What is Strategy?
Large-scale, future-oriented plan Used to interact within competitive environment to achieve company goals Provides a framework for managerial decisions Reflects a company’s awareness of the main elements of competition
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The concept of strategy
1.
Plan or course of action or a set of decision rules making a pattern or creating a common thread;
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2.
The pattern or common thread related to the organisation's activities which are derived from the policies, objectives and goals;
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TWIN OBJECTIVES
long-term, sustainable growth to its member farmers
value proposition to a large customer base by providing milk and other dairy products a low price
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3.
Related to pursuing those activities which move an organisation from its current position to a desired future state;
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How Kurien transformed AMUL from a dream into a major industrial entity
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A network of plants, cooperative societies, research centers, An institute for training future managers in rural management, Secondary services like veterinary …… expertise/feed factory
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Concerned with the resources necessary for implementing a plan or following a course of action;
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AMUL has adopted the network model in early 1950s
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Connected to the strategic positioning of a firm, making trade-offs between its different activities, and creating a fit among these activities.
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Horizontal Diversification Strategy
• Newer products with newer technologies
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AMUL’s Best Practices
• Umbrella Brand Strategy • It skillfully avoids interunion conflicts through this strategy • by giving every union and sub-brand the opportunity to contribute in the developing products. • Amul is the common
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• Automatic Milk Collection System units (AMCUS) • VSATs for seamless exchange of information. • using Geographic Information Systems (GIS) for business planning • Opted for the .coop domain to position its brand in a distinct way
Enterprise- wise Integrated Application System (EIAS).
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The planned or actual coordination of the firm's major goals and actions, in time and space that continuously co-align the firm with its environment.
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Constant Innovation
• cooperative ensures that the sequence and product mix of high value brands is consistent with Amul’s philosophy of low pricing and affordability.
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• Amul is a great brand. It has not only been a great dairy products brand but it has also been a source of income and livelihood to many people in the state of Gujrat in India... • This is something which other brands fail to do. They build their own brands with all strategies and plans but fail to do much for the community.
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Dimensions of Strategic Decisions
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Strategic issues require topmanagement decisions Strategic decisions overarch several areas of a firm’s operations Usually only top management has the perspective needed to understand their broad implications Usually only top managers have the power to authorize necessary resource allocations
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Strategic issues require large amounts of the firm’s resources They involve substantial allocations of people, physical assets, and money Strategic decisions commit the firm to actions over an extended period In highly competitive firms, achieving and maintaining customer satisfaction frequently involves commitment from every facet of the firm
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Strategic issues often affect the firm’s long-term prosperity
Strategic decisions commit the firm for a long time, typically 5 years; however the impact lasts much longer Once a firm has committed itself to a strategy, its image and competitive advantages are usually tied to that strategy Firms become known for what they do and where they compete. Shifting away from that can jeopardize their previous gains.
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Strategic issues are futureoriented They are based on what managers
forecast, rather than what they know A firm will succeed only if it takes a proactive (anticipatory) stance toward change
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Strategic issues usually have multifunctional or multi-business consequences.
Strategic decisions have complex implications for most areas of the firm Decisions about customer mix, competitive emphasis, or organizational structure involve a number of the firm’s SBUs, divisions, or program units
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Strategic issues require considering the firm’s external environment
All businesses exist in an open system. They affect and are affected by external conditions that are largely beyond their control Successful positioning requires that strategic managers look beyond operations and consider what relevant others are likely to do
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Strategic management defined
Strategic management is defined as : the dynamic process of formulation, implementation, evaluation and control of strategies to realise the organization’s strategic intent.
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Four phases in strategic management
Establish ment of strategic intent Strategi c evaluati on
Formulation of Implementation of strategies strategies
STRATEGIC CONTROL
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Comprehensive model of strategic management
Strategic Intent
Vision Mission Business definition Business model Objectives
Strategy Formulation
Environmental Organisational Appraisal Appraisal SWOT Analysis Corporate-level Strategies Business-level Strategies Strategic analysis and choice Strategic plan