Strategy SM

8/3/2019 Strategy SM

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Different Types of Strategy

Presented by:

Subhash Yadav

Surbhi Singh

Manish Singh Parihar

Apeksha Parmar

Sanjay Kumar Mallik


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Content

Grand/Master Strategy

Business Strategy

Functional/Operational Strategy

International Strategy


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Grand/Master Strategy


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Concentration

A strategic approach in which a business focuses on a single market

or product. This allows the company to invest more resources in

production and marketing in that one area.

Zodiac brand concentrate on formal shirt for executives and

professionals.

Steel Authority of India Limited produces steel. Monsanto :Sector Seed Industry

Products :High-yield crop varieties and Hybrid crops ,Net Profit

(2008-09) Rs. 7,354 lacs.


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Market Development

The expansion of the total market for a product or company by (1)entering new segments of the market, (2) converting nonusers into

users, and/or (3) increasing usage per user.

It was the arrival of low cost airlines Air Deccan that revolutionized

the sector and air travel no longer the luxuries of business executive

and the economically well off. Ready-to-eat Meals launched by ITC under brand name Aashirvaad is

targeted towards those consumers who do not have time or

willingness to prepare food.


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Product Development

Ashok leyland has been a market leader in Indias commercial vehicle industry. The company pioneered concept like full air-

breaks, power steering, multi axle vehicle, rear engine and CNG-

powered buses in India.

Focus on providing better product and newer technology, they are

the now the leading supplier of vehicles for the Indian militarylogistics operation.

Sony has developed a framework and is to implementing measures

on an ongoing basis to improve the quality of its products and

services.


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Innovation

Biocon Ltd has lined up many new brand launches across its six

therapy baskets this fiscal; among them is a reusable insulin pen,branded Insupen, less painful jab for diabetics than their regular

injection according to Mr Rakesh Bamzai, Biocon's President-

Marketing.

Insupen would be affordable in keeping with Biocon's philosophy of

affordable innovation for the masses. Educomp bags NASSCOM foundation 'innovation' honours-The

Financial Express (16-Feb-2010). Educomp has over the years

focused on the use of technology to enhance the process of

teaching-learning with the vision that education has the power to

transform lives of our children and their families. They have openschool such as The Millenium School, Euro Kids, Taxshila School.


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Horizontal Integration

H

orizontal integration occurs when a firm is being taken over by, ormerged with, another firm which is in the same industry and in the

same stage of production as the merged firm.

HDFC Bank and Centurion Bank of Punjab (CBoP) merged on 23 March

2008 to form a bigger bank.

The merger of BSES (Bombay Suburban Electric Supply) Ltd. withOrissa Power Supply Company and and renamed as Reliance

Energy(2002) which is now known as Reliance Infrastructure (2008).

Merger of RIN & Surf excel


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Vertical Integration

vertical integration is displayed by one firm engaged indifferent parts of production (e.g. growing raw materials,

manufacturing, transporting, marketing, and/or retailing).

Essar Steel Minnesota is part of Essar Steel, a global producer

of steel with a footprint covering India, Canada, USA, Middle

East and Asia. Essar Steel is a fully vertically integrated flatcarbon steel manufacturer from iron ore to ready-to-market

products.


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Joint venture

NTPC BHEL Power Projects PrivateLimited (NBPPL) is a Joint Venture

company of NTPC and BHEL, both

Navaratna, public sector companies

of GoI. NTPC-Bhel Power Projects

was set up in 2008 to supplyancillary equipment and carry out

engineering, procurement and

construction contracts for power

projects in India.


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Concentration Diversification

This means that there is a technological similarity between theindustries, which means that the firm is able to leverage its

technical know-how to gain some advantage.

For instance, the addition of tomato ketchup and sauce to the

existing "Maggi" brand processed items of Food Specialties

Ltd. is an example of concentric diversification.

Nike used concentric diversification when it diversified from

sports shoes to sports clothing and then to sports equipments.


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Conglomerate Diversification

Type of diversification whereby a firm enters (through acquisition ormerger) an entirely different market that has little or no synergywith its core business or technology.

The Essar Group is a multinational conglomerate corporation in thesectors of Steel, Energy, Power, Communications, Shipping Ports &Logistics as well as Construction head quartered at Mumbai, India.

The Aditya Birla Group is an Indian multinational conglomeratecorporation headquartered in Mumbai, India. It operates in 33countries with more than 133,000 employees worldwide. The groupcompanys are Hindalco, Grasim, Aditya Birla Nuvo, Idea cellular

and UltraTech Cement. After purchasing Columbian Chemicals

Co. the Group is now the largest manufacturer of CarbonBlack worldwide.


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Retrenchment/Turn around

Retrenchment is a corporate-level strategy that seeks to reduce thesize or diversity of an organization's operations. It is also a reduction of

expenditures in order to become financially stable.

Nov 4, 2011: Computer chipmaker Advanced Micro Devices Inc. (AMD)

said it plans to cut its global workforce by about 10 percent in a move

to reduce operational costs. The layoff will occur across all functionsglobally and is expected to be completed by the end of the first

quarter of 2012, the company said.

About 300 Jet Airways employees, including cabin-crew, staged a

protest outside the airline's office here on Wednesday against the

management's move to retrench nearly 1,000 staffers. It is a part of

handling economic slowdown and carefully rationalizing operations.

(2008)


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Divestment Strategies

A divestment strategy involves the sale of a portion of business, or a

major division. Divestment is usually a part of rehabilitation or

restructuring plan and is adopted when a turnaround has been

attempted but has proved to be unsuccessful.

By 1999, the whole Daewoo Group ran into financial trouble, and

was forced to sell its automotive division. Candidates for the

operation included Hyundai associated with DaimlerChrysler, Ford

Motor Company and the GM-Fiat alliance. Finally, General Motors

was the one who bought Daewoo Motor's assets.

L&T sold off its cement division to Kumar Mangalam Birlas

Grasim industries. By selling off this division, L&T was betterable to concentrate on its growth strategy of its core

engineering business.


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Liquidation

Take the book value of assets, subtractdepreciation and sell the business. This may behard for some companies to do because there maybe untapped potential in the assets.

Enron's European operations filed for bankruptcyon November 30, 2001, it was the biggest

bankruptcy in U.S. history. Enron's party insolvency took the form of a

liquidation, assets such as Enron's energy andbandwidth trading businesses, the Enron Windenergy unit, the IT consulting businesses, oil field

services company Mariner Energy, and Enron'spaper and forest products companies in the U.S.and Canada were sold.

Empress Mills , a struggling textile mill within theTata Group, was shut down and liquidated in 1986.


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Functional Strategies

Every business unit develops functional strategies for each majordepartment..

Financial Strategy

Production Strategy

Marketing Strategy Human Resources Strategy

Management Information System Strategy


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Financial Strategy

Financial Strategy is to select the main source of funding: thedevelopment of their own funds (profit, the issue of shares, etc.) or

through debt financing (bank loans, bonds, commodity suppliers'

credits, etc.).

A big-bang initial public offer (IPO) of shares by Coal India Ltd closed

with a thumping collection of Rs 236,148 crore, 15.2 times thetargeted amount.

Kingfisher Airlines has been asked to raise $160 million in equity by

creditors. The Sahara group will give a loan of more than Rs 2.5

billion to cash-strapped Kingfisher Airlines, to help the carrier

continue operations, the Times of India reported.


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According to World Vision's

2006 Consolidated Financial

Statements:

Around 40% of their revenue

comes from private sources,

including individuals, World

Vision clubs in schools,

corporations and foundations.

27% comes from governmentsand multilateral aid agencies

such as USAID and the

Department for International

Development (DFID) in the UK.

30% comes from other WorldVision programs and gift in Kind,

typically food commodities,

medicine, and clothing donated

through corporations and

government agencies.

Focus Areas:

emergency relief,

education,

health care,

economic development,

promotion of justice.


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Production Strategy

Production strategy defines what the company produces itself, and

that purchases from suppliers or partners, that is, how far worked

out the production chain.

P&G reputation as a great marketing company is matched by its

excellence as a manufacturing company. P&G spends large sums

developing and improving production operations to keep its costsamong the lowest in Industry.

Tata is also changing manufacturing practices. Thats because the

auto maker is asking engineers and mechanics to join together to

set up their own assembly operations to build the Nano.


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Marketing Strategy

We've increased our annualmarketing budget substantially,launched many new products, anddeveloped a model to help our retailcustomers maximize their saleswhile we continue to plan for thenext one, five and ten years inbusiness. Coca-cola

Baseline : Taste of IndiaAmul has used the hoardings andadvertising to perfection. Taking

cues from new films, celebrities, thecreatives are fun to watch. Moreover Amul has sticked with thecreative messages throughout.


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HR strategy

The Bank has continued to lay great emphasis on human resource

development, to make its employees attain global standards in

productivity, thereby maximising value creation for its stakeholders.

The employees attend training programmes , both domestic and

overseas, and the average training per person was 37 hours, which

meets international benchmarks.

TCS BPO bags HR excellence honors at Asias Best Employer Brand

Awards 2010. It received the Award for Talent Management, Award

for Excellence inH

R through Technology, Award for ContinuousInnovation in HR Strategy at Work, Award for Innovation in

Recruitment, Award for Innovative Retention Strategy and Award

for Excellence in Training.


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Management Information System

In HDFC with the help of INFORMATION SYSTEM the dailytransactions are recorded in branch computers and these branchcomputers are then connected to the main head office server. Dueto IS employees can easily connect with other branches, customerservice get improved, online banking emerged and lot of others

benefits.

Jharkhand Gramin Bank, Project Gram SHAKTI: introduction andimplementation of Core Banking Solution to connect and inter-linkall 217 branches. This technological initiative shall also improve

Management Information System (MIS) as it will become possibleto access and consolidate data from central locations like the HeadOffice as well as from Regional Offices.


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Business Strategies


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Cost Leadership

It describes a way to establish the competitive advantage.

Cost leadership, in basic words, means the lowest cost of

operation in the industry.

A cost leadership strategyaims to exploit scale of production,well defined scope and other economies (e.g. a

good purchasing approach) , producing highly standardized

products, using high technology.


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RIN ADVANCED DET.POWDER 1KG

Rs.67.00

WHEEL ACTIVE LEMON & JASMINE 975G

Rs.30.00


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Differentiation

It is the process of distinguishing a product or offering from

others, to make it more attractive to a particular target market.

This involves differentiating it from competitors' products as

well as a firm's own product offerings. Extra money for extra benefit.


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Focus

The firm can choose to compete in a defined, focused market

segment with a narrow scope.

Narrow/niche/segment ;demography geography, lifestyles


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BRITANNIA CREAM CRACKER

BRITANNIA NUTRICHOICE

SAFFOLA GOLD OILS


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International Strategy


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Export

Chinese electronic products


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Joint Venture

Maruti Udyog Ltd. (India)+

Suzuki(Japan)

Tata Teleservices +

NTT Docomo (Japan)


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Manufacturing

Good CSR policies, eco-friendly

technology usage, other environmental

initiatives like pollution control etc.

Hyundai's manufacturing plant at

Irungattukottai near Sriperumbudur.


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Acquisition

Is now


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Turnkey operations

Reynold India Pvt. Limited specializes inundertaking global turn key projects forsetting up of chilling plants & chilledwater systems.

Scope of Work

Preparation of preliminary reports

Framing technical specifications

Preparation of drawings and sitelayouts

Equipment selection

Foundation drawings Design & Manufacturing

Erection & Commissioning

Training of people at site for operatingin plants


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Strategic Alliance

A Strategic Alliance is a relationship between two or more parties to

pursue a set of agreed upon goals or to meet a critical business needwhile remaining independent organizations.

Nokia and Microsoft enter strategic alliance on Windows Phone, Bing,

and more.

American Airlines, British Airways and Spanish flag-carrier Iberia have

signed a long-awaited strategic alliance that will see them cooperate

on flights between Europe and North America. (2010)

The deal worth approximately 4.4 billion annually will see the

airlines share passengers and costs on flights between the European

Union, Switzerland, Norway, Canada, Mexico and the United States.


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Management Contract

A management contract is an arrangement under which

operational control of an enterprise is vested by contract in a

separate enterprise which performs the necessary managerial

functions in return for a fee.

In 2001, Taj Group took on the management contract of Taj Palace

H

otel, Dubai. In 2005, Taj Group obtains a management contract to operate "The

Pierre" in New York, USA


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Assembly

BMW is a worldwide manufacturer of high performance premium

cars and motorcycles, and is known for classic BMW luxury cars andBMW motorsports cars.

BMW started operating in India in the year 2006. In a bid to avoidhigher tax scenario, BMW recently announced that they would benow assembling their 5 and 3 Series sedan engines and their X1

SUV engine at their Chennai plant. About 50% of BMW engines areassembled in India.(May 2011)


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Licensing

An international licensing agreement allows foreign firms, eitherexclusively or non-exclusively to manufacture a proprietors product

for a fixed term in a specific market.

US drug maker Gilead Sciences Inc. has agreed on new licensing

terms with Ranbaxy Laboratories Ltd, Indias biggest pharmaceutical

firm by sales, and three other companies to produce genericversions of three HIV/AIDS drugs that are in late-stage clinical

development, as part of an effort to provide faster access to its

treatments to patients in developing countries.

Dr. Reddy's is presently licensed by Merck & Co. to sell an

authorized generic version of the popular drug simvastatin(Zocor) in the USA.


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Documents

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