes will appeal to local buyers,
customizing a co.’s products country by country may have the effect of raising
production and distribution costs due to the greater variety of designs and
components, shorter production runs, and the complications of added inventory
handling and distribution logistics.
Aside from the basic cultural and market differences among countries, a co. also has
to pay special attention to location
THE POTENTIAL FOR LOCATION ADVANTAGE
Differences in wage rates, worker productivity, inflation rates, energy costs, tax
rates, Govt. regulations and the like create sizable variations in manufacturing
costs from country to country.
Plants in some countries have major manufacturing cost advantages because of lower
input costs, relaxed govt regulations, the proximity of suppliers, or unique natural
resources.
The quality of a country’s business environment also offers locational advantages –
to attract foreign investments and go all-out to create a business climate that outsiders
will view as favourable.

Infrastructure suppliers (universities, vocational training providers, research

enterprises)
THE RISK OF ADVERSE EXCHANGE RATE SHIFTS
Shifting exchange rates pose significant risks to a co.’s competitiveness in foreign
markets. Exporter win when the currency of the country where goods are being
manufactured grows weaker, and they lose when the currency grows stronger.

Domestic companies under pressure from lower-cost imports are benefited when
their govt’s currency grows weaker in relation to the countries where the imported
goods are being made.
Companies with manufacturing facilities in Brazil are more costcompetitive in
exporting goods to world markets when the Brazilian real is weak; their
competitiveness erodes when the Brazilian real grows stronger relative to the
currencies of the countries where the Brazilian made goods are being sold.
THE CONCEPTS OF MULTICOUNTRY COMPETITION & GLOBAL
COMPETITION
Multi-country competition exists when competition in one national market is not
closely connected to competition in another national market – there is no Global or
World market, just a collection of selfcontained country markets.

1. Buyers in different countries are attracted to different product attributes

2. Sellers vary from country to country

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
3. Industry conditions and competitive forces in each national market differ in
important respects.
With multinational competition, rival firms battle for national championship and
winning in one country does not necessarily signal the ability to fare well in other
countries.
Ex – life insurance, banking, radio & TV broadcasting, apparels, etc., Global
competition exists when competitive conditions across national markets are linked
strongly enough to form a true international market and when leading competitors
compete head to head in many different countries
Rival firms in globally competitive industries vie for worldwide leadership.

Ex. Automobile, TVs, tires, mobile phones. PCs, watches, digital cameras,
commercial aircrafts, etc,
It is also important to recognize that an industry can be in transition from multi-
country to global competition.

At same time, consumer tastes in a no. of imp product categories are converging
across the world. In addition to taking the obvious cultural and political differences
between countries into account, a co. has to shape its strategic approach to competing
in foreign markets according to whether its industry is characterized by multicountry
competition or global competition or a transition from one another.

STRATEGIC OPTIONS FOR ENTERING AND COMPETING IN

FOREIGN MARKETS

1. Maintain a National (one-country) production base and export goods to

foreign markets, using either co. owned or foreign controlled forward
distribution channels.

2. License foreign firms to use the co’s technology or to produce and

distribute the Co.’s products.

3. Franchising Strategy

4. Follow a Multi-country strategy, varying the co’s strategic approach in

accordance with local conditions and differing buyer tastes and preferences.

5. Follow a Global strategy, using essentially the same competitive

strategy approach in all country markets where the company has a presence.

6. Use Strategic Alliances, Joint ventures with foreign companies as the

primary vehicle for entering foreign markets and perhaps also using them as
an ongoing strategic arrangement aimed at

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Unit – V:

Corporate Governance:

The three pillars of corporate governance are: transparency, accountability, and security. All
three are critical in successfully running a company and forming solid professional
relationships among its stakeholders which include board directors, managers, employees, and
most importantly, shareholders.

In simplest terms, transparency means having nothing to hide. For a company, this means
it allows its processes and transactions observable to outsiders. It also makes necessary
disclosures, informs everyone affected about its decisions, and complies with legal
requirements. After the financial scandals in the early 2000s, transparency has played a bigger
role in preventing fraud from happening again, especially at such a large scale. But aside from
stopping the next illegal moneymaking scheme, transparency also builds a good reputation of
the company in question. When shareholders feel they can trust a company, they are willing to
invest more, and this greatly helps in lowering cost of capital. Therefore, a company gets its
ROI on the money it spent on improving transparency.

Transparency is a critical component of corporate governance because it ensures that all

of a company’s actions can be checked at any given time by an outside observer. This
makes its processes and transactions verifiable, so if a question does come up about a step, the
company can provide a clear answer. And after the Enron scandal in 2001, transparency is no
longer just an option, but a legal requirement that a company has to comply with.

But although transparency is a necessity for the whole company, its presence is even more
important at the top where strategies are planned and decisions are made. Shareholders expect
that the corporate board is open about their actions; otherwise, distrust will form. And when
trust breaks, shareholders tend to stay away and invest somewhere else.

How transparent is your corporate board? Are directors’ actions readily verifiable by internal
and external audit? Is their leadership visible from the top to all the way down? Is transparency
applicable to everyone? Transparency should have no exceptions, especially when your
company’s goals are involved. All stakeholders — from employees to investors — have the
right to know about the direction your company is headed for.

Second Pillar of Corporate Governance: Accountability

It takes more than transparency to build integrity as a company. It also takes accountability,
which can also mean answerability or liability. Shareholders are deeply interested in who
will take the blame when something goes wrong in one of a company’s many processes. And
even when everything goes smoothly as expected, knowing that someone will be held
accountable for future mishaps increases shareholders’ confidence, which in turn increases
their desire to invest more. Again, this concern over accountability goes back to the financial
scandals in the early 2000s, in which there had been a lot of money stolen, but not enough
people to answer for the crime.

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
Accountability can have a negative connotation because many people associate it with blame.
“Who’s responsible for when something goes wrong?” is just one of the many questions that
accountability seeks to answer. But accountability is more than that. It’s about having
ownership over one’s actions whether the consequences of those actions are good or bad. Thus,
accountability covers not only failings, but also accomplishments. When the idea of
accountability is approached with this positive outlook, people will be more open to it as a
means to improve their performance. This applies from the staff all the way up to the corporate
board.

How can accountability improve performance? People who have no sense of ownership over
their tasks don’t feel the motivation to do more than what’s expected of them. There’s no
incentive to work hard and achieve something. But when they understand the weight of their
responsibilities, they’re more inclined to make sure that they carry out their tasks properly. And
when they’re successful in this regard, they’re likely to feel a sense of accomplishment, and
this further fuels their desire to do better.

So how’s the level of accountability in your corporate board? Are you directors there to simply
fill in a seat while leafing through their board packs and board books, or are they actively
engaged in decisions and strategies for your company?

Third Pillar of Corporate Governance: Security

A company is expected to make their processes transparent and their people accountable while
keeping their enterprise data secure from unauthorized access. There is simply no compromise
for this. Companies that experience security breaches involving the exposure of their clients’
personal information quickly lose their credibility.

The increasing threat of cyber crime in recent years puts security at a high priority for many
companies. Complying with security standards isn’t enough — a company needs to imbibe a
culture of security to ensure that trade secrets, corporate data, and client information are all
kept safe from unauthorized access from inside and out. Security is not just an IT concern
anymore, unlike in the past.

Nowadays, everyone in a company has a responsibility to adhere to strict security standards.

Even entry-level staff members usually have their own company email addresses. But are they
trained enough to conscientiously keep their accounts safe? And that’s just scratching the
surface. Think of how much confidential data there is at the hands of directors in the corporate
board, and suddenly, the stakes are much higher.

SMART GOVERNANCE

 Smart governance is the process of utilizing modern technologies and ict to create a
collaborative, communication-based, transparent, and sustainable environment for the
citizens and government. Smart governments can be based on four different models:
 Government to citizen (g2c) model- in this approach, the government interacts with
citizens using communication mediums such as newspaper, radio, television, and the
internet. And, the government provides a platform for citizens to voice their opinions
about government policies and schemes.
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
  Government to business (g2b) model- government communicates with businesses to
facilitate the growth of the economy. Companies can directly acquire knowledge about
new policies, taxes, regulations, and credit facilities. Moreover, governments promote
online business practices to save time and costs, and businesses can collect real-time
data from the government.
 Government to government (g2g) model- this model creates a landscape for
communication between government and government organizations, agencies and
departments. The aim is to integrate all channels of governance with the help of ict
tools for a paperless, corruption-free, and sustainable system.
 Government to employee (g2e) model- with this model, the government can
communicate with employees and companies. Furthermore, personal information of
employees such as social security number, bank details, and personal details are stored
in a government database. And, organizations can carry out employee-related tasks
such as payroll, bank loans, medical plans, and pension plans online.

Benefits:

1. Enhanced participation of citizens

2. Access to crucial information
3. Better democracy
4. Financial and social inclusion
5. Sustainable future
6. Involvement of the private sector

Implementation of smart governance:

 Educate the citizens about smart governance and train the local authorities.
 Hire skilled professionals who can help with the deployment process.
 Set up goals that can be accomplished with smart governance.
 Create strategies to achieve your goals.
 Collect funds and look for potential investors for the project.
 Introduce schemes and programs to promote public and private collaboration
 Update legislation and policies that wold help the growth of smart governance.
 With the rise of modern technology, smart governance can build on the foundation laid
by the principles of good governance. Therefore, govts need to decide between smart
governance that will develop their nation and economy with advanced tools, or the
same old good governance principles that have been lacking in several areas.

Good corporate citizenship:

 It involves the act of proactively addressing business and society issues, while building
stakeholders partnerships.
 Good corporate citizenship integrates social, ethical, environmental, economic and
philanthropic values in the core decision making processes of a business. Corporate
citizenship has supporters and detractors from corporate citisenship is defined as the
act of business taking greater account of its social, environmental and financial foot
prints.
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 Social impact
 Economic impact
 Environment impact

Generic principles of corporate citizenship:

 Making difference in the wider society

 Stakeholder empowerment
 Accountability
 Transparency
 Sustainable capitalism (profitability & prosperity)
 Sharing responsibility
 Triple bottom line
 Long term oriented
 Dialogue
 Stakeholders inclusion
 Communicaiton
 Engagement
 Being a good corporate citizen is not a “nice to have”. To remain a responsible,
competitive and profitable company, it’s a “must have”.
 A good corporate citizen means being guided by strong moral and ethical standards in
daily interaction with customers, shareholdes and employees. That includes carefully
balancing shareholders’ needs with those of the community and always considering
the environmental impact of business operations.
 Good corporate citizenship strenghthens employee engagement, and good things
happen.

Strategic leadership:

 Utilizing strategy in the management of employees. It is the potential to influence

organizational members and to execute organizational change.
 Strategic leader should have the following traits – loyalty, keeping the team updated,
judicious use of power, have a wider perspective, motivation, compassion, self-
control, social skills, self-awarenes, readiness to delegate and authorize, articulacy,
constancy / reliability

Strategic entrepreneurship:

 Taking entrepreneurial actions using a strategic perspective

 Engaging in simultaneous opportunity seeking and competitive advantage seeking
behaviors.
 Designing and implementing entrepreneurial strategies to create wealth.

Corporate social responsibility:

 Csr refers to the self-imposed responsibility of companies to society in areas such as

the environment, the economy, employee well-being, and competition ethics.
STRATEGIC MANAGEMENT, MBA IV SEM
Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN
 Many companies use internal csr regulation as a form of moral compass to positively
influence the ethical development of their business.
 Positive corporate social responsibility can also offer economic benefits

STRATEGIC MANAGEMENT, MBA IV SEM

Ms. NSL. PRAVEENA, ASSOC. PROF, RISHI UBR PG COLLEGE FOR WOMEN