Strategy for Dummies (Read: Juniors)

strategY

manoJ

thomaS

whaT ?

A multinational FMCG company has been operating in India since the

last six years. A product, A, when launched was an instant success.

The primary reason was the differentiation that made the then

market leader obsolete.

For the last couple of years, the segment’s increasing profitability

has led huge FMCG firms introducing similar products in the market.

This has led to loss of market share. The market monopoly has been

reduced to a state of almost perfect competition.

You are the brand manager of A.

Formulate a instant plan of action and a long term strategy for A.

strategiC

managemenT

A strategy is an integrated

and co-ordinated set of

commitments and actions

designed to exploit core

competencies and gain a

competitive advantage.

A strategy is an integrated

and co-ordinated set of

commitments and actions

design to exploit core

competencies and

gain a competitive

advantage.

Core Competencies

Core Competencies are capabilities that serve as a

source of competitive advantage

for a firm over its rivals.

Competitive Advantage

Competitive Advantage is achieved when a firm implements

a strategy competitors are

unable to duplicate or find too

costly to imitate.

Capabilities Description

Valuable Capabilities • Help a firm neutralize threats or

exploit opportunities

Rare capabilities • Are not possessed by many others

Costly-to-imitate Capabilities • Historical

• Ambiguous

• Social Complexity

Non-substitutable Capabilities • No strategic equivalent

Risk

Risk is an investor’s

uncertainty about the economic

gains or losses that will result

from a particular investment.

frameworkS

1.Environment

2.SWOT

3.Porter’s Five

Forces

4. BCG

5. GE/McKinsey

1. Environment Analysis

P

E

S

T

1. Environment Analysis

Political/Legal

E

S

T

1. Environment Analysis

Political/Legal

Economic

S

T

1. Environment Analysis

Political/Legal

Economic

Sociocultural

T

1. Environment Analysis

Political/Legal

Economic

Socio-cultural

Technological

1. Environment Analysis

Political/Legal• Taxation Laws

• Deregulation

• Labour laws

• Political stability

1. Environment Analysis

Economic• Inflation

• CRR/Repo Rates/Interest rates

• Trade deficits, surpluses

• Savings rate

• GDP

1. Environment Analysis

Sociocultural• Demographics

• Women in workplace

• Career planning

• Job culture and attitude

• Concerns about Environment

1. Environment Analysis

Technological• Product innovations

• Communication technologies

• Telephony

• Data

• R&D trends

GE/McKinsey Matrix

Industry Attractiveness

• Market Growth Rate

• Market Size

• Demand Variability

• Industry Profitability

• Industry rivalry

• Global Opportunities

• Macroeconomic Environment

GE/McKinsey Matrix

Business Position Strength

• Market Share

• Growth in market share

• Brand equity

• Distribution channel access

• Production capacity

• Profit margins relative to

competitors

GE/McKinsey Matrix

questionS??

Varun Kumar Gupta

BM 2009-11

varun.gupta@astra.xlri.ac.in

b09115@astra.xlri.ac.in

97.98.59.27.99