Issues in Strategy

By Abhishek Maloo

Contents

• Objective function• Operation efficiency & Strategy• Why strategy?• Corporate plan• Why growth?• Core competency• BCG & Core competency• Porter & Hamel• PLC & Porter• Conclusion

Objective Function

• Mission Statement– Boundary definition for an organization.– Tells what business you are in.– Basis of SWOT analysis

• Vision Statement– Aspiration , dream & desire to move to a higher

position.– Transition of dreams into objectives & goals.

Operational Efficiency (O.E.) & Strategy

• Must Do – O.E.– Product Quality.

• Should Do- Strategy.– Cost Leadership, Technology, Product Differentiation.

• Wheel Vs Nirma

Why Strategy?

• Competitive Advantage.• Strategy hand in hand with uncertainty and

risk.• Increase return by taking risk.

Corporate Plan

• Path of movement from starting point to a desired goal.

• IC – the resource base.• TP – desired goal/ objective.• TH – time to execute the strategy.

Why Growth?

• Need for Market Control– initial phase of growth

• Need for diversification– New mission.– New product.

• Rent Seeking Behavior.

Core Competencies.

• Collective learning, embedded in time & represents the Assets of a company.– Three tests:• No duplication.• Value addition.• Access to multiple markets.

BCG & Core Competency

• Should develop portfolio of core competency rather portfolio of business.

• Mergers & acquisition.

Porter & HamelPorter (consistency school) Hamel (Stretch School)

Fit & consistency fit Revolutionary, Stretch

Perform different activities Perform activities differently

CEO JOHN DOE

DEPENDENT PILLARS:•Market structure.•Product life cycle.•Generic strategy.

PLC & Porter’s Generic Model

•Introduction •Super-normal profitFocus

•Growth phaseProduct differentiation

•Maturity phasePrice leadership

Conclusion

• Power is the driver of strategy.

Perception

Technology

Position or Market share

Brand loyalty

Profits

Thank you