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8/14/2019 Developing Business Strategy
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Group-3: Anita Archit Bharathi Jyotis Ab
Strategy Development Proces
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The MissionThe Vision
Goal/Purpose
Objective
Strategy
Strategy
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Environmental analysis Industry Level Analy
Two types of Analysis
To determineenvironmental Threats
to the companys
present strategy andobjectives
To determine theenvironmental
Opportunities tocompany for achieving
its objectives
To determine andunderstand the MarketCompetitive structureand making decisions
to anticipate it
Steps of Analyzing the environment
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External Environment (Macro)
Political Environment
Economic Environment
Social Environment
Supplier Environment
Technological Environment
Internal Environmen(Strategic Advantage
Production Function
Finance Function
Marketing Function
Operation Function
Personnel Managem
Types of Environment
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External Environment
Political EnvironmentChange in government policies affect
company business
Influences Supplier, Consumer &
Competitor function
Company face production constraint due
to antitrust laws, fair trade decisions, tax
rate, pollution & pricing policies
Allocation of Product Research Grant to
companies
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External Environment
Economic Environment Every market is unique and has elastic
consumption pattern
Microeconomics trends like Prime interest
rate, Inflation rate, GNP, Disposal income,
Propensity to spend etc.
Changes in Wealth distribution or Wealth
management pattern in the society
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External Environment
Social EnvironmentChange in values, beliefs, lifestyle, attitude, opinion creates
potential for an organization. (Eg.- Women in the work forc
Demographic change has implication on several business
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External Environment
Supplier EnvironmentChange in availability of Raw Materials
and Sub-assemblies
Change in price of Raw Materials
Entry of new suppliers & exit of
existing Big supplier
Technological breakthrough in Raw
Materials affecting companys
Manufacturing process
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External Environment
Technological EnvironmentCost of Technology is very important
Rate of change of technology influences
the strategy formation
Receptivity of New Technology by the
public affects organizational strategy
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Internal Environment
Marketing Function Involves study of product market
Brings together the Organization &
the External environment
Efficiency in bringing closer the
various departments of the
organization
Tells about the Market share,
strength in supermarkets, productquality, pricing etc.
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Internal Environment
Operation FunctionConcerned with production of goods
and services
Managing the Process thats converts
the Input into output
Maintains the level of Inventory
Maintains long term relationship with
the suppliers
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Internal Environment
Personnel ManagementManaging the most important
Assets of the organization, the
Employees
Recruiting & training, providing faircompensation plans to the
employees
Maintain Fair terms and conditions
to the employees
Track recording of achieving
Objectives
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Industry Level Analysis
Study Porters Five Forces Model To find out the number of firms
in the industry & their respective
market shares
Major new products in themarket
Shifts in Pricing structure of
products
Shifts in consumer Preference
Change in PLC for the industry
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Porters Five Forces Model
IndustryCompetitors
PotentialEntrants
Buyers
Substitutes
Suppliers
Threat of new
entrants
Bargaining of Buye
Bargaining power
of Suppliers
Threat ofSubstituted products
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Game Theory
Game Theory proposed by John vonNeumann and Oskar Morgenstern
by their book Theory of Games and
Economic Behaviorin 1944
Consist game elements like players,
set of rules, actions, information,outcomes, payoffs & equilibrium
Helps organization to overcome
competition
Organization can understand rivals
behavior Helps to understand Business better
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Game Theory
Techniques which improve companyscompetitive instinct.
o Fish bowl
o Everybody brings his or her own views
o Advocates of certain stay in the center ofthe Fish bowl
o Advocates debate on their data and facts
o Decision makers evaluate quality of facts,
expose weak positions and analyze
strategic options
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Game Theory
Techniques which improve companyscompetitive instinct.
o Red team/ Blue team
o Managers are put in charge of teams
representing major competitors
o Plan the strategies they would be use
beat the organization
o Increases organizational Competitive
Intelligence
o Quickens organizational reflexes bybuilding competitive awareness
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Game Theory
Techniques which improve companyscompetitive instinct.
o Future Mapping
o Way of looking at different scenario for
Future
o Looking at several alternative Futures or
End States
o Assign profanity to each states to identify
the forces to determine whether that
scenario actually unfoldo Identify actions with Biggest return and
least Risk or both
Future is here
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Strategic Systems Planning (SSP) is used to study an organiza
information needs, identify strategic opportunities and deve
plan to address those information needs
Strategic systems planning is always performed with an organiza
senior management and is not undertaken as an end in itself.
objective is to create action by implementing the Strategic SysImplementation Plan
The system shows you how to develop a set of strategies
action plans and to arrange them in such a way that vastly incr
your chances of having a sustainable, profitable long term bus
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Strategic Leadership provides thevision and direction for the growthand success of an organization. Tosuccessfully deal with change, allexecutives need the skills and toolsfor both strategy formulation and
implementation. Managing changeand ambiguity requires strategicleaders who not only provide asense of direction, but who can alsobuild ownership and alignmentwithin their workgroups to
implement change.
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Is a term coined by James Brain Quinn in 1980 Constantly integrating the simultaneo
incremental process of strategy formulation a
implementation is the central art of effecti
strategic management
Implementing in large organization
is complex and time consuming
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General ConcernBroadcasting of an general idea
Formal development of a change plan
Use of a Crisis or Opportunity
Adaptation
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According to Peter Senge (1993)Learning Organization are:
organizations where people continually exp
their capacity to create the results they tdesire, where new and expansive patternsthinking are nurtured, where collective aspirais set free, and where people are continu
learning to see the whole together.
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STAGE 1: PREPERATIONSTAGE 2: PLANNING
STAGE 3: RESOURCE DEVELOPMENT
STAGE 4: IMPLEMENTAION
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Before any process can begin, basic preparatmust be made. This includes making a commitment
planning, enlisting appropriate personnel, gather
data, getting necessary commitments, setting as
appropriate calendar time, and determining the procto be used.
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During the planning phase, or the actudevelopment phase, the strategy is formulate
Various meetings are held that lead church membe
to process the data and make decisions concernin
strategic objectives, goals, and action plans. Thdirection for the church is set with specific actio
that lead to fulfilling the desired intent.
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Once the plan has been completed, necessary resou
for implementation must be identified. This phase inclu
identifying both existing resources and new resources tmust be secured, as well as determining how these resou
are to be allocated. All of the resources will not be availa
at the beginning of implementation. These resources
include:
The allocation of personnel to staff ministries, progra
activities or events planned
The development of a budget that resources the objecti
goals and action plans
The development of a calendar reflects the objectives, gand action plans
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The final phase of strategy development is implementithe vision, taking action, and making it happen. One of tmost frustrating experiences in life is getting to the goline, yet failing to score. History reveals that the mocommon point of breakdown of strategy development is
the point of implementation. Horror stories are legendaboth within the corporate world, as well as amoassociations and churches, of organizations that started tprocess but never completed it.
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A systematic way to examine all activities a companyperforms and how they interact among themselves
identify sources of competitive advantage Every companys value chain is composed of nine
categories of activities (value addition steps) which cbe classified under two major headings:
Primary activities- Connected with the physical creationthe firms product or services, its marketing, delivery &post sales service
Support activities: which provide inputs for infrastructufor primary activities
Helps to analyze strategic relevant internal activitiesthe competitive advantage
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Primary Activities
Support Activities
Inbound Logistics
Operations
Outbound Logistics
Marketing & Sales
Service
Firm Infrastructure
Human resource
Management
Technology
DevelopmentProcurement
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Organisations response to the changing environment is often within the param
of the organisations culture, which over time becomes more and more appare
this respect, culture is traditionally seen as a preventative to change, which s
strategy innovation and results in a momentum of that can lead to strategic dri
This view therefore supports the assumption that strategic change must alwa
accompanied by an appropriate cultural change.
Eventually transformational change is required
if the demise of the organisation has to be avoided.
Changing Environ
Unchanging organizational Culture and Activity
Strategic Gap lead
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